Texas, New York, and a few others already recovered. Nevada and Michigan wont until 2018.
The oil and finance industries have done well, and the housing boom didn't hit these states as hard as others.
The oil and finance industries have done well, and the housing boom didn't hit these states as hard as others.
The author draws an interesting comparison between the governing system of the United States and that of the European Union in explaining how a federal system works better than a confederacy in speeding recovery along:
Okay, this is obviously horrible for Nevada, Michigan, and Rhode Island — but so what? It's good when people move from where the jobs aren't to where they are. It's part of what makes a currency union work. See, we don't usually think of it this way, but we live in something called the dollar zone. We have 50 states that share the same language and fiscal policy — and monetary policy too. But, as the euro zone amply shows, the monetary policy that makes sense for one member of a currency union might not make sense for others. So what do you do if one country (or state) is stuck in a depression, and the other is booming? Well, in Europe, nothing. Or, more accurately, blame the country stuck in a depression for being stuck in a depression — and demand that it cut spending like you'd always wanted it to.
But, in the U.S., states have a few escape hatches from a slump. Or, more accurately, the people do. People can more readily move from a depressed state to a booming one than people can move from, say, Portugal to Germany (although that has happened to an extent). And, remember, the federal government will keep sending out Social Security checks to retirees in Nevada regardless of how many young workers leave the state. That isn't true when young Portuguese workers leave; that just makes its pension picture uglier. It's actually the same problem that U.S. state and municipalities face over state and municipal pensions — losing too many people for too long can leave state and municipal governments staring into too deep budget holes. But, again, at least people don't have to worry about their federal benefits.
