Weakonomi¢s » tour of the country

New Jersey’s Reputation

The Weakonomist — Fri, 18 Jun 2010 14:14:33 +0000

I don’t have anything against the state of New Jersey (click the link for an economic tour of the state). I’m sure it’s a fine and beautiful place. But why are these the two stories I’ve heard about the state in the past few days?

Jersey Politician Draws Total Disability Pay yet Runs Marathons

New Jersey Woman Charged in $45 Million Ponzi Scheme

Both are good reads.

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour of the Country: North Carolina

The Weakonomist — Fri, 21 May 2010 15:17:05 +0000

AKA the “Our Industries Left” state

Welcome to North Carolina, home to beautiful coastline, rolling mountains, great people, dying industries, two sources of the financial crisis, and the 10th highest unemployment rate as of March of 2010. North Carolina is a mixed bag of strong growth 21st century industries that’s being held back by the industries of the 20th century.

North Carolina was once a thriving economy backed by manufacturing and agriculture. The farms around the state do well with animals (cattle, poultry, eggs, milk, hogs, and even turkey), but they also do sweet potatoes, soybeans, and the big gun tobacco. They are the biggest grower of tobacco which goes on to support companies like Reynolds American based in NC, which is the second largest tobacco company in the US behind Altria in nearby in Virginia. It’s likely tobacco growers in North Carolina support both of these companies.

North Carolina also had a healthy manufacturing sector. Among the likes of paper, chemicals, furniture, and some electronics, textiles were once a really big contributor to the economy. Though North Carolina remains the textile leader in the US, they’ve lost many jobs to Asia and South America. When you lose lots of manufacturing jobs, the economy is slow to adjust because many of these people were paid good wages and are forced to work for less to keep the lights on. This leads to persistent high unemployment.

But don’t count this state out. They’ve been diversifying their economy for years, and it’s kept them from becoming like Michigan (sorry Michigan). Behind New-York City, Charlotte is the largest financial hub in the country. Bank of America calls Charlotte home (for now) and Wachovia’s headquarters were also there. As you probably know, Wachovia sold themselves to Wells Fargo to avoid a bank failure but many operations remain in town and it serves as the east coast hub for the San-Francisco based bank. Elsewhere in the state BB&T resides which has a very large footprint in the Southeast and is a top 10 or 20 bank depending an how you measure size and define “bank”.

The giant scar of finance isn’t all North Carolina has left though. The area around the capital, Raleigh, is an IT and biotech cluster known as Research Triangle Park (RTP). IBM, GlaxoSmithKline, Microsoft, and SAS all have operations there as well as dozens more. RTP has insprired other metro areas in the state to start their own research areas, and as a result North Carolina is becoming a high demand state for the technologies of tomorrow.

Helping along this development is a university system rivaled by few. The University of North Carolina and Duke University are nationally recognized in sciences and business, and a number of other schools are nationally or regionally important such as Wake Forest University and North Carolina State University. UNC, Duke, and NCSU all play very large roles in the success of RTP.

Finally, there exists an entertainment industry where are few shows and movies have been made around the state. Talladega Nights, The Color Purple, and Hannibal were filmed in NC, as well as a number of television shows and other movies. And where there are movies, you also have the arts. Frankly, I don’t know much about this stuff and don’t know how much it contributes to the economy, but the state pimps it because it gets people like me to talk about it.

One problem with the setup of this economy, as with many economies, is that the urban areas tend to do much better than the rural ones. North Carolina has some rural areas and some urban ones. They’ve got some tourism with wineries, beaches, and mountains. The diverse state is making the transition to the 21st century better than others in the south, but the loss of manufacturing jobs is a generational issue, and will continue to contribute to high unemployment for some time to come.

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour Of The Country: New York

The Weakonomist — Mon, 25 Jan 2010 15:45:41 +0000

AKA The Capital State

Number 11 of the original 13 colonies, New York is one of the most significant states in the country. It trails only behind Texas and California in total economic output. We all know much of this is thanks to New York City, but we’ve got the rest of the state to cover first.

New York state is often overlooked as an economic power, living in the shadows of New York City. It’s quite sad that many people think the capital of the state is NYC, but it also explains why people don’t know much else about the rest of the state.

Canada shares a border with New York, and when Canadians want to vacation in the US they come to New York. They also account for 1/4 of all of the state’s exports. Right across the border into New York is Buffalo, made famous for not a whole lot other than when it snows a lot in the north, the Weather Channel always goes to Buffalo. But the town does play home to a financial sector for regional banks as well as lots of government jobs. If you stay along the interstate heading east, you’ll pass all the major towns in the state including the actual capital, Albany.

Much of the state is rural. Thanks to glaciers carving up the dirt, the state has some great soil for agriculture. Cherries, apples, potatoes, onions, maple syrup, and dairy are among their biggest cash crops. It is the largest producer of cabbage, and certain areas are right for pears, plums and peaches. Grain products like corn, soy beans, wheat, and oats are also grown, along with peas, carrots, and cucumbers.

Mining is also an important contributor to the state’s economy. One area of mining is near NYC and basically supplies the stuff people need to build with in the city. In the mountainous areas, talc, garnets, and zinc are heavily mined. There are also some patchy areas where oil and natural gas can be found. This is not surprising since the first oil rush was started in neighboring Pennsylvania. Manufacturing also plays a role in the economy, but like most areas, it is dwindling. They do some nanotechnology in Albany, ceramics and photographic equipment and some contributions to the rail and bus industries elsewhere.

The state is among the most oddly shaped states, thanks to the phallic like protrusion from the mainland known as long island. Anyone with a map can tell this could have easily been a part of Connecticut or New Jersey, geographically speaking, as it’s basically all the beach access New York has. To get to Long Island you have to drive near or through New York City. Once you get there you will find a diverse economy, largely supported by the intense wealth that calls this place home. You’ve heard of the Hamptons, this is where they are. Thanks to very high property taxes, the government is able to suck away some of that wealth.

But of course, most people are interested in New York City. We learned in New Jersey and Connecticut that many commuters from those states go into the city for work, since they were so close by. So why is New York City such a hub of commerce?

NYC is second only to Tokyo in terms of the single largest hub for commerce in the world. In the early days Manhattan Island was a popular port for shipping goods out of the colonies and bringing goods in. Today that atmosphere is very much alive, but most of the commerce is happening on land. Along with London, NYC’s financial district is the center of the world of finance. It plays home to the New York Stock Exchange and NASDAQ. A number of Wall Street firms call New York home, including Goldman Sachs, JP Morgan Chase, Citi, Morgan Stanley, AIG, and Metlife. Just about every national financial services company at least keeps an office in New York, and thousands of smaller investment companies are based around the area as well.

But it’s not just about finance. Oh no. New York is also a media hub; and it’s as vital to the entertainment industry as Los Angeles. It’s the home of NBC, CBS, ABC, MTV, HBO, Viacom, Time Warner, News Corp (owner of FOX) and just about all of the major book publishing companies. Then you’ve got the big 4 major leagues located in NYC: NFL, NHL, MLB, and NBA. On top of that you have 3 of the big 4 accounting firms, Coach, J. Crew, Polo Ralph Lauren, Avon, Revlon, Estee Lauder, Bristol Meyers Squibb, Pfizer, Weight Watchers, Barnes and Noble, Verizon, and Donald Trump’s main company. This just to name a few.

On top of the name brand firms listed above, there are plenty of other companies that are huge that you’ve probably never heard of. Additionally, many international companies maintain offices in the city, and biotechnology is taking off as an emerging industry.

This is only scratching the surface of an economy that is perhaps the most powerful in all the world. It should be quite obvious why this state is called the Capital State; more money flows in an out of here than any other state in the country.

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour Of The Country: Virginia

The Weakonomist — Fri, 04 Dec 2009 15:30:53 +0000

AKA The “Hidden Gem” State

Welcome to the commonwealth of Virginia, it’s called a commonwealth instead of a state because Virginians think that makes them special. Don’t be fooled, Virginia is a state.

Virginia benefits from being a diverse state, geographically. You’ve got a coastal area, central piedmont, and mountains. Much like many southern states Virginia got its start in agriculture and this remains an important part of the economy today. I can personally vouch for cows and dairy, as I saw dozens of such farms along the interstate during a recent Thanksgiving jaunt. Though not as popular as California, wineries are starting to pop up all over the state. In addition to the cattle already mentioned, tomatoes, peanuts, and tobacco are the big cash crops.

The capital of Virginia is Richmond, a proud tobacco town that has managed to snag themselves one of the 12 Federal Reserve banks, and a handful of Fortune 500 companies. With the exception of CarMax, you probably haven’t heard of them because they aren’t big consumer brands. Nevertheless, they make good money for the state.

Finding your way to the beaches of Virginia usually means one thing, Virginia Beach. The entire Chesapeake region plays host to tourism, shipping, and farming. Though insignificant on a GDP scale, it should be noted that Virginia Beach is a hotspot for hip-hop music.

As you travel elsewhere around the state, you’ll find more of the same. More Fortune 500 companies, more farms, and many satellite offices of other large corporations. Another big employer around the state is the many fine universities that can be found. Virginia Commonwealth University (not to be confused with Virginia State) is based in Richmond and employs more than 20,000 people. Elsewhere you can find Virginia Tech, well known for football and outstanding academics. In Charlottesville and Williamsburg you’ll find the University of Virginia and the College of William & Mary, respectively. Both of these institutions are among the 8 original “public ivies” and Virginia is the only state with more than one. There is no shortage of smart alumni coming out of Virginia, and amazingly, these are all public schools.

But why are they the “hidden gem” state? What is hidden in Virginia that makes their economy so special? Why is their unemployment rate so low compared to other southern states? Two words: “The District.” We learned in our tour of Maryland that their economy suckles on the power teet of Washington DC. Well DC is bordered by two states, Maryland and Virginia.

It would almost be easier to list the government agencies that aren’t based in Maryland, but I’ll just cherry-pick the one’s you’ve heard of. To start with, the Pentagon is in Virginia. Virginia is on par with California in terms of Department of Defense spending, and no other states are higher ($30 billion way back in 2001).

Aside from the military of the free world being headquartered in the state, Virginia also calls home to the US Marshals Service, US Fish & Wildlife Service, TSA, FDIC, CIA, US Geological Survey, Patent Office, the Immigration & Naturalization Service, to name a few. In addition to government jobs, government contractors also little the DC metropolitan area, eager to get stimulus money and any other government funds they can,.

All told Virginia has a powerful and diverse economy that most of us would be surprised to learn about. The proximity to the nation’s capital is obviously a big helped there. But they are also friendly to business, and in 2007 Forbes and CNBC pointed out how business friendly they were. Hidden gems and all, the commonwealth has one of the strongest economies in the country.

Weakonomics Tour of the Country: North Carolina

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour Of The Country: New Hampshire

The Weakonomist — Wed, 30 Sep 2009 14:25:20 +0000

AKA The “Primary” State

New Hampshire is most well know for its…. Ummmm….. hmm. New Hampshire is the most important…. Ummm….. Can someone help me start this?

Oh yeah, New Hampshire is most well known for being that state that becomes important (to the media) once every four years when presidential candidates come to town to pretend this state is politically significant for a month for presidential primaries. New Hampshire should actually be proud of this the same way Delaware should be proud of their interesting tax laws which incent corporations to locate there. If you don’t have a bunch of land or large population to support an economy, create inventive methods to bring money to the state. Primaries bring millions of dollars in revenue to New Hampshire with every election, so more power to em.

But New Hampshire has other means of getting people to come to the state. It’s beautiful. In the fall the entire state practically turns yellow and orange. Scenic drives through the mountains and hiking trails are popular destinations for New-Englanders looking to escape the city. In the winter there is plenty of skiing to be had and the spring and summer months are cooler than most other areas of the country and attract more tourists getting out of the heat. Tourism is a multi-billion dollar industry in New Hampshire. If you like being outside, whether it be at a lake, in the woods, or on the slopes, New Hampshire has it for you.

Not to worry about New Hampshire, they’ve got more than just pretty oaks to look at. New Hampshire, like much of the Northeast, has a manufacturing sector that produces many of the things that make everyday life possible. Such examples are electric equipment, rubber, and plastic products. Like most states, they initially lost many of these positions to cheaper labor in the south, and eventually cheaper labor overseas.

The US is a big place, and even though New Hampshire is small in size they still have plenty of space for agriculture. Thanks to animal products such as dairy, cattle, and eggs and produce like apples, the primary state has a farming base that should endure for the foreseeable future.

But you can’t rely on tourism, dwindling manufacturing, and farming to support and economy. New Hampshire has you covered again. Financial services, private health care, and law firms also make significant contributions to the local economy. Dartmouth College, an Ivy League institution, ensures that some of our nation’s most prominent politicians, business leaders, engineers, and physicians all have ties back to New Hampshire.

New Hampshire is fortunate to not be as sensitive to the global economy as other states. With unemployment well below the national average (currently 6.9% vs 9.6%) the local governments can continue to make more reliable budget decisions based on expected tax revenue. On that note, it should be pointed out that New Hampshire has no sales tax and no income tax. Instead, residents pay one of the highest property taxes in the country. The fact that state legislatures have resisted the temptation to tax the sales on tourism shows an astounding amount of fiscal constraint.

In summary, New Hampshire is not a very well known state to most of the US. If you asked someone to name all the states and they left off 10, New Hampshire would probably be one of them. But not being well known has as many pros as it has cons. They aren’t in the news for awful layoffs, there are no scandals of financial ruin, it’s just a bunch of people that have “Live Free Or Die” on their license plates enjoying the beautiful outdoors. And with one of the highest per capita income levels and low energy usage New Hampshire may be one of America’s best kept secrets.

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour Of The Country: South Carolina

The Weakonomist — Tue, 07 Jul 2009 13:20:05 +0000

AKA the “Other Carolina” State

8th to ratify the Constitution and 1st to secede, South Carolina seems to have been punished every year since the Civil War because of it. South Carolina has been especially hurt by the current recession, with an unemployment rate currently at 11.5%. But don’t count SC as a TKO just yet, they’re home to some of the oldest industries in these United States.

One of America’s first cash crops was tobacco. It thrives in South Carolina’s climate today just as it has for almost 350 years. This is not likely to change soon because despite a reduction in smoking domestically, cigarettes in developing countries are very popular. South Carolina does not rely on tobacco alone though. Poultry, dairy, and hog farming are also big today. Processing facilities for these animals requires a lot of manual labor, which is usually done onsight on near by. In addition to that South Carolina also farms soy beans, peaches, and sweet potatoes.

One of America’s second cash crops was cotton. SC had their hands in this one too. Just like processing for animal products is done within the state so has cotton, which led to a booming textile industry. The Piedmont area of the state plays home to this, where shipping lines to the rest of the country connect. Unfortunately, the textile industry starting moving to China in the latter half of the 20th century and shows no signs of coming back to the southern US. Since much of the state remains undeveloped Forrest, logging and paper manufacturing are contributors to the economy as well. All of these industries above rely on some kind of exploitation of nature and the blue collar factory jobs that come along with it. While vital to the health of any economy, these jobs do not produce much wealth for the state.

South Carolina recognizes this and has taken some steps to diversify their manufacturing base. BMW manufactures their X6 and X5 SUVs and made the last generation Z4 in Spartanburg, SC. There are also plants around the state that make other machinery and industrial chemicals.

It is on the coastline of South Carolina where largest singular source of income can be found. Tourism. Being a resident of the south I’ve made many trips to the South Carolina coast. You’ve basically got two big population centers. Myrtle Beach is the first. Hotels line the strip and reach for the sky. It’s popular every year with biker weeks, though this practice is changing. People are drawn to Myrtle Beach because it’s very cheap to stay there relative to other beaches from Virginia to Florida. The area is highly developed and there is much to do from shopping to concerts to golf. You can’t spit in any one direction without hitting a golf course.

Further down the coast is one of the most charming towns in the southeast, Charleston. This area is a tourism and transportation hub. A port with high customer satisfaction rates and retiring boomers help keep a fresh supply of money into the area. Finally all the way down towards the Georgia border is Hilton Head. HH is your standard high-end beach destination. Gorgeous, expensive, and worth every penny.

But tourism alone can’t hold up an entire state, unless you have Florida’s coastline. This is why unemployment is so high. What really hurts the state is their lack of leadership in any one area. Many major corporations have operations in the state but so few are located there. Of all the Fortune 500 companies, only two are located in the state, and you haven’t heard of them. They are on the low-end of the list and aren’t huge employers.

The good news is South Carolina has plenty of people ready to work, tons of space to do it, and the power to do all the tax incentives they need to get companies to move in. The future could look bright for SC, but only because the present is so dim. And that’s why they’re merely a runner-up to the other state that shares the name ‘Carolina’.

Photos: reellady,

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour of the Country: Maryland

The Weakonomist — Wed, 24 Jun 2009 13:55:21 +0000

AKA the “More Diversified Than An Index Fund” State

Maryland was the 7th state to ratify the Constitution. It was started by a guy who wanted to set up a colonial presence for Catholics. It was named after the Catholic wife of the Protestant King Charles I, Henrietta Maria. Maryland is sandwiched between Pennsylvania, Delaware, West Virginia, and Virginia. Most non-residents will think of only a couple of things when they think of Maryland, Baltimore (and The Wire) and Washington DC. You’re right for the most part, but we’ll get to them last.

There’s more to this state than the big cities. Just as the Heisman Trophy sticks his arm out, so does Maryland into the hilly areas of Appalachia. Like most mountainous regions, the area is quite rural and lends its similarities to West Virginia and Pennsylvania more than the traditionally populated parts of Maryland. Like its neighboring states, this area is popular for coal mining and dairy farming. Heading southeast to the coast you’ll find beautiful beaches, or perhaps a beautiful beach. The peninsula that serves as Maryland’s beaches is shared with Delaware and Virginia, with those folks getting most of the coastline facing the Atlantic. Maryland basically has Ocean City, MD for their coastal needs, much of the rest of their beach is the protected Assateague Island National Seashore which lends itself to visitors, but not development. It’s in the flatter areas of Maryland that much of the agriculture for the state takes places. Salisbury is home of Perdue Farms, who probably processed the chicken you had last night for dinner. An addition to chicken farming, Maryland produces cucumbers, watermelons, peas, corn, tomatoes, and even has some room for tobacco.

Maryland is also home to a large, but highly diverse, manufacturing base. No one industry or company dominates this, but the various facilities include computer equipment, electronics, chemicals, and a dwindling presence in steel. Being diversified is highly desirable for a state, however without leadership in a specific industry they are also vulnerable to the overall reduction in factory work in the United States as a whole.

Luckily, Maryland has a few tricks up its sleeve. Head north to Baltimore and you’ll find a city rich in culture, history, and… crime. Sadly, the murder rate is 3 times that of Los Angeles, and 6 times New-York City in murders per 100k citizens. Other than that it’s all good. The Charm City was and remains an important distribution center for many imported materials destined for industrial centers further west. Baltimore suffered a similar fate as the industrial sector in the 20th century, however they’re recovering faster than, say, Detroit. Legg Mason, T Rowe Price, Grace Chemicals, Black & Decker, and Constellation Energy all call the Baltimore metropolitan area home. Baltimore can also claim ownership of one of the best medical facilities on the planet. We all know it as Johns Hopkins, birthplace of neurosurgery, urology, endocrinology, pediatrics, cardiac surgery, and child psychiatry; it has been ranked as the best hospital in America for the last 18 years by US News and World Report.

But in a recession even the stability of the medical field is tested. If you want to truly have an awesome economy, you need government money. Hop on interstate 95 heading south and you’ll run into the teat of the free world. Locals call it the Capital Beltway which is a gigantic circle of highway that makes a circle around the Washington DC metropolitan area. When we think of government agencies, we often think of DC itself. Well drive through there and you’ll notice it’s kind of cramped. So many government agencies are located near Washington, but not in it. Here are just of few located in Maryland, most of which are near the beltway: Census Bureau, Department of Energy, Environmental Protection Agency, Food and Drug Administration, Internal Revenue Service, National Security Agency, and Social Security Administration. In addition to federal departments, MD is home to Camp David (the President’s official vacation home), the National Naval Medical Center (basically where our elected officials get medical care), and Andrews Air Force Base where the Air Force One lives. Of course because this is a major metropolitan area many people live in Maryland and commute to DC and serve in many other capacities.

The final area of the economy is education, which is closely related to the government agencies. Research is both in sourced and outsourced. Most outsourced research goes to universities, a large portion of this money stays local. Johns Hopkins isn’t just a hospital, it’s also a university. Maryland is also home to the appropriately named University of Maryland at College Park, which is a part of the Consortium of Universities of the Washington Metropolitan Area which also includes such prestigious schools as Georgetown University and George Washington University, among others.

As a result of all this Maryland has the highest median household income in the country, at over $68,000; this is ahead of New Jersey and Connecticut which are 2nd and 3rd. Despite being the 9th smallest state in land area and a having a questionably odd flag, Maryland serves as the poster child of a diversified and well-balanced state.

Ocean City Beach Photo: Bravo213

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour of the Country: Massachusetts

The Weakonomist — Mon, 13 Apr 2009 14:15:20 +0000

(AKA the “Important Part of New England” State)

The most patriotic of New England states is Massachusetts. Famous for their tea parties and awful accents, this state is one of the most important to the country. We would gladly give up some other states if we had to in order to keep Massachusetts. No it isn’t because of their colonial history, but from what has emerged since then.

Massachusetts is most well known for the metropolis of Boston. Boston is an intellectual powerhouse. You’ve got some of the most prestigious universities in the world surrounding the town. Here are just a few you might have heard of: Harvard, MIT, Boston University, Boston College, & Northeastern University. Among this group you have some of the best business, law, and medical schools in the world. Thanks to the Harvard Business School, Boston is a hub for financial activity. Many companies mutual funds are located there, including the corporate headquarters of Fidelity Investments. The very lucrative business of venture capital (investing in start ups like Twitter, Google, or Facebook) is also very big in Boston.

Outside of the finance sector, the greater Boston area is also the home of a number of well known American companies. Around here you’ll find the corporate headquarters of Gillette (now owned by Proctor and Gamble), Reebok, New Balance, Sun Microsystems, IBM, Teradyne, Dunkin Donuts, consulting companies: Boston Consulting Group and Bain & Company, and National Amusements, Inc. National Amusements sounds like the parent company of Six Flags or something, but you would know the company better by the companies they own. Two such companies are CBS, and Viacom. Viacom operates MTV, BET, Paramount Pictures, and DreamWorks. Thank Harvard once again for their strong contributions to the medical field in the area, including biotechnology. Though mostly based in New Jersey, the pharmaceutical industry has many regional centers in Boston.

As you can see Boston has a fairly diverse economy. But we aren’t done. Boston is a hotbed for tourism as well. With a number of convention centers, rich history, and big sports teams (Celtics, Red Sox, Patriots) people travel from all over the region, and country to visit the city and soak it in. Our last stop in Boston is the port. Made famous by the Boston Tea Party, the Boston Port is a major hub for fishing and international shipping.

But is Massachusetts only as good as Boston? The answer is no. The state is small, but as you head inland from Boston there is still plenty going on. Much of the rest of the state is rural. Of the 6,100 farms, about a third make only a few thousand dollars each year. This would mean their owners are only farming as a side business, and work full time elsewhere. The most popular farm products are tobacco, animal products, nuts, and fruits – especially berries. Massachusetts is the second largest farmer of cranberries, after Wisconsin. In the 1930s three cranberry farmers wanted to market their crops better, and formed a cooperative . This co-op is known as Ocean Spray. Together with distributors like Pepsi, they sell juices and food products, like Craisens. Ocean Spray is responsible for many innovations over the years, including the introduction of the first juice box!

All this economic activity adds up to make Massachusetts worth a lot more than its size would suggest. Next to Connecticut, Massachusetts has the highest per capita income in the country. Their income tax is flat at 5.3% and there is a 5% sales tax on most items. They’ve also got some fascinating taxes (yes it’s apparently possible to have fascinating taxes). The sales tax does not apply to clothing, food and periodicals. For clothing though, you are taxed at the 5% rate for each dollar you spend over $175 (not sure if that is in one trip or per item). My favorite tax though is the short-term capital gains tax. This 12% tax is a tax on income made from investments held for less than a year. Think of day traders. In many other states this is a much cheaper tax.

With a rich history, strong intellectual capital, and a diverse economy, Massachusetts has set themselves up to be the state to beat in the northeast. I guess that’s why they are the “Important Part of New England” state.

Photo: Drewesque, mcritz007,

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour of the Country: Connecticut

The Weakonomist — Fri, 16 Jan 2009 13:38:24 +0000

AKA the “Where New-York’s Wealthiest Live” State

Connecticut is a lot like New Jersey in that it sucks on the power teet of New-York City. Only Connecticut’s addiction is worse. This is evident in the way Connecticut’s economy and geography are so related to New-York. To explain this we will pretend we’re walking through the state.

Starting with the westernmost portions of CT, you will see the state border actually stretches into New-York state almost as if it’s reaching out for another hit of that tasty New-York economy. This area lies on the coast and is referred to the Gold Coast because of all the money in this area. The town of New Canaan is the wealthiest in the state and one of the wealthiest in the country, with a per person income over $85,000. New Canaan lies on the Gold Coast.

Naturally we know much of the economy is driven by NYC commuters and the local businesses that support the family life, but the Gold Coast is also the home of many hedge funds. Since even a billion dollar hedge fund only has a few employees and most of the business is electronic, they have no need to locate directly on Wall Street. But because the successful hedge funds generate tons of income for the employees and those employees often originated from Wall Street, the proximity to New-York is not a coincidence.

As we head northeast to Hartford, we see more and more of the financial services industry’s humble roots. Insurance really took off in the state during the late 1800s, and the state has always been quick to pick up the newest forms of financial services since. Venture capital, which is a type of private investment company specializing in start-ups, also has roots here. Like hedge funds, the companies are mostly unheard of to many of our ears, so it accomplishes little to list them.

Sadly though, as you enter Hartford you cross the lines into one of the poorest communities in the country. Hartford sits in the middle of the state and in almost every direction is rural New England. There is some farming, mostly of dairy products and cattle. There is also some seafood being farmed. Much of it is lobster and clams, which are considered specialty items.

Heading east and in random pockets around the state is Connecticut’s manufacturing industry, which is surprisingly vast. Connecticut had their hand in specialty transportation equipment. This includes helicopters, airplanes, and nuclear submarines. Chemical and pharmaceutical production is also a contributor to the local economies.

Beyond that there isn’t much generating money in Connecticut. The state is rich in history and beach communities, so tourism plays a role in the economy.

what could have been CT

Connecticut remains one of the wealthiest states, and has the bragging rights for the highest per person income in the country. But because much of that income is attributed to New-York and Wall Street, the 2008 recession may have hurt this state more so than any other. If Connecticut’s economy doesn’t find a foothold somewhere, it may falter and simply become the “place where you have lunch on your way to Boston from New-York” state.

Related posts brought to you by Yet Another Related Posts Plugin.

Weakonomics Tour of the Country: Georgia

The Weakonomist — Thu, 15 Jan 2009 13:25:02 +0000

AKA the “We Started As A Prison” State

Originally set up as a place for Britain to dump it’s people that couldn’t pay off their debts (now there’s a plan!), the colony never really materialized in this fashion. 4th to ratify the Constitution and one of the original 7 to secede from the Union, Georgia has a storied history.

Georgia is also the largest state east of the Mississippi and has a number of rivers flowing to the Atlantic. This made agriculture and shipping both very important to Georgia’s early economy. Agriculture remains an important contributor to the state’s economy. Much of their output is of the following: poultry & eggs, pork, pecans, peaches (duh), peanuts, cattle & dairy, tobacco, and veggies. But they of course do more. I’m a huge fan of all of those things except tobacco, but I respect someone’s rights to participate in the destruction of their lives.

Speaking of which, Georgia is also big in the manufacturing of cigarettes. The industry dates back to colonial times, and has seen a new surge in demand in the last decade as developing powers like China and India have embraced the habit. If you own S&P 500 indexes, then this is good news for you. Before you bash smoking , this is one of the few industries that still funnels money BACK into this country. I like to pretend it’s the government’s secret plan to destroy the health of China. Give Georgia credit for having one of the last remnants of a textile and clothing manufacturing industry. They also have a strong base for food processing, paper & chemical products, and electric & transportation equipment. These industries are energy intensive, and Georgia uses a lot of it. 75% of their usage is strictly from coal, making them one of the biggest polluters in the country. All this industry does add up to make Georgia a certifiable blue collar state.

But don’t think Georgia is just a state of hicks, farmers, and Joe the whatevers (they got them though). If you haven’t heard, Georgia is home to some of the most well known and respected schools in the country. Auburn, Georgia, Georgia Tech, and Emory all produce some seriously smart people. Many of them stay in Georgia, making it a hub for all kinds of business. Nowhere is this more so than in Atlanta. ATL is one of the ten largest metro areas in the country. Over 750 of the Fortune 1000 companies have a presence in the city. Among them, the following companies and subsidiaries call Atlanta home: Arby’s, Chik-fil-A, Hooters, Coca-Cola, ING Americas (personal favorite), AT&T Wireless, CNN, Georgia Pacific, SunTrust Banks, Delta Airlines, and Cox Enterprises. Cox owns a number of radio stations and newspapers. They also have some TV channels, including the Travel Channel.

As if that isn’t enough, other areas of the state serve as homes for some other big companies: Home Depot, Rubbermaid, UPS, Aflac, and Waffle House. All this talk about the food industry in this state is making me hungry.

The economy doesn’t even stop there. The government is a big spender in any economy, and their presence in Georgia is felt. The Center for Disease Control (CDC) sits right next to Emory in Atlanta, but it’s the military that really has a statewide footprint. At least a dozen different forts and bases from the various branches are spread around the state, making Georgia a primary launch point for southeastern military operations.

Finally, like New Jersey, North Carolina, and California, Georgia benefits from having both mountains and beaches within its borders. Tourism is very important to Georgia’s economy. Between the ocean and mountains you’ll find many sporting clubs like the Atlanta Falcons and Atlanta Braves that bring an enormous amount of cash into the state’s economy. I can’t help but mention a number of celebrities call Georgia home, and their mentioning of home through their exposure to the public has brought Georgia some additional fame. Notably, Paula Dean of the Food Network has increased tourism in her town of Savannah, and too many rappers to name constantly speak of living in the ATL.

If Georgia were to secede from the Union today and become its own country, it would have the 28th largest GDP in the world.

England may have intended Georgia to be a colony for debtors, but as you can see it has one of the strongest economies in the country. Many states that were supported by agriculture have trouble branching out into other industries. Georgia is a perfect example of the diverse economy. With good climate, beaches and mountains, and such a strong economy it’s no wonder they are doing so well.

Updated – Auburn is in Alabama as the commenter below pointed out.

Related posts brought to you by Yet Another Related Posts Plugin.