Wednesday, May 14, 2008

America's Siberia

A recent post of mine over at the Blog at Mises.org.











America's Siberia
by Jim Fedako


It appears that the Appalachians are about to move again. Earthquakes? Shifts in tectonic plates? Not this time. Instead, the movement will be the result of an even more damaging force: congressional legislation.

As a young buck growing up in Pittsburgh, I enjoyed riding my bike through the hills and valleys of the Appalachian Plateau of Southwestern Pennsylvania. Today, residing in Central Ohio, the Appalachians are far from my horizon. However, not to fear, while I can no longer open my front door to rides in the Appalachians, the feds are slowly, and graciously, bringing the Appalachians back to me.

A new bill introduced and passed in the House includes the addition of four more Ohio counties to the Appalachian Region. Though geologists may growl at the addition of glaciated plateaus and till plains to the region associated with rounded mountains and deep river valleys, classifications of rock formations and topography have no impact on those intent on redistributing money to likely voters in the next election.

On a recent camping trip to Kentucky, I was able to once again experience the wonders of the road network that crisscrosses the northern portion of that state. The sites and sights are fantastic, as is the surface of almost every road I traveled. For a cyclist, the road condition is a key factor in the enjoyment of a ride, yet there wasn't a single Pittsburgh-sized pothole to be found within these impoverished mining and timber sections of Kentucky. Smooth and safe roads beckoned at every intersection. And this got me thinking.

The book, The Siberian Curse: How Communist Planners Left Russia in the Cold, details the failure of centralized planning to encourage economic growth in the hinterlands. For years, Russia has been trying to settle the wilds of its frozen tundra. First, the tsars encouraged population movements, then the Soviets commanded it. The result today is cities crumbling in Siberia, far removed from population centers and markets.

As these cities age, Russia is burdened by their very existence. A solution under a system of interventionism does not exist. And, an authoritarian government cannot simply let its masses exit the tundra and find their own productive places to live and work; places likely within the already burdened population centers of Moscow, etc.

We look at such a system – centrally planned cities that are inefficient and unprofitable, and far removed from centers of commerce – as vestiges of the Evil Empire. Yet, the US does the very same despite knowledge of Ludwig von Mises’s clear refutation of the ability of central planners to achieve anything greater than general starvation.

Russia suffers due to the cost of supporting the residents of cities that are not efficiently located. At the same time, the US suffers due to redistributive measures that support residents in regions that no longer provide jobs. In both cases, residents remain in areas that are unproductive while the rest of their respective nations suffer due to the redistribution of wealth from economically productive regions to economically unproductive regions.

As noted above, the US House is looking to make matters worse by proposing an increase in the area receiving tax-funded support. So the Appalachians move farther west in Ohio, possibly encompassing counties that are near tabletop flat; counties where the unemployment rate is not much different from the state or national average. Not only are these proposed counties non-mountainous, they are productive, with an ample supply of jobs.

Of course, counties that are designated as Appalachian by the feds receive loads of federal dollars. For the local politicians, being designated Appalachian is a cash cow. Federal appropriations include dollars earmarked for rural poverty assistance. Whether it’s the smooth asphalt on roads that have little residential or commercial traffic, or the war-on-poverty-type programs such as federal support for education, counties benefit from being declared rural and impoverished. And the politicians – local, state, and federal – benefit at the polls by being the providers of this fattened pork.

Yet, the Appalachian Region is impoverish because high-paying jobs do not exist there. So, instead of having acting individuals move to areas of economic prosperity, the feds attempt to chain rural residents to areas where the golden years have long gone.

You hear the politicians claim that the infrastructure needs to be improved, and then jobs will follow. This is similar to the pronouncements coming from the Soviet planners of yore. However, both claims are fallacious and without merit. Building a new school and paving additional roads in the Appalachian regions will not encourage businesses to relocate anymore than doing the same in Siberia resulted in profitable enterprises.

Business owners – entrepreneurs – are not fooled by the plaintive tales spun by the vote-hungry class. Businesses locate in areas that the owners deem most profitable. The lure of paved roads, new schools, and government support programs, are not enough to counteract (say) the physical distance to market.

In addition, by extending the Appalachian region to the already profitable glaciated plateaus and till plains, the feds will lock even more voters into lives of tax dependency. Federal dollars will be spent by local and state politicians in a manner not too different from the Soviet planners; local infrastructure will be increased where it is not needed, and support programs will be created or expanded.

Sure, in the short-run, some rural residents will benefit by being employed in these governmental works-projects. But these very same residents will be unemployed once the projects or programs go belly-up or lose federal funding. The cycle of poverty will continue.

As harsh as it sounds, the only way to improve the lives of rural residents in the Appalachian region is to remove government support. Let these folks face the true cost of their decisions. Some will accept reduced lifestyles and remain to enjoy the natural features of these still-wild regions, while others will migrate to areas where they can attain higher-paying jobs. Either way, acting individuals will demonstrate their preferences within a market environment. And, US taxpayers will not have to continue funding what has become America’s Siberia.

Jim Fedako, a former professional cyclist who lives in Lewis Center, OH, is a homeschooling father of five and maintains a blog: Anti-Positivist.



7 comments:

Brian said...

Jim:

Good article. I live in the region and have posted an article dovetailing in to your's.

http://tinyurl.com/2f6ch2

Enjoy your weblog.

Best regards,
BD

Scott said...

Interesting read, Jim. I grew up just north of St. Clairsville so I know all about this region and its poverty. Hence my relocation to the Columbus area and right to the point of your post.

Amazingly, the only classmates of mine doing well while still residing in that area are teachers! Imagine that!

Anonymous said...

Jim, Another great Letter to the editor about Gallawaste and The Board. Thanks for all you do. Signed, Sick of this crap

Paul said...

Jim:

I am a seventh generation Appalachian - my family settled Ohio in the 1790s on land granted for service in the Revelutionary War. Many of my ancestors are buried on a hilltop in Lawrence Cty...

...and I agree with you. I've written the same in my blog a number of times.

My family left Europe for the New World, and then the east coast for the Northwest Territory for one reason - to find a way to improve their economic condition. They farmed, and for a while mined clay that they sold to the many Ohio River brick works. When heavy industy hit the Ohio Valley, they worked in the factories and for the railroads.

Much of that industry is gone from the area. So is most of my generation of our family. We found other places to seek employment and raise our families - without government provocation, just selfish economic motivations.

The most heavily subsidized school districts in Ohio are in southeastern Ohio. Dawson-Bryant in Lawrence County spends about $9,000/pupil but only $100 of that comes from local sources. The rest of it is money from Hilliard and Olentangy and Dublin etc.

They also have a boatload of brand new schools paid for by the Ohio Building Fund. Meanwhile we in Hilliard is spending $65 million of our own money to build a high school.

Our society needs a safety net, but it can't be such that it takes away the motivation to react to fundamental and permanent changes in one's own economic environment.

As the prophet Sam Kinnison once said relative to the food crisis in Somalia: "Don't send them food - it's a desert! Send them U-Hauls!!"

PL

Jim Fedako said...

Paul,

I had a letter in Dispatch five or six years about Trimble Local Schools -- the poorest district in Ohio -- having more revenue and expenditures than Olentangy. And, Trimble only had 20 mills of property tax.

I said at the time, and would say again, DeRolph is no longer an issue.

Paul said...

Indeed.

When I first read the history of the DeRolph litigation, I was surprised to find that over 500 of the 600+ school districts in Ohio joined the case. That was a big part of the revelation for me - that this wasn't about the kids at all - it was about securing the compensation systems for school employees by taking the choice out of the hands of local voters.

Still, that's only part of the puzzle. The guys who are getting the pass are the various mayors who have let the real estate developers blow up all the suburbs.

Jim Fedako said...

We still need to review my school funding model. Growth is a minor component. And, statewide, it has to be a nonissue due to our declining population.