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Meredith Whitney on the 'Fate of the States'

Image of Fate of the States: The New Geography of American Prosperity
Author: Meredith Whitney
Publisher: Portfolio Hardcover (2013)
Binding: Hardcover, 272 pages

Meredith Whitney was one of the first to call trouble at Citigroup in the early days of the 2008 financial crisis. She’s making another bold prediction in her new book, “Fate of the States: The New Geography of American Prosperity.

As coastal states like California and Arizona slowly recover from the housing boom-and-bust, states in the middle of the country will be in a better position to capitalize on the economic recovery. Homeowners in states like Indiana didn’t have as much access to cheap credit a few years ago. Their cities and state governments didn’t build budgets on expectations the boom would continue. And now, they’re able to offer a host of incentives to prospective businesses as other states cut public services and school funding.

Now, says Whitney, you’re seeing “businesses relocate to the central corridor because of tax advantages, because of cheap energy, because of better ease of operations.” The central corridor includes states in the Midwest, states that were, until now, “flyover” states.

Whitney says “you look where opportunity is presenting itself." And that’s not California or New York she says. While economic recovery is coming to states once struggling, “the disparities in growth [between different states] are pretty dramatic.”

Whitney’s firm is located in Manhattan. She says she and her husband often debate moving to Texas.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
Image of Fate of the States: The New Geography of American Prosperity
Author: Meredith Whitney
Publisher: Portfolio Hardcover (2013)
Binding: Hardcover, 272 pages
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Kai,

Normally I am more than happy with your reports and general economic insights, but last night's report on the Meredith Whitney's book made my blood boil. Your constant interruptions seemed to be focused not on any economic insights but rather on an emotional gut response. Intangibles? People go where the jobs are, ask any college student.

I'm 3 years out of college and find myself as a software engineer for a large multinational company in Iowa. The job pays well and the cost of living is such that my wife and I are already building a house. My brother in law relocated to California for a similar job at a different company with a higher pay. He just signed a deal on a tiny apartment because A)That's what's available and B) that's what he can afford. I've still got cash left over to sink into the local economy and save up for my retirement.

Lets not forget to mention how much cheaper and better the food is over here. From the sounds of things, beef is pretty pricey out in Los Angeles, not over here where its raised. Not happy with the organic selection? Grow it yourself. I hear the soil is pretty good.

Don't worry, keep on arguing over the Keystone XL pipeline. Its keeping gas cheaper over here. Check the regional averages with envy.

I lived in Pennsylvania for a while, I know the high and mighty attitude that is prevalent out there. It is utter baloney. Delusions of grandeur surrounded by decaying old steel mills and broken promises. On a recent trip to New York City I took the train in from New Jersey, all I could see was abandoned factory after abandoned factory. Were those the intangibles you were mentioning?

One may ask, what about the arts? Perhaps you like reading? The Midwest has produced literary geniuses like F. Scott Fitzgerald, Kurt Vonnegut, and Ernest Hemingway. There is an alive and thriving music scene built on a tradition of Jazz, Blues, and Rock and Roll. We have museums of science and art, too. Odd, isn't it? These strange and mysterious Midwestern-ers have much of the same lives as you do out on the coast. Only its cheaper to do it here.

Recently a video went viral concerning the "Iowa Nice Guy." Perhaps you should watch it.

I'm sick and tired of this stereotype that is labeled on us by people who's exposure to the Midwest is limited to the opening scenes of Superman. Its insulting to the diversity of this great country and simply isn't true.

So next time you gut response to a book concerning economic growth in our country, which I can confirm is in fact happening, how about you check your facts? That is your job after all.

I'm out.

Kai, Please stop calling them "flyover states." It's elitist.

I would have loved to have heard what Ms. Whitney had to say, but you kept interrupting or cutting her off, Kai. Very disappointing!

OK Kai, you knew this was coming. As a resident of the "fly over" state of South Dakota I had to write.

I've heard it before. When my husband and I told friends we were moving from Portland Oregon to Rapid City SD, the most common response was a quizical / slightly critical "why?" When we asked if they had ever been here, the response was usually "no."

I could recite the tourism bullet points (more sunshine than Miami; outdoor sport mecca - think rock climbing and mountain biking; and then there are those 4 presidents hanging out just down the street) but I'll resist.

I will say this: Meredith Whitney is on to something when she observes the potential of the midwest. Not only does SD have the tax incentives and less red tape than the coastal states; it also offers a quality of life that is no longer possible in large urban areas. As a native South Dakotan who spent most of my adult life in places like Phoenix, Seattle and Portland, I know first hand the daily stress of that life. To all of that I say "no thanks."

Now I can actually enjoy my commute AND an outdoor lifestyle. Literally, as I heard you question who would want to move here, I was making my way home on my 12 mile / 20 minute commute, in my convertible with the sun shining on my face and the Black Hills in the distance. Last weekend, I ran a marathon that followed a former railroad route and finished in the famed town of Deadwood. I can't think of another place I would rather be.

Don't take my word for it. Come visit and produce a story about us "fly over" states. I'll even take you and the crew to see the sights of the Black Hills for what my Dad calls the "25 cent tour." I'm guessing you might reconsider.

Oh, and as a Marketplace kinda guy, I'm guessing you would also appreciate the benefits of lower unemployment, lower cost of living and the engineering / tech school here in Rapid City as well.

Signed,
Been there / done that / glad to be home

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