As the recovery begins, albeit fitfully, where can we expect growth
in jobs, incomes and, most importantly, middle class opportunities? In
the US there are two emerging "new" economies, one largely promoted by
the Administration and the other more grounded in longer-term market
and demographic forces.

The November election and its subsequent massive expansion of
federal power may have determined which regions win the post-bust
economy, but the stakes in November are particularly acute for some
prime beneficiaries of what could be called the Obama economy: the
education lobby, Silicon Valley venture firms, Wall Street, urban land
interests and the public sector. All backers of his 2008 campaign,
these groups have either reaped significant benefits from the stimulus
or have used it to bolster themselves from the worst impact of the

In a sense the Obama policies are designed to overturn the pattern
of economic dispersion -towards the exurbs, the south, the
intermountain West, and more recently the Plains – that has defined the
last half century. The biggest winner, in regional terms, is the
Washington area. Even as local governments cut back, the federal
establishment continues to swell. Federal employment, excluding the
postal service, remains roughly 200,000 larger than in 2008.

It is not surprising then that the capital district enjoys the
highest job growth since December 2009 of any region. Indeed, the Great
Recession barely even hit the imperial center. Given its current
trajectory, it’s likely to remain the primary boom town along the east

There are other less obvious regional winners from Obamanomics. Wall
Street, despite its recent wailing, has fattened itself on the Fed’s
cheap money. It may benefit further from highly complex new financial
regulations that will drive smaller, regional competitors either out of
business or into mergers with the megabanks.

Manhattan – a liberal bastion dependent on arguably the greediest,
most venal purveyors of capitalism – enjoyed a revived high end
consumer economy of high fashion, fancy restaurants and art galleries.
Silicon Valley’s financial community also is seeing a surfeit of grants
and subsidies for the latest venture schemes, keeping Palo Alto and its
environs relatively prosperous. Perhaps this is the positive "change"
that Time recently credited in its paen to the stimulus.

Other regional winners from the Obama economy generally can be found
in state capitals and University towns, particularly those with the Ivy
or elite college pedigrees that resonate with this most academic
Administration. One illustration can be seen in the relatively strong
recovery of Massachusetts – home to many prestigious Universities and
hospitals – which has seen jobs grow by 2.2 percent since the Obama

Similar, albeit less dramatic recoveries can be found in Columbus,
Madison and Minneapolis-St.Paul, with their large university
communities and regional federal employment centers. Yet the political
benefits of this growth may be limited. Many other parts of these same
states, including the outer boroughs of New York are not doing well;
aside from Columbus, Ohio has continued to skid as its industrial and corporate base dwindles, often moving to more business friendly states.

At the same time, the strongest growth clusters in those regions
that stick to the basics: relatively low taxes, pro-business
regulations and continued infrastructure investment. Some regions –
particularly in Texas, Alaska, Wyoming and the Great Plains – also have
benefited from the growth in such basic industries as agriculture, oil
and mining.

Like resource-producing Canada and Australia, which barely felt the
great recession, these economies have been boosted by continued growth
in demand from countries like India and China. The current rise in food
commodity prices, in part due to poor conditions in Russia and other
former Soviet Republics, may further intensify this trend. Beyond the
current food crisis, changing consumer tastes in boom markets like China
seem certain to boost demand for such products as corn, used to help
meet that country’s soaring demand for pork and other meat products.

But perhaps even more important, once the economy recovers these
areas – with their business friendly regimes and lower costs – may
continue to siphon much of the next wave of industrial and even tech
growth from the more expensive, largely Obama-friendly regions. Caterpillar,
for example, one of the likely beneficiaries of expanded exports,
recently announced plans to open a new assembly plant not in its
Midwestern base but in Victoria, outside Houston.

This trend has been building for at least a generation and seems
likely to intensify under today’s highly competitive global business
environment. If we start seeing a recovery in such things as auto
sales, one can expect much of the new demand to be meant in efficient,
largely foreign owned factories that have been gearing up across the
Southeast. Unless powerful federal intervention forces Americans to buy
General Motors products like the Volt, consumer preference is likely to
be strongest for smart, fuel efficient brands built largely in towns
from southern Ohio down to Texas.

Perhaps even more significantly, these areas are also challenging
the Obama regions in such fields as high-technology. Tech hiring has
picked up in places like Silicon Valley, New York and DC, but
consistently the fastest growth in science, engineering and technical
jobs has been in low-cost states such as North Dakota, Virginia, New
Mexico, Utah and Texas. Just recently, several major Silicon Valley
powerhouses – Adobe, Twitter, Electronic Arts and eBay – announced
major new expansions in Utah, a state that is among a brood seeking to move prized businesses, including even entertainment, from the Golden State.

To a distressingly large extent, the fate of these two distinct
economies may hinge on the outcome in November. If the Republicans gain
an effective blocking majority – perhaps with a handful of centrist
Democrats from growth-oriented states – many favored programs of the
Obama economy may be cut or eliminated entirely. These include
high-speed rail, increased subsidies for new light rail lines, massive
investments in University research and investment breaks for renewable

On the other hand, if the Democratic majority persists the tilt
towards the Obama economy may even become stronger, as the Democrats
will be the ones primarily losing their seats in many growth states.
Many policies inimical to the growth states – support for government
satrapies like General Motors, tougher restrictions on domestic fossil
fuel development and policies designed to curb suburban single family
housing – might even intensify.

In this sense, we need to see November as much as a conflict between
growth economies as an ideological contest. The results could determine
what regions are next to boom, and whose economy will slow or even
decline. What might be best – a compromise recognizing the need to
boost growth in all regions – may be a too far a stretch of logic in
this political climate.

This article originally appeared at