Which States Are Hot? Which States Are Not? And Most Importantly, Why?

Recently, Bloomberg announced which states are hot -- in terms of population growth and decline -- and which states are not, but there is not a great deal of explanation as to why. The top 10 states for increasing population (between July 2006 and July 2006) are:

Arizona 213,311 3.6%

Nevada 83,228 3.5%

Idaho 37,098 2.6%

Georgia 231,388 2.5%

Texas 579,275 2.5%

Utah 59,729 2.4%

North Carolina 184,046 2.1%

Colorado 90,082 1.9%

Florida 321,697 1.8%

South Carolina 74,316 1.7%

There are several unique characteristics about these population shifts:

* They are often huge. Texas gained over 500,000 in one year! This is absolutely significant. This is not only due to the horrible affects of Katrina that hit in the summer of '05, but because of the huge number of businesses that have relocated to the state.

* All of these states lean Republican or are very Republican. Republican strategists lips salivate when they think of these population shifts to their state. This means more Congressional seats moving to their states and away (as you will see later) from Democrat states. However, they may be surprised by the long term results, as I will explain later.

* They are all in the West or (even more so) the South. This has been a trend that has persisted for decades and continues to be the case. Politically, the implications of this are significant. All of our Presidents since John F. Kennedy have been from Texas, California, Georgia, and Arkansas. The only exception to this trend was Gerald Ford, who was from Michigan. But remember, he was not elected.

What about states that have seen decline?

Connecticut 4,108 0.1%

Mississippi 2,044 0.1%

Ohio 7,321 0.1%

Massachusetts 3,826 0.1%

New York -9,538 0.0%

Michigan -5,190 -0.1%

District of Columbia -519 -0.1%

Rhode Island -5,969 -0.6%

Louisiana -219,563 -4.9%

So what can we observe about the decline of these states?

* They are in predominantly Democratic states. Five of these bottom 10 are strong Blue states. Only two are consistently Red (Louisiana and Mississippi) whose decline can be attributed to Katrina, which hit in the summer of 2005. This, again, makes Republicans excited and Democrats concerned, but the long term implications could prove different.

* They are on the East Coast and Midwest. With the exception of Louisiana and Mississippi, all of these are in the East Coast and Midwest, which have also suffered when it comes to political prestige.

What are the lessons learned?

I believe that the political and economic environment of many of these states have become so hostile to entrepreneurship and economic growth, people are voting with their feet in a quest to find better jobs and opportunities. Michigan has taken a pounding for decades (my family was among the "Michiganders" who flew South to flee the rust belt in the 1970s) and continues to face economic pressures due to unions that international competitors never have to encounter. New York and Connecticut are noted for their constant regulatory pressures they apply on business, forcing many to have little choice but to leave. The list goes on, people are leaving these states on the quest for economic freedom and they feel as though they are finding them in the above top ten states.

I believe Republicans, who appear to be the winners in these shifts, should be cautious in their enthusiasm. I remember when I worked as an aide for US Senator Gordon Humphrey (R-NH). That state had become extremely Republican by the 1980s and was enjoying growth as people fled the disastrous political and economic situation in Massachusetts just to the South. Eventually New Hampshire became Democratic as people moved who knew there were things wrong with their home state -- taxes, crime, etc. -- but didn't realize that the people they were voting for was the source of their problems. So once they moved to a new promise land, they brought the same terrible policies with them.

The future looks bright for Republican states on paper, but this will only be the case if new voters support the very policies that have made these states so attractive in the first place.