With Senator Robert Byrd’s passing, there’s naturally much commentary about the large quantity of federal funds he was able to direct to West Virginia, much of it fond or wistful. I even heard Senator Amy Klobuchar talk on MSNBC about “all he did for the people of West Virginia” with pork clearly what she meant from the context.
It makes me want to point out that just as pork is generally overestimated as a cause of high levels of federal spending, it’s also generally overestimated as a source of economic prosperity. To state the obvious, there’s been no West Virginia Miracle during Byrd’s decades of service in the Senate—it remains one of the poorest states in the union. That’s not something we should blame Byrd for. The fact of the matter is that the states that are poor in 2010 are generally the same as the states that were poor in 1960 and 1910. There’s enormous path dependency here.
But by the same token, in economic terms the best thing people born in West Virginia and Alabama and other poor states have always had going for them is that they’re citizens of a large, diverse, and quite wealthy country. That produces opportunities to participate in a wider national economy. And what really drives prosperity in these places, like in all others, is the growth of the overall national economy. Nationwide growth creates the demand for goods and services produced in West Virginia. Nationwide growth creates opportunities outside of the state that West Virginians who relocate can take advantage of. And nationwide growth creates the resources that finance nationwide social insurance programs like Social Security and Medicare.
Consequently, it’s really not clear that misallocating infrastructure investment by diverting too much of it to low-value projects in West Virginia is ultimately beneficially to West Virginians. Byrd and his staff can say on their own behalf that had they not misallocated the funds, some other Senate appropriator would have just done it instead. And it’s true that it’s better for West Virginia that they get the misallocated funds rather than letting them flow to Montana or whatever. But we should keep our eyes on the fact that we’d nearly all be better off if we could better-allocate this kind of money and not have politicians spend so much time and effort on the competition over where badly allocated dollars go.