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What’s With Iowa?


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As we kick off 2016 here at No Nonsense Economics it’s the perfect time to give a nod to the ‘official’ start of the presidential election year. This week’s Iowa caucus has once again raised eyebrows – and hackles. The amount of time and money candidates spend in this small mid western farm state is truly astonishing—not to mention the time and money spent by media organizations that dutifully follows the candidates around.

Iowa has few electoral votes (6 to be exact), and in the last two election cycles the state picked Republican candidates who failed to achieve the party’s nomination. Yet Iowa plays an outsized role in framing the substance of the debates and public discourse by determining who has the momentum and, therefore, the attention of the press going into the other states. Candidates don’t have to win there, but they do have to do well and this means crafting positions that appeal to Iowans. Consider the wave of folding campaigns in the aftermath of this week.

In so many ways the Iowa caucus situation represents what is wrong with American politics. Going further, it represents the broader role that our broken political system plays in a U.S. economy that continues to fail to address the true challenges of our generation.

What specifically is the problem with Iowa? Quite simply it does not look like America. You’ve likely heard this before, but it’s worth reiterating a few statistics. Iowa is small—barely 3 million people live in the state, less than 1% of the overall U.S. population and less than one-third of the population of Los Angeles County. The people who do live in Iowa are exceedingly white. Only 5% are Latino, 4% are African American, and 2% are Asian. Compare that to 17%, 14%, and 6%, respectively, in the nation as a whole. Less than 5% of people living in Iowa are foreign born, compared to 14% in the U.S.

The structure of Iowa’s economy also looks different. Agriculture makes up over 7% of the state economy, compared to 1% in the nation overall. Manufacturing also makes up a disproportionate size of the local economy. Iowa has fewer of both high skilled and low skilled residents. There are no major urban areas in the state—the largest city is Des Moines with slightly over 200,000 residents, half the size of Long Beach. In short, this is a very, very narrow slice of America’s population picture.

Why does Iowa always get to go first and exert this oversized influence? Indeed, why are state primaries staggered over a multi-month period many months before the actual election? There is a sad answer: It’s simply how it has always been done. And even though it is clearly logical, fair, and efficient to change the way the primaries are scheduled, our political system, in its unhealthy state, seems incapable of pursuing even modest reforms.

Our really big problems seem insurmountable in the current system. At the national level we have the failed war on drugs and unsustainable entitlements, not to mention an empty road fund and a tax system that is sharply skewed to benefit the very wealthiest among us. At the local level there are pension problems, water allocation issues, volatile revenues systems, and a housing shortage.

These aren’t problems without solutions. In fact, they all have relatively obvious solutions. You don’t need a PhD in economics or the IQ of Einstein to figure out some basic realities. For example, we clearly need to increase the retirement age for Social Security and Medicare. And in California, we have to stop allowing senior water rights holders to grow water-intensive hay on the state’s desert lands and then ship it abroad.

The problem isn’t finding a solution—the problem is that we have allowed the system to calcify around small groups of special interests who exert outsized control over the outcomes of key public issues. The big ideas and bold policy choices of the past seem to have gone away, replaced with a mantra of ‘slippery slopes’ and ‘no compromise’. Politicians are too afraid of their hard line bases to take on critical problems—it is safer to tilt at windmills. And surely some blame can be put on a spin industry that has absolutely perfected the art of pseudo-science and diversion.

How we got here, I don’t really know. That’s for political scientists to answer. But for 2016 I have a modest proposal: We should stop talking endlessly about the ‘problems’ and start worrying about how to get to the solutions.

CATEGORY: General Economy



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