Harnessing Local Strengths for Economic Growth

Why did the Rust Belt really lose its manufacturing base? Middlebury College political scientist Gary Winslett has a provocative answer: It wasn't China or robots. It was Georgia, Texas, South Carolina, and Florida. In a recent Washington Post op-ed, Winslett argued that the South's pro-growth policies—not foreign competition or automation—were the real drivers behind the industrial shift. That makes for an uncomfortable narrative in a political environment where both parties have a stake in telling more convenient stories about trade and globalization.

Winslett explains how factors like "right to work" laws, housing construction, regulatory efficiency, and immigration made the South more attractive to manufacturers. The conversation moves beyond nostalgia for lost factories and asks whether the American dream now lies in places like Nashville and Raleigh—and whether we're too busy looking backward to notice.

Sources Referenced:

• "Manufacturing is thriving in the South. Here's why neither party can admit it." by Gary Winslett
• U.S. export share: Rust Belt vs. southern states
• Annual New Privately Owned Housing Units Authorized by State, by the U.S. Census Bureau
• "What to Know About the U.S. Trade Imbalance, in Charts," by Alana Pipe, Drew An-Pham, and Jeanne Whalen
• Milo Yiannopolis on X: Americans will love working in factories again

Men are depressed and addicted and broken because they have nothing to do. They get no stimulation or satisfaction from BS email jobs. I'm telling you, white Americans will love working in factories again. Making things, in the image and likeness of God the Maker.

— MILO (@Nero) April 4, 2025

• Howard Lutnick on CNBC: You and your grandkids will work in the same factory

Lutnick: It's time to train people not to do the jobs of the past, but to do the great jobs of the future. This is the new model where you work in these kinds of plants for the rest of your life, and your kids work here and your grandkids work here pic.twitter.com/dRq9aDfdgH

— unusual_whales (@unusual_whales) May 3, 2025

• J.D. Vance's 2024 Republican National Convention speech

Chapters:

• 00:00 What really happened to Rust Belt jobs?
• 05:11 The politics of the manufacturing decline
• 10:22 Nostalgia and the rise of southern manufacturing
• 15:20 Unionization, right to work, and labor policy
• 20:43 How immigration and housing fueled southern growth
• 26:02 Why the Rust Belt didn't adapt
• 32:21 Permitting, regulation, and business friendliness
• 38:36 Trade deficits and service exports
• 44:05 The myth of manufacturing as America's future
• 50:01 Remote work and the class divide
• 56:26 Upward mobility and bipartisan economic failure

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Transcript:

This is an AI-generated transcript. Check against the original before quoting.

Zach Weissmueller: Today's guest recently argued in the pages of The Washington Post that it wasn't China or the robots who took most of the Midwestern jobs—it was the South. Gary Winslett is an associate professor at Middlebury College. He's here today to discuss that provocative argument and its implications with us today. Thank you for joining us, Gary.

Gary Winslett: Happy to be here.

Liz Wolfe: So, the proportion of exports from Rust Belt states has plunged since the '90s while rising in the Southern states. But you never hear this story about manufacturing in our political discourse. 

Gary, why?

Gary Winslett: Because it's inconvenient politically for both parties.

The Republicans love to be this party of romantic nostalgia—"take us back to the past." Under Donald Trump, they also really liked tariffs. So, they don't want to acknowledge that, in one part of the country, things are going great in terms of manufacturing. That undercuts their "everything is going to hell" kind of argument on their side.

On the Democratic side, they'd rather blame greedy corporations or China because that doesn't point to some of the policy choices that Southern states have made that challenge the log rolling coalitional politics of the Democratic Party.

If you're going to point out that, "Hey, Georgia has a great permitting reform where they help manufacturing firms set up shop quickly", that directly challenges the way we do things in California, where it's a nightmare to set up anything. The success of right-to-work in South Carolina directly challenges the power of organized labor that other parts of the party really like.

So, it's just not convenient for either party. And like politicians tend to do, they ignore the inconvenience to sell what they'd rather be the truth.

Liz Wolfe: But are we, as libertarians or libertarian-adjacent people, also doing the same thing where we're paying attention to the politically convenient narrative for us?

Because in a sense, you're basically vindicating what libertarians and small-government advocates have been saying all along, which is you create a more fertile environment in your state, you attract businesses there, you make it a little harder for unions to operate, and all of a sudden, growth happens. This is a very convenient thing for us to believe. Are we succumbing to the same thing?

Gary Winslett: I don't know.

There are other areas where I think libertarian-adjacent people could do better. I think some of the stuff on social safety net really can be strengthened. We probably don't spend enough in this country on poor children. Universal free school lunch is something I think would be great.

But on this particular topic, I think the libertarian or libertarian-adjacent approach—I consider myself a market-friendly Democrat—is right. So I don't think we need to go around apologizing on those topics where we're right.

Zach Weissmueller: Yeah, and we'll get into some of the empirical data here in a second that completely validates what we've been saying for all these years.

But first, I just want to ask a bigger kind of political question. When you look at the amount of people working in jobs that are directly competitive with import-heavy industries—in other words, jobs that would ideally be protected by something like tariffs—it's fairly low. I pulled this from the 2024 Trade Organization report. I've got the red arrow there pointing to: less than 2 percent of U.S. jobs are competing directly with an overseas manufacturing industry.

Given that reality, why do you think this draws such political heat? Why is so much attention focused on it?

Gary Winslett: The biggest thing people don't think about is how much imports are inputs into other manufactured goods.

I grew up in Alabama. My dad worked in one of the steel plants in Birmingham—the kind of hard-hat job that they make political ads about, the kind protectionism is supposed to be for. They hated the Bush steel tariffs. The reason is because they imported raw steel and did all the value-added part of the process there to make specialty steel items for all kinds of American companies.

Even in steel processing in Alabama, you're not actually competing with imports—you're using imports as inputs. And I think people forget that all the time.

They significantly overestimate how many jobs compete with imports, rather than use imports to create higher-value-added, higher-paying American jobs—even in manufacturing.

Liz Wolfe: There's also an interesting thing that I've noticed in our labor data of the last few decades which is the, sort of, the explosion of service-sector jobs.

What do you make of that—that a bigger chunk of the American economy is now in the service sector compared to manufacturing? Compared to what it used to be three decades ago.

Gary Winslett: That's fine. We want people to have good jobs, and we shouldn't be particularly picky about exactly which sectors those jobs are in.

Here's a service-sector job that's working-class and pays well: nursing. Physician assistants, right. That's hard work, work with dignity, and it pays well. If someone's working as a nurse, I don't see why we should be upset that they're not in a ball-bearing factory.

Liz Wolfe: Well, the thing I think—go ahead Zach

Zach Weissmueller: I was just going to say, that sort of work is only going to become more and more prominent, especially with the demographic shifts we're projected to see in the coming years. But go ahead, Liz.

Liz Wolfe: The thing that I think is interesting is that I think you're right—we should be values-neutral, sort of agnostic, about in which sectors people are choosing to seek employment.

The thing that's so puzzling to me though is that our political discourse hasn't really started to reflect the changes in how employment looks in America. And so it's odd to me— do you have any sense as to why, you know, manufacturing? And you know, our industrial capacity has gripped people's imaginations and gripped our political discourse to a far greater degree than like the service sector. 

Gary Winslett: I don't even think it's the actual work in the factory.

I don't think people, when they stop and think about it for a minute, actually want to go back to dirty, mind-numbing, difficult, dangerous work.

I think what they miss is affordability.

It's not always accurate, but there is something to the fact that things used to feel more affordable. You could have—usually a man— you could have one person in your household working, and the other being part-time or staying home. And you could afford that.

That's what people are missing. So, if we want to actually help people out, instead of trying to make them go back into jobs that we have now robots do now anyway, which won't even work, we've got to work harder on making life more affordable.

Zach Weissmueller: Yeah. And I mean, that seems to be part of the story here with the rise of the Southern states—the population influx. A lot of that seems to have a lot to do with affordability, which we'll talk about in a second.

But I want to ask you one more question on this topic. Is classic political economy at play here? Where we've got these Rust Belt states—when you add them together, they are the swing states in any election. So, you've got really concentrated benefits for people yearning for their industries to be protected, even though it's kind of like the Iowa example, where every candidate goes out there and talks about how great ethanol is—even though none of us really need it as fuel in our cars.

Is that a component at play here, from your vantage point?

Gary Winslett: I don't think it's a component. I wouldn't chalk all of it up to that. I think that this is one of these things that has a bunch of factors going on, but I think it would be inaccurate to say that that's not playing some role here.

Liz Wolfe: J.D. Vance was born in a steel town in Middletown, Ohio. At the RNC, he spent a lot of time emphasizing his Rust Belt roots. John, can we roll that?

J.D. Vance (clip): "I grew up in Middletown, Ohio, a small town where people spoke their minds, built with their hands, and loved their God, their family, their community, and their country with their whole hearts.

But it was also a place that had been cast aside and forgotten by America's ruling class in Washington. To the people of Middletown, Ohio, and all the forgotten communities in Michigan, Wisconsin, Pennsylvania, and Ohio—in every corner of our nation—I promise you this: I will be a vice president who never forgets where he came from."

Liz Wolfe: Obviously, this plays well. But it's not just at the RNC. The Trump administration has also spent a lot of time defending their new tariff policy, specifically saying, "This is going to revitalize Rust Belt manufacturing."

Even Vance, the vice president, still lives in Ohio. Of course, it's hard to imagine that J.D. and Usha Vance would live in Ohio if it weren't for J.D. Vance"s political aspirations and him wanting to seek that Senate seat there and now ascending to the vice presidency.

Do you have a sense of why is it that Rust Belt nostalgia is so baked into our politics?

Gary Winslett: I think part of it is that story that was just mentioned—these are purple states.

Part of it is that, for a long time, the American South didn't have the same kind of cultural power that its numbers and size might suggest it should. There are all kinds of historical reasons for that: accents, snobbery, and racism that persisted through the '60s and '70s.

Liz Wolfe: The legacy of hookworm too—unironically.

Zach Weissmueller: I mean if we're talking about— if we're including Texas in the South here…

Gary Winslett: Sure. 

Zach Weissmueller:…Florida and Texas are the No. 2 and 3 most populated states, to your point.

Gary Winslett: It's funny though because I remember listening to J.D. Vance say that at the RNC, and it drove me a little nuts.

Because I have blue-collar roots as deep as his. I lived in a mobile home until I was 11. My dad worked in a steel mill. My uncle helped build the first auto factory in Alabama.

It's very frustrating to me that the blue-collar story in Ohio has turned into "We've got to make all the toasters here—even if they cost $300."

Rather than, "actually there are blue-collar people across the South who work for Toyota, and Honda, and Mercedes, and Nissan—and that's just the car industry. I could name a dozen other industries where working-class people across the South do really well. The region used to be poor, and now it's not. And globalization is a big part of that.

Zach Weissmueller: You mentioned in your piece that unionization plays a big role here. Here's a map that shows union membership rates by state as of 2024. You can see this crosshatch pattern shows higher union membership in Michigan, Pennsylvania, Ohio, Illinois. And then less in Florida, Mississippi, Alabama—some of those states are below 5 percent of unionization.

So, right-to-work is a red-state policy. Trump, though, is now realigning the GOP and he's aligning himself with big labor.

What would happen, based on what we've seen unfold over the past decade, if Trump started pushing a federal law— a Bernie Sanders federal lie. Bernie Sanders has this law called the PRO Act where it would override state right-to-work laws? Being Trump, I could even see him issuing an executive order to that effect if he went full "boss union guy."

What kind of effects would that have going forward based on what's happened in the past?

Gary Winslett: It would be an economic declaration of war on the South.

South Carolina's political leadership is baffled at the economic leadership of the Trump administration. Right now, both senators from Georgia are Democrats. North Carolina has trended blue.

The Democratic Party —I would hope— going into 2028, knows it needs to compete hard across the Sun Belt and the South.

If the Trump administration's economic policies are really, really bad on the South and the Sun Belt, that opens up a big terrain for a Bill Clinton–type of Democrat to do really well there. I think a Bill Clinton figure could take major advantage of the Trump administration doing PRO Act kind of stuff.

Zach Weissmueller: On one level, it's kind of obvious that unions drive up the cost of labor—but what effect have right-to-work laws actually had? Why is that such an important component of the rise of these kinds of jobs in the South?

Gary Winslett: Part of it is that right-to-work laws in the Rust Belt really drove up a lot of legacy labor costs. Pensions were very, very high, and so were many health care costs.

But it's not just the cost—it's the threat of strikes and the threat of disruption to production that's really worrisome for capital. If you can locate in North Carolina, which has a 2.4 percent unionization rate—most of that is in the public sector— that's teachers, firefighters, and cops, not in private sector—or in South Carolina where it's 2.8 percent, or Georgia where it's under 4 percent, that just makes more sense.

Then what you can do is you can pay really well, you can offer good benefits packages, and most of your workers don't want to join a union anyway.

Famously, the Amazon factory in Bessemer, Alabama, has had a couple of votes as to whether or not to unionization—and the workers themselves voted it down both times.

There are all kinds of things you can do to help your workers out, maintaining some of that flexibility. Capital would much rather do that. If you've got the money to build a new factory, do you want to go somewhere where they're going to credibly threaten to shut down production? Or do you want to go somewhere where they're going to be a bit more collaborative?

Liz Wolfe: To steelman the argument—and to LARP as a leftist for one second—what do you make of people's objection that coal miners in 1960s West Virginia really do need their union protections to ensure safe working conditions? Is there legitimacy to that argument?

Gary Winslett: Sure. In 1960, in a coal mine? By all means. My God, the 1880s in U.S. factories were awful. Thank God we had unions then.

Context matters a ton.

In some contexts, the unions are absolutely essential. Are they essential in all cases, everywhere?

Certain workers have the ability to decide for themselves if they want to join a union or not. In 2025, we're not mostly working in 1960s coal mines. And in this context—

Zach Weissmueller: I mean I don't think you even need to take a leftist approach to grapple with this issue. Because even people who call themselves left-libertarians would say unionization is free association.

And right to work, the unions might make this argument that these kinds of laws are preventing our ability to collectively bargain. We have a right to— freely associate, create a union, and then have a close shop. And the rights of work laws are somehow undermining that.

Do you buy that?

Gary Winslett: Then have a closed shop. That's the issue. If you want to join a union—knock yourself out. Have a great time. Do whatever freedom of association you want.

But individuals know their own situations best. They should determine their own work situations best.

I'm sure there's a stereotype of Middlebury College professors out there, but I swear to you and your listeners, I do not know your situation better than you do. If you want to work under a given context between you and your employer, that's you guys. That's not for me—or a government official to tell you that you got to join a union to do that.

Liz Wolfe: Isn't the classic objection to this, that when you have 80 percent of the workers who are in a union and 20 percent who are not, when the union does secure greater protections for the workers, the non-unionized people who haven't paid their dues end up benefitting from that? 

Like it make sense for it to be all or nothing?

Gary Winslett: I don't know about that. I just don't. To me, this is sort of a core issue of economic liberty, right? You should be able to live where you want to live. This is why I don't like NIMBYism—because it blocks housing where people would like to live. You should be able to work under conditions that are satisfactory to you and your employers, above a certain minimum level. We're going to have child labor laws, we're going to have worker safety—

Liz Wolfe: Oh, you're in favor of child labor laws?

Gary Winslett: Yeah, I haven't been hurt…

Liz Wolfe: On this podcast, we support putting kids to work.

No, I think—well, here's the thing I'm really curious about. Your argument is fascinating—this idea of China isn't really to blame for the decline of the Rust Belt. I'm curious about when exactly did this transition from the Rust Belt being the heart of American manufacturing to the South presenting this really viable, competitive force and pulling those jobs away? Could you map when this started and when it really caught on?

Gary Winslett: Okay, so it starts a little bit in the '80s, but it really catches on in the '90s. The '90s is really when you start to see the South take off, for all the reasons I laid out in the article.

We've talked about unions a bit, but it's not just right to work—it's cheaper electricity, it's in part about fossil fuels, part of it is permitting, part of it is cheaper housing. Since 1993, a whole bunch of red states have been building a lot more housing than pretty much all the blue states.

It's about immigration. This is something Republicans don't want to acknowledge—that immigration has helped the South grow much more quickly than the Rust Belt.

So, it starts in the '90s, but really takes off in the 2000s. Then you get to the 2008 recession, which kind of puts a break on it for a second, but then it really shoots back off starting in the mid 2010s up through today.

If you look at employment charts—I kind of wish I had some in front of me. If you look at them across different states, they look radically different. In a lot of the Southern states, if you look at an employment chart,  you see this upward trend in the '90s, you see more upward in the 2000s, a big dip in around '08, and then from 2015 to today it just takes off.

It's not just Texas and Florida—but the Carolinas, Alabama, Georgia, Tennessee. That's the chronological story here. It looks very different from the Rust Belt states that have been much more slowly growing or been basically flat. 

Liz Wolfe: But why didn't they respond to this by noticing that the jobs were being stolen from them?

Why didn't Ohio or why didn't Pennsylvania look around and say, "Holy cow, we have to emulate some of these approaches, we have to change policy in order to bring this back"?

Gary Winslett: I think part of it is—I don't want to say complacency— there's a way in which Southerners see new factories popping up and see it as validation, as part of modernization and growth.

It's like, "Wow, we were looked down on for so long, and now people want to invest in us. This is awesome."

Whereas in the Rust Belt there's sort of a confusion about what exactly to do. Because they don't really want to adopt right-to-work laws and some of the other things—-here was just a kind of paralysis around some of this.

Zach Weissmueller: I want to talk in a little more detail about the housing component of this. I recently moved back to Florida a few years ago, and over and over again, meeting other people who moved recently—that the price of buying a house or having a comfortable place comes up again and again.

Florida, now, the real estate market has gone up, but they also build quickly.

Here's a chart that shows annual new privately owned housing units authorized by state as of 2023, according to the Census. You see Texas, Florida with these big circles, North Carolina with a way outsized circle, too.

You notice that the speed of construction, especially coming from California—

We know a lot about the housing problems in the big coastal cities—California, New York—but what distinguishes housing and building more generally in the South versus the Rust Belt?

Gary Winslett: This is one of those areas where I'd say the Rust Belt's actually not too bad.

If you go into Michigan, they build housing pretty well. The problem there has been demand. So this is one of those areas where the story is about the South doing really well—not that the Rust Belt is doing terribly.

Zach Weissmueller: So you're saying the South had growth for these other reasons, and they accommodated that growth with more housing—in a way that Silicon Valley boom did not.  

Gary Winslett: Correct. That is the right way to read that.

Liz Wolfe: These are really inconvenient facts for blue-state Democrats.

But then you gestured at this before—the really inconvenient truth for the entire MAGA crowd is that immigration is also a huge part of the equation. Immigration to the South, specifically, has been huge to their success.

Explain how this dynamic has played out and what those migration trends really look like.

Gary Winslett: Obviously, there's been a lot of Hispanic immigration to Texas and Florida. That's a big part of it.

And that's who's building the housing. I don't think it's news to anyone who's been around a construction site in the Sun Belt.

That's promoting new housing, but it also promotes growth because immigrants are also customers. They're also people who buy goods and services locally. That really helped the growth of the South.

Liz Wolfe: Also, in some cases, these are people who have higher birth rates than native-born Americans, depending on the demographic group.

There are a lot of childless millennials in Brooklyn. But let me tell you—Latino immigrants in Texas are popping out a few more kids than my New York City cohort, unfortunately…

It's not unfortunate that they're having a lot of kids. It's unfortunate that the Brooklynites are so cringe. That's all.

Gary Winslett: I knew what you meant.

I get really frustrated when people in the MAGA crowd do not want to recognize the wholesomeness of hardworking people wanting to come to America. And I also get really frustrated when they don't want to realize how much value is added by these people.

And it's also not like it's a huge cultural challenge. I get why, maybe, there are sort of cultural challenges in Europe.

But a Catholic family moving from Guadalajara to San Antonio? It's just not something to get super worked up about.

It promotes growth. It makes America stronger. It makes our economy go faster. It's fine.

Liz Wolfe: Why is it not something to be super worked up about?

Gary Winslett: I would say it's not something to be super worked up about economically or culturally.

On the economics, it's promoting growth, again. Immigrants are customers—they add goods and services. When a student comes from abroad to study at Middlebury College, that's someone paying tuition who helps fund my salary. That's not a threat to me. Right.

Immigrants are customers just as much as they are workers. And when they do work—like in housing—they provide goods and services that we all need. American meatpacking would shut down tomorrow if it weren't for immigrant labor.

Liz Wolfe: During Trump's first term, we had entire meatpacking industry little towns where when you had ICE raids, they basically shuttered overnight. And I think people—for whatever reason—this didn't make headlines to the degree that I had expected. But it really devastated a few small-town economies, especially in the South and Midwest.

Gary Winslett: And I don't think it's a challenge culturally either. We're this big, global country. We've got taco stands all over the place. We've got taco trucks. Not just food—we've got cultural influences from all over the world. There are amazing Netflix shows from abroad. I was just watching Money Heist from Spain about a bank robbery.

We're a global country. And I don't know how to tell people, but if you're not on board with that—that ship sailed 200 years ago. We're just going to be diverse, and that's what makes us awesome.

Liz Wolfe: A lot of our viewers, a lot of our commenters get pretty incensed about the issue of immigration. This is your opportunity to convince— to make a pitch to them.

There's something that I'm really noticing which is this undercurrent within libertarianism where there are a lot of people who seem otherwise totally libertarian, but there is this deeper frustration with what immigration policy has been under Joe Biden and certain antagonism— They'll use "open borders" as a slur, a derogatory term. 

To take their objections really seriously, they seem to believe that the shared values, shared cultural touchstones we used to have will no longer be things that we have in common. That it will become harder to communicate with our neighbors and to establish commonality, that our communities will descend into total disarray. But also there really will be an economic impact from lots of people coming in and doing jobs that could be given…earned by native-born Americans—and I think there's also a little bit of a crime and public safety concern.

Zach Weissmueller: And housing—people are worried about them. We've got a housing shortage, and so the immigrants are going to fill up the houses.

Liz Wolfe: One objection that is sometimes persuasive to me is the specific type of immigrant you're talking about. And maybe this is an argument for more careful screening and vetting and having a national conversation about what kinds of immigrants we want to let in.

How would you swat away or convince somebody who really does have some of these fears within them? 

Gary Winslett: Let me start with the objection that I think is the strongest and work down. What is just border security?

People don't like seeing chaos at the border—and that's perfectly legitimate. I think that is a totally reasonable objection—that a border needs to be orderly. I think we should have quite a bit of immigration, but you want it done in an orderly fashion—not just "whoever can sneak in."

So that's the first objection. Which I say, "I hear." We've got to fix that.

The second one down is talk about skills-based immigration. I think you can make a lot of headway talking people through having high skilled immigrants, particularly in certain sectors where there's a clear and identifiable need. 

Earlier this year, Tennessee became the first state that is giving out, basically, special licenses for qualified foreign doctors to come and provide services, underneath the agent of a clinic or hospital.

So, if you're a doctor in the U.K. and you're tired of making £18 a day working for the NHS, and you want to come work in Nashville—come on. That's Tennessee's attitude.

I think you can get a lot of public support for higher skilled immigrants, particularly in sectors with clear needs.

So that's where I would start there, is on border security and on skills. And in terms of public safety I'm really sympathetic to that. But, to me, there's not this like division between immigrants and native born people on public safety. If somebody is a public safety problem, I don't particularly care if they were born in New Jersey. I want the police to make public areas safe.

The subway cannot be a de facto homeless shelter. Public use of hard drugs is bad. I don't want needles in the park.

That's just like a separate issue from immigration. Because I think that's a problem no matter who's doing it. 

 

Zach Weissmueller: I want to pick up on that example of a doctor coming here to make more cash. That's generally a good magnet for individuals moving to the South and for businesses relocating to the South.

Famously, Tesla relocated from California to Texas.

We haven't really talked about the regulatory, permitting, and tax climate of the South versus the Rust Belt. What does that look like?

Gary Winslett: The South is typically just much more business-friendly. If you seem like you want to do something—you know, build a cool business—the South and the Sun Belt are much more likely to say, "Okay, how do we help you out?"

Whereas a lot of blue states, particularly California and some of the ones on the East Coast, are really skeptical that a business is up to no good. And that just creates a totally different environment for building in.

So like Arizona has great regulations around AVs—or autonomous vehicles—and so that's what has helped, like, Waymo and some of these other companies really open up in Arizona early.

I can point to you all different kinds of examples.

Wind energy—one of the examples I had in the article is wind energy in Texas. It's really, really easy to build. It's hard to build in Ohio.

And so, just like what you permit—and how quickly you permit it—matters too, for businesses.

Zach Weissmueller: Is it even possible — not to be a total pessimist about it —  is it even possible for the Rust Belt to be competitive with the South at this point?

Given, the sort of entrenched—once you have put down roots and set up shop—this was a decades-long project for the South to build this robust economy. Is it kind of over for the Rust Belt?

Gary Winslett: No, I don't think so. That's much too bleak.

I don't think you're gonna rebuild Erie, Pennsylvania, in the exact same manner it looked like in 1977. But I don't think that these eight states around the Great Lakes are forever doomed to have  a bad economy.

There's all kinds of service sector work that can be done. They've got all kinds of natural advantages. The Great Lakes don't just have plenty of fresh water—they're gorgeous.

Outdoor recreational tourism—if you go to, like, Charlevoix, Michigan, where's the money coming from? Well, it's not coming from a factory. It's coming from the fact that, like, being in Charlevoix, Michigan in the summer is awesome.

So I just—I think it's much too bleak to say, like, "Oh, well, the factories don't provide the employment they once did; therefore, the whole region is sunk." 

I just wouldn't go there.

Liz Wolfe: What's the roadmap look like for them though?

Say you were the governor of one of these states. What would you start to do, that would be politically realistic and viable, to change the equation?

Gary Winslett: You've got to look at what your state naturally has an advantage in.

Why does Memphis have so much freight/airplane infrastructure? Because of where it's located. You can get to the East Coast, West Coast, the Midwest. You can get all over.

I just mentioned Charlevoix, Michigan. In Pennsylvania you've got a ton of resources there. You've got one of the biggest cities in America on the Eastern part.. On the West, you've got Pittsburgh, which has this steel past— I mean it's the Steelers for a reason, but it's also got some great colleges. It's one of those walkable, fun small cities. It's got the bones of a great place.

Illinois has Chicago, which—for my money— Liz, I know you're from New York. But for my money…

Liz Wolfe: I'm from Texas! I live in New York.

Gary Winslett: Chicago—at least to me—is this amazing global city that's pretty affordable, right?

Play to your strengths. And your strengths aren't always the factory.

So that's what I would do, whichever state you're looking at. They've got strengths. None of them are totally without strengths.

Even West Virginia—you can create more mountain biking, you can create more tourism. It's beautiful. It's rugged.

There's nowhere that has no strengths. So I would lean into those.

Liz Wolfe: I like your very obvious deep appreciation and respect for these places. That's actually very cool.

This is a frustrating part of, for whatever reason in American politics, it's like, I wonder whether people in these places get sick of politicians either pandering to them or using them as negative examples, as opposed to actually people paying attention to what are these actual communities that you hear about so often…

Gary Winslett: One hundred percent. That's something I used to practically scream all the time.

In the late teens, it seemed like the superstar cities were pulling away from everybody else, and I used to get so frustrated when everybody between, like, Berkeley and D.C. was just lumped into one. I'm like, "You guys, these are people with names who live in places with names. Just recognize that and try to deal with that as they are." Yeah—I couldn't agree more.

Zach Weissmueller: It seems, from my point of view, that it's sort of gotten heightened even more in the post-COVID world, in that COVID kind of reinvigorated federalism, which I think has a lot of good things about that, there's interstate competition.

But also, the rivalries maybe have turned into caricatures of these different states. And it's good to have competition and rivalries, but, you know, the kind of beauty of the federalist system is that you're in competition, but you're still kind of on the same team in a way.

And in that spirit, let me pull the lens out even a little further to talk more about global competition.

The Wall Street Journal had this really nice visualization of the U.S. trade balance. And you can kind of see in that story that it's not really a story of us not exporting things anymore. It's not like our exports have collapsed—they've gone up since the '80s and then sort of flatlined, went down in 2020.

It's the imports that have gone up and created the trade imbalance, as it were.

What do you think explains this general dynamic?

Gary Winslett: Oh God. I'm going to really have to contain myself since I don't have a captive student audience like I do with my students.

A couple of things going on.

One, we're less good at measuring services than we are at measuring goods. Somebody comes down from Quebec to ski for the weekend here in Vermont—we're not nearly as good at knowing that that amount of money crossed the border than we are with goods.

Zach Weissmueller: Okay so the services here are visualized as this darker gold at the top and you are saying that maybe that in reality that bar would be even higher.

Gary Winslett: Yes. International trade scholars—such as myself—think those service numbers are underestimated in important ways. That's the first part.

Zach Weissmueller: Are service imports also underestimated?

Gary Winslett: Yes, but if you notice our service exports are bigger than our service imports. And if you think both of those are underestimated, it's the exports that are going to get larger.

Zach Weissmueller: So what's just a really strong example of a big service export from the United States?

Gary Winslett: Higher education. If a student comes from abroad, you know, they pay good tuition. That's me doing a services export.

Tourism is a huge services export. I just mentioned the example of people coming down to Vermont. We get a lot of tourists in the United States.

So those are two of the ones that I think are really intuitive. They're not the only ones, but they're good examples.

Liz Wolfe: What are other more obscure ones? Like what's a services export that we're not thinking of? 

Gary Winslett: You might not be thinking of the ways in which services get wrapped into manufactured goods now.

So it used to be the case that if you needed a hearing aid, you went to an audiologist, and it was this handmade thing. It was really expensive, and it took all these steps.

But now, you go to your audiologist for a hearing aid and they'll take a 3D scan of your ear and then send it to Poland. And the sending of that is basically a service.

In Poland, they'll make you a unique, 3D-printed hearing aid at these big production facilities they have there. Then it gets internationally shipped back to you. And it's a fraction of the cost that it used to be.

But that's counting as a goods import for us, in ways that are much easier to track than the service export that went over there.

Liz Wolfe: That's a really good example of a really niche product I wouldn't have thought about.

Gary Winslett: And hearing aids are way cheaper than they used to be. People don't realize it, but they're a fraction of the cost of what they used to be.

Liz Wolfe: You can buy them at Costco!

Zach Weissmueller: So the premise of the Trump administration's policies is that, just to bring this back up one more time, that black line going down, which represents the trade deficit, is inherently bad and that is what he is trying to fix with the tariff regime. The tariffs were not reciprocal in that you put a 50 percent tariff, we put a 50… 

It was actually meant to rebalance that trade deficit in a way. 

Gary Winslett: What I am saying is that this is both overstated and not a huge problem.

Zach Weissmueller: Why is it not a huge problem?

Gary Winslett: So it's not a huge problem because we're getting goods and services we like—like hearing aids. And part of it is, like I said, overstated. But another part of it has to do with the fact that the dollar is the world's central reserve currency.

So, let's say you want to have savings for your country because you need to exchange money with others internationally, right? Like, if right now in your wallet there were a whole bunch of Thai baht—you can't really do much with that candy because nobody around you wants Thai baht.

But everybody around the world always wants dollars. And so, wherever you are in the world, it's always useful to have a bunch of dollars on hand.

Okay, so how do you get dollars? Well, you exchange them for what you make. So if Madagascar sends us vanilla and we send them dollars—I fail to see how we lost on that.

Zach Weissmueller: Well, the argument that the Trump administration is making is that we do need industrial capacity. I mean the examples that you often hear are chips, for instance, we can't be so reliant on…

Gary Winslett: A couple of national security areas, defense procurement, semiconductors—I'm willing to accept these arguments.

It does not make sense to be reliant on China for anything we need for our aircraft carriers. I buy that.

What I disagree with is that that set of arguments applies to 99 percent of the stuff you want to buy at Walmart.

Zach Weissmueller: This wouldn't be the policy that you would pursue if your entire agenda was to secure things that your country needs for national security purposes. It would be much more targeted. 

Gary Winslett: Exactly. You wouldn't go around alienating Canada and Europe and all of our other allies if you were actually trying to do a coherent China-containing strategy.

Liz Wolfe: Also, I mean, the CHIPS Act was already passed—we've already gotten semiconductor supply chain sturdiness into play.

And there's a certain amount— all of these industries need transition time if you actually want them to be successful. But attempting to sort of cripple them—you're essentially crippling them and thwarting their ability to actually build this type of capacity out.

A few weeks ago, Commerce Secretary Howard Lutnick said something very telling about Trump's own industrial policy goals.

Can we roll that clip, John?

Howard Lutnick (clip): "It's time to train people—not to do the jobs of the past, but to do the great jobs of the future. This is the new model. Where you work in these kinds of plants for the rest of your life, and your kids work here, and your grandkids work here. You know, we let the auto plants go overseas. Right now we…"

Liz Wolfe: This sounds—to speak candidly—very bad to me. This is not the future I want for my children or grandchildren.

But we see a lot of right-wing influencers playing up this nostalgia and talking about how great this would be.

What is wrong with this romanticism?

Gary Winslett: I think it's just  totally focused on the wrong sector. Which is manufacturing instead of construction.

If you want to focus on how we have good blue-collar jobs, they exist—and they're in construction, not manufacturing. I think there's a lot to be said for—particularly if your kid is not, you know, the most academically oriented, which is totally fine—that they might want to be an electrician or a plumber.

You know, I've got a six-year-old daughter. If she becomes an electrician, I'm proud of that. That's really cool.

Liz Wolfe: It's a great-paying job. It's very dignified, solid, and stable.

Gary Winslett: It's great, right? And so, like, part of me deeply sympathizes with this instinct of where are we going to create good jobs for people who maybe aren't A students but are smart people—solid people, hardworking, nice people?

There's plenty of good people who aren't straight-A students. So how do we make sure they have good jobs? I'm extremely sympathetic to that.

I just think they're totally looking in the wrong sector for how to do that.

Whether you're talking about the Rust Belt, the South—wherever—automation has come for a lot of those manufacturing jobs. Not all of them, but a lot. But, like, you're not going to automate doing the plumbing.

And so I would just—if I were sitting down with some of these right-wing influencers I would say, "Stop focusing on manufacturing. Start focusing on construction."

 

Liz Wolfe: Yeah, there's something really frustrating about the state of our political parties right now—which I'm sure is an observation both Zach and I have made on this show before.

Specifically, the fact that it feels like, if you pay attention to the GOP, you get this narrative about the importance of dignified work—but it's not even really about that. It's about a very specific type of work, and their attempt to achieve it via a very central plenary means. I don't think they'll actually work. And it will end up having all these unintended consequences on these middle-class and poor Americans who they're allegedly trying to help.

I think their financial situations are actually going to be worse off.

But then you look on the left and there appears to be this really frustrating elitism everywhere you look. Where the answer that we've fed America's youth is: you have to go to a four-year university, you have to get an education, you might have to take out obscene amounts of student debt to get it.

And there's really not as much emphasis on trying to make sure that we sort of maintain this idea of the American dream is within reach. 

Upward mobility is really important. You need to be realistic, and look at your budget, and look at your skills, and look at which industries actually need workers, and figure out a path. And it's very reasonable to start thinking about that from a younger age— fifteen, sixteen not twenty-two, twenty-three.  And like, for whatever reason, both the right and the left have lost their ability to actually be able to say, "look, dignified employment, hard work, your ability to raise your own socioeconomic level, this matters so much. This is something that everybody deeply cares about. We need to make sure that we give people, you know, appropriate realistic paths to do this. 

Do you, like, how did this…?

Gary Winslett: Amen. First of all—amen. I agree with all of that.

Liz Wolfe: But this used to be something our politics emphasized. I feel like I'm very '90s-coded when talking about this—but where did we go astray?

Gary Winslett: That's a good question, because I agree with everything you just said. And also feels very '90s-coded—but fine. The '90s were right. If that's '90s-coded, so be it.

Where did we go astray?

I think that for weird reasons, each party lost some of its commitment to upward social mobility as one of the core values….

Liz Wolfe: That's so sad.

Gary Winslett: Oh, it's depressing as all hell.

So let me start with the left and then we'll move to the right.

On the left, I think you got a lot of populism that was more about tearing down the 1% than about trying to really focus on that upward mobility, and they treated everything as very zero-sum.

There's also—you got kind of bad versions of equity thinking where you needed, like, a central planner to be, like, giving the short kid boxes and, like, the taller kid gets fewer boxes. Like, I don't know if you've ever seen that meme, but, like, that kind of thinking—it was very Harrison Bergeron, like tall poppy syndrome kind of thing going on.

And on the right, you got this, like, weird way in which upward mobility itself came to be seen as kind of like a selling out, or as a moving away from your small town. It was really odd to see. But it—I think part of it also came from a kind of place of cultural populism.

And I think it was just really odd, but also sad and destructive as a dynamic. And I'm really hoping that we're moving away from that.

Every now and then I'll see something that gives me hope, right? Like when doing a job on the side started to be called a side hustle—that was, like, all right, I could see some of that, like, you know, grindset mindset kind of thing coming out.

And even in our darkest days we didn't totally abandon it. We always had, like, Shark Tank. Like, I loved that show, right? That was just, to me, like the ethos of, like, you're gonna create something cool and go be an entrepreneur.

I think it's that instinct in American politics—it's dormant. I don't think it's dead.

Zach Weissmueller: Yeah, and I see that in that Lutnick clip. It's so rich having this multimillionaire, maybe billionaire, sitting there saying, "You and your grandkids will work these kinds of jobs forever."

I don't know if Lutnick has ever set foot on an assembly line or anything before.

And Liz was mentioning, these right-wing influencers romanticizing certain kinds of jobs and degrading other types of jobs. 

We pulled this one from Milo: 

"Men are depressed and addicted and broken because they have nothing to do. They get no stimulation or satisfaction from BS email jobs. I'm telling you, white Americans will love working in factories again—making things in the image and likeness of God the maker."

This is from a guy who spends 99 percent of his time on Twitter talking about how you're going to go toil in the factory.

You said you have some hope—where is the hope for some sort of revival on either the right or left in aiming for something other than this completely fabricated nostalgia?

Gary Winslett: I think political parties have a better ability to reflect on the ways in which they are going wrong after they lose.

So I don't see a whole lot of pullback from Republicans until they lose.

On the Democratic side, I think it's wide open. There's all kinds of experimentation, arguments going on right now about what the party needs to be moving forward. I think a really helpful intervention in that has been a lot of the abundance discourse. Really good.

I think it would be to the good for Democrats to try to really think hard about: how do we win in Georgia and Texas and Florida and Arizona and North Carolina?

I think that that's gonna move the party in an economically moderate direction that can be really helpful.

So we'll see.

I think Donald Trump being all about tariffs has maybe reawakened—albeit via negative polarization—some interest in free trade on the Democratic side.

There's been a whole lot of Democrats who have been opposed to Trump's tariffs.

The Center for New Liberalism just came out with a whole big infographic yesterday showing who's been great on it—and who's being less good.

Liz Wolfe: But do we have any sort of, I'm thinking of like, John Fetterman, who's sort of not doing so great these days. I mean health wise, but do we have any actual sort of market embracing, market loving Democrats who are good at making speeches and to have a political future ahead of them? 

Like who, who is there? 

Gary Winslett: I would put Jared Polis there as my first one. He's good on tons of this stuff.  

Liz Wolfe: But nobody thinks— I should tread lightly—Jared Polis doesn't have extreme, you know, once in a generation politician sex appeal. Like he's not—

Gary Winslett: He's not the next Obama.

Liz Wolfe: Yeah, right?

Gary Winslett: Okay. We don't get Obamas very often.

Liz Wolfe: We were talking about Bill Clinton earlier. And to be clear—because I'm sure commenters are talking about this—I'm not talking about literal "sex appeal." I mean someone who has real promise.

Sometimes people point to Pete Buttigieg, and he's all right at talking, but he's not profoundly talented. Or people will point to Cory Booker, and it's like, yeah, but again, these aren't Bill Clinton, these aren't Barack Obama type figures.

Do we really have anyone?

Gary Winslett: I don't know. It's a long way, away.

Zach Weissmueller: Yeah, and the political mold is— it doesn't even— it can be a total outsider. I saw someone saying Ezra Klein should run. Maybe that's the next…

Liz Wolfe: I guess…

Zach Weissmueller: What a great ray of hope for the Democratic Party.

Liz Wolfe: He's notorious for connecting with that classic Rust Belt, middle-American voter.

Zach Weissmueller:Yeah.

Liz Wolfe: Ezra Klein, man of the people.

Zach Weissmueller: Well, they're ceding that to the MAGA coalition, they're going to win the South and West.

Liz Wolfe: Let them do it—as your client John Fetterman did.

Zach Weissmueller: I do want to ask you about—it's a related topic—but something that I know you're working on: remote work. Because that kind of gets to this divide between the much-maligned email jobs and the factory jobs.

You're working on something about policies that would actually enable remote work even more so. What are some of those, and why are you interested in getting more people to do the email jobs?

Gary Winslett: So first of all, remote work is great because it gives individuals more options in how to do their work and organize their family life.

My wife works in medicine, so she's often got a pretty, like, set schedule. So if somebody needs to take my daughter to the dentist, it's usually me. So it's great that my job is more flexible.

When you've got somebody in the household with that more flexible job, that makes family life a lot easier. And so I think remote work is fantastic on those grounds.

It lets people live—gives people more options of where to live. You only have to go in one or two days a week. Maybe a longer commute is less of a hassle. If you're totally remote, you can live wherever you want.

You know, if you can live in Ohio on a New York City salary—you're rich.

So, I think it's great for helping people live wherever they want to live and lead the kind of lives they want to….

Zach Weissmueller: When you say that, it also makes you think, that could be one component of reinvigorating Ohio—if people can go back there and work a decent-paying job.

Liz Wolfe: They've doled out some digital nomad incentives for people to move to West Virginia. That was like a sort of 2021 policy, maybe, that the city rolled out. 

Gary Winslett: So, I think remote work is awesome.

I am not particularly sympathetic to telling people who are providing for their families that they're uncool because they're working from home rather than in the depths of a coal mine or something. 

That seems weird to me. 

Zach Weissmueller: Is that the new, impassable divide—between the virtual and physical jobs? 

Is that the real class divide?

You hear people talk about the "laptop class"and so forth. Is there something off about that where you've got the people working in the cloud and the people doing things and there's some divide that can't be bridged. 

Gary Winslett: I tend to think that framing politics in terms of social class is usually more unhelpful than it is helpful.

I think it pits things in these really zero-sum ways that don't need to be.

Right. So, like, let's say you have the person who is more educated and gets the remote job, and they work in—I don't know—like, you know, we picked Ohio earlier. Let's just stick with that.

Let's say that they moved to JD Vance's old Middletown in Ohio. Well, okay. They still go to the restaurant and buy dinner, right?

They still go into the grocery store. They still get haircuts. They still need all of these other services.

And so, when that remote worker moves to somewhere like that, they're a net economic benefit to all the other people around them—not a drain.

I don't particularly like framing it in terms of, like, social class.

Liz Wolfe: There's also an interesting component to this, which is that those of us who work in the "email lines" would have a very hard time legitimately transferring those skills to being plumbers or electricians.

But there's also an interesting component to this, which is—email jobs, quote-unquote—there's a lot of different things that are encapsulated in that term. And there's really nothing stopping people from poor backgrounds from attempting to get those jobs.

In fact, it's not like they're all the most high-skilled jobs in the entire world. There really aren't—

Especially when you remove college degree requirements from considering the application of people who are applying to these jobs. And the more we do that, it's almost like so odd that we don't focus on the– just remove the barriers on the front end and allow people to sort of improve whether or not they can succeed or fail and allow employers to just take a risk on people if they want to. 

Gary Winslett: I think that would be great.

I don't love the government requiring it, but I would love to see a cultural move toward companies having fewer degree requirements. I think that would be nice.

Liz Wolfe: Yeah, who's to say an 18 year old with no college degree couldn't be an excellent marketer? And in fact have a little bit more of this like digital need of fluency in some of these realms? 

Like, I don't understand TikTok, but somebody who's a decade younger than me sure as hell does. 

Zach Weissmueller: So what are some of the other barriers, besides that one that would accelerate this? 

Gary Winslett:Yeah, some of the other barriers are occupational licensing.

A lot of occupational licenses are state by state, and there's not nearly enough reciprocity on this. So you get a license for a job in one state, and it doesn't carry over to the next state—even though it's the same job.

So I think a lot more reciprocity around occupational licensing, and cutting down on some occupational licensing that isn't necessary, would also be helpful.

So that would be one that would help.

Liz Wolfe: Zach, I can't help but theorize that some of the anti–email job discourse surely just has to do with the sort of memetic nature of Twitter and the sort of right-wing internet, where some of this has become this weird meme, almost. To talk about the slop bowls,like Sweetgreen and Cava and Chipotle—and almost constructing this odd stereotype of these sort of soulless, almost American Psycho–evoking, basic gals in Manhattan who just do their little Sweetgreen salads on rotation.

And they just, like, you know, live in this very synthetic digital reality and are super detached from working with your hands and knowing your neighbors and speaking to people.

Zach Weissmueller: And the irony is—the more extremely online you are, the more likely you are to be engaging in that critique.

I don't hear just normal people working at the grocery store talking about writing the email jobs and… 

Liz Wolfe: Yeah, it's also just such a classic function of our discourse. Like, of course we end up— the things that are most familiar to us breed contempt.

But then there's also such a natural human impulse—and a wealthy nation impulse—to take for granted the good things we have.

And so it's like, people having the ability to work flexible hours in an air-conditioned environment where they are never in physical harm… I'm sorry, but if you told my ancestors this 100 years ago, their minds would have been blown.

If you tell my granddad this, his mind is a little blown.

And to me that's just evidence that we live in abundant, prosperous times—and I want my son to have that same opportunity that I do.

Gary Winslett: One hundred percent. This wouldn't just blow my ancestors' minds—sometimes it blows my mind.

Like, I remember the card—like, I'm 38, I'm not that old—I remember the card catalog at the library. I remember the giant phone book.

Like, we didn't have the internet, you know? We had, like… you know, we just didn't have the modern conveniences we have now.

And, like, sometimes I'll think about this—like, when I go to Costco. A couple weeks ago, I got this giant water slide splash deck for my kid—the 17-foot-wide, 11-feet-tall one.

And it was like $300, which is not nothing—but that would not have existed for regular folks back in the day.

And so we just live in this, to me, era of opulence. I just wish we would reflect a little more on how nice it is.

Is everything perfect? No. But it beats the hell out of the past.

Zach Weissmueller: Yeah, it's a big problem the idea of kind of taking the "W" and, you know, not always looking to tear everything down because there are some imperfections, which there always will be.

We're going to bring this to a close. I want to ask you the final question of the show, though, which we ask all of our guests:

What is a question that you think more people should be asking?

Gary Winslett: Oh, a question I think more people should be asking?

In politics, I would say the question people should be asking is: What is the immediate problem in front of me, and how do we solve it?

I think there's far too much of—gotta make everything this grand narrative, gotta have a big theory, who gets status and who doesn't, right?

Then there's, like—what is the problem staring in front of me? Right?

Is it too little housing? Is it expensive energy? Just—what is that? And then work on that problem pragmatically, rather than try to do a big ideological crusade.

Zach Weissmueller: It's so much more fun to spin the grand narratives, though because then you don't actually have to solve anything.

Anyway, thank you so much for joining us.

Gary Winslett: Thanks for having me on.

Zach Weissmueller:
We'll see you all next week.

Outro:
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• Producer: John Osterhoudt

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