Why Iowa? Though it’s too late for this year’s presidential race, I’d like to see a more representative state than Iowa as having the chance to winnow the field of presidential candidates. My adopted home state of New Jersey would be an ideal choice.
Forget the jokes about turnpike exits, “The Sopranos” or Snooki and “The Jersey Shore.” New Jersey is much more like the rest of America than Iowa is. Presidential candidates ignored the Garden State in 2008 because it’s seen as close to a sure thing for Democrats. New Jersey will probably be ignored this year for the same reason. That’s a pity because the state’s residents may be far more amenable to the Republicans’ message this year.
For one thing, Jersey is governed by Chris Christie, a Republican. Christie has shaken the state’s political establishment to its core. Though his abrasive personality has enraged many, Christie remains surprisingly popular, with 56% of residents approving of his job performance. Even so, Christie’s coattails didn’t translate into significant gains in the legislature for the Republicans.
Iowa voters’ perspective may be skewed by the state’s robust economy. Real GDP in the Midwestern state grew by 3.1% in 2010, fueled by its booming agriculture sector. New Jersey’s economy grew by 2.5% during the same time period, in line with the 2.6% national average. Iowa’s unemployment rate is 5.7%, far below New Jersey’s 9.1%, which beats but is close to the 8.6% national number. As University of Iowa professor Stephen Bloom noted in a controversial essay in The Atlantic, Iowa is culturally quite different than the rest of America.
“Today, half of Iowa’s 952 incorporated towns have populations of fewer than 500 residents, and two-thirds of the state’s towns have less than 1,000,” he writes. “Iowa is home to the highest per-capita percentage of people older than 85; the second highest of residents older than 75, and the third highest of people older than 65. The largest and most elegant house in many rural towns is the local funeral parlor.”
Though it’s tempting to dismiss the Iowa caucuses as irrelevant, they can be a big deal. President Obama’s strong finish in the state in 2008 paved the way for his ultimate victory. But former Arkansas Gov. Mike Huckabee was unable to translate his victory among Iowa Republicans to his party’s 2008 nomination. Several candidates may drop out this year if they perform poorly.
Despite the caucus’ mixed track record, the media covers the event as if it were a coronation, which it is not. That’s why it’s important for investors to examine what motivates Iowa voters.
For instance, when it comes to taxes, Iowa isn’t in the same league as New Jersey, where the Tax Foundation estimates that residents have the largest state and local tax burden. Iowa ranks 24th. New Jersey residents also pay the highest amount in property taxes, which makes them especially sensitive to issues about government spending such as school budgets.
The Garden State also is far more diverse. The latest Census data show New Jersey’s population was 13.7% African-American versus 2.9% in Iowa. It has a population of 8 million, more than double the 3 million that call the Hawkeye State home. New Jersey is the second-most densely populated state in the U.S. with nearly 1,200 people living per square mile, compared just over 54 people per square mile in 38th-place Iowa.
New Jerseyeans are also wealthier than Iowans, and is one area where Iowa is closer to the nation. Median household income in Bruce Springsteen’s home state was $68,444 as of 2009. The corresponding Iowa figure is $48,061, and the national number is $50,021. About 12% of Iowa residents live below the poverty line versus 9.4% of New Jersey residents. The national rate is 14.3%.
If nothing else, the Iowa caucuses prove that Americans have a very peculiar way of picking a president. It would makes far more sense if a state like New Jersey, which is more representative of America, had more of a say in picking the leader of the free world.