Regional inequality is a thorny problem. Inequality at the household level has some obvious fixes, such as taxing the rich and redistributing the wealth to the poor with tax credits and benefits like health care. But, while there is no unified economic consensus as to how to solve deindustrialization and regional blight, there are three broad ideas: government investments in local industry; investments in local colleges and research centers, which can also boost local innovation; and income transfers to the residents, whether in the form of tax credits or something more targeted, like moving vouchers.
So far, Trump’s answer to this multiple choice question has been “none of the above.” His policies don’t merely ignore these ideas. They move swiftly in the opposite direction.
First, Trump’s budget blueprint abolishes several programs that have directly helped the same regions he’s promised to support. The federal government has relatively few economic programs that specifically help the Rust Belt and Appalachia, but they include the Manufacturing Extension Partnership, which helps small- and medium-sized manufacturing companies; the Economic Development Administration, which provides bridge loans and other support for infrastructure in poor regions; and the Appalachian Regional Commission, which supports jobs in 13 states (of which Trump won 10). Under Trump’s skinny budget, all three programs would be canceled. This has already elicited deep concerns, or even direct criticism from the governors of Kentucky, Alabama, Arkansas, and Maryland.
"A core piece of Trump’s message was that he would have the backs of workers in struggling regions, in struggling industries, specifically in the Rust Belt and the Midwest,” said Mark Muro, senior fellow and policy director at the Metropolitan Policy Program at the Brookings Institution. "But here, three programs directly relevant to that are zeroed out.” As a candidate, Trump promised convergence; as president, he’s entrenching divergence.
Second, America’s research universities are critical for productivity and job growth in many small and medium-sized cities away from the coastal behemoths. According to Muro, the metro areas with the fastest-growing productivity outside of tech hubs like San Jose and Seattle are anchored by major research universities, like Ames, Iowa, Blacksburg, Virginia, and State College, Pennsylvania. But Trump’s policies would starve these areas for both resources and talent, a needless and counter-productive double-whammy. The White House proposal guts federal science funding, including a nearly 20 percent cut at the National Institutes of Health, which funds billions of dollars of research at universities and hospitals across the country. What’s more, Trump’s antagonism to immigration will dissuade the world’s smartest people from conducting their research at American universities, in addition to starving struggling areas of population growth that might improve their economies.