Notice anything? They are all different colored, there is no Godot demand theory that covers this mess. The small states do not have long value chains, and value chains crashed. The states split in skew, there are a lot of concentrated production in the value chains.
The issue becomes, why save California's value chains when we could let some of the other states build value chains to match. This is the essential problem that Krugman and the 50 Hoovers are trying to cover up, as in fraud.
What value is a California production chain to Vermont? Federal taxes, these chains develop income which it income taxable. So why isn't Krugman and the 50 Hoovers crowd chatting up this advantage to the small states? Because if they acknowledged a closed surface, we call it, then they admit failure of their simplified theory.
Nancy and Newsom have to sort through this maize and get no help from the flat earthers. That is why the last recession lasted so long, only a few economists were willing to sort through the various possibilities and formulate a sound theory. And some of them did, with their corona infection models, many were well done, better than I was willing to do.
I count 15 states likely to benefit from Nancy's proposal. Any of the other states that agree will be spending most of their political capital on earmarks to make up the short change. These are the problems we solve with Markov tree. A technique widely used across all the sciences with the exception of about four or five holdouts from the flat earth society. We meet the Lucas criteria (closed surface) , though Lucas badly stated it. The Lucas criteria determines the N needed to meet an economy of scale, a very important addition to economic science.
We can advice Nancy and Newesom much better about the possibilities and outcomes to navigate this maze. Flat earthers are not helping and Nancy and Newsom have to tip toe around a bunch of scams. The answer is the reason Menzie made the chart, he wants to get the resolution of this chart higher so he can solve the three coloring problem, get a hidden Markov model. And he well find a deviation among the states too great to be overcome by commerce. That is not a problem if we adapt along the way. We know Marx better than they, we know Coase, Nash. We can do valuer chains, tell you their equilibrium shape.
My advice to Nancy? Invest a shitload of money on Vermont, and distribute in equal amounts. Then do the per population. Working value chains is fraught with error, do not try.
About twenty to thirty economist hold out. Flat earthers, like those engineering physicists stuck on fake units.
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