A commenter asks,

As libertarian economist, what do you recommend for WWC [white working class] in the Rust Belt. Paul Krugman is right the jobs in these areas aren’t coming back no matter what happens to China. And it is really hard to solidify a culture without private investment. (And no David Brooks Sullivan Travels nonsense is not the answer.) Do we teach these kids to work hard to basically get the hell out like the urban inner cities of the 1980s?

1. I could dodge the question, and say that as a libertarian I leave it up to the WWC in the rust belt to figure it out.

2. How are all those programs to alleviate African-American urban poverty workin’ out for ya?

3. I think that what the Federal government does poorly is administer programs at a national level–see (2). What it does well is hand out money. So here is what I would recommend:

First, come up with some criteria for determining a low-income geographic region. Something like the bottom 20 percent of counties in terms of median income. (County is not the right geographic unit, but you get what I mean.) Hand over some Federal tax money to the governmental units in those regions. In addition, give a very large subsidy to any organization that builds a new facility that employs at least 1000 people in one of those regions or which relocates a facility from a high-income region to one of those regions. Even if the facility does not hire from the local community itself, the multiplier effects should be favorable.