In our model...incumbent politicians rather than interest groups seek inefficient policies, because such policies help them get re-elected. The increased likelihood of re-election comes not primarily from the economic rents obtained by the supporters, but from reshaping the electorate through policies that either induce the incumbent’s opponents to emigrate or alternatively keep his supporters from social mobility that might change their votes. Indeed, no economic benefits need to accrue to anyone for a policy to be attractive to an incumbent.Which, as the link makes clear, has been dubbed The Curley Effect after Boston's long time mayor James Curley, who determined his best chances of being re-elected were to drive out as many non-Irish, non-poor from his city, as they were unlikely to vote for him. In so doing, in the first half of the 20th century, Boston stagnated economically and it's population increased very slowly in comparison to the state as a whole.
Henderson thinks that something like that is happening in California right now, just as it did in the late 20th century in Coleman Young's Detroit (as well as internationally, as in Mugabe's Zimbabwe or in Pre-Thatcher England).
Driving out the affluent isn't a strategy available to a President, such as Barack Obama, but keeping his supporters from upward mobility definitely is. Hence, the Julia Effect, where nothing is possible for the downtrodden except reliance on the benevolence of government.
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