The bailout is big. But, where exactly is it going?*
Thanks to the efforts of ProPublica, we can track bailout funds by state. The map below, based on their data, shows the geographic distribution of bailout spending.
The bailout is massively concentrated in just a few states. Total bailout funding, according to the ProPublica data, is $476.5 billion to date. One state, New York, has captured $175 billion of that, more than a third. Michigan is next with $80.7 billion or 17 percent of the total, followed by North Carolina with $56.3 billion, Virginia with $54.9 billion, and California with $34.4 billion. The top three states accounted for 66 percent of bailout spending; the top five 84 percent; and the top two more than 10 percent.
How does the geography of the bailout look when we control for the size of state economies - say, by population and economic output? With the number-crunching help of Ronnie Sanders and map-making assistance of Scott Pennington, both of the Martin Prosperity Institute, we decided to take a look.
The second map shows the geography of bailout funding per person. The average per state, excluding the District of Columbia and based on the ProPublica data, is $1,570.34 bailout dollars per person. Again, two states dominate the tally - New York, where the bailout adds up to $8,978.83 per person, and Michigan where it's $8,067.28. There are just five additional states where bailout funds top $1,000 per person: Virginia ($7,044.47), North Carolina ($6.104.69), Minnesota ($1,379.21), Connecticut ($1,085.33), and Iowa ($1,065.76).
The third map shows the geography of the bailout as a percent of state economic output or gross state product. The bailout, again based on the ProPublica data, was three percent of total state output, with each state on average receiving 1.8 percent of its GDP. Michigan takes the top spot here, with bailout funds equivalent to a whopping 21.1 percent of its total economic output. New York is next at 15.3 percent; followed by North Carolina, 14.1 percent; and Virginia, 13.8 percent. No other state received bailout funding that was more than three percent of its output.
By any measure, the bailout has been massively concentrated geographically.
* An earlier version of this post was incorrectly titled "The Stimulus Maps." Thanks to ProPublica's Chris Flavelle for pointing this out. It has been revised accordingly.
Richard Florida
Gosh, the stimulus concentration map bears a strong resemblance to another map I vaguely remember from last November.
Whoa whoa, back the truck up here.
Is this bailout spending or stimulus spending?
If it's bailout then it makes sense to be condensed on the east cost, where financial centers lie and in states hit hardest by the mortgage meltdown.
If it's stimulus, I'd be ticked.
Read the maps — it's TARP, not stimulus spending.
Either Mr. Florida can't read the maps, or he thinks his readers can't understand the difference, or he's relying on other data not presented.
Yes, if its TARP then its capital injections to banks. A map where funds were adjusted by assets of banks headquartered in each state would make much more sense.
I understand New York (Wall Street banking), Michigan (Detroit automakers), and North Carolina (Charlotte banking), but Virginia and Iowa? These aren't major banking centers, are they?
Freddie Mac, which is headquartered in Fairfax County, accounted for 98.8% of the total TARP money going to Virgina.
Iowa had quite a few small banks that got TARP money, Heartland Financial and West Bancorp leading the way. The reason Iowa is so green on these maps because of it's tiny population, which warps the per capita numbers.
The thumbnail on Atlantic's front page has the Recovery/Stimulus logo, but this map tracks TARP funding. Very misleading.
This is appears to be the same information Treasury has been putting up on TARP for some time. It allocates TARP funds based on where banks are headquartered, not on where the branches or deposits are. Hence the heavy concentration in the financial centers. I think you'll find a much better map, that corrects for this (and has it by county, not state), at http://subsidyscope.com/projects/bailout/tarp/map/
Wow this is very interesting.
I was actually wondering if east coast states got more money and this chart pretty much tells the whole story.
Jim
ANTIQUE CEILING FAN
"By any measure, the bailout has been massively concentrated geographically."
I don't understand this. Freddie Mac may be headquartered in Virginia, but the bailout money that it received went to support mortgages all around the country (albeit primarily in states with the sharpest drops in home prices, like California and Florida). Freddie doesn't put that money in a vault beneath its headquarters.
It would appear that most of the comments realize that this map is unsurprising, misleading, and -frankly- irrelevant. Why is it still posted? The Atlantic looks irresponsible, Mr. Florida appears careless, and readers like snavetrebor and Jim Rodgers continue to misinterpret the results.
This map and the analysis that it supposedly supports is inaccurate and misleading.
The problem is that money is assigned to states based only on the headquarters location of the recipient bank. For example, North Carolina "receives" over $50 billion in TARP funds simply because Bank of America is headquartered in Charlotte. Meanwhile the map shows Arizona as "receiving" only $4 million; Vermont and Montana have no TARP dollars assigned based on this approach.
For better or worse, our banking system is much more complicated than what is depicted here.
Large financial organizations like Bank of America do business in every community in the county – in fact even the location of BofA's "headquarters" is somewhat of a fiction as it has business units, executives and hundreds of thousands of employees distributed across dozens of states.
The banking activity that the TARP money is intended to support takes place far beyond the communities where the banks have a physical presence. Countrywide, now part of BofA, is responsible for a substantial part of the mortgage lending that drove the housing bubble. Much of that lending activity happened in high-growth states like Arizona, Florida and Nevada, which are grossly under-represented in this map. Rampant real estate speculation in these areas was enabled by organizations headquartered elsewhere but very much a part of the local financial landscape.
If you look at banks as being located where they hold deposits or make loans you see a very different picture of TARP impact (I helped create such a map this past spring: http://subsidyscope.com/projects/bailout/tarp/map/). It’s important to note that the actual flow of dollars can’t be mapped – despite what this article suggests it is impossible to say how many dollars any given community "received." Instead, an alternate way to frame the question is: to what extent does a community rely on banks that received funds? It is still an imperfect measure but far better than using the headquarters.
By mapping out the share of deposits, branches and loans you can begin to understand the vast market share held by a few very large banks. The story is not about the physical concentration of bank headquarters on Wall Street but rather the extent to which this handful of large institutions have become Main Street banks. This is a recent and significant change and one that has been insufficiently discussed as a causal factor in the financial crisis.
Unfortunately the final analysis provided in this article, "By any measure, the bailout has been massively concentrated geographically," is completely backwards. Instead, we should be asking: how did so much of the country end up reliant on so few financial institutions? And import importantly, have we fully realized the consequences of this shift?
Macro Economics Are Rigged
This always has been the case and it may remain this way, unless our free press and our national will prevent it.
Wealthy families have always believed they both make and save politicians by their power and will. Political families believe they protect and preserve the wealthy families. Each thinking they are smarter than the other. Both are multi-generational and unbelievably corrupt. These families comprise our ruling classes... We can admit this to our self. It is not a new discovery.
Form of government and modes vary from culture to culture, but all submit to the ruling class whom always abuse their weaker citizens. Middle and lower class live in a different dimension - Busyness and complying with regulations, imposed by their ruling class keep them there... there they mostly remain oblivious to what is being planned or implemented by their ruling class, believing media spin designed to propagandize them. Only extreme events attract their attention.
Not so funny results that are not well published include these.
Citigroup banking families in the USA and Rothschild banking families in Europe financed government regimes. They were the primary source of financing provided to the Nazi regime, as it came into being. Politicians in the Nazi party had peculiar ideas of how they would repay their debt. They used other peoples money...and then planned to take both England and Rothschild family assets....why repay creditors if you can rob and plunder?
The IMF and Fed Reserve play a similar game. They take assets. Ask Argentina how much of their assets the IMF families and their related foreign investors now own there. Ask other nations if IMF assisted inflation and currency helped or wiped out their economy.... Ask world leaders who’s gaining control of world wide water rights, oil and gas, prime real estate, valuable corporations, and military protection. Guess who benefited most from the recent Tarp bailouts? Try a google search: “map economic benefit bailout”. See how the East defeated the West in September 2008, courtesy of the Fed. Reserve – Trusting them to distribute the wealth was insane. Can anyone be so blind as we are in 2009.
HR 1207 Audit the fed., is a start towards sanity.
Trusting the Fed. bank or the IMF with wealth, is like asking the foxes to guard the hen house. SY Mike. mikejaeger@live.com