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We’re talking about 1985-2020, not 1945-70. At least I am. If you think red and blue are economically equal partners today there is no real conversation here.
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The defense economy bootstrapped Silicon Valley — in the 50s-70s. It is a fraction of that economy today. The Googles and Amazons have emerged from that state bootstrapping to create a thriving private sector. No similar vitalism took root in what us now Red America.
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I think part of that is that we produce product whose cost for distribution is pretty much sunk in AT&T's past; write once, run anywhere, right? WAY different in commodities markets, which you acknowledge; a harder market, but equally if not more important to everyday living.
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Competitive regions innovate and stay ahead of commoditization pressures. Memory chips give way to CPUs etc. Software gets commodified into open-source. Low-margin commodity economies and globalization pressures are not unique to red regions.
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That hasn't been my experience; memory chip manufacture gets sent over seas, software does not become open-source but becomes SAAS/PAAS while at Apple, Amazon, and Google, internal repos demand disassociation from open-source initiative.
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Those things don’t just happen. People come up with ideas to make them happen. SaaS as a response to open source wasn’t just nature. The point is, there is a certain willingness to play the game on a global field on the strength of your open market competitive ability.
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The auto industry is borderline blue/red. It came under threat with the 70s oil shocks. It slowly retreated and fell behind. The return to innovation and competitiveness today is being led by Tesla in CA. Not any of the rust belt regions. Why?
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I think Tesla is a particularly poor example for you, as he seems to be moving out of state due to the sclerosis success delivered to CA; certainly put most of his personal property in CA on the market and my cybertruck will come from TX. I think he just liked the sunsets...
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And I know we were going to avoid talking about yrs before 1980 when examining the decline in economic fortunes in the red states (and we're being fuzzy about states/cities) but when you are asking why Elon was in CA, the fast internet connection from DARPA is an obvious reason!
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Nevada has backbone going through it. Kansas City is pretty much a lab for high bandwidth. CA has highly developed infrastructure because chicken-egg this is where much of it was invented. After initial bootstrap, infrastructure follows economic vitality, not other way around.
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Elon moved to CA In the 90's when he was working for PayPal; not after gFiber attempted to goose AT&T to up bandwith by loss-leadering in KC (and then finding no profit). I agree w/yr final sentiment--*private* money follows success--but "bootstrap" is doing a lot of work there!