Virginia crushes Maryland in Economic Ranking of All 50 States" was the provocative headline on last week's announcement by a pro-markets, pro-limited government research group.
That's true - if you don't measure poverty, education, business creation, household income, homeownership growth, venture-capital investment, broadband access, major league sports, cultural opportunities, sprawl and pollution.
Other than those areas, in which Maryland does better than Virginia, this is a terrible state in which to live, raise a family, hold a job and own a business.
As you might guess, the study by the American Legislative Exchange Council gave states favorable marks for low taxes, low wages and not much else.
But low taxes aren't everything, or else Mississippi would be a thriving corridor of biotech startups and investment banks. Economies need reasonable taxes and investment in brains, bodies and infrastructure. Any study that pretends otherwise isn't worth the 4 megabytes it takes on your hard drive.
"The historical evidence is clear," says the report, by economists Arthur Laffer (of "Laffer Curve" fame) and Stephen Moore of The Wall Street Journal. "States that keep spending and taxes low exhibit the best economic results, while states that follow the tax-and-spend path lag far behind."
That must explain the brilliant success of South Dakota, Wyoming and Tennessee, each ranking in the Exchange Council's top five states.
Virginia was No. 6, getting plaudits for its low minimum wage and lack of inheritance tax as well as middle-of-the-road corporate and personal taxes. Maryland was 32nd ("19th worst," said the news release) and would have done even more poorly if the study had taken Gov. Martin O'Malley's recent tax increases into account.
You can certainly draw a pattern of low-tax states doing well in recent years, and Laffer and Moore have done so. Utah, No. 1 on their list, boosted its employment base by a fourth over the past decade. No. 2 Arizona performed even more spectacularly, increasing jobs by almost 40 percent.
But the pattern is by no means uniform. And as trained economists, the two should know that statistical correlation does not equal causation.
Federal water subsidies, air conditioning and retirees fleeing northern winters have as much to do with Sun Belt growth as low taxes. Texas and the Rocky Mountain states are thriving because of high oil prices, which are more or less indifferent to the personal income-tax level.
