It's better out West…

While most of the United States is locked in the economic and political doldrums, growth west of the Mississippi is relatively resilient -- particularly in much of the resource-rich Mountain West.  This characteristic, coupled with a strong libertarian influence that has stoked hostility to the Iraq war, explains why Senator Barack Obama, the presumptive Democratic presidential nominee, intends to spend so much time campaigning 'out West' over the next several weeks.

Economic dynamism

While the once-prosperous Midwest entered an extended period of industrial decline in the 1970s and became the 'Rust Belt', the West -- particularly the Pacific coast -- drove the information technology revolution of the 1990s.  Coupled with the growth of existing export-oriented multinationals, such as Nike and Boeing, the region helped spur globalisation -- by outsourcing some services, creating enormous new wealth, and attracting highly-skilled immigrants and innovators from around the world.

The IT economy along the coast continues to hum along.  However, over the past four years western growth has also been driven by the long-moribund mining and agricultural sectors, which are in the midst of a demand-driven boom.  The United States has by far the largest coal reserves in the world, and the greatest concentration of coal is in Montana.  Soaring world prices for coal and precious metals have driven a new 'mining rush'.  Uranium mines that were unexploited for decades in Wyoming and Colorado are opening up again, as a resurgence of interest in nuclear energy drives demand.

Most recently, surging food prices have brought new wealth to the Great Plains -- despite rising production costs.  The past two years have witnessed the largest spike in grain prices since the wild boom of the early 1920s; ethanol demand, in particular, is hoovering up the region's corn.

Soft spots

Of course, the West is no Elysium.  Nevada and California have the highest and second-highest shares of sub-prime mortgages per 1000 home loans (42.3 and 37.7, respectively) in the nation, according to the Federal Reserve Bank of New York.  The manufacturing sector west of the Mississippi is largely stagnant, according to the Fed's June 11 'Beige Book' -- a compilation of surveys by the regional Fed banks.  However, compared to the rest of the nation, especially the Rust Belt and northeast, the West is an economic dynamo.

Go West, young man!

Resilient growth, persistent cultural optimism, and an outward-looking openness to new ideas have also made much of the West a prime electoral target for Obama.  The electoral vote-rich pacific coast, which seemed within reach for Arizona Senator John McCain a few months ago, now looks like tough territory for the Republican nominee.  Instead, Obama is targeting a handful a group of western states -- including Colorado, New Mexico and Nevada -- that President George Bush won in 2004.  He faces a tough sell -- the mountain West is filled with conservative libertarians -- but his campaign thinks it can triumphantly ride off into the sunset.