Richard Florida
by Richard Florida
Fri Aug 21st 2009 at 12:00pm UTC

The Bailout Maps

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.

5 Responses to “The Bailout Maps”

  1. Fred Says:

    If the portion of the bailout devoted to financial institutions were distributed on the basis of branch locations and the auto bailout distributed according to factory locations, I think the geographic concentration would be much less than shown.

  2. Scott Davis Says:

    I agree with Fred. If you made similar map of distressed loans by institutions it would be heavily weighted to those same locations.

  3. Kevin Webb Says:

    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.

    As Fred and Scott point out, if you look at banks as being located where they hold deposits or make loans you see a very different picture of TARP impact. In fact, 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, one 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 county end up reliant on so few financial institutions? And import importantly, have we fully realized the consequences of this shift?

  4. Where Did the U.S. Bailout Money Go? | Globizen Property Says:

    [...] The Bailout Maps [Creative Class] [...]

  5. Mike Jaeger Says:

    Macro Economics are rigged. Always have been and always will be. Wealthy families believe they make and save politicians. Political families believe they protect and preserve wealthy families. Each 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 if they planned to take England and the Rothschild family assets….why repay dead creditors? Why not take assets and lands they surmised.

    The IMF plays the same way as the Nazi party did. They take assets from nations, always have over many years. Ask Argentina how much the IMF has taken there. Ask about IMF assisted inflation and currency that wiped out their economy…. In Argentina the bad guys won. Ask about world wide water rights. Guess who is accumulating them.

    Can anyone be so blind as we are in 2009.

    Trusting the Fed bank or the IMF with our wealth, is like asking a fox to guard our hen house. SY Mike. mikejaeger@live.com