Seeding Economic Development in Rural America, with Ann Eisenberg

Notable Quotes

• Rural communities don’t need to suffer because of macroeconomic change: “We’ve normalized the idea that a rural town can just be left in the lurch if that’s what happens because of economic activity. We’ve gotten used to the idea of a plant closing, everybody losing their jobs, and the town descending into a state of socioeconomic despair. My argument is that we shouldn’t say that’s normal. We could be making different decisions right now as a society, and we could be managing these economic transitions much more proactively, responsibly, and humanely.” (8:46)
• The federal government can help rural communities restructure local economies: “One tool we have is the centralized authority in the country that has the most resources: the federal government. We need to take that seriously and find ways to sustainably support these local governments that are losing their lifelines so that they can engage in planning, get back on their feet, and come up with new industries to replace the [sole industries their towns relied on]. They need help in getting in an upward, positive cycle of economic development, instead of this downward, vicious cycle of people leaving, tax money leaving, and local governments drowning.” (13:15)
• Rural electrification demonstrates that supporting rural economies can benefit the whole country: “Oftentimes, when we’re talking about investing in rural regions, people get the impression that we’re talking about passive beneficiaries—people who are sitting there just waiting to be handed all of the urbanites’ hard-earned money. In fact, [the establishment of rural electrification co-ops] was a locally led, collaborative infrastructure project that wasn’t just good for rural people—it was good for farms to be connected to electricity networks. There were benefits for society as a whole, not just rural people.” (20:51)

Top of the Stack

• Reviving Rural America: Toward Policies for Resilience by Ann M. Eisenberg
• Demon Copperhead by Barbara Kingsolver

The Full Transcript

Daniel Raimi: Hello, and welcome to Resources Radio, a weekly podcast from Resources for the Future. I'm your host, Daniel Raimi. Today, we talk with Ann Eisenberg, professor of law and research director at the Center for Energy and Sustainable Development at West Virginia University's College of Law. Late last year, Ann published a book called Reviving Rural America, which focuses on identifying strategies that can support rural US communities that have faced economic hardship over the last several decades.

In today's conversation, I'll ask Ann to describe what these strategies might look like and give some examples from history, including a close look at the 1930s-era Rural Electrification Act. I'll also ask her to describe why she sees the deregulation of certain economic sectors, such as trains and airlines, as key drivers of some of the challenges facing rural communities today. Stay with us.

Ann Eisenberg, from West Virginia University's College of Law, welcome to Resources Radio.

Ann Eisenberg: Thank you so much for having me.

Daniel Raimi: It's a pleasure to have you on. I'm really excited for our conversation today. We're going to talk about your new book, Reviving Rural America. Before we start, we always ask our guests how they got interested in working on environmental topics, whether you had some early life inspiration or whether you got inspired later in your career.

Ann Eisenberg: I was giving this some thought, and I think I have a pretty strange answer to that. My interest in the rural environment and the rural economy goes back to my love of French as a kid. I was just a big language geek and, looking back now, I can see that there's this French-language-to-Francophone-Africa-to-rural-development pipeline. So, I got really into French in middle school and high school, and that led me eventually to the Peace Corps in Morocco. Then, the Peace Corps in Morocco was where I really got interested in rural development, and energy questions, and rural infrastructure, and things like that.

Daniel Raimi: That's fascinating. I didn't know that you were in Morocco. How long were you there?

Ann Eisenberg: I was there for two years, 2006 to 2008, in between college and law school.

Daniel Raimi: Cool. Did you work specifically on energy and environmental stuff there, or was that just part of your portfolio?

Ann Eisenberg: I actually didn't. I was there as a youth-development volunteer, so I was teaching English. But in my town there was, in the foothills of the Atlas Mountains with this primarily Indigenous population, this massive hydroelectric project and this big pipeline running down the side of the mountain. You could see it coming into town on the bus. It was a regular conversation topic. People would say, "We hate that pipe; that pipe serves people who aren't from here," and that was a formative experience. Even though I didn't realize it at the time, it got me thinking about rural energy, who benefits, and other things like that.

Daniel Raimi: That's fascinating and definitely a thread that is in your book in many places.

Let's talk about the book now. As I mentioned, it's called Reviving Rural America. One thing that you spend a while on near the beginning of the book is defining this term “rural.” So, when you say rural, what do you mean?

Ann Eisenberg: That's really important, defining what we’re talking about when we talk about “rural.” For me, rural is a kind of place that I think of as having a couple of important characteristics. One characteristic is that there are fewer people; there's a smaller population. The second important characteristic is that there’s some distance or remoteness from where there are a lot of people. It's fewer people living in far-off places.

Daniel Raimi: Are there example communities that come to mind that would fit into your definition of rural and ones that wouldn't fit? Where are the edges?

Ann Eisenberg: That's a really fun question, because there's definitely a spectrum. If you want the quintessential place that’s not rural, that’s Manhattan. If you want the quintessential rural place, where maybe there’s two or three people living on a ranch in a remote area, that’s one of the Dakotas. Then, really, everything in between could be, depending on if you're using the definition provided by the United States Census Bureau or another authority, up for debate. And that's important, too, because a lot of the challenges facing rural communities in small to mid-sized cities, like in the Rust Belt, are really similar to challenges facing, let's say, more rural parts of West Virginia.

Daniel Raimi: That's interesting. You talk a lot in the book about the different types of economic opportunities that exist in rural places versus more urban and suburban parts of the United States. Can you give us a basic sense of the differences in economic opportunity that you describe and observe?

Ann Eisenberg: Yeah. When you think of how I've defined rural, it follows naturally that there are going to be rural economic challenges based on the definition of rural. The basic difference is that, because you have fewer people in far-off places, there's just less economic activity in a rural place. That matters, because it ends up making rural populations more vulnerable to economic problems.

For example, if you have a town that grew up around one plant, and the plant closes, that's a really serious problem. It can be a really serious problem in cities, too. I live in Pittsburgh, where plant closures are a very palpable part of life here. But even if cities get hurt by something like that, they are, by definition, going to have more resources to bounce back with, because they have more people and more economic activity. That diversified economy gives people more options to recover with.

Daniel Raimi: That makes total sense. In the book, you talk about several instances where you argue that federal policy has exacerbated the lack of opportunity that might exist in rural America. Can you describe some of those arguments for us?

Ann Eisenberg: It is a big, complicated topic. The best time to have made better decisions about the rural economy was probably 100 years ago. The best time to not have a town evolve around one plant, mine, or another sustainable mono-economy was when these places were born about 100 years ago. There were public-policy drivers of that unsustainable foundation for the rural economy. But we can't go back in time and do that, and now, we're having to deal with the fallout. There was never good planning for a lot of these regions. So, factor number one is that bad planning—or total lack of planning—100 years ago.

Issue number two is that we are seeing a lot of traditional rural industries contracting. Agriculture, manufacturing, natural resource extraction, timber—a lot of the economic activity in those sectors has declined. The energy transition is a really good example of that. Coal, oil, and natural gas are probably not the energy sources of the future, but there are a lot of places that have relied on the fossil fuel economy that have either already been hurt a lot or risk getting hurt.

We've normalized the idea that a rural town can just be left in the lurch if that's what happens because of economic activity. We've gotten used to the idea of a plant closing, everybody losing their jobs, and the town descending into a state of socioeconomic despair. My argument is that we shouldn't say that's normal. We could be making different decisions right now as a society, and we could be managing these economic transitions much more proactively, responsibly, and humanely. So, I point to the lack of federal transitional policy over the past half-decade as one of the things that has really made all of this worse.

Daniel Raimi: Can you say more about that? What might you imagine a policy looking like that ameliorates some of the downsides of the prototypical plant closing or some other disruption that happens in the rural community?

Ann Eisenberg: In the '80s and '90s, when there was trade liberalization, which meant that a lot of plants closed really quickly, this hurt urban and rural communities alike. But rural communities, again, had this disproportionate reliance on any given employer. So, during that raft of plant closures in the '80s and '90s, there was a social movement that said, “You shouldn't just be able to pull the rug out from under us.” That resulted in one piece of protective legislation: the Worker Adjustment Retraining and Notification Act, also known as the WARN Act. The WARN Act said, “If you're going to close your plant and lay off a bunch of people, you have to have some kind of transition, pause, or notice.” It's the notice act.

That was better than nothing. I don't remember the exact details. I think you have to notify folks two months ahead of time, and I think it's only for a workforce of more than a few dozen workers that are going to get laid off. When you're thinking of a town that may have existed around this plant for half a century, if not more, that's a drop in the bucket. So, I would envision a lot more robust protections for workers in towns. That's a model, but I would want to go a lot further and provide people with a lot more help to both find a new vision for individual workers and households, but also for towns that need a new life.

Daniel Raimi: I’d like to go a level deeper on that town part. I think most people can imagine why an individual might need some support, retraining, or financial assistance as they work toward their next job, but what are the interventions that might support a community actually building up that economic resilience?

Ann Eisenberg: One of the things that's really challenging in our society is that the private and the public are often really interconnected. This is especially true in a rural place where a local government, or even a state government, might be very reliant on tax revenues from one sector. Let's say you have a town that had a coal mine, and the coal mine closes and lays everybody off. People don’t just lose their jobs. People move away, and as that industry moves away, you have a lot less money going into the local government coffers to provide public services, like schooling, libraries, sewage, police, etc. So, we can conceive of some of this as a municipal fiscal crisis, and there are a lot of tools we can use to try to deal with that.

One tool we have is the centralized authority in the country that has the most resources: the federal government. We need to take that seriously and find ways to sustainably support these local governments that are losing their lifelines so that they can engage in planning, get back on their feet, and come up with new industries to replace the one lost industry. They need help in getting in an upward, positive cycle of economic development, instead of this downward, vicious cycle of people leaving, tax money leaving, and local governments drowning.

Daniel Raimi: That scale of resources is really quite substantial. In the fossil fuel sector, where you and I both work, those industries provide tens of billions of dollars per year for local governments to provide the types of services that you're talking about—schools, roads, libraries, and the like. Is there an example that comes to mind of a place where the community did replace the coal mine with three new industries? Are there any good news stories you can share with us?

Ann Eisenberg: There are a lot of good news stories. I need to work on getting my top three at the ready, because I get that question a lot, and my answer is still a bit vague. One thing you'll hear a lot in this space is that we do not have examples of successful transitional economic policy for regions. I think that that is a bit of an exaggeration. Towns all over the country are doing really cool things and are being entrepreneurial. A lot of that hinges on whether they're getting technical assistance to tap into local amenities and make the most of them.

There is one fun story of a town that's not in coal country. I hope I'm getting this right: I think it's Aiken, South Carolina, that said just a few years ago, “We are going to become a horse-and-equestrian destination.” And so, they had this Main Street visioning process and looked holistically at what that could be. Then, all of a sudden, instead of having a struggling town, you can have this concerted, multifaceted effort that has public-private partnerships and attracts new tourism activity. So, I do think that there are blueprints for successful small-town economic revitalization. I don't know that we've mastered leadership on that from the federal to the state to the town level.

Daniel Raimi: Right. Ann, just a couple minutes ago, you were talking about what things were like 100 years ago. Let me take us back almost 100 years and ask about a policy that you talk about in your book, which is the Rural Electrification Act (REA), which I think was passed in the 1930s. You identify that as a model for how federal policy can effectively support rural places. Can you tell us more about the REA and why you see it as a good model?

Ann Eisenberg: That follows up nicely on what we were just talking about—what is the secret sauce to intervene and get a distressed locality back on its feet? There's an intuition among many of us working in this space that it's probably a combination of universalist approaches with local leadership and locally tailored deployment. That's one thing that was really cool about the Rural Electrification Act and the agency that administered it, the Rural Electrification Administration. It had this universalist approach. This was federal legislation that said “We are going to electrify the countryside.” First off, that's already really cool and really different from what we tend to see with rural policy today. I saw a quote recently that I, unfortunately, can't attribute to the right person. They said that “the characterization of modern federal rural policy is its programs, not policy.” There are a ton of programs, but very few of them have a bold, clear, measurable mandate, such as electrifying the countryside.

So, that's already a thing that's cool about the REA. And it was universalist. They said, “We're going to do it everywhere. We are the federal government. We have resources.” But then, the way it was structured was federal, down to local, down to grassroots partnerships. The REA was there to give low-interest loans to groups of rural residents, typically farmers, that wanted to come together and get electricity. That put local folks in a proactive role to say, “We want this, and here's what we're going to bring to the table to make it happen and make it work for our unique circumstances.”

That's also exciting, because if you just have top-down injections of resources … People often misinterpret my work and think I want us to have the federal government throw money at all these places. But this is one of the things that lets it be strategic. If you have that local leadership and an accountability role, it really helps direct the resources to where they're going to be put to the best use and get them put to the best use sustainably.

Daniel Raimi: Interesting. Can you say more about what that local role looked like and why it helps channel resources the right way?

Ann Eisenberg: Groups of farmers came together into what we now know as rural electric co-ops, which provide, to this day, electricity to substantial portions of the population in large swaths of the country. They needed to form these organizations and say, “We're going to be the people who take out these loans, and we are going to pay them back.” That was nice from the point of view of the federal political side. Senator George Norris (R-NE), who was really committed to making this vision happen, was very clear that he wanted this to be a public-interest, not-for-profit endeavor. There were folks in Congress who were saying, "Well, can't we let private businesses take out these low-interest loans?" And Norris said, "No, the whole point of this is that private businesses don't want to serve the countryside, because they're less profitable." So, he was very clear about wanting this to be a not-for-profit, public-interest project, led by the government. But he also wanted it to be “self-liquidating,” meaning he wanted money to come back in to cover this. So, there was that investment, accountability, and that proactive role of the rural people to get this resource.

I like that because, oftentimes, when we're talking about investing in rural regions, people get the impression that we're talking about passive beneficiaries—people who are sitting there just waiting to be handed all of the urbanites' hard-earned money. In fact, this was a locally led, collaborative infrastructure project that wasn't just good for rural people—it was good for farms to be connected to electricity networks. There were benefits for society as a whole, not just rural people.

Daniel Raimi: Right. You've already touched on this, but I'd love for you to say more. If you had a magic wand, and you could implement policies at the federal level that translated some of these successes from rural electrification into other policy domains, what are some of the ways that you would wave your wand, and what would you do?

Ann Eisenberg: I love the idea of a clear mandate. Also—and I'm not alone in this—there have been a few folks, whether it's in coal-transition policy or rural-development policy, that like the idea of a single centralized agency that takes on the rural economy. With the REA, we had it with electrification. But I think we have this contradictory dialogue about the rural economy today. Half of the time, people say, "This is a huge deal; it's reshaped everything." And then, half the time people say, "Eh, that's a niche issue. Why would we tackle it with more aggressive policy?" I'm definitely more in the former camp—that rural economic change, over the past half century, has been a huge deal, and we need a huge policy response to it. And so, the fact that the REA was deployed through an intentionally created agency meant to do that is a model.

Over the past few years, we have had some exciting newer federal industrial policy statutes that had REA flavors to them, in terms of trying to inject nice, big economic resources into rural communities on a broad scale, like the Inflation Reduction Act and the CHIPS and Science Act.

I have a suspicion—I haven't looked into this, but I’m going to guess—that the application process to get a loan through the REA in 1935 was probably simpler than modern grant applications. And so, that's one area where I'm wondering, Could we learn from the analog age to remove the barriers to the communities that need resources the most and think about what more sustainable financing looks like, as opposed to the competitive grant system that modern federal policy has leaned into?

Daniel Raimi: For folks who aren't familiar with this topic, one thing that Ann and I have both learned in our work is that when accessing federal dollars—whether it's through the CHIPS Act, the Inflation Reduction Act, or the Bipartisan Infrastructure Law—one of the big barriers that rural and low-capacity communities have faced is the complexity of these federal applications, the tracking that comes with it, and the many hoops that need to get jumped through. It'd really be fascinating to go back to the 1930s and try to track down one of those applications. I wonder if you could find it in the Library of Congress or somewhere like that.

Ann Eisenberg: I agree, I wonder what those look like.

Following up on your point, we end up with the places that need the resources the most often having the least capacity to get them. Grant writing is hard. As someone who has done it just a couple of times, it's really hard, even if that's part of your job and you've done it a few times. And so, if we're talking about a small town where the mayor is also the firehouse captain, just finding the time to go through the process, let alone to learn how to do it right, is a huge barrier.

Daniel Raimi: Yeah, for sure.

Ann, I want to ask you one more question before we go to the Top of the Stack segment. It's a little bit of a tricky one, because a lot of our audience is economists or economics-minded folks. You make a variety of arguments in the book that focus on deregulation and how deregulation across certain sectors of the economy, such as railways and air travel, negatively affected rural communities.

I suspect a lot of our listeners have observed the positive impacts of deregulation on things like air travel. Economists have quantified the economy-wide benefits of these types of policies. How do you think about that? Maybe it's a trade-off, or maybe you wouldn't characterize it that way. How do you think about deregulation and how some of the benefits of deregulation might be paired with solutions that can support rural communities?

Ann Eisenberg: I tend to talk about this topic a little bit more dramatically than economists do. I'm really interested in the idea of sacrifice and this moral or ethical question of who and what we are willing to sacrifice for other things, and why. Sometimes, I think, when we try to quantify those questions in economic terms, other values get lost. So, I have gotten skeptical in my work over the past few years about justifications based on aggregate welfare. I'll complain about something that happened in rural communities, and I'll hear a lot about aggregate welfare, the greater good, or economy-wide benefits. That usually means we're recognizing that somebody did get hurt by some policy, but we might be arguing that it was worth it. Part of one of my points is that that's pretty subjective. I think some disciplines get the benefit of the doubt of having an objective assessment, but it really depends on the values that you're measuring for.

My own instinct is that I don't think the many ways that deregulation hurt rural communities was worth it, even if you have some measure of aggregate welfare that came out of those decisions. Actually, I complain about our transportation infrastructure, just in my own life, constantly. So, this feels very personal for me, and I think it is for a lot of people.

I live in Pittsburgh, which is sometimes called the Paris of Appalachia. It’s not exactly remote; it is a concentrated population center. If I want to visit my mother in upstate New York, I cannot take a single direct flight to upstate New York. I can't take a train. You have to go through New York City, and it's very expensive. That's hard for me as a privileged urban person. So, you can imagine that, for rural folks, travel is a lot harder. It got a lot harder after deregulation, and then there's this compounding localized economic harm that came from shuttering a train station or an airport.

I am for the wise and efficient use of resources, but I suspect that, when we cut a lot of communities off from intercity bus services, we didn't get the balance quite right.

Daniel Raimi: It's a really interesting set of arguments, and I would encourage people to check out the book and read through them. It definitely challenged some of the ways that I had thought about effective deregulation over the years, so it was very productive in that sense.

Congratulations on the book, Ann. It's a really good read, and I learned a lot from it, and I appreciate you coming on the show to talk about it.

I would love to now ask you the last question that we ask all of our guests, which is to recommend something that you've watched, read, or heard that you think is great and that you think our listeners would enjoy.

Ann, what's at the top of your literal or your metaphorical reading stack?

Ann Eisenberg: I am late to this; this was a popular book a couple years ago. But I finally just listened to the audiobook of Demon Copperhead by Barbara Kingsolver. It's a really good read. It’s a modernized version of David Copperfield, but it’s a really compelling illustration of a lot of what we've been talking about here. It really drives home the life-and-death stakes of geography and class. It is a hard read (or listen, in my case), but it really illustrates the human costs of the opioid epidemic and what it really means when we talk about economic issues and they become social issues. It was a really powerful read for me for that reason.

Daniel Raimi: It's funny—I actually just read it a couple months ago, as well, and had a lot of the same reactions, so I second your recommendation.

Ann Eisenberg: Barbara Kingsolver is great.

Daniel Raimi: Yeah, the writing's amazing.

One more time, Ann Eisenberg from the West Virginia University College of Law, we really appreciate you coming on the show. Thank you for writing this excellent book, and thank you for sharing it with our listeners.

Ann Eisenberg: Thank you again so much for having me.

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