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‘Go Woke, Go Broke’: Billionaire Chamath Palihapitiya Thinks Northeast Cities Like NYC And Boston Are Hemorrhaging Income Due To Political Ideology — While The South Keeps Booming

‘Go Woke, Go Broke’: Billionaire Chamath Palihapitiya Thinks Northeast Cities Like NYC And Boston Are Hemorrhaging Income Due To Political Ideology — While The South Keeps Booming

by November 17, 2023 0 comments

By: Summer

Do you agree??? Let Tommy know in the comments!!!

Chamath Palihapitiya, the CEO of Social Capital, is one of the more controversial figures in the investing world.

Once known as the “SPAC King,” he faced criticism for his comments on human rights abuses in China and was also sued for misleading investors.

In June, he tweeted a screenshot of a Bloomberg article stating that six Southern states had contributed more to the U.S. gross domestic product than the Northeast corridor of Washington- New York- Boston for the first time in history.

But his accompanying caption sparked a heated debate: “Go woke, go broke,” he said, implying that the ongoing culture war and economic policies of northeastern states had facilitated the migration of wealth and economic power to the South.

While tweeps weighed in with their thoughts — including fellow billionaire Mark Cuban — here’s what the numbers show.

Wealth migration is taking place.

Bloomberg’s analysis of Internal Revenue Service data highlights the southern wealth migration. From 2020 to 2021, Florida, Texas, Georgia, the Carolinas, and Tennessee collectively added $100 billion in new net income.

Meanwhile, the Washington, New York, and Boston corridor lost $60 billion in income in that period.

This marked the first time the tax agency saw this type of reversal since it started collecting this data in the 1990s.

Bloomberg attributes the shift to a “flood of transplants.” Out of the 15 fastest-growing cities in 2021–2022, 10 of them were in the southeast corridor, according to Census Bureau data. Some of that growth is likely attributable to several corporations moving their headquarters from the Northeast to the South, bringing many jobs.

And it doesn’t hurt that residents will experience “warmer weather, lower taxes, looser regulation, and cheaper housing” in the South, as Bloomberg points out.

But what about the ‘woke’ issue?

Palihapitiya argued there’s a cultural layer to the debate. He claims “woke” policies were also a driving factor in the migration.

“Is the major differences between these two groups only ideology? Or is it something else like genetics, health, etc etc that I’m not understanding?” he asked his followers on X.

Several of those followers on the app agreed with Palihapitiya’s conclusion, with one noteworthy exception: billionaire Mark Cuban.

“Name me one woke company that has gone broke,” the self-described independent Cuban replied to Palihapitiya.

Palihapitiya took Cuban up on his challenge, responding with a list of all startups that had gone bankrupt in recent years and said some were likely to be “woke,” but Cuban wasn’t satisfied: “A list of STARTUPS failing is weak, and you know it Chamath.”

Cuban’s venture Cost Plus Drugs, which aims to lower drug prices for Americans, is arguably a “woke” corporation. Launched in 2022, the company delivers over 100 generic medicines across all 50 U.S. states with a simple pricing structure: costs plus a 15% markup, a $3 pharmacy service fee, and a $5 shipping fee.

Where does that leave the debate?

As further data comes in, the debate over America’s ongoing domestic migration rates will surely rage.

The IRS data Palihapitiya cited was based on 2020–2021 statistics when remote work and pandemic lockdowns peaked. That saw many office workers fleeing expensive cities to find more space and affordable living elsewhere.

More recent Census Bureau data points to a slight reversal of this trend. For instance, Manhattan (New York County) had a net domestic migration of 2,908 from 2021–2022 after a net domestic outmigration of 98,566 the prior year.

Either way, it’s safe to say Palihapitiya and Cuban will be eager to review the latest numbers when they’re available to see if they support their assertions.

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