Robert Farley is skeptical of my market potential argument:

I like the high speed rail idea, but I’m not sure I buy the argument that distance is the real problem in the Rust Belt. Seattle, Portland, and Vancouver really aren’t that close to each other by Midwest standards, yet they all seem to be doing fine. Denver is very far from anything of consequence, yet is typically regarded as a wealthy city. I haven’t done any research, and so my thinking could be all wrong (maybe Cincy and Cleveland are richer than Seattle and Portland in some non-obvious way?) but cities that aren’t really close to other cities would also seem to benefit from being regional centers of consumption. Maybe there’s some kind of upside down bell curve, such that close proximity and relative isolation are good for growth, while middling distances are a problem? Or perhaps the experience of the coastal cities of the West isn’t transferable to the Midwest (this wouldn’t apply to Denver, though)?

One way to think about this is to note that if we’re computing a city’s market potential by averaging over distance weighted GDP, then we include the city’s own market in that calculation. Denver is a pretty big market with high levels of human capital investment, and so it does ok, despite its isolation. Ditto for the Pacific Northwest. But these places are still affected by their isolation. Incomes are lower than we’d expect given population attributes. And on the other side, cities in the northeastern corridor with unenviable economic profiles do much better in terms of output and incomes than they ever could in isolation.

So it’s not at all the case that Midwestern cities couldn’t succeed in isolation. It’s just that the task is made easier if those cities are able to leverage their own resources in a regional economy.