updated 7/16/2008 5:07:47 PM ET 2008-07-16T21:07:47

“A valley of humility between two mountains of conceit”: That is what Benjamin Franklin called New Jersey, which even in colonial days was overshadowed by the metropolises of New York and Philadelphia. New Jersey was named by King James II, then Duke of York, for the Channel Island on which he was sheltered during the English Civil War. New Jersey was plagued in its early years by rival claims from its neighbors and, still defensive, went to the Supreme Court in the 1980s to argue that it and not New York owns the Statue of Liberty and Ellis Island; New Jersey eventually got most of the islands’ acreage, but New York got the immigrant museum and Great Hall which are built on fill land. But New Jersey has much to say for itself. It is “a sort of laboratory in which the best blood is prepared for other communities to thrive on,” Woodrow Wilson said when he was governor, just a tad defensively.

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Today, New Jersey is the nation’s eleventh most populous state: It boomed in the 1980s, suffered sharply in the early 1990s recession, came back strongly, then fell back by the tech bust of 2000. New Jersey was the home of Thomas Edison and of the old Bell Labs, and a decade ago it was one of the centers of the telecommunications business. But Lucent, the successor to Bell Labs, was burned in the high tech bust; its stock fell from $65 to $3 and it was acquired by the French firm Alcatel in 2006; its former parent AT&T shut down its Basking Ridge campus in 2002. New Jersey is the home of several of the nation’s biggest pharmaceutical firms—Merck, Johnson & Johnson, Bristol-Myers Squibb, Novartis, Schering-Plough—with complexes spread out through north and central Jersey. But they have been troubled by class action lawsuits and by the threat of policies—reimportation of drugs from Canada, government negotiation of drug prices—which would destroy their business model and force sharp cuts in research on new drugs. These industries have given the state a high-income, high-education work force, but one ill at ease in an economy whose creative destruction richly rewards those who anticipate the future but imposes harsh penalties on those who, by mistake or misfortune, don’t. New Jersey is by most measures exceedingly prosperous: in 2000 it passed Connecticut and posted the nation’s highest median household income. But its hold on that position seems tenuous. It still trailed in per capita income and wealth and has a lower percentage of college graduates than Colorado, Connecticut, Maryland, Massachusetts, Virginia, and the District of Columbia; this is the home not only of high-income Ph.D.’s, but also of The Sopranos. This is prosperous middle-income country, with more two-car than one-car families but fewer limousines than Manhattan, with an estimated 13,500 $1 million houses but not the multi-million dollar co-ops of Manhattan or mansions of Greenwich, Connecticut.

Within New Jersey’s close boundaries is great diversity, geographically from beaches to mountains, demographically from old Quaker stock to new Hispanics, economically from inner city slums to hunt country mansions. Though New York writers are inclined to look on New Jersey as a land of 1940s diners and 1970s shopping malls, this state much more closely resembles the rest of America than does Manhattan, though drivers will find some peculiarities: horizontal traffic lights, jughandle intersections (you turn off to the right, and then wait for the light to make a left turn), a ban on self-service gas stations. The Jersey City row houses seen on emerging from the Holland Tunnel, many renovated by Wall Street commuters and Latin immigrants, give way within a few miles to the skyscrapers of Newark and its new Performing Arts Center. Farther out are comfortably packed middle-income suburbs and the horse country around Far Hills, the university town of Princeton, old industrial cities like Paterson and Trenton, and dozens of suburban towns and small factory cities where people work and raise families over generations. Among them are commuter towns like Middletown, whose commuter trails lead to Lower Manhattan, and which lost dozens of neighbors on September 11. A year later, only 37% of New Jersey citizens said their lives had returned to normal and 29% said they would never be the same; 43% said they thought about the attacks every day.

Whoever has legal title to Ellis Island, New Jersey has long been a magnet for immigrants, and it is again today. In 2000, 29% of its residents were born in another country or had a parent who was; only California and New York have larger percentages of foreign-born residents. Hudson County, the land along the ridge opposite Manhattan, was the home to hundreds of thousands of Irish, Italian, Polish and Jewish immigrants in the early 20th century; in 2003 it was 41% Hispanic, with Cubans, Puerto Ricans, Dominicans and Mexicans. Immigrants are plentiful in the little middle-American towns of Bergen County, Filipinos in Bergenfield, Guatemalans in Fairview, Koreans in Leonia, Indians in Lodi, Chinese in Palisades Park. The old central cities of Elizabeth and Paterson were half-Hispanic in 2000 and Camden, opposite Philadelphia, was 39% Hispanic. There is still a black majority in Newark, but that includes many of the Brazilians in the Ironbound district. New Jersey has all the ethnic variety that America offers.

In the last two decades, a new New Jersey has sprouted. The oil tank farms and swamplands of the Jersey Meadows have become sports palaces and office complexes; the Singer factory in Elizabeth, the Western Electric factory in Kearny, the Ford plant in Mahwah, the Shulton plant in Clifton are all gone, replaced by shopping centers or hotels or other development, and the GM plant in Linden, the last New Jersey auto plant, closed in April 2005; the intersection of I-78 and I-287 has become a major shopping and office edge city; U.S. 1 north from Princeton to North Brunswick has become one of the nation’s high-tech centers. Even some of New Jersey’s long-ailing central cities are perking up. New Jersey increasingly has an identity of its own. It is the home of big league football, basketball and hockey franchises and of the world’s longest expanse of boardwalks on the Jersey Shore from Cape May to Sandy Hook. And New Jersey is one of America’s great gambling centers: Atlantic City, an hour from Philadelphia and two hours from Manhattan, had gambling revenues in 2006 of $5.5 billion, a close second behind the Las Vegas strip's $6.7 billion.

State government played an important role in building New Jersey identity and pride. Governor Brendan Byrne in the 1970s started the Meadowlands sports complex and got casino gambling legalized in Atlantic City. Governor Tom Kean in the 1980s started education reforms and promoted the state shamelessly (“New Jersey and you: perfect together”). The revolt against Governor Jim Florio’s tax increase in 1990 was led by the first all-New Jersey talk radio station and took on national significance with the 1993 election of Christine Todd Whitman, who later became EPA administrator. In the 1990s crime and welfare rolls dropped, but auto insurance and property taxes remain the highest in the nation—and health insurance is expensive as well, thanks to state mandates requiring all policies to cover all manner of treatments. New Jersey, contained within two of the nation’s biggest metropolitan areas, was a harbinger of the national trend in the big metro areas toward Bill Clinton’s Democrats. Not so long ago, suburban New Jersey was one of the most Republican of big states: It voted 56%-42% for the first George Bush in 1988 and it turned against Florio in 1993 and moved toward Republicans in 1994. But in 1996 New Jersey voters, turned off by the congressional Republicans’ Southern leaders and by the national party’s opposition to abortion and gun control, voted 54%-36% for Clinton and 53%-43% for Democrat Bob Torricelli for the Senate. In 1997 Whitman, despite cutting taxes, was reelected by only 47%-46% over little-known Democrat Jim McGreevey.

In the years since 2000, the balance in New Jersey politics has favored the Democrats. In two elections each for governor and senator New Jersey has voted between 53% and 56% for Democrats and between 42% and 44% for Republicans. The numbers tell a story. Governor 2001: 56%-42%. Senator 2002: 54%-44%. Governor 2005: 53%-43%. Senator 2006: 53%-44%. In these years, surprisingly, the worst Democratic result was in the 2004 presidential election, when still reasonably fresh memories of September 11 probably helped George W. Bush: 53%-46% Democratic. On a map showing the results by city and townships, Democrats carry the spine of the state, on either side of the Metroliner route and through the South Jersey suburbs of Philadelphia; Republicans carry the outliers, most of the Jersey Shore on the east and the affluent suburban and exurban areas on the northwest. Democrats’ margins have been augmented by the steady absorption of immigrants—some 40,000 take out naturalization papers every year—and the outflow of modest-income Americans from the formerly middle American suburbs within close range of the Metroliner spine.

Democrats have been helped by a number of factors. First, the fact that New Jersey is the second most expensive political state in the nation, because candidates who hope to compete have to buy New York and Philadelphia television, which reach more people than live in the number two population state, Texas. That has helped Democrats because Jon Corzine, who amassed a fortune of $300 million when Goldman Sachs went public, spent more than $100 million on his races for senator in 2000 and for governor in 2005 and has generously subsidized other Democratic campaigns in between. Second is the habit of high-income, highly-educated New Jersey politics to defer to the choices of county and city political machines, of varying degrees of competence, cronyism and corruption. It is, astonishingly, a great advantage in both parties to have the designation of the local county party on the primary ballot. A 1993 campaign finance law allowed county parties to take contributions 18 times as large as candidates could, so money is increasingly raised by chairmen of parties that have control of local government and can dole out contracts—the Jersey term is “pay to play”—and then “wheeled,” or doled out, to favored candidates all over the state. Corzine has given hundreds of thousands of dollars to county Democratic machines which has enabled him to wield the power once held by the bosses of yore. Third has been the readiness of Democrats to pitch losers aside and the willingness of the legal and political establishments to go along. In September 2002 Senator Bob Torricelli, plagued by scandals, dropped out of his race for reelection and the state Supreme Court, in a bipartisan decision, upheld the right of Democrats to substitute on the ballot former Senator Frank Lautenberg (whose relations with Torricelli were famously acerbic). In August 2004 Governor Jim McGreevey, already in trouble because of his ties to later-convicted fundraiser Charles Kushner, announced that he would resign November 15; this was prompted by the revelation that he had appointed a gay lover as his homeland security advisor. McGreevey’s delayed announcement prevented a special election in 2004 (which a Republican might have won), installed in office as successor state Senate President Richard Codey (an amiable man who gets along with most New Jersey politicians) and allowed Corzine, with his capacity to spend unlimited amounts, to muscle Codey aside and seize the gubernatorial nomination, which proved to be tantamount to election.

What New Jersey gets out of this is a state with significant achievements and significant handicaps. McGreevey, Codey and Corzine all pushed for state subsidy of stem cell research, and in 2006 the legislature voted for a $270 million to subsidize this research at the New Jersey Institute of Technology in Newark, the Rutgers campuses in New Brunswick and Camden, and several other facilities. The Highlands Water Protection and Planning Act, passed in 2004, sealed off one-ninth of the state’s land in the northwestern hills from development, with delayed if any compensation to landowners. The legislature, given an ultimatum by the state Supreme Court—one of the most activist state courts over the last half-century—passed a civil unions law in December 2006. Corzine, over the opposition of Speaker Joe Roberts, in 2006 pushed through an increase in the sales tax, with an assurance that half the revenues would be spent on property tax relief. He pledged to support all-day kindergarten, community health clinics, rehabilitation of Port Newark and low-interest loans for first-time homebuyers. New Jersey, for many years the site of vibrant suburban growth, has seen since 2006 a domestic outflow of 3% of its 2000 population, matched only a little by a 4% immigrant inflow; can its pharmaceutical and telecom sectors continue to support a government that is growing as a percentage of the private sector economy? New Jersey honors its recent past with 9/11 memorials, a statute of an eagle in flight on the Eagle Rock Reservation in West Orange, on a ridge overlooking the Manhattan skyline 15 miles away, and an American eagle grasping a beam of the World Trade Center in Monmouth County, where so many residents left their cars in the parking lots that bright September morning never to return. New Jersey is headed to a different future, with the outcome uncertain.

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