Houston, New York Has A Problem

Over at City Journal, Edward L. Glaeser has a tail of two cities–one whose fiscal policies invite middle class growth, another whose punitive liberalism discourages it. And of course, both cities are microcosms of the states that contain them; as Nicole Gelinas wrote in April when she profiled New York Governor David Paterson’s early days in office, replacing the disgraced Eliot Spitzer:

To lay out his goals, Paterson gave a speech last week similar to the one that Codey delivered nearly three years ago. “We need to take a realistic view of New York State’s budget,” he said, which is “too big and too bloated.” He gently warned the legislature against its usual budget-balancing tricks: overestimating revenues, issuing long-term debt or hiking taxes to cover one-year shortfalls, and trying to use “gimmicks to solve real problems.” He added that the legislature’s modest cuts to Spitzer’s budget proposal would be eaten up by April as tax revenues continue to fall. “We have got to address these issues,” he said, “and not by taxing anybody.”

Paterson could have recited facts and figures from census reports on how New York ranked dead last, in both raw numbers and percentages, in net domestic population losses between 2000 and 2004, with nearly 183,000 residents leaving the state annually. While immigration from other countries more than made up for these losses, New York still lost some ground in its percentage of the nation’s population. And immigration could slow precipitously with the economy’s woes, as a protracted credit slowdown will lessen the state’s need for Parisian investment bankers as well as Salvadoran construction workers. The governor could also have cited numbers from the Tax Foundation showing that New York’s state and local tax burden is a full one-fourth higher than the national average, and significantly higher than the burden in some of the states competing most fiercely with it for jobs and residents: Pennsylvania, Florida, Texas, and most of the states in the new South.

Instead, Paterson cited a number of personal friends, all former New Yorkers, who have contacted him from out of state since his ascent to the governorship. “A friend from primary school, Randy San Antonio, told me he moved to Dallas 20 years ago,” Paterson began. “Another friend, Randy Watts, had moved to Reno. A friend from Syracuse, Marvin Lee Simons, said he’s working in Lower Manhattan. I said we should get together . . . and he said, ‘Well, I don’t live in New York. I live in western Pennsylvania.’ Jeff and Stacey Stackhouse wanted to start a business on Long Island. They moved two years ago–they’re trying to start their business in Charlotte, North Carolina. They couldn’t pay the taxes here.”

Socialism: if you build it, they will leave.