Getting Squeezed By The Parentheses States
Tom Wolfe likes to call New York and California "the Parentheses States", as he mentioned to the Wall Street Journal back in 2006:
George Bush's appeal, for Mr. Wolfe, was owing to his "great decisiveness and willingness to fight." But as to "this business of my having done the unthinkable and voted for George Bush, I would say, now look, I voted for George Bush but so did 62,040,609 other Americans. Now what does that make them? Of course, they want to say--'Fools like you!' . . . But then they catch themselves, 'Wait a minute, I can't go around saying that the majority of the American people are fools, idiots, bumblers, hicks.' So they just kind of dodge that question. And so many of them are so caught up in this kind of metropolitan intellectual atmosphere that they simply don't go across the Hudson River. They literally do not set foot in the United States. We live in New York in one of the two parenthesis states. They're usually called blue states--they're not blue states, the states on the coast. They're parenthesis states--the entire country lies in between."
And they really do appear to squeezing their pincers ever tighter against their citizens -- and especially their businesses. Just to follow-up on Rick Newcombe's essay in the Journal about Creators Syndicate leaving Los Angeles, it's safe to say that Steven Malanga of City Journal wouldn't advise them to relocate to Manhattan, lest they face "Life in Taxopolis:"
Six years ago, Mayor Michael Bloomberg justified a $1.8 billion property-tax hike by comparing New York City with a “luxury product” that businesses were willing to pay more for. “It isn’t Wal-Mart,” Bloomberg said. “It isn’t trying to be the lowest-priced product on the market.” One can only imagine what the mayor thinks of his analogy now. After all, demand for luxury goods tends to fall sharply in recessions, in part because the customer base for these products is narrow and highly sensitive to economic swings. That’s why the luxury market has virtually collapsed in recent months, while Wal-Mart remains among the best-performing retailers in America. Will something similar happen to Gotham? In the wake of the global financial crisis, New York’s luxury consumers—that is, the Wall Street firms that paid the city’s bills—are likely to shrink considerably and generate far less in profits and wages. New York will need to find someone to replace them. Yet the city will be hard-pressed to find another industry that can afford its staggering local tax burden, which has grown steadily under the businessman mayor. True, New York’s quality of life has improved enormously over the past 15 years, and today it is one of America’s safest and most livable big cities. But if it is to attract taxpaying businesses after Wall Street’s meltdown, it must also price itself competitively.
In a city where a $200,000 salary allows for renting "eight hundred moderately roach-infested square feet in an unfashionable neighborhood of New York" as Megan McCardle wrote the other day in the Atlantic, good luck with that happening anytime soon.