Sunday, January 15, 2012

Buffalo'd - Here's Steven Malanga at the WSJ: "How stimulus spending ruined Buffalo."


Having a senior fellow moment said...

And yet, New York City, which labors under many of the same horrendous state laws and fiscal decisions as Buffalo, was ranked 1st out of 366 metro areas in 2009-2010 growth by the U.S. Bureau of Economic Analysis this past September. Rochester, NY ranks 53rd. Albany ranks 56th. Syracuse ranks 77th.

Meanwhile, other areas in New York state rank poorly. And still other areas of New York are in the middle. Strange and non-definitive results for a state which is, Steven Malanga assures us, entirely "inhospitable to new investment"... "even while other governors have already signed laws lessening the fiscal burden on local governments."

P.S. Buffalo ranks 54th.

Elkhart-Goshen, Indiana ranks as one of the fastest-growing metropolitan areas. Would stimulus spending have "ruined" their growth?

Too bad Mr. Malanga missed this extra data. The world can be awfully limited when your only view is through the turret of a conservative think tank.

Eric said...

OK, I checked your link and I don't see where NYC was first in growth. It was listed first in GDP among American cities which, being the largest American city, is not surprising.

Even the 2009-2010 growth was preceded by contractions in the previous two years and the Real GDP (adjusted for inflation) ranked it 42nd, far behind a lot of Indiana and North Carolina cities.

I'm going to have to take another look at the census data, since I know that the population tends to follow job opportunities. NYC and California must be pulling 'em in.

For he's a jolly good senior fellow said...

NYC is first by the total amount of growth from 2009 to 2010: $66 billion.

That number represents approximately 14% of the United States' overall increase. New York City’s bump is a few billion less than the 2009-10 increases of the 2nd- through 5th-place areas, combined. NYC's percentage increase over its own 2009 figure (+4.7%) is the stat where it ranks 42nd.

Obviously New York has a major head start in overall GDP, where it already ranked 1st. But by the same token, it’s a lot easier for the smaller towns to post bigger one-year jumps in percentage. For example, Elkhart-Goshen, Indiana (+13%) is third in the nation by percentage of growth... but it's no coincidence they’d just dropped over 15% the previous year. Nor is it a coincidence that they got targeted stimulus money.

Example: Buffalo dropped by a smaller percentage from 2007 to 2008 than Houston did, but Buffalo likely had a harder time absorbing its smaller loss.

And that’s the point. This stuff is complex and contextual. So when Steven Malanga writes about sales tax and union benefits killing Buffalo, it’s all about his preconceived outcome.

Whichever criteria you want to use-- raw GDP, percentage increase, one-year increase-- the top scores come from both high-tax states and low-tax states. From conservative-voting states and liberal-voting states. From overregulated states and underregulated states. From the west and the east and the north and the south and the middle.

To get a more accurate picture for Buffalo or anywhere else, think tank guys like Malanga need less tank, and more think.