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Blue Model Blues
Big Blue is Killing Upstate New York

Upstate New York is dying—and big blue is its killer. That’s the takeaway from an excellent piece by William Tucker in Desert News National on the economic woes of the upstate area. Tucker’s case in point is Binghamton, an upstate town that is doing almost as badly, and even in some ways worse, than Detroit. Binghamton has low average incomes, high unemployment, low home ownership rates, and high “evacuation” numbers. Other upstate areas are suffering similarly. The reason?

[U]pstate New York is tethered to New York City, whose residents overwhelmingly support higher taxes, stricter regulation and bigger spending than the national averages. Those policies are blamed for upstate’s economic woes by many in the region.

“Basically what you’ve got in New York is a state tax code and regulatory regimen written for New York City,” says Joseph Henchman, vice president for state projects at the Tax Foundation in Washington. “Legislators say, `Look, New York is a center of world commerce. Businesses have to be here. It doesn’t matter how high we tax them.’ I hear that a lot. But when you apply that same logic to upstate, the impact is devastating.”

Tucker walks through the destruction wrought by two policies in particular. New York spends twice the national average on its Medicaid system, even though cheaper systems, like California’s, work better. Moreover, New York, unlike other states, requires cities and counties to help fund the Medicaid system. So the cost of maintaing a poorly functioning Medicaid system gets partially shunted onto upstaters who can’t afford it.

In the high-income playground New York City has become, residents can bear terrible government, excessive taxes, and burdensome regulations. The money wealthy New Yorkers make has helped keep afloat a blue model system that would have collapsed otherwise. But upstate, poorer Americans are reeling from the impact of over-regulation, and the region is drying up. NYC’s blue progressives think of themselves as champions of the little guy and the poor. Upstate New York gives the lie to that self-assessment.

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  • dfooter

    Inland California another case in point.

    • johngbarker

      exactly!

    • JR

      Or Rhode Island. NYC suffers from a classic case of resource curse. NYC happens to include the island of Manhattan, which happens to be one of the major financial centers in the world. That brings in an immense amount of money into the city which allows all sorts of idiotic policies to flourish. But upstate NY, or even Chicago for that matter, do not have the money coming in that allow “blue” policies to go on. Arithmetic wins again.

      • vepxistqaosani

        Clearly, it’s time for us to ban arithmetic. Aren’t four millennia of racism, classism, and sexism enough?

        • JR

          The things about arithmetic is that it don’t give a $%@%$ about voting to abolish it, voting to ignore it, etc etc etc… Ask Rahmbo from Chicago. 🙂 I mean, arithmetic got a white guy elected as Mayor of Detroit. Don’t mess with it…..

  • Fat_Man
    • Pete

      It would if it could.

  • Anthony

    In wonder why Minnesota, which is more blue than red – although a lighter shade than New York – has done so much better than the country as a whole. This is not a rhetorical question. Maybe the Scandanvian work ethic and culture make the state an attractive place to live and work, politics aside. This has been a long term trend. On a percentage basis, fewer Minnesotans were rejected for military service on health grounds during the first world war than any other state.

    “The Miracle of Minneapolis.”
    “No other place mixes affordability, opportunity, and wealth so well. What’s its secret?”

    http://www.theatlantic.com/magazine/archive/2015/03/the-miracle-of-minneapolis/384975/

    • Anthony

      Also, rural America is going down the tubes, regardless of the politics in the state. Review this link to confirm what I have said. It shows almost every zip code in America. You can see the average income and the percentage of people that went to college.

      Rural Georgia, which is fire red, has a lot in common with upstate New York. Politics is not the main things to focus on. Rather, the loss of heavy industry (a great deal of which was located in rural areas or small cities) and the century long decline of the family farm are to blame.

      http://www.washingtonpost.com/sf/local/2013/11/09/washington-a-world-apart/

      • guest

        Are you the original Anthony or the other one? And if the other do you seek to provoke reader under mistaken name?

        • Anthony

          I am not the original Anthony if you mean that guy who posts a lot here. I feel that I have the right to use my name on this blog, and the other Anthony has not objected. He said that our different writing style make it pretty clear who is talking, and I agree with him.

          I have been a regular reader of this blog since 2011, and used to write comments using my full name before via meadia switched to discus. I no longer do that because I do not want prospective employers to be able to discern my political views on google.

    • guest

      No red or blue nor regional ethic – history, history, and clean government maybe.

      • Dan Greene

        What generates the “history, history, and clean government?”

        • bannedforselfcensorship

          The theory is Scandinavians.

    • seattleoutcast

      Nope, as someone who grew up there, I can tell you that much of the state is suffering thanks to the policies of the Twin Cities.

  • jeburke

    It’s also cold, it snows from October on, and industry no longer needs to locate along the NY Harbor-Hudson River-Erie Canal-Lake Erie corridor – – in part, because there is no industry; it’s all in China. That said, it would help compete with Texas to have lower taxes and fewer regs.

  • maulerman

    When you add to this mix that Binghamton and the upstate area sit on a vast deposit of natural gas resources which New York has prohibited from development, one can certainly understand the desire to secede.

  • rheddles

    Does Big Blue refer to International Business Machines or NY State politics?

    • Dan Greene

      Neither precisely. It refers to Mead’s concept of “the Blue Model” of high tax, high transfer payment, high regulation governance in the “blue states.” It’s a recurrent theme at this site, and if you type it in the TAI search window, you will probably get dozens of other examples.

      • rheddles

        No kidding?

        • Dan Greene

          Guess your humor was too subtle for me.

    • http://myindigolives.wordpress.com/ Ellie Kesselman

      That’s what I thought too, Big Blue = IBM! I used to work for IBM at GPD San Jose. I was totally confused. While IBM is to blame for off-shoring jobs to India in areas like Fishkill, Poughkeepsie and Endicott, that is not quite “killing upstate New York”. IBM certainly isn’t to blame for high taxes or high regulations in New York State!

  • seattleoutcast

    Again, Baker vs Carr is the culprit in this disaster. Since 1962, cities have dominated state legislatures because the check of the state senate was removed by an interfering, activist judiciary.

    Repeal Baker vs Carr and the rural areas of the state will have a voice.

    • feastfirst

      Yeah, nobody gets this…and they never will. One man one vote, and all…or you’re a fookin’ racist.

    • catorenasci

      I remember when Baker came down, and many, many people and commentators believed it would destroy the states with both large agricultural areas and densely populated cities. They even likened the bicameral legislatures elected one geographically and one on population to the compromise of the US Constitution balancing the power of differing interests. Many predicted just the result we have had in places like New York, Illinois, Michigan and California. Indeed, it is the very tyranny of the majority our Constitution and all but one state constitution (pace Nebraska’s unicameral legislature) were designed to avoid. Baker v Carr and Reynolds v Sims may have been the most destructive Supreme Court decisions in our history regarding the “republican government” guaranteed by the Constitution.

      • seattleoutcast

        Is there any way we can bring this to the courts today? Would the Heritage Foundation or the Landmark Legal Foundation be interested in taking this up?

        • catorenasci

          While I doubt the current court would have reached the same conclusions as the Warren Court did in Baker and Reynolds, the votes were (respectively) 6-2 and 8-1 and I think it is unlikely the Roberts Court would overturn either of them. It would take a Constitutional Amendment to restore the checks and balances in state government between large population centers and rural areas, and that’s unlikely to happen because the states dominated by urban interests would never ratify the Amendment.

          It was a disingenuous two stage process: Baker v Carr determined that, contrary to prior understandings, political redistricting was a justiciable question (to be decided by a court) rather than a political question (to be determined by the legislature or other political processes with which the courts do not interfere). It was a response to egregious failure to redistrict state legislature seats as population changed (not a question of whether you could have a geographically distributed state senate). It was a very hard fought case and the result belies how controversial it was. A classic case of hard cases make bad law, because some of the district imbalances in voting (not for state senate, but lower house) were almost as bad as some of the 19th century English “rotten boroughs” which spurred the Great Reform Act of 1832.

          Reynolds v Sims was the real killer, which enunciated “one man, one vote” and did away with geographical districts in state elections. Harlan wrote a vigorous dissent that the decision violated the principle of federalism (which I agree with) and Sen. Everett Dirksen warned of exactly what happened: the domination of states with urban centers by those urban centers.

          • seattleoutcast

            Thank you for that very well written response. I have learned much!

  • ubik

    So glad I left.

  • Paula

    I live on the PA side of the NY/PA border. It is like going to a different country when you cross over the border. You drive through these small towns and know they prospered years ago only to lose out to the leeches in Albany. Beautiful farms just left to rot because the owners can’t afford the taxes to keep the place going. It is a sad state of affairs, especially for those of us whose family heritage is based in upstate farming communities. My grandparents left for the greener pastures of PA years ago. I am thankful they did, but still sad to see what’s become of their homeland.

    I also worked in Binghamton for a few years and was just shocked at how financially depressed it was, even then. Scranton/WB look like boom towns in comparison. I saw first hand, due to my job, how downstate (NYC) sucked up all of the resources of the state, leaving upstate high and dry and fighting for peanuts.

    • ljgude

      I was born in Upstate NY near Binghamton but my family sold the farm and moved to New Hampshire in the late 40s. I have only seriously revisited the region once about 30 years ago with my sister and we came away glad that out family had chosen to move because the immediate vicinity where we had lived seemed much more depressed than rural New Hampshire. So thank you for your much more detailed on the spot experience. Certainly my father who was an economist and a New Yorker was aware of the tension between upstate and the city. He saw it as an extension of Adam Smith’s contention that the basic tension in a capitalist society was between agricultural and industrial capital. It would seem that by hobbling the power of the upper house of the legislature that industrial capital has trumped rural and small town interests and created a socially pathological imbalance. I agree with WRM that we can’t go back to the ‘Liberalisms’ of the early 20th century when agricultural capital employed a much larger percentage of the population. But we may be able to go forward to a time where the decentralizing effect of the Internet makes mega cities economically unsustainable and creates a new polity based on small towns and cities.

  • http://myindigolives.wordpress.com/ Ellie Kesselman

    There’s a typo in the first sentence. The source of the article by William Tucker is the Deseret News not the “Desert News”.

  • ripsnorter

    One correction: it’s Deseret News, with 4 Es, not 3.

    • Bill Pugh

      How many Es?

      • ripsnorter

        dEsErEt nEws

  • jim

    Binghamton’s problem is that IBM (founded just outside the city) has greatly downsized its operations in the region (more than 90%) and nothing anywhere near as successful as IBM has come along to replace it. (Plus the thousands of retirees with IBM pensions get older every year)

    The last real business success from the area is Dick’s Sporting Goods, but of course they don’t have nearly the local employment that IBM had.

    Local and state politics don’t help, but when the best idea local “leadership” can come up with is “have the state of New York establish a law school at Binghamton University”, I suspect they don’t matter much.

  • JR

    Which brings us back to Scotland, Catalonia, etc etc… At some point forcing people to live like you want them to live, with the bestest intentions becomes tyranny, and they want to leave. I would be shocked if we don’t see something in the US in the next 10 years.

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