North Coast Online

The Rest Of The Story

Finally, a coherent explanation of the causes that led to the Soviet Union's seemingly sudden collapse.

The timeline of the collapse of the Soviet Union can be traced to September 13, 1985. On this date, Sheikh Ahmed Zaki Yamani, the minister of oil of Saudi Arabia, declared that the monarchy had decided to alter its oil policy radically. The Saudis stopped protecting oil prices, and Saudi Arabia quickly regained its share in the world market. During the next six months, oil production in Saudi Arabia increased fourfold, while oil prices collapsed by approximately the same amount in real terms.

As a result, the Soviet Union lost approximately $20 billion per year, money without which the country simply could not survive. The Soviet leadership was confronted with a difficult decision on how to adjust. There were three options--or a combination of three options--available to the Soviet leadership.

First, dissolve the Eastern European empire and effectively stop barter trade in oil and gas with the Socialist bloc countries, and start charging hard currency for the hydrocarbons. This choice, however, involved convincing the Soviet leadership in 1985 to negate completely the results of World War II. In reality, the leader who proposed this idea at the CPSU Central Committee meeting at that time risked losing his position as general secretary.

Second, drastically reduce Soviet food imports by $20 billion, the amount the Soviet Union lost when oil prices collapsed. But in practical terms, this option meant the introduction of food rationing at rates similar to those used during World War II. The Soviet leadership understood the consequences: the Soviet system would not survive for even one month. This idea was never seriously discussed.

Third, implement radical cuts in the military-industrial complex. With this option, however, the Soviet leadership risked serious conflict with regional and industrial elites, since a large number of Soviet cities depended solely on the military-industrial complex. This choice was also never seriously considered.

Unable to realize any of the above solutions, the Soviet leadership decided to adopt a policy of effectively disregarding the problem in hopes that it would somehow wither away. Instead of implementing actual reforms, the Soviet Union started to borrow money from abroad while its international credit rating was still strong. It borrowed heavily from 1985 to 1988, but in 1989 the Soviet economy stalled completely.

Read the whole thing.  It turns out that Gorbachev was really not the marvelous and far-thinking leader he's often portrayed as in the West.  His country was broke and about to starve; about all that can be said for him is that he didn't pull a Kim Jong-Il and allow that to happen.

If This Works, Then It's True -- Markets Can Solve Everything

Once frowned upon and even illegal, ticket scalping reselling has become a big -- and legal even in New York -- business. Today's article in the Buffalo News brings up one interesting aspect of reselling, it may boost season ticket sales.

Both the Bills and Sabres consider their season-ticket sales the lifeblood of their existence. The vast resale market, with the click of a few computer keys, can make that season ticket more valuable, as long as there’s a demand for tickets.

“If you’re a season-ticket holder, your investment is worth a little bit more, because you can sell your tickets [at a profit],” Teal said.

Those increased season ticket sales and easy access to ticket resellers via the Internet will have another effect.  They'll allow the the local teams to raise season ticket prices higher than they might have once dared as they struggle to stay profitable in what have become "big city" games.   Local fans will be more likely to pay those high prices because of the opportunity to "hedge" the cost by selling off a few games (or all of them for that matter.)

A lot of people won't like it (I can picture Donn Esmonde's outraged column in my mind now), but wouldn't it be ironic if, in Buffalo of all places, a free market in tickets ended up saving our sports teams and not the Governor shoveling out our taxes?

Beware The Study

One shibboleth deeply-held by big-government new urbanists is that rail rapid transit improves property values and spurs development.  A professor of urban planning at UB has conducted a study, and shazam, he concludes its true here, too.

Houses located within a half-mile radius of Buffalo's light rail stations are assessed to be valued between $1,300 and $3,000 more than houses not within walking distance to a station, according to University at Buffalo study.

   The study, "Impact of Proximity to Light Rail Rapid Transit on Station-area Property Values in Buffalo, New York" by Daniel Hess, assistant professor of urban and regional planning in the UB School of Architecture, found property values were increased in neighborhoods close to stations at the UB South Campus, LaSalle Street, Amherst Street, Humboldt Avenue-Sisters Hospital, Delavan Avenue-Canisus, Allen Street-Buffalo-Niagara Medical Campus and Fountain Plaza.

Now, it might just be that these are some of central Buffalo's nicest neighborhoods to begin with.  You'll notice that the area around the Utica Street station doesn't figure in the list, for example.  I've seen no evidence after living here for 15 years that Buffalo's middle class gives a damn about being near public transport.  They don't use it.

I have a feeling this study will be widely-cited in the future.  Local light-rail proponents have been looking for some economic figures to justify expanding the system.  But if they do, think back and ask yourself this.  20 years ago we dug up Main Street to build the subway and nearly destroyed it in the process.  If, after all that time, housing values nearby are a measly $1,000 to $3,000 more than those 1/2 mile away -- was it really a good use of our money?

[UPDATE:] Just for the record, I'm a public transport fan, I just realize that it can become an expensive showtoy if allowed to.  Now that the weather's nice I take the Elmwood bus to work in Tonawanda just about every day.  But even though that bus travels through some of Buffalo's wealthiest and supposedly most socially-conscious neighborhoods,  I'm here to tell you that I'm one of two or three passengers in office clothes.

As it travels up Elmwood, there's perhaps one person at each stop -- usually a schoolkid.  There are more at the intersections (Utica, Delevan, etc.) where the east-west buses cross. Ridership is overwhelmingly minority and obviously not so well-to-do.  It seems that even with gas well over $3/gallon, those most likely to advocate transit expansion don't use it themselves.  How odd.

Cut Corporate Taxes

A lot of Americans believe that our industries need to  be protected against unfair foreign competition.  It's not fair, they claim, that low Chinese labor costs, for example, shut down American plants.  But labor costs aren't the only problem we've got as Fred Thompson appears to understand.

Here he is on CNBC's Kudlow & Company yesterday:

Mr. THOMPSON: We have, you know—if you include state taxes—the highest corporate tax rate in the world. That makes us less competitive. All those things have to be looked at. And all those—especially as far as the corporate tax rate is concerned, need to be clearly reduced, I think.

KUDLOW: Yeah, it's an interesting point. There's been a bunch of news articles. Europe, believe it or not--I mean, old Europe, believe it or not is engaging in low tax-cutting competition. And...

Mr. THOMPSON: It's ironic that when western Europe starts going lower than you, you need to be concerned about it.

Democrats in particular are pretty convinced that limiting foreign trade is the way to go.  They beat the drum of low Chinese currency exchange rates and even lower Chinese wages.  Of course, they all know that our corporate taxes are an even bigger cause of the problem, but they just can't give up that revenue.

Why else be in Congress if you can't dish out other people's money?

Plastics!

When we think of oil, we imagine cars, trucks and jet planes guzzling the stuff.  But, of course, oil is used in the production of a lot of consumer goods, and it's on that point that Tyler Cowen suggests that China's newfound love of the stuff may not hurt us as much as we think.

If you've been to the mall lately, you've probably noticed that China is making scads of plastic. As the world's second-largest plastic producer, it is furiously turning oil and petrochemicals into everything from lobster souvenirs to sneaker soles. By embedding oil in products, China is, in effect, importing oil on behalf of U.S. consumers -- as much as 1 million barrels per day.

While China's demand for energy is driving up oil prices worldwide, its cheap goods are having the opposite effect on the cost of living in the United States. A recent analysis by the U.N. World Economic and Social Survey suggests that Chinese pressure on oil imports may have raised U.S. inflation by 0.23 percent from 2001 to 2005, but cheap imports of Chinese goods decreased U.S. inflation over that same period by 0.28 percent. For the moment, the net winners are U.S. consumers.

What goes up must come down?

Buffalo News: The Poor Should Pay Wal-Mart's Health Care Costs

That's as accurate a headline as the one in today's paper, Wal-Mart lets public foot the bill.  Reporter Phil Fairbanks borrows the latest union tactic to damage the retailer by claiming that it's a business's responsibility to pay its employees' health care costs.

By Wal-Mart’s own admission, more than half of its workers either go without health insurance or get it through another source.

And of those, about 1 in 5 receives benefits from Medicaid, Medicare, the military or other state programs funded by taxpayers.

How Wal-Mart’s health care policies affect Western New York and the rest of the state is difficult to quantify, although one labor-backed group says New York State taxpayers pay $61 million a year to finance health care for Wal-Mart employees.

Fairbanks could just as easily have praised Wal-Mart for the hundreds of thousands of jobs it's supplied to  poor people who might otherwise receive not only government health care but food stamps and welfare, too.  I wonder what the savings to the taxpayer are there? 

His argument is phony.  Employers are no more duty-bound to pay for their employees' health care costs than they are to buy their gasoline, their food or their housing.  Those are all individual responsibilities and where they're not, it's only because politicians have passed laws to make the rest of us pay.  Wal-Mart had nothing to do with it.

If Wal-Mart were to pay for every employee's health insurance, it would have to raise its prices to cover the cost.  The "savings" to the taxpayer would just be transferred to its customers.  Its business would drop, too.  Wal-Mart is successful because it's cheap, and losing that edge would mean fewer jobs for the very least qualified (and thus poorest) employees forcing them back onto the welfare rolls. 

The silliness of this fake outrage is illustrated by the fact that the poor make up a very large portion of Wal-Mart's customer base, and they're the ones would end up footing most of the bill for those other poor people's insurance. Doesn't really make much sense, does it?  It's easy to get the impression that these people don't really think anything through.

Of course they'll insist that those insurance payments would come out of the company's [no doubt, exhorbitant] profits, but that's just smoke. If Wal-Mart's profits drop then its shareholders will sell their stock and look for better investments.  The share price would drop and seriously hurt the company's chances for future growth.  It would be in real trouble then -- which is what I suspect has been the goal of its critics all along.

 

 

Free Trade Could Get Freer

If this happens, Buffalo would benefit.

The Canadian dollar will reach parity with the U.S. currency by the end of 2007 with the help of high commodity prices, ongoing merger-related interest and higher interest rates, CIBC World Markets said on Friday.

CIBC said the Canadian dollar, which was last at par with the U.S. dollar in November 1976, will maintain parity with the greenback into at least the first quarter of 2008.

A high Canadian dollar would reconnect Buffalo with its "western" suburbs adding millions to our economy.  Even with the two currencies at par, Canadians stand to benefit from shopping here and partying here because -- believe it or not -- our sales taxes are lower.  We get more business and they still save money.

Everybody wins.  Ain't trade great?

Fixing The Economy Isn't A Mystery

This op-ed was probably passed over once the majority of Buffalo's readers had reached the second paragraph.  He's absolutely right -- but it's not a popular message for some reason.

A recent editorial in The Buffalo News spoke of restoring the upstate economy. It quite correctly places the responsibility with Albany. Albany broke it. It should fix it.

The trouble is, it can’t be fixed. Not unless Albany stops concocting government programs to fix things, and starts doing what really needs to be done.

Economic growth requires a low cost environment. Period. End of story.

Buffalo has to compete with cities in the rest of the country and everyone agrees on that point.  But for some mysterious-to-me reason, the people who run and influence Buffalo have decided that we should compete on the basis of urban amenities: parks, architecture, culture, etc.. 

If we want to create life in upstate communities, we have to give people a reason to stay, and that means a tax environment that encourages small business growth, starting with the income tax.

Not surprisingly, states with average or below-average income tax rates have above-average rates of job creation.

Virtually all of the people around here who promote high taxes and government programs to spur the economy know nothing about business.  This local elite is generally composed of lawyers, career politicians and academics.  Their understanding of economics is colored by pseudo-Marxist theory that downplays profit in favor of planning and meeting social goals.   

In their view, tax cuts are give-aways to business.

Unfortunately, Governor Spitzer is in their camp.  His very first budget included a $1/2 billion increase in corporate taxes.   If he came out tomorrow and announced a $500 million state program to promote upstate economic development, we'd just break even, but he'd be widely praised for his attention to our problems.  Of course, nothing would change and he'd raise taxes the following year to spend that money on economic development, too.

Suck money out of the state and inject it back in.  Feign surprise when nothing changes.  Rinse, lather, repeat.  We've been doing that for 50 years now.  You might begin to think someone would figure out it doesn't work.

Out Of Character -- But Welcome

Well, knock me down, Albany has voted to let ticket resellers and scalpers operate in a free market.

A measure ending current price caps on how much scalpers and brokers can charge on tickets to sports and entertainment events is moving toward final approval by state lawmakers and Gov. Eliot L. Spitzer.

Now, maybe we can work on liberating the rest of the economy.

Gasoline Price Blame

While it tickles my heart to see a Bush and a Clinton receive the blame for something, I believe Doug Turner still has it wrong when it comes to high gasoline prices.

Between 1991 and 2000, Democrat Clinton and Republican Bush OK’d 2,600 mergers in all segments of the American petroleum industry.

Clinton and Bush left us with predictably sky-high pump prices and massive oil company profits. Now, five companies control more than 55 percent of gasoline sales, giving them massive regional clout on wholesale prices.

Have you seen the price of oil lately (gasoline is refined from oil)?  It closed at almost $65/barrel today.  That price is determined by millions of investors and there's next to nothing that the oil companies can do to influence it. 

They're not quite the global force they were in the seventies.  70% of the world's oil supply is now controlled by the producing nations and not by the oil companies.   That's why we even have to listen to the likes of Russia, the Arab countries and Venezuela.   They can certainly affect oil prices and thus gasoline's by curtailing production.

Since the gasoline supply crunch in the 1970s, gasoline consumption doubled but no refineries have been built by any of these new “oiligarchs.”

This is probably the most irritating of the Democrats' complaints.  Environmental regulations imposed in the seventies are why we don't have any new refineries, not a lack of desire to build them.  They're almost impossible to get approved and no one wants one in his backyard anyway.  At the moment a little ethanol plant proposed for Buffalo is being fought with lawsuits.  Can you imagine the local reaction if Exxon wanted to build an oil refinery here?

But that's not to say that we're trying to operate on the same refining capacity we had in the seventies. That capacity was fine right into the nineties -- in fact there was excess capacity back then.  But as gasoline usage has increased, the oil companies have spent billions upgrading those facilities and expanding their capacity.

In fact, we probably wouldn't even be having this debate over high gasoline prices if it weren't for another helpful environmental regulation, the one that specifies 20 separate regional blends of gasoline.   This beauty splits up the American gasoline market to the point that excess gasoline in Buffalo, for example, can't be rerouted to St. Louis in case of a shortage there.

To make things even worse, those 20 blends are further separated into winter and summer varieties.   

Summer-blend gas isn't new. It was first sold in 1995, as required by the Clean Air Act's 1990 amendments, and the current, even cleaner, concoction was phased in for the summer of 2000. Since then, there have been sharp spikes in fuel prices every spring as summer blends get rolled out. This is not so much because it's expensive to make the gas—the added cost per gallon is only 1 or 2 cents—but because refineries generally try to sell every last bit of winter fuel before mixing in the slightly more expensive summer batch. Sometimes they draw down the stock too far, creating shortages before the first deliveries of summer blend enter the supply chain.

So refiners have to perform the delicate balancing act of predicting how much winter blend will be required through March while assuring at the same time that it's all gone on April 1st.  During that process they also have to shut down the refinery and retool it for the summer blend.   Throw in an increase in gasoline demand this year and $3.19 gas is what you get.

George H.W. Bush and Bill Clinton may both have made mistakes during their careers (both, oddly enough, having to do with lips), but causing gas prices to rise wasn't one of them.  Environmental regulations have a cost.  If we think gas prices are too high, then we should work to get rid of the superfluous ones.  And those who believe that only high gas prices will save the earth should just shut up while they're ahead.

Treading Water Would Be An Exaggeration

Think about it.  While North Carolina, Alabama and Indiana (just to name a few) are spending hundreds of millions of dollars to lure new industries, we're doing the same just to keep the few we have.  Think we're in a hole?

This, Too, Shall Pass

I have to believe that "serious hardship" means something different in 2007 than it did, say, during the Great Depression.

Nearly half the country thinks near-record gasoline prices will cause serious hardship, prompting ever more people to consider trading their gas guzzlers for more fuel-efficient cars, an AP-Ipsos poll says.

Jeez Louise, the damned stuff only costs 10 or 20 cents a gallon more than it did a year ago. For most of us that's an extra $2 to $4 for a fill-up.   A "crimp" perhaps, but a "serious hardship?  Not so much.

Apt Analogy

Don Boudreaux only just recently learned of the "Fly America Act".  It's a federal law that "requires Federal employees and their dependents, consultants, contractors, grantees, and others performing United States Government financed foreign air travel to travel by U.S. flag air carriers." Boudreaux has written his Congressman to suggest the "Study America Act" which would require all federal government-sponsored research to use only American research.

Why must hard-working, high-wage American researchers compete against foreign researchers - a competition that undoubtedly jeopardizes our nation's defense?  Why, for example, should researchers at the Centers for Disease Control use American tax dollars to pay for subscriptions to the British medical journal The Lancet?  Doing so shrinks the market for American medical research and thereby hurts America's health-care industry and, ultimately, America's children.  Or why should federally funded social-science researchers use tax dollars to buy books on international trade written by foreigners when my own book on globalization will soon be out?

Impeccable protectionist logic.

I Can Predict How This Will End Up

Town government in Salem, MA is working with its, um, psychic community to determine the proper qualifications for entry into the field.

Lawyers have the bar exam. Accountants have the CPA exam.

Should Salem's fortunetellers have to pass a test of their own to prove they're psychic?

City councilors, hoping to crack down on fraudulent fortunetellers, are trying to define exactly how a psychic can become licensed to set up shop in the Witch City. They want candidates to undergo a criminal background check and to either live or run a business in Salem for at least a year.

But many psychics want the city to go a step further  - make sure they're actually qualified to predict the future.

Look, there's only one way to discern fortunetellers' abilities -- make 'em predict something and see if it comes true.  Wanna bet that won't be part of the licensing process?  The government shouldn't be worrying about silly people who spend money trying to find out the future and then feel cheated.  You can't legislate against foolishness, though we keep trying.

I can understand the desire of the psychics to participate in this exercise, though.  Like every other group of workers, they'll find it in their own best interests to create legal barriers to others trying to  do the same work.  They can charge more if there's less competition for their services.  That's why you need a license to cut someone's fingernails in New York State.

[UPDATE:] I remember when I was a kid, my mom's best friend ran a small beauty parlor out of her home. As a favor, she used to cut my hair for next to nothing.  But she would first draw the curtains and I was always reminded not to tell anyone because her license only permitted her to cut women's and girls' hair and she didn't want a fine.

The barbers' lobby must have been quite strong in New York back then -- though the seventies would eventually put most of them out of business anyway.

Everyone's Allowed One Bad Performance

I'm a huge fan of Thomas Sowell, but for the first time in my memory, he's made some really poor arguments.  They're against immigration and bear in mind that I don't like the immigration bill either.

The first, and perhaps biggest, fraud is the argument that illegal aliens are “doing jobs Americans won’t do.” There are no such jobs.

Even in the sector of the economy in which illegal immigrants have the highest representation — agriculture — they are just 24 percent of the workers. Where did the other 76 percent come from, if these are jobs that Americans won’t do?

All agricultural jobs are not the same.  The best involve owning or managing farms and operating mechanical equipment.  The worst are those which require stooping over all day in a field filling up a  bag of tomatoes for little pay.  Oh, and it's real hot, too.  Americans may very well not find those jobs worth doing.  That's certainly not proven; perhaps if tomato-pickers made more, Americans would do it.  But lumping all farm jobs together is dishonest.

The argument that illegal agricultural workers are “making a contribution to the economy” is likewise misleading.

For well over half a century, this country has had chronic agricultural surpluses which have cost the taxpayers billions of dollars a year to buy, store, and try to get rid of on the world market at money-losing prices.

If there were fewer agricultural workers and smaller agricultural surpluses, the taxpayers would save money.

I'm even more surprised by this one.  The only reason that we've had "chronic agricultural surpluses" (and why would that be necessarily bad?) is that federal price controls and farm subsidies have encouraged them.  Mr. Sowell surely knows that.  If Congress and the President eliminated farm-welfare, the surpluses would disappear as prices decreased.  Immigrants, illegal or otherwise have had nothing to do with surpluses.

As I said, I'm opposed to the current immigration bill, but not for economic reasons.  I suspect that more people in the working in the U.S. only serve to grow the economy.  But I consider myself conservative instead of libertarian for a reason.  The United States must protect its borders and be able to regulate the number of people who come here if only to preserve order.

I'm disappointed that Dr. Sowell didn't come at it from that angle instead of citing easily disprovable economic straw men that would be more expected of someone like Paul Krugman.

How About A Law Against Politicians Gouging

The House passed a law today aimed at gasoline "price-gouging."  They didn't define it, they won't even try to measure it, but they're quite sure they'll know it when they see it.  Rather like obscenity, I suppose, a fine example of which this law is.

Responding to high costs at the pump, the House approved legislation Wednesday that would outlaw gasoline price gouging.

Many lawmakers said that may be easier to say than to detect or enforce.

The legislation would penalize individuals or companies for taking "unfair advantage" or charging "unconscionably excessive" prices for gasoline and other fuels.

Now, you can define a murder or a rape (though determining if the latter actually happened is often another story) and the law's pretty clear on what theft means.  But passing a law against "unconscionably excessive" fuel prices is not legislation -- it's just an invitation to more lawsuits.  If the bill's chief sponsor, the delightfully named Bart Stupak (D-MI), were serious he would have specified a percentage over the prevailing price that qualified as "excessive."

But he's not, of course, and rightfully so.  And besides, the thing won't likely pass the Senate anyway.  It's fascinating, though, that with all we've learned about economics in general and price controls in particular, politicians are still trying to tell supposedly free citizens how much they can charge to sell their own property.  That's what's unfair, unconscionable and excessive.

Gas Doesn't Cost Enough But Investigate Why It's So High

The Buffalo News editorial board is mighty conflicted over the price of gasoline.  On the one hand, the price is obviously not high enough.  After all, we keep buying it.

The other problem with the price of gasoline is that, despite the public outcry and the echoed outrage in the halls of Congress, people keep right on buying it. They drive gas-guzzling SUVs. They buy houses that require 45- or 60-mile commutes, one way, much of it sitting at stop lights with their dirty engines idling, idly looking at all the other cars that hold one commuter each.

But dammit, they just know there's  corporate skullduggery afoot and so those too-low prices should be investigated.

The petroleum industry is so dominated by so few firms that the question of whether the market has been manipulated is self-evident. Of course it has, as much by the government’s unwillingness to pass and enforce anti-trust laws as by any treachery among the petro giants.

Sen. Charles E. Schumer’s call for an investigation into suspected price-fixing by the oil industry is a good idea. We need to understand that price-inflating limits on the supply of gasoline have at least as much to do with deliberate decisions about building and using refineries as they do with hurricanes or environmental laws.

Got that?  "Whether the market has been manipulated is self-evident."  Well, why even hold an investigation? Probably because the Democrats have a long history of holding ostentatious hearings into the price of oil. The last one came after Hurricane Katrina.  There have been dozens of these investigations since the automobile became an important part of American life, and the results are always the same.  Um, no evidence of skullduggery.

Schumer knows this.  So does Mme. Pelosi I'd wager.  These are not business-ignorant people.  But their base expects it and an antagonizing attitude toward big businesses soothes the liberal editorialist's soul. Look, oil prices are high now.  It only makes sense that the oil companies would want to sell every possible gallon of gas they possibly could.

Conspiracy theories of withheld inventory and unneeded refinery shutdowns have all the credibility of fire can't melt steel.

 

Follow The Money

Leave it to the left-leaning Brookings Institution to give the Buffalo cart-before-the-horse gang even more ammo.  It's issued a report that lists 12 upstate New York cities as trailing nearly all 300 cities studied nationally -- but not to worry.

But unlike past reports that merely repeat the woes, the Brookings report optimistically points up an array of attributes possessed by the state’s 12 “older industrial cities” that can overcome their challenges.

Those include historic properties and neighborhoods, walkable city grids, public transit, untapped waterfronts, a concentration of educational and medical facilities, and cultural options like museums, theaters and sports teams.

Sound familiar?  Here are some of the recommendations.

“We really try to demonstrate that, given the many assets these cities have, the moment is really right for the revival of these urban economies . . . if the right public policies were in place to capitalize on them.”

Remember, this is the Brookings Institution, it only follows that "public" policies will fix us -- private enterprise, um, not so much.  Here are some of those policies.

In particular, the report urges efforts to reduce city crime, improve schools, reduce costs for families and businesses, reinvigorate downtowns, invest in industries in which cities have a competitive edge, upgrade infrastructure, develop waterfronts and parks, tear down obstacles like highways that block public space, build the middle class by investing in job training and wealth-building programs, and support growth of desirable urban neighborhoods.

Out of all of those suggestions, only "reduce costs for families and businesses" makes sense, and while everyone in New York mouths the words they do little to nothing about it.  When Albany cut Workmen's Comp rates, it also raised corporate taxes by $1/2 billion. 

Everything else mentioned is only what city government should be doing anyway -- except investing in "industries in which cities have a competitive edge", of course.  Government has no business investing in industries.  Why would we want a bunch of politicians in Albany picking industries to invest in with our money? I mean, Eliot Spitzer's a very smart man, I'd take investment advice from him any day. 

But how much of his personal portfolio do you suspect is tied up in embryonic stem cell research, for example? Not much I'd imagine, but he's proposed that New Yorkers' taxes invest in it.  And what portion of the vast New York State retirement fund is placed in bio-informatics.  It's purported to be the industry of the future, but it's also not terribly profitable at the moment. 

When government invests to make money differs from when government invests for political reasons. Government's role is to maintain a stable environment in which individuals can invest with confidence. I would have rewritten the introductory paragraph to read as follows.

But just like past reports that gloss over an economic climate that discourages business activity, the Brookings report optimistically cites an array of urban attributes that appeal highly to those who already have good jobs but ignores the reality that businesses don't care much about public transport, urban parks or historical architecture.

Businesses want to make a profit.  That's why job growth is booming in little old cold; barren; unhistoric; light rail-free; no pro sports teams; lousy-image Wyoming. The whole state's population is about half of Metro Buffalo's, but over the last decade they've added 38,000 new jobs while  we've lost 3,740.  Think about how many of our children, siblings, parents and friends might still be here if we'd created 38,000 new jobs over the last 10 years.

Wyoming's got one thing going for it out there -- a business climate that attracts entrepreneurs who want to make money.  People are following that money (just as they did a century ago in Buffalo) and the amenities will follow them.

That's how it's always worked and still does.   The irony is that if New York would cut back on its crushing government spending and taxes and let business flourish here, we'd get out of our economic rut and state revenues would grow.  We'd still end up with the pretty waterfront and our precious arts.  Our neighborhoods would revive largely on their own because more Buffalonians would be working at better jobs.  They'd pay more taxes and there'd be even more money for public spending.

But we're too hung up on government plans to let that happen and the Brookings Institution hasn't helped.

 

Tourism Dead-End

I suppose it's only natural that upstate communities increasingly turn to tourism as a solution to our horrible economic situation.  After all, it's the one industry that citizens can work to attract on their own.  Since Albany won't do much of anything to improve the economic climate for more productive and profitable businesses, we do what we can.

Buffalo restores its architecture and preserves its history to attract heritage enthusiasts.  Jamestown builds an ice arena and beats the bushes for hockey tournaments and skating contests.  Dunkirk puts a big hotel on its harbor and waits for the tourists (it's still waiting.) And every little town along the Erie Canal struggles to find something -- anything -- that might convince a vacationing boater with a few bucks on his VIsa card to stop there for an afternoon and maybe spend the night.

And all for what?  A few hotel jobs and a new building here and there that might wipe out some of the blight of a half century of decline.  It's pitiful when you think about it.  Now, I don't blame New Yorkers for trying, it's to their credit that they still do.  But why do they keep voting for people who won't do what's needed to get us out of this mess?

There's nothing wrong with tourism dollars -- they spend just like all the others.  But in a part of the country that can attract them for only three months of the year, they give thin economic gruel, indeed.  That's the reason, of course, that there's little or nothing to do on our waterfront.  It's not that no one's thought of it and it's not that our catatonic government's preventing it -- it's because you can't make your money back when you only earn revenue for 1/4 of the year.

That is why, of course, the government has had to step in to create something there.  It's not bound, after all, by the rules of profit, cash flow or payback periods.  It can spend our taxes on anything that will make the voters who stamp their feet the loudest happy.  We'll have a pretty waterfront, goddammit, and the cost be damned, too.  Tourists will pay for it, they say.  But they're lying and they're counting on the fact that we won't hold them accountable.

Given our history, we won't.

Gas Prices

Glen Whitman illustrates why today's gasoline is a bargain compared to what we paid in the early eighties.

Protecting The Poor From Themselves

Business Week magazine has followed our local paper's lead and printed an article on how business "preys" on the poor.   Russell Roberts isn't impressed.

Preying on low-income consumers? So poor people are mice and companies are owls? Poor people are gazelles and companies are lions? Poor people are bugs and the companies are venus fly traps? People are being encouraged to live beyond their means by companies? Ah yes, it's not in our genes to want more, it's something being foisted on us by companies that prey on us. 

It reminds me of the state-run liquor stores in Alabama where my parents live. They are ugly and uninviting. the lighting is harsh. There's no attempt to make the product appealing. Making shopping for liquor a pleasant experience might encourage me to enjoy myself. Or worse, get drunk. I guess we're lucky that they let us buy liquor at all in Alabama. Business Week should produce its cover in black and white rather than in color. You don't want to encourage poor people to buy it.

Business should be conducted honestly, period.  The product advertised is the one sold.  The stated price is the one charged.  Return policies are made available and followed.  No laws or health regulations are violated.  As long as those conditions are met, then attempting to regulate who sells what to whom should be none of the government's (or the media's) business.  And that applies to gas stations, check-cashers, rent-to-own stores and brothels for that matter.

You Mean The Sky Isn't Falling?

Neil Boortz puts gasoline prices in perspective.

According to the AAA, one year ago the price of regular was $2.929. Today that price is $3.114. That's an 18.5 cents per gallon increase over the past year.

Now we go for the average gas mileage for cars in the U.S. The National Highway Traffic Safety Administration says that as of 2004 the average mpg for new cars sold in the U.S. was 24.7. In 1980 it was 23.1. So, to make a point here, we're going to go even below the average price for 1980. We're going to use 20 mpg.

Now ... for those of you who went to government schools, I'll do the math for you. You're driving your family of four 1400 miles to get to Disney World and back. That means you'll be burning 70 gallons of gas at 20 mpg. The gas is now 18.5 cents more expensive than it was last year. Let's go ahead and round that UP to 20 cents. So, we burn 70 gallons and each gallon costs 20 cents more than it cost last year. That's going to cost you an amazing $14.00.

Oh My God! What an incredible tragedy! What a devastating blow to your finances! You're going to have to spend $14.00 more to drive your family to Florida this year than you did last year! That's $3.50 for each family member! How in the hell are you ever going to be able to afford this? Alert your local radio station news department! Call the newspaper! Sound the alarm! Americans are being crippled by these rising gas prices! Call your politician. Something has to be done about the evil oil companies! Get the government involved! We need more regulation!

Oh .. and you people driving to and from work need to be outraged too! Are you doing your share of the whining?

The average commute to and from work in this country is 16 miles. Now of course we know that cars don't get the mileage on a stop-and-go commute as they do on the road, so we're going to lower the gas mileage figure from 20 to 15. So, you're driving 32 miles (on the average) to get to work and back every day. That is gobbling up about 2.13 gallons of gas. Go back to that 18.5 cents per gallon increase over last year and you'll see that you're spending about 40 cents more for gas for your commute this year than you were last year. That would be about $2.00 a week. Less than the price of a decaf skinny latte at Starbucks. A lot less.

Oh, the humanity! You're spending less than the cost of three text messages on your cell phone every day to cover the increasing cost of gas!

I think he's right.  It's a 6.3% increase since last year -- not pleasant, but not devastating either.

Medicine, Cure: Worse Than

We free-trade types are often criticized for acknowledging that changes in the economy will result in long-term gain but will, no doubt, create hardship for those people who lose their jobs in the short-run.  But one letter-writer to the Buffalo News proposes doing just that intentionally -- to make a political point.

Detroit should offer vehicles that double the miles per gallon in the next two years with the goal of totally weaning us off our foreign oil dependency. In order to help Detroit with this endeavor, I suggest Americans stop buying new cars for two years. This action will have a huge, but temporary, impact on our economy but in the long run will be worth it. [emphasis mine]

Wow, talk about your (temporary) tough love.  All of a sudden I feel like a bleeding-heart liberal.

Ben Bernanke, Where Are You?

What to do when the 1990's convention of tipping $1 per drink has now increased to $1.22 because of inflation?

Actions Speak Louder Than . . ., Well, You Know

Lawrence White digs up an old Susan Stamberg NPR interview with Milton Friedman.

STAMBERG: I don't know how many Russian cabbies in New York have told me -- in the course of a really bumpy, pothole-filled ride -- how dreadfully tough their lives are here, having made that transition from a government which took care -- yes, in very brutal, cruel ways -- but took care of most of their human needs, and try to fight it out on the streets of the major city of capitalism.

FRIEDMAN: And why did they come there?

STAMBERG: Gold in the streets, was it?

FRIEDMAN: Yeah. Why didn't they stay in the Soviet Union?

STAMBERG: Of course, they saw more opportunities. That's true, Professor, but in terms of...

FRIEDMAN: Do they regret having come?

STAMBERG: Well, I think they did. I'm not saying...

FRIEDMAN: Don't you think that the most meaningful vote is a vote with your feet?

STAMBERG: So you're saying pack up and go back if it's so tough for you here?

FRIEDMAN: Well, how many have done so?... Don't misunderstand me. I'm saying if you really want to know what they really believe about the relative merits of the two systems, see what they do, not what they say. And what they do is to stay here. They don't go back. I think of my own family. My parents came here from Europe at the age of 14 and 16. And they had a hard time, a very difficult time, but it opened up a world of opportunity for them. And the same thing with these cab drivers whom you're talking about who are bitching about it. Look at what they do, not what they say.

Good advice.

Yes, Virginia, It Surely Is A Tax

Buffalo News Everybody's Column

Opponents of the expanded bottle bill love to label it as a “tax” because they know how volatile that word is. But any reasonable person could tell you that no “tax” is 100 percent refundable. The truth is that deposits on bottles would save taxpayers millions of dollars in landfill and incinerator fees. It is an environmental tragedy that the country now goes through 2.5 million plastic bottles every hour. It is estimated that if nondeposit bottles and cans were recycled at the rate that deposit bottles and cans are, New York State could save 600,000 barrels of crude oil, and greenhouse gas emissions could be cut by 20,000 metric tons.

Increasing awareness of recycling is a noble idea, but the reality is that a deposit to be returned has proven to be enough incentive to the average person. If it is too much trouble for you to bother with, you’ll find many groups or individuals willing to do the job for you. I know of a very industrious gentleman who has collected bottles for years and has donated many hundreds of dollars to various charities through this endeavor.

Sue Martin

Tonawanda

When the government requires a surcharge on a purchase (bottle deposits in this case), we can all detect a suspiciously tax-like smell.  When the purchaser must apply for his refund (i.e., store the bottles, clean them and return them), the tax smell grows stronger.  And when, after having paid the surcharge, the purchaser doesn't bother claiming his refund and the state then confiscates it from the supermarket where it was paid, it passes the final smell test.  It's a tax.

Many will claim that it's a needed one -- but they must not deny the obvious.  The bottle bill is designed specifically to increase the amount of revenue to New York State from unclaimed bottle deposits.  It's a tax hike.
 

Big Food

The Buffalo Niagara Enterprise consulted with the Cattaraugus County legislature to identify opportunities for local farmers.  That's all well and good, but this quote, from a Republican no less, caught my eye.

Several legislators commented during the presentation that they have heard complaints from farmers that federal milk pricing prevents them from meeting costs or making profits.

“Farming is the only industry that goes into the marketplace and says what will you give me for my product,” said Legislator Charles W. Couture, R-West Valley.

Excuse me, but every industry does that, Mr. Couture.  In fact, American farmers benefit from more meddling and costly (to us consumers) government regulations than probably any other.  Look, farming is a tremendously hard way to make a living and I truly admire and envy anyone who still wants to do it.  But let's not cry a river either.

We're paying plenty for our food already and the day has passed when the "family farmer" was the most efficient means of producing it.  I mean, when was the last time you read about the "family automaker", the "family phone company" or the "family software-giant"?  Like it or not, "big food" is in our future.

And why aren't our legislators worried about family-owned gas stations?  They're treated like pariahs; it doesn't make sense.

Sabres And The Wealth Of Buffalo

An article in the Buffalo News about those ever more precious Sabres playoff tickets.

As of late Wednesday afternoon, three pairs of Game One tickets in the 100 Level with multiple bids had lured high offers in the $200 to $300 range on eBay, although those prices may rise considerably as game time approaches. Another pair in the 100 Level had a “Buy It Now” price of $800.

• Buying tickets through the most intriguing method, a futures market known as Ticket- RESERVE, which partners with various leagues, including the NHL, to provide tickets to fans willing to gamble on their team’s success.

“We run an online options exchange,” TicketRESERVE marketing director Kate Aubry said. “It’s guaranteeing that you’re in a seat if your favorite team participates in the playoffs.”

Buffalo resident Tom Smalley used that option.

In February, he went to www.ticketreserve.com, where he paid between $15 and $20 per ticket for the right to buy options to Sabres home playoff games. That option is in addition to the ticket’s face value. Smalley basically was gambling that the team would make the playoffs and that it would advance. Had the Sabres not made the playoffs, he would have forfeited the money.

“It’s like the stock market,” he said. “You deal in futures, and it can come back to bite you. This is our shot, and I wanted to be a part of it,” he explained. “I wouldn’t have done it if we were the eighth seed just squeaking in.”

In this case, though, Smalley’s investment paid off.

All of this new economic activity is fascinating. Now, I believe that Adam Smith would have insisted that paying to watch a hockey game (had hockey existed in 18th century Scotland) doesn't create wealth.  In The Wealth Of Nations, he wrote of plays and concerts which, while perhaps well worth their time and expense, were nonetheless extinguished at the moment they ended.  Nothing tangible was created and thus no new wealth, simply a transfer of money from attendee to performer.

Smith's guidance has formed my opinion of our pro sports teams' economic influence here.  Now, to the extent that Canadians, Rochesterians and Syracusans flock to Buffalo with brimming wallets to watch a Sabres game, rent hotel rooms and borrow some or our beer, there is an economic benefit to us -- new money in town.  But our expenditures at the Ralph or HSBC are just drains on the local purse.  And while the watering holes downtown may benefit, their suburban counterparts probably suffer on game night.

Not that there's anything wrong with that, of course.  We have a perfect right to spend our hard-earned cash as and where we choose (even, dare I say it -- gambling); and a nail-biting evening of play-off hockey can be worth every penny to the die-hard fan.  Let's just be clear that it doesn't rank up there economically with building transaxles or making ethanol. 

But now that what we still call ticket "scalping" has become accepted and legal, people are actually creating wealth from the Sabres.  Those very tangible tickets are worth a lot more now than when they were purchased and while it's not likely that Buffalo's economy will be noticeably improved, I'm quite happy to see that entrepreneurialism is alive and well here and that at least someone's making money.

But No Sacajaweas, Please

The federal government would like to cease printing $1 bills in favor of longer-lasting coins, but the American public always resists.  The economic argument's not hard to make and I will admit to a certain fondness for loonies and £2 coins.  But Lawrence White has a somewhat shocking suggestion. 

Instead of deciding it by government edict or public opinion polls, let the market decide.

Not From Whom All Blessings Flow

Robert Lawson was annoyed when the speaker at his university's commencement, Rep. Sherrod Brown (D-OH) claimed that the increases in our life expectancy since 1900 are owed to government programs like "Medicaid and Medicare".  Robert replies graphically.

Natural Living

Via Don Boudreaux

Was His Nose Growing When He Said It?

Here's how one scientist argues that higher fuel economy standards on American cars will help the economy.

“Automakers would not have to sell more small vehicles to offset sales of large vehicles,” which happens now, said David Friedman, research director for the Clean Vehicle Program at the Union of Concerned Scientists. “All vehicles will have to use better technology to improve fuel economy, not just big vehicles.”

Friedman argued that automakers would have to add jobs to develop new fuel-efficient technologies.

Ah, so that's how it works. The government creates burdensome regulations that require businesses to hire people to comply and job creation results. It's like adding a new bunch of tax laws that force the hiring of more accountants.  It certainly does end up creating accounting jobs, but no one looks at who was let go so profits wouldn't suffer.  But I suppose that Concerned Scientists don't concern themselves with such trivia.

Mass Ave Project

I also want to mention this letter on urban gardens.

The Massachusetts Avenue Project is working with community volunteers to produce organic food, educate the public about healthy food and nature, and help local youth eat right and obtain life skills. Residents leased abandoned lots from the city for one dollar a year and turned them into vibrant gardens.

While I'm critical of a lot of feel-good attempts to help the poor (oh really, Craig, we hadn't noticed), the Massachusetts Avenue Project urban garden initiative is not only feel-good and do-good, but achieve-good.  It encourages people become more self-reliant, it turns rubble-strewn eyesores into productive land and has an important economic effect to boot.

Imagine that the lot next door has been turned into a vegetable garden that ends up producing the equivalent of $500 (or $100) of grocery store food.  The produce of that garden is no different than $500 of any other manufactured product. The food grown there represents $500 of wealth created in the city that benefits a city resident. 

He now has an additional $500 to enhance his food budget or to spend on something else.  It's $500 that didn't exist in Buffalo the previous winter and it came here without a single politician authorizing a check.  Multiply that one garden times 1000 (or more I'd hope) and it becomes a considerable economic engine.  Urban gardens are an example of what Jane Jacobs called import replacement.

She was certain that when a city turned its efforts to making for itself what it once had to bring in from elsewhere, that often led to "explosive growth."  I'm not as convinced on that latter point as she was, but it's certainly true that we're better off making our own stuff when it makes economic sense.  Urban gardens do.

By the way, it doesn't hurt that food seeds can be purchased with Food Stamps -- talk about leverage.

Gay Marriage Good For The Economy?

I'm always interested when someone tries to defend a pet project based on economics -- it's the reason I started this blog.  So, my attention was captured by this letter in today's Buffalo News Everybody's Column.  The writer is defending government benefits to gay spouses.  It's a nice try and it does show some creative thinking.

You would think the Conservative Party would be happy to have had gay and lesbian employees prior to the governor’s order. Look at the money the state saved by denying them benefits for years.

Cute, and probably accurate.  There's no doubt that New York has saved money by denying them benefits, lo, these many years.  It's an interesting argument that can be used in many situations.  Just think of the money we haven't spent by not purchasing every New Yorker's food -- gee, we could spend trillions with those savings.

We see the governor’s initiative as a plus all around. Canada will be receiving more revenue from marriage licenses, public assistance rolls might be reduced and since gay and lesbian spouses wouldn’t have to fork out huge amounts for private health insurance, there will be more spending money in pockets.

This one's the kicker.  Apart from the marriage license revenue which would be negligible, every other argument in this paragraph involves either substituting one government program's spending (welfare) for another program (benefits);  or, in the last case, replacing one person's private expenses with public spending.  She'd like to convince us that by not having to buy private health insurance, the recipient will have more money in her pocket -- which is certainly true -- but unfortunately you and I will have less.

This is a win-win for New York State. When civil unions or marriages come, the dollars will flow. Florists, caterers and limousine companies will be helped. Gays will help the economy of New York State.

While the marriage industry would no doubt see an uptick in revenues, it's only fair to point out that other local businesses would experience a compensating downturn in SUV sales and theater tickets.  It all comes out in the economic wash eventually.

Actually, come to think of it, I suspect this writer had her tongue firmly planted in her cheek.  But it shows that she's been paying attention.  If you want to convince Buffalonians that your suggestions have merit, you just need to claim that they'll improve the economy -- that's the magic strategy.  Why, our government representatives have been getting reelected around here for years with nothing more and no need to show results.

In fact, this young woman might have a brilliant future in politics, herself. 

 

The City Of Good Lawyers

The Buffalo Teacher's Federation has lost in court -- this time the Supreme Court -- but it's probably no surprise that they'll fight on to overturn the wage freeze.  Phil Rumore says the next lawsuit will center on the city's improving fiscal status and increased state aid.

But what if the State Legislature in future years decides to cut aid, or New York’s financial condition takes a nose dive?

“You can always argue the doomsday scenario,” Rumore replied. “There has hardly ever been a decrease in [state] aid.”

Sadly, he's right on that one.      

Research Spending

There's a political race afoot to spend tax money on embryonic stem cell research.  Congress is trying to overturn the President's ban on federal funding and the states are planning to dump billions into it.  But why?  There are plenty of other worthy projects for government to fund, scientific research isn't necessarily one of them.

Medical research has never ground to a halt when government has declined to support it. The Journal of the American Medical Association reported last September that between 1994 and 2003, the U.S. nearly tripled spending on biomedical research, and in any year where federal funding decreased, private funding increased to make up for the difference. The private sector can easily compensate for fluctuations in government spending, and can move forward without any federal funding at all.

The great advantage of private funding is that it allows research to proceed even when it is politically touchy. When the federal government refused to fund in vitro fertilization research in the mid-1970s, critics cried that the United States would fall behind, that there would be a brain drain, and that infertile couples would suffer. None of these dire predictions came true. Instead, the research proceeded privately and today reproductive technologies -- IVF and related technologies for humans and animals -- represent a $16 billion a year industry.

So, not surprisingly, when President Bush exercised the first and only veto of his presidency to stop federal funding for embryonic stem cell research in 2006, private interests donated millions upon millions of dollars to continue embryonic stem cell research without federal assistance.

Now, when private laboratories are already in motion, the Senate is sending over to the House a ham-handed bill that would threaten everything our scientists are already accomplishing. The lure of federal funding would pervert existing incentives, prompting laboratories to abandon productive but politically sensitive research for politically safe but less promising work.

Even Michael J. Fox's own Foundation for Parkinson's Research seems to have given up on government action. Just last month, Fox's foundation made a significant contribution to ReNeuron, a private stem cell research laboratory. The actual dollar amount of the donation remains undisclosed, but ReNeuron officials claim that it is large enough to cover their operating costs and accelerate their research efforts for at least the next year.

There's a huge misconception in this country that if the government doesn't do it, it won't get done.

The Sky And The Dollar Falling Together

When global warming enthusiasts claim that we haven't seen "weather like this" for 50 years and that's supposed to prove that something alarming is afoot, do you ever think to yourself that -- yes, but we've already evidently seen this so what's the big whoop?  Well, the dollar has dropped to "historical lows" against the Euro, but as the Econopundit points out, the Euro hasn't been around all that long.

WHAT THEY TELL YOU: The dollar dropped to an all-time low against the euro after the U.S. government reported the economy grew at its slowest pace in four years.

WHAT THEY DON'T TELL YOU: The dollar's been around for quite a while. On the dollar-historical scale, the euro was invented last week. "All time" highs or lows aren't really very interesting under these circumstances. Similarly, "slowest pace in four (count them -- 4!) years isn't that interesting either (except as a scary headline).

Read the whole thing -- there's a lot more that "they don't tell you."

How Ya Gonna Keep 'Em Down On The Farm?

Americans claim to love their farm subsidies -- of course they don't think about who pays them.

Here's the best survey I've ever seen on farm policy.  Big findings:

Farm subsidies are extremely popular.  Respondents had to choose between the following positions:

A. It is not consistent with the American way to have a whole sector of the economy dependent on government handouts at taxpayers’ expense. We should trust the market, not the government, to find the right balance between supply and demand.

B. There is nothing more important than food. The government needs to subsidize farming to make sure there will always be a good supply of food and that the price does not go up and down according to the whims of the market.

37% preferred the free-market position; 58% preferred the interventionist position.

I can't help but wonder what the responses might have been had the second question read something like this.

B. There is nothing more important than food.  Government needs to pass regulations that raise its prices above what they might have been in order to make sure that farmers never lose money and that prices do not go down when more food has been produced than is needed.

That's what farm subsidies do after all.

If Only There Were A Separation Of State And Economics

Ever wonder why poor people seem more disposed to obesity than the better off?  It's perhaps not due only to a lack of education.

For the answer, you need look no farther than the farm bill. This resolutely unglamorous and head-hurtingly complicated piece of legislation, which comes around roughly every five years and is about to do so again, sets the rules for the American food system — indeed, to a considerable extent, for the world’s food system. Among other things, it determines which crops will be subsidized and which will not, and in the case of the carrot and the Twinkie, the farm bill as currently written offers a lot more support to the cake than to the root. Like most processed foods, the Twinkie is basically a clever arrangement of carbohydrates and fats teased out of corn, soybeans and wheat — three of the five commodity crops that the farm bill supports, to the tune of some $25 billion a year. (Rice and cotton are the others.) For the last several decades — indeed, for about as long as the American waistline has been ballooning — U.S. agricultural policy has been designed in such a way as to promote the overproduction of these five commodities, especially corn and soy.

There's no good reason to subsidize agriculture, it's all just for vote-getting.  Come to think of it, that's the reason for all subsidies.  End 'em.

From Each According To His Luck, To Each According To His Lack Thereof?

From the Buffalo News Everybody's Column

Well, at last a sober analysis of the issue. After reviewing for us a good number of facts, Robert Samuelson concludes in his April 19 column that the poor aren’t poor because the rich are richer. This conclusion is important enough on its own right, nevertheless he amplifies it with the more significant one that their poverty reflects low skills, poor work habits or bad luck. What Samuelson fails to point out is that he is rich because he has the good luck of having the high skills and the good work habits to regularly write nonsense like this.

Walter Greizerstein

Williamsville 

Smells Like Growth

Check out the Anti-planner to see what a city without a Master Plan and, by the way, no zoning, looks like. 

Confusing Money With Wealth

If this letter in the Buffalo News really reflects the economic beliefs of Dennis Gorski's former economic advisor, then we can gain some real insight into the causes of Erie County's terrible economic performance during the nineties.

Here’s the equation for this “economic development” retail deal [Bass Pro]: products sold come from outside of this community + customers come from inside of this community = withdrawal of wealth. That’s right. Our “leaders” want to invest $25 million of our money to make our community poorer. Period.

Mr. Chambers can't seem to get his head around the idea that if Bass Pro opens, we won't simply be giving it our money to then be whisked out of town.  Private business is not the government after all, of course, therein may lie the source of his misunderstanding. When government taxes us, much of that money does go somewhere else to benefit others we'll never know in ways which we may not agree with.

But in the case of Bass Pro, we'll be voluntarily exchanging the money we've earned for something else of equ