Asymmetrical Information

So we finally know just where in Upstate you travel on occasion. Small towns are fun--I live in one that is probably about 3 times the size of Newark. After coming here from the Metro NY area 11 years ago, it made a refreshing change.

Christmas this year was really nice, but you are right about the lack of snow. Whether we really are in a global warming trend, irrespective of whether it is man-made or not, the winters have produced less snow than in years past. Nothing beats a white Christmas.

Since you've changed your spelling to conform to a British publication, I'm surprised that you didn't describe the upstate houses as having "aluminium" siding.

White Christmas? BAH! Can't ride your fancy new bike or play with the new basketball when you're shivering through a White Christmas. Give me a Southern California Green Christmas any time.

Lovely story.

The Economist is wise to give you the ball, Megan.

On white Christmases, I think it is one of those things (like wild polar bears) that we will bore our grandchildren with: how it used to be. They won't be able to imagine it-- a bit like the Berlin Wall.

Interesting JG's contentions about the causes of economic ills in upstate New York.

My thoughts:

- there are other states in the upper Midwest tier that have the same problems of de-industrialisation and marginalisation (think Ohio and Michigan). So NYC tax policies cannot be the whole story.

- Ontario, which has the same geographic issues, by and large doesn't have these problems (to the same extent). A major locational factor cited by 'traditional' manufacturers like Toyota in investing in Ontario and locating (in this case) a new Lexus plant there was that Ontario had very good infrastructure, a highly educated workforce, and *healthcare*, provided by the state (province) not as a burden on the employer. They chose Ontario over Tennessee and Alabama for these reasons.

So, again, a low tax/ low spending government policy wouldn't necessarily reverse de-industrialisation. Ontario has a high tax strategy, and it appears to work better.

- it's not clear to me how 'NYC centric' state policies contribute to high *property* taxes in Upstate New York. Because property taxes fund local expenditures like education, whereas income taxes (which hit all New York residents) are a state matter.

What we could say is the tax base of these declining areas doesn't meet the education and infrastructure obligations. Hence relatively high property taxes which are a burden.

But a strategy of having worse roads, and worse schools, say, might not increase the economic attractiveness of upstate New York.

- a factor JG doesn't mention, but which I think might be important is the lethal combination of old style manufacturing and old style unionisation. High wage jobs, and restrictions on what workers can and can't do on the site, don't go well with globalised manufacturing and competing with China.

Although the Germans do manage it (have increased their share of total world manufactured exports since 2000).

- I think the real killer is geography. Distance in an international sense matters less (make it in China and ship it) and the location of upstate New York therefore has fewer advantages (for any employer) over other places.

Path dependence is also a big factor. The pharmaceutical industry (to give an example) did not rise up in upstate NY, but in NJ-Philadelphia. So there is where the 'cluster' of pharma and biotech cos is.

Unfortunately not enough neat new companies and industries have spun out of Eastman Kodak and other big upstate employers.

I would add that I have watched the decline of Buffalo over my entire life. When my parents moved to Canada, Buffalo was the hopping nightspot, and Toronto a dull Methodist town that closed the blinds in department stores on Sundays, because window shopping on the Lord's Day was unseemly (no joke).

Buffalo was a great brawling eastern European- Irish- Scotch Irish settled industrial town of that rich Midwestern tradition (think Cleveland, or Pittsburgh, or Akron). Carl Sandberg's 'American City' in its Lake Ontario incarnation. Many of its inhabitants had left the United States exactly once: to fight for the freedom of the Free World on the beaches of Normandy and in the Ardenne Forest.

It quite literally burned down in my youth: each nightly newscast from the Buffalo News Station ('Channel 7 Eyewitness News with Irv Weinstein') was a bunch of guys trying to boost the city in every way they could, whilst the news was all of shootings and fires.

I don't know what killed Buffalo, but I devoutly hope it finds a way back.

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