Saturday, May 17, 2008

The Rust Belt Should Be Bitter - WSJ.com


Jenny and Kwame!
The Rust Belt Should Be Bitter - WSJ.com

In the firestorm touched off by Barack Obama's comments about those who "cling to" guns and religion out of economic resentment, most analysis missed a crucial point: The "bitterness" felt in the so-called Rust Belt is mainly a product of high-tax, highly unionized states.

While there are pockets of prosperity in Pennsylvania, upstate New York, Ohio and Michigan, a good deal of this area is economically depressed. That's not because of Washington's policies (or lack thereof). These policies aren't killing Texas, North Carolina, Georgia, Arizona, Nevada and Florida.

While southern states do have problems, their governments generally don't smother economic growth by layering on ever-rising taxation, regulation and expenses. They don't permit workers to be forced to join closed-shop unions. No one in D.C. – Obama, Clinton, McCain or Superman – can fix the Rust Belt's self-inflicted wounds.

Western New York offers a prime example. Despite proximity to major markets, a long international border with a major trading partner, a well-developed transport system, untold natural splendors and a well-educated workforce, the Buffalo area's population shrinks every year. Why? High taxes, high government costs and forced unionization are major factors.

New York state is run by and for its public-employee unions, particularly teachers, but several others as well. The unions collect dues and then recycle a significant amount of what they collect into politicians' campaign funds. These contributions (plus state electoral law, which seems designed to protect incumbents and hobble challengers) produce tax-and-expense structures that drive employers away. To varying degrees, the same is true for much of the Rust Belt.

Mr. Obama referred to the ire of poor folks who've been given false promises in the past by national politicians. The real falsehood is the notion that federal programs or subsidies can overcome a state's own ruinous policies.

Mr. Durstewitz, co-author of "Younger Than That Now – A Shared Passage From the Sixties" (Bantam, 2001), lives in Saratoga Springs, NY.
Jenny wants to complete her governoreering by turning the rest of Michigan into Detroit!

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