People in New York are Voting with their Feet

Politicians keep telling us that the rich need to "suck it up" and throw in well beyond their share. They tried this in Maryland and it has resulted in a drop in revenue that is comparable in their tax rate increases. A recent study from the Empire Center for New York State Policy is showing that the state is suffering from a similar fate.

The authors of the studies -- E.J. McMahon and Wendell Cox -- point out that between the years 2000 and 2008, there was a departure of 1.5 million people, mostly from New York City, with destinations that were safer for finances. Proof that money was a major factor in the decision making is seen in the income groups that have been coming and going from the state and the impact it is having on the budget.

According to the study, the families that have been leaving have income levels that were 13 percent higher than those arriving to the Empire State. In Manhattan and the New York County area, the impact was even more profound. Those leaving the Big Apple had an average income of $93,264, which was approximately 28 percent higher than those who were arriving (which made $72,726 on average).

The real injury is not so much in people, but in revenue. According to the study, the trade off in the income groups of those arriving and those leaving translated in a lost $4.3 billion in taxpayer income. Add that to the other years in the study (2001 through 2008) and it adds up to a devastating $30 billion.

The authors of the study are some what cautious in their approach and do not attempt to single out a particular reason for the mass departure, but the Wall Street Journal places the state's and city's excessive tax rates. Citing the Tax Foundation, between the years of 1977 and 2008, New York was consistently ranked first or second for having the highest rates compared to the rest of the country. During the years covered in the Empire Center Study, New York's taxes ranged between 11 and 12 percent of income.

Taxes reach its highest level in 2004 saw a high in departures in 2005. That year, the state lost approximately 250,000 people who moved to other parts of the country. Meanwhile the state has passed another massive tax bill that likely lead to people leaving the state as they vote with their feet.

There is an old saying, "the more you tax something, the less you get of it. The more you subsidize something, the more you get of it." New York is committing economic genocide, through heavy taxation, on its most affluent residents. The result, ironically will be fewer tax dollars and a decidedly poorer state.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

The Role of Geography in News

There was a time where it made sense for the distribution of news to be confined to one or two locations. Instead of sending news from Dallas, Kansas City, Chicago and other cities to all cities around the country, it was simpler to send information to major sources and for them to distribute it. It fit the technology limits of the time, but is no longer necessary today because of the online world we now live in.

The choice location for news to be sent was New York, which became the industry "leader" in journalism. More news is distributed from New York than any other source. The vast majority of the content in magazines, newspapers, and other traditional media are from the "Big Apple" and it is from that city's perspective that news is often "couched" or interpreted.

New York has polling numbers of "liberals vs. conservatives" that is almost twice the national average leaning to the left. Very few states -- maybe Hawaii, Vermont, or Massachusetts -- can even compete. Furthermore, the center of the universe of New York City is a tiny little neighborhood that yields a disproportionate amount of power called Wall Street. There is no question that the businesses traded there have a profound effect on the nation's economy, but it doesn't even come close to creating a majority of the jobs in this country (that honor goes to small businesses around the nation). Simply put, New York has an exaggerated view of itself and seems to measure the importance of all news on how it reflects on this small area.

The other major source for news is the nation's capital, Washington, DC. Having had lived many years there, I can speak first hand about the extent of its self importance. Those on the left content the rest of the nation cannot feed itself without an act of Congress. We are a nation of pets waiting to be taken care of by those far brighter than ourselves. This has long been the case, but seems to have hit an all time high under the Obama administration. Those on the right, on the other hand, have largely become cowards. They are no longer fighting for what is right and what is wrong, but are merely hoping to slow down the break neck pace of socialism. Those in the policy process that actually ask the question of what government can and should do are simply laughed at as irrelevant. It isn't "cool" to think the constitution matters. All sides there seem to think that policy is crucial, rather than the millions of people who create meaningful lives for themselves in spite of the governments best and worse efforts.

Combined these two cities add up to around 10 million people. Than there are the other 290 million of us who are fed up with the arrogance of both cities. People who believe that the average American is more capable of pursuing his or her destiny than the best government institutions can do for them. These people believe that the Constitution matters and if you swear to defend it, you better do so. These same people know that the vast majority of jobs are made by them and in spite of government.

The explosion of the blogosphere and social media are directly linked to the national discontentment towards both Washington, DC and Wall Street. People are making their own media that provides a better picture of reality than the vast majority of the mainstream media. In my opinion we have only seen the beginning of news media driven by the people. There is more to come and the need is huge. The news media was intended for the people and like what you are seeing with the Tea Party movement and government, expect the people take the news industry back also. These are interesting times indeed.

Kevin Price is Host of the Price of Business, the longest running show on AM 650 (M-F at 11 am) in Houston, Texas and on AOL Radio. His articles often appear in Chicago Sun Times, Reuters, USA Today, and other national media. Steve Moore of the Wall Street Journal calls Price the “best business talk show host in the country.” Find out why and visit his blog at www.BizPlusBlog.com and his show site at www.PriceofBusiness.com. You can also find Price on Strategy Room at FoxNews.com.

Elliot Spitzer Learns Tough Lesson

Governor Elliot Spitzer (D-NY) had a reputation as "Mister Clean" when he went after New York investment firms for behaving badly. He used his "get tough" approach for dealing with greedy businesses as a spring board to get elected governor. Now Spitzer finds himself under a highly unwelcome microscope.

In a short statement (see video above also), Spitzer said:

"For the past nine years, eight years as attorney general, and one as governor, I have tried to uphold a vision of progressive politics that would rebuild New York and create opportunity for all. We sought to bring real change to New York and that will continue.

"Today I want to briefly address a private matter. I have acted in a way that violates my obligations to my family and violates my, or any, sense of right and wrong. I apologize first and most importantly to my family. I apologize to the public, whom I promised better.

"I do not believe that politics in the long run is about individuals. It is about ideas, the public good, and doing what is best for the state of New York. But I have disappointed and failed to live up to the standard I expected of myself. I must now dedicate some time to regain the trust of my family.

"I will not be taking questions. Thank you very much. I will report back to you in short order. Thank you very much."

This is, of course, just enough blood to make the media sharks swarm. This is the beginning of a great deal of trouble for the liberal governor. Interestingly, the media said that the "governor apologized" but "did not resign." That's pretty tough and is an indicator of what the governor can expect. The Governor placed a very high standard on others, I'm not surprised that he is being held to it.

I strongly disagree with his statement "that politics in the long run is not about individuals." This is the typical double talk used by politicians who are caught with their hands in the cookie jar. "Personal integrity doesn't matter in public policy." Both arenas require trust. The person who is untrustworthy in one arena is likely to be untrustworthy in the other. We will have to see how quickly the Governor gets this incident behind him, if at all.

Kevin Price is Host of the Houston Business Show (M-F at 11 AM on CNN 650) and Publisher of the Houston Business Review. Hear the show live and online at HoustonBusinessShow.com. Visit the archive of past shows here.

Fast Comments on Fast Company's Fast Cities, Part 1

Fast Company has rated fast cities, too fast cities and cities that are slow. I always find lists fascinating and appears others do too, since we seem to see them virtually everywhere.

You can find the complete list of fast cities here. I'm going to comment on a few that I found interesting.

In the "Creative Class Meccas", New York, NY and San Francisco, CA turned up in this list of five. This isn't a surprise, but certainly seems predictable. It would seem a little creative to me if they chose some where, any where else, for such distinctions.

In the "Global Villages" section there was no US representative. The US has a reputation of being "ethnocentrist" and the "Ugly Americans." You couldn't expect to find the US there. Although I would think New York, San Francisco, or even my Houston, Texas would be excellent candidates for such.

In the "R & D Clusters" section the US had two of the three destinations (Ft. Collins, CO and Raleigh-Durham, NC). Seoul, South Korea showed up to represent the rest of the world. I'm sure many will point to this as an example of the US being "Ugly Americans."

In the "Green Leaders" department we find Chicago, Illinois and Portland, Oregon making up two of the four cited. Chicago, Illinois? I realized it has made some serious advances, but should a city get such high recognition for simply playing catch up? It is easy to look like you made major progress when you start at zero.

"High Tech Hot Spots" has Boise, Idaho in with Ho Chi Minh City, Vietnam and Chandigarh, India. This seemed a little weird. I read many high tech magazines and these names simply don't come up that often. It was almost like they said, "let's see if they notice." Very strange indeed.

In other posts I'm going to review the magazine's "Urban Innovators," "Culture Centers," "Unexpected Oases," and "Startup Hubs." Finally, I'm going to review the cities cited as "Too Fast" and "Slow." I would love to hear your thoughts on these cities.

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