Can we in Wichita learn lessons from the decline of Buffalo, New York? Steven Malanga chronicles the fall of this city in a recent piece in the Wall Street Journal.
After describing the many forms of government subsidy poured into Buffalo, Malanga concludes: “These massive investment subsidies failed partly because officials were ill-suited to select the right projects and often instead gave money to favored insiders. Even former Mayor Anthony Masiello described the federal government’s redevelopment funds as “a politically motivated system trying to please everybody.'” That sounds familiar to us in Wichita.
While Buffalo suffered from some problems that Wichita doesn’t have, there are many parallels. The lesson: We in Wichita need to worry about our ever-growing city government and its appetite for planning the economic development of Wichita.
How Stimulus Spending Ruined Buffalo
Four decades of subsidies and high taxes haven’t arrested the city’s decline, but here comes New York’s governor with another billion dollars.
By Steven Malanga
Why do cities like Buffalo decline, and what role should government play in promoting recovery?
In his State of the State Address this month, New York Gov. Andrew Cuomo announced $1 billion in incentives to attract new investment to the beleaguered city by Lake Erie. “We believe in Buffalo,” he said, “and we’ll put our money where our mouth is.” Too bad Mr. Cuomo ignores the factors that help keep areas like Buffalo inhospitable to new investment—namely steep tax rates and the high cost of government.
This is an old story for Buffalo. Ever since the city began losing its manufacturing base in the 1950s and gradually declined into one of America’s poorest cities (the poverty rate today is nearly 29%), the federal and state governments have poured hundreds of millions of dollars into subsidized redevelopment schemes that have yielded few tangible benefits.
Buffalo may be the paradigmatic example of why expensive government revitalization efforts often fail. Back in 2004, the Buffalo News estimated that the city had garnered more federal redevelopment aid per capita than any other city in the country, a total of more than half a billion dollars since the 1970s. Yet, the paper noted, the city had virtually nothing to show for the money.
Continue reading at the Wall Street Journal (subscription required)