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Why First World Countries Have Third World Cities
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Interesting take on the issue of just why First World countries -- the wealthiest nations on earth -- have a relatively high number of what are for all intents and purposes Third World cities. Think New Orleans, Baltimore and Detroit -- my hometown -- to name just three in the U.S.

For Detroit, while the 1967 riots may have intensified the decline (the city had been losing population since the mid-1950s after peaking at 1.86 million in 1950), the author's contention is that scary-high tax burdens and regulations, combined with labor market restrictions (i.e. high rates of unionization) have cratered local economies.To be fair, the piece also discusses gun violence and high poverty rates, so it's not always about what government takes from you or prevents you from having.

"One of the most profound insights from Stansel’s paper is that moving from the 5th (least free) to the 4th quintile causes a drop in unemployment by 0.9%. Stansel’s index ranks Detroit number 345, Baltimore number 102, and New Orleans number 262 out of the 384 metropolitan areas examined.

Both Baltimore and Detroit make it into the top 5 cities with the highest tax burdens, according to the Office of Revenue Analysis. As for New Orleans, Louisianans face the third highest combined state and local sales taxes, as well as excessive levels of deficit spending. These three cities are also plagued by excessive and even bizarre occupational licensing laws. Louisiana licenses florists, Detroit licenses hair-braiders, and Maryland counties license fortune tellers. If only Maryland’s licensed fortune tellers could have predicted that big government would cause businesses to flee these cities.

As if these regulations and taxes weren’t enough, labor market restrictions have left job-seekers in Detroit and Maryland crippled. Both cities have unionization rates higher than the national average (10.7%), alongside minimum wages exceeding the federal $7.25 level.

Not unexpected, this has significantly increased unemployment, with Detroit and Maryland having unemployment rates of 8.1% and 6.1%. Admittedly, this is one area where New Orleans has excelled with a union membership rate of only 4.2% – although having the worst education rank in the nation has prevented wage growth."

Why First World Countries Have Third World Cities | Intellectual Takeout





"Politics is just show business for ugly people."
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Re: Why First World Countries Have Third World Cities [big kahuna] [ In reply to ]
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I don't know. If I look at various lists of cities with high tax rates and various lists of unionization rates I see no obvious strong correlation to 3rd-worldness.

Economic freedom is good, but I'm not sure the answer is so simple.

Also those cities, particularly Baltimore, have very wealthy sections. And some large, thriving businesses. The enclaves of poverty are sub-sections within the city. Baltimore is not a genuine 3rd-world city compared to, say, a city in Haiti.
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Re: Why First World Countries Have Third World Cities [big kahuna] [ In reply to ]
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SUBJECT "Why the US has Third World Cities"

Fixed it for ya.

Far too myopic, doesn't even try to analyze why many cities with similar tax loads are successful.
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Re: Why First World Countries Have Third World Cities [big kahuna] [ In reply to ]
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So basically Democrats
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Re: Why First World Countries Have Third World Cities [oldandslow] [ In reply to ]
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oldandslow wrote:
SUBJECT "Why the US has Third World Cities"

Fixed it for ya.

Far too myopic, doesn't even try to analyze why many cities with similar tax loads are successful.


I think part of the answer lies with Mr. Trail's analysis and, maybe, the character of the economic development. Certainly, Detroit and Baltimore and New Orleans have wealthy enclaves (though small in size) within their city limits. Some cities with relatively high tax burdens have a more diversified economic base, it seems to me, with commensurately higher wages, etc.

But for Detroit, when the auto plants began dying off -- or relocating or building up in ring suburbs (this was especially the case in the mid-1960s, when automakers began in earnest building plants in those suburbs) -- the city began dying off in more intense fashion. Population was on the decline, beginning in 1951, but it likely would have stabilized at a bit north of 1 million residents in the 1970s, in my opinion, had not a confluence of events dealt it such a hard blow. Count tax burdens as one of them.

Detroit residents pay property taxes -- on homes typically not worth all that much, from a market value standpoint -- that are very high. Much higher than the rate the wife and I pay for our home here in a south-of-Detroit suburb, by far. And our city services are just fine. Detroit's? Not so great, even with high property taxes. But it becomes a vicious cycle, I think. More taxes, less ability to keep up with those taxes, loss of home to tax repossession, blighted neighborhoods, and so on and so forth.

"Politics is just show business for ugly people."
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Re: Why First World Countries Have Third World Cities [oldandslow] [ In reply to ]
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Far too myopic

You're being too kind. His employers need to tell that kid that he's writing naive, simplistic horseshit and that more is expected from their interns.
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