The Streets Were Paved with Gold - Ken Auletta [120]
What was the effect of taxes, which are high in New York and Philadelphia? “Economists look at the total tax burden and say that compared to elsewhere it’s not that much worse,” answers Sternlieb. “But economists are schmucks. They often ignore the psychology of businessmen”—who see no end to the growth of local taxes—“and the real pocket costs to the decision-maker, who decides whether the business stays or goes. This is controversial, but why is New Hampshire growing as fast as the Sunbelt? It’s a Northeastern state. It has a reactionary governor. But it also has no taxes. It’s pulling jobs out of Massachusetts and Vermont.” Well, does this suggest that if New York drastically reduced its taxes, it could recapture its lost economic base? “I’m afraid not,” says Sternlieb. “Once you’ve busted the egg it’s very hard to put it back together again.” If that’s true—and I’m not sure it is—the argument for special federal help for New York is, ironically (and tragically), strengthened as the city becomes economically weaker. Small comfort. More than likely, New York—like other older cities in the past—will continue to shrink as the nation continues to decentralize.
New York is not an exception in the attention focused on its “resurgent” downtown. Because Fortress Manhattan is alive and well, it’s assumed that the rest of New York is, too. Ten years after its devastating race riots—43 killed, 5,000 left homeless, $50 million in property damage—Detroit is also said by the press and its officials to be coming back. They cite the sparkling new shopping centers, town houses and apartments that dot downtown. A modern seventy-story hotel looms over its glittering $337 million Renaissance Center complex. St. Louis has preserved the flat where Scott Joplin composed his ragtime music and persevered to witness a burst of office and hotel construction redefine its skyline. The Boston Plan, as it is called, has pooled $1 billion of private and public money to reinvigorate downtown and face-lift four neighborhoods. Baltimore imported Mies van der Rohe, I. M. Pei and Edward Durell Stone to forge a new downtown silhouette. Pittsburgh and Atlanta have almost totally modernized their central business districts.
But the plague spreads and surrounds these glittering castles. Middle-income people—black and white—continue to ooze from central cities, leaving the poor behind. Building abandonment multiplies. Tax revenues stagnate. Dependence on federal aid grows. As in New York, the national unemployment rate among urban blacks is almost twice that for whites; among black youths, it hovers between 40 and 50 percent. A September 1977 survey of twenty-five cities by the federal Housing and Urban Development agency, reported on six critical indicators of a city’s economy—employment, assessed valuation of real estate, loss of population, investment, retail sales and office space. Most of the twenty-five cities, they found, continue to decline, though the erosion has slowed. In 1976, devising what they called a Hardship Index, Richard P. Nathan and Charles Adams of Brookings contrasted New York with thirty metropolitan areas and thirty central cities. Against six criteria—unemployment, dependency, education levels, income level, crowded housing and poverty—New York fared comparatively well, ranking 11th among the metropolitan areas and 29th out of the thirty central cities.
The economic decline of central cities contrasts not just with the new downtown office towers and hotels, but with national growth. According to Fortune magazine, non-farm employment in the U.S. increased