Failure of the Luxury City Model

This post is a two-fer, Walter Russell Mead writes about this Joel Kotkin column about the failure of the "luxury city" model in New York City.  In short, the "luxury city" model could support high taxes, big government, and heavy regulation by delivering a unique "luxury" experience to the high income tax payers footing the bill.  Think Manhattan and San Francisco.  Minneapolis aspires to offer a Midwestern, smaller-scale version of the model.

It's not going so well these days for the archetypal luxury city, the Big Apple.  Writes Mead,

"The past decade’s NYC revival was almost wholly based on an unsustainable reliance on the financial sector.  Growth in the government-Wall Street partnership fueled a luxury boom in trendy Manhattan–and masked a hollowing out of the city’s core—middle class families have fled the boroughs in droves. High rents, high taxes, lousy schools, and restrictive regulations have driven the middle class away."