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March 22, 2013

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"Second, everyone who actually studies the subject—save Kotkin—agrees that cities and density spur economic growth."

That's like saying that everyone knows business spurs economic growth, and that therefore governments should subsidize business. It also assumes that density causes growth, which isn't obviously true.

The real problem with Florida's model is that it gets local governments into the role of picking winners and dispensing subsidies. Governments have a bad track record in such activities, which tend to create perverse incentives and to foster cronyism and corruption rather than any net economic improvement. The stronger argument is for governments to get out of the way as much as possible, starting by reducing corruption, streamlining regulations, lowering taxes, and reducing other productivity impediments such as land-use controls that increase the cost of housing.

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