The preliminary census numbers are out and as could be expected, the non union, lower tax, more business friendly states, reaped the rewards and the heavily unionized and higher tax states lost out. Texas was again the big winner picking up 4 seats in Congress with Florida right behind with 2. The northeast and rust belt lost again as population moves with the money. Now Illinois has done the worst possible thing by raising taxes to a very high level and not cutting the budget. Probably the exact opposite of what was required. On the other hand Chris Christie continues to be the shining light showing the way to solving the overwhelming fiscal issues which are faced by states and cities. He took on the unions head on and was not corrupted by the money and people support other local politicians rely on. The amazing thing that the media has never noted is that the real influence is not banks and big business, it is the unions and they have nearly destroyed many areas of the country. Just as the UAW took down the auto industry by taking advantage of sclerotic management which was so inbred and arrogant that they had no idea how to really run a large corporation, the public unions have taken down government which is similarly incompetent and afraid to really lead. Now local and state governments are facing real bankruptcy and Jamie Dimon and others are predicting some will happen this year. I have no way to know if government bankruptcies will occur, but they should so that these pension and healthcare obligations can be redone as they were in the auto industry. The trade is reduced services, higher taxes and declining populations living less protected and less well served lives.

So what does all this mean to real estate. Clearly the population and business is going to migrate to where taxes are lower and services are better, and where unions do not rule the roost. Where the tort lawyers do not threaten business. The liberals have never understood that the teachers union is one of the worst things that ever happened to America and to the kids. I have numerous friends whose kids or nieces and nephews started to teach because they wanted to and then found that the union would not permit them to work late, put in extra effort and strive to really serve the kids. It was all about get more money and benefits to the teachers. They think all business is greedy and bad and tort lawyers serve the helpless. They think banks just want to foreclose. Reality is the opposite so real estate values in most cases follow the problems of local government. As taxes and regulations increase, business will move out. As schools deteriorate, parents will leave for a better life for them and their kids.

It is not that Manhattan is going to lose out. It will not because it is still the center of a lot of the world of finance and other businesses and it is unique. But the rest of New York and New Jersey will continue to lose out even with the terrific job being done by Christie and Cory Booker. New Jersey is so corrupt and under water that all those guys can do is try to save the ship form sinking. It will be years before New Jersey is functioning and by then Christie will be running for president in 2016. Maybe Booker will be governor then and there will be some hope for the state to continue to improve.