[Mises] If you live in the United States, you are most likely familiar with empty storefronts, especially in malls. Once-great shopping centers are now suffering vacancies and a lack of patrons. To the readers of mises.org, it should not be surprising that the government is largely responsible. The state, through various interventions, has led to more vacant storefronts and financially struggling malls than there would be otherwise. Let me explain using a personal anecdote.One of the malls close to me is the Galleria at Pittsburgh Mills, in Fraser Township, Pennsylvania. I used to stop at this mall with friends all the time. Recently, I revisited the mall while I happened to be in the area, and what greeted me was an endless procession of empty stores and a vacant food court. The sight was depressing, and I wondered what caused this languishing idleness. There are two things that might explain the unfortunate state of the Galleria: tax incentives and credit expansion.
The creation of the Galleria was welcomed with much fanfare due to its lavish promise of success. Possibilities as grand as a water park and even a nearby National Association for Stock Car Auto Racing (NASCAR) track were said to be right around the corner. Estimates of the mall’s future revenue excited local government officials, spurring a twenty-year tax agreement "defer[ring] a portion of property taxes to pay for the new $21 million Route 28 interchange leading to the mall as well as needed infrastructure like water and sewer lines."