How Bad Are These Economic Times For New York?

A few less Starbucks stores in the neighborhood, a few more "For Sale" signs and landlords offering a free first month upon signing are all indicators in Manhattan at least that times have gotten tough. Seriously though, unemployment has skyrocketed in the city and across the country and life in NYC has gotten harder. The boom times of Wall Street's excess had the poor barely getting by and the affluent loving every moment, but hardly anyone expected it could get this bad, this quickly. Well, economists that have been paying attention knew about it, and now that the recession is upon us their portend for the future does not look so bright.

From The NY Times:

John Tepper Marlin

Former Chief Economist

City Comptroller’s Office

Some people have compared this recession to the Great Depression. Mr. Marlin’s view? It could turn out to be worse.

He is troubled that this time, the crisis is more global in nature, given the interconnectedness of the world economy. That means it affects more people, and it also means there are more people to blame: the aggressive peddlers of subprime mortgages in California; the proponents of deregulation, led by two powerful former members of Congress from Texas, Dick Armey and Phil Gramm; and the people he sardonically calls the “geniuses” on Wall Street.

“We’ve had the verdict — Wall Street is guilty — but what’s playing out here is the sentencing, and it’s not just Wall Street that’s being sentenced; it’s the rest of the world,” Mr. Marlin said.

And that is just one person the Times talked to. Others did not have much better news. Nicole Gelinas at the conservative-leaning Manhattan Institute predicts that even though property taxes are helping the city stem the bleeding, reassessments will lead to even further reduced revenues. Ronnie Lowenstein of the Independent Budget Office in NYC says for us to forget about those boom years if Obama follows through with re-regulating Wall Street (a good thing from a macro perspective, that's for sure). Still others suggest things aren't as bad or will not get as bad as the Great Depression or even the recession of 1982. Precautions have been put in place so that the city won't go bankrupt like it has.

Of course as the article says in the title, we should expect change. That means we need to not rely on Wall Street like we have and in my view, diversify our economy. Long before Bloomberg's ramped up gentrification plan, the city had a booming cultural economy that has been stymied by the Mayor and others like him in the past. We need to stop begging and pleading the large banks to solve all our fiscal woes because more often than not, they dig our holes bigger than we started out with.