Violent, crime ridden, crumbling infrastructure and de-populating? Megan McArdle tries to answer the captioned question today:
(…) What turned this around was not the creative class, who were still flocking to rent-controlled apartments in the safer parts of town. No, what made the difference was money. Money bought peace among the city’s various interest groups, repaired infrastructure that had been neglected for decades, and paid for more police. It created jobs in construction and services and almost everything else you can imagine. And where did that money come from? Deregulation, and a 17-year bull market that inflated Wall Street salaries, and tax revenues right along with them. Without the financial renaissance, these days New York might well look a lot more like Detroit or St. Louis.
So it’s interesting to contemplate what it will look like, if the financial industry gets shrunk down to the size that many are hoping. The last time that happened, in the 1930s-1960s, New York had a lot of other businesses: shipping, manufacturing, and for that matter, being the corporate headquarters for so many national businesses. That’s pretty much ended. New York is now a specialist city: creative industries, finance, and tourism.