Lately there has been considerable discussion/debate about if New York is dead and or irreparably/mortally damaged due to the economic fallout of Covid. In the context of this debate, by ‘New York,’ they mean the city, and more specifically, the higher-income parts. New York City will liekly always have a lot of people, particularly in the poorer areas, but the question on people’s minds is, will the virus irreparably hurt the expensive areas, such as Midtown Manhattan. Will New York City, overall, lose its luster, its influence, and wealth, returning to its dark old days of the ’70s and ’80s.
This whole debate was kicked off about a month ago by a James ALtucher article unambiguously titled NYC is Dead Forever — Here’s Why, which went massively viral. Part of the virality can be explained by politics, in that conservatives saw it as a sort of vindication or victory to see New York dying, whereas liberals took an opposing stance, leading to a cavalcade of back and forth responses, with even Jerry Seinfeld stepping in to defend the city against its detractors. As for myself, I don’t care about politics or which ‘side’ is right, in that I am more interested in the soundness or lack thereof of the arguments brought fourth by Altucher in regard to why New York is dying or dead, than scoring political points.
But to answer the question, no, I do not believe New York is dying or has died. To recap some history, after a post-WW2 boom, New York saw a slump starting in the mid 50s that continued until the early 80s, although possibly until as recently as 1994,when Dinkins, who many regard as a failure, particularly on crime, was succeeded by Giuliani (although in fairness, crime rates began to fall in 1991, three years before Giuliani took office). As New York fell into a debt crisis in the late ’70s, narrowly avoiding bankruptcy (and how Donald Trump supposedly famously made his fortune with the help of his dad, Fred,) the assumption was, Chicago, Baltimore, Detroit, Nashville, Minneapolis, St. Louis, etc. would dominate. In a pre-information age era, there was nothing special or unique to differentiate New York from the other big cities at the time.
But then in the early 90s or so, New York began a revival, and the aforementioned cities saw their fortunes reverse, due to high crime, decline of the auto industry and manufacturing, white flight, and other factors. At theturn of the new millennium, New York was the financial and tourism capital of the world and a major cultural hub, taking advantage of trends in globalization, leaving other cities behind, and also by reducing crime under the tenure of Giuliani. The 2001 recession and stock market crash, 911, and then the 2008 financial crisis did not faze New York, and the city quickly rebounded. Similarly, at around the same time, San Francisco and Seattle also boomed, due to the growth of high-tech industry.
Such wealth cannot be explained by politics but rather by the high concentration of high-IQ people and high-IQ industries. The concern now in regard to New York is that these smart, wealthy people are leaving and will never return, but speculation about Covid being the undoing of New York are premature and likely wrong. As bad as New York may seem now due to Covid, other parts of the country are far worse (such as due to rioting,) which is why I am skeptical of this cognitive flight argument.
Part 2 will cover james’ article in more detail.