IT'S THE ECONOMY, STUPID

This comes from another Daily Gotham author. It is NYC centric but I think everyone in the country can appreciate the issues brought up. The entire nation is in the middle of a SECOND Bush recession (third if you count his father's recession) and this one seems the worst of all. Inflation AND a recession seem the norm now for America, something we haven't seen since the Ford and Carter years. Boy do we need a change in direction! From Daily Gotham:

So here we are at the tail end of the disastrous Bush era - 201 days and 14 hours left at this writing - and can start doing damage assessments. Take the economy. Our currency has lost half its value, our government debt has roughly doubled, we have lost millions of manufacturing jobs and replaced them with lower-paying jobs in the service sector, our infrastructure is crumbling, and most importantly, due to a burst asset bubble created by lax regulation in the housing industry that in turn produced a credit bubble, our economy is going to either stay stagnant or contract outright. As The New York Times points out today, this state of affairs is likely to persist until the Fall of 2009. In short, we are fucked.

You'll be hearing apologies for this from conservatives with all the frequency you heard them from Soviet-era apparatchiks, of course. One virtue of being an ideologue is that you're never wrong, no matter how crushing the weight of facts that might indicate otherwise.

So, as some parts of the country are in recession and others lurch into outright depression - Michigan, Ohio and Indiana along with most of the rust belt, for example - it's time to take a sobering look at what the medium-term future may hold for the City of New York.

Our economy is based on services, real estate and insurance, with the finance sector alone contributing roughly 35% to the City's overall payroll. The financial monoculture arising from the economy's dependence on Wall Street creates serious risks, since Wall Street layoffs - Bear Stearns is gone, and it might not be the only major bank on the brink of extinction - percolate through the service sector dependent on the salaries paid there. That said, New York City has several strengths that should help us weather the Bush depression less badly than, say, Phoenix or Columbus.

Real estate: Along with London and Tokyo, New York City is a global hub of industry and culture, which very concretely means that foreigners with currencies that aren't depreciating by the day buy our real estate stock. This has contributed, along with the natural limits on supply created by the City's finite physical space, to a somewhat more stable market than elsewhere in the country.

Tourism: They buy our apartments, but they also spend their money in our stores, visit our theaters, eat at our restaurants: flush residents of the Eurozone. Again, a net plus. Just stop crowding the damned subway and standing in the middle of the streets.

International business: The United States economy, despite George Bush's best efforts, remains the largest in the world, and as the country's largest city and business hub, New York attracts more foreign companies than any other city.

Taxes: it's a standard trope from conservatives that New York has crushingly high tax rates. And our taxes are high; but for foreign corporations, due to the structure of our tax code, effectively, that situation is reversed.

Internet connectivity: This is not often appreciated, but New York is the terminus of several trans-continental and trans-Atlantic fiber-optic cables, as a result of which we have probably the highest connectivity in the world. That's wonderful for the YouTube afficionado, but it's also a real competitive advantage for companies doing business on the internet.

Diversification: You have to give mayor Bloomberg some credit even as he turns this town into a ghetto for the wealthy: he's worked hard to attract new industries to the City's economy. One example is film, and though our economic dependence on Wall Street is still worrisome, it's been somewhat mitigated by the growth in other sectors.

Make no mistake, the next eighteen months or two years are going to be hard. But compared to other places, things could be very much worse.

Some of my readers are in places worse hit than NYC. Michigan, Ohio and Pennsylvania are suffering from a loss of jobs so deep that we need a real effort to revitalize their economies...the kind of effort that could make a whole new alternative energy industry that creates jobs AND domestic energy source in our rust belt. Then Iowa, Wisconsin and Illinois are not only hit with job loss and declines in agriculture, but the Republican failure to maintain our most basic infrastructure has led to a disasterous flood season that has ruined many homes and towns. There is not one state in the United States of America that has overall benefitted from the Bush Administration, and most have been seriously hurt by it. Pretty much only Exxon/Mobil, Saudi Arabia and Halliburton and their buddies have benefitted. You and I have only been hurt.