Modern New York: The Life and Economics of a City, Greg David, Palgrave Macmillan, Pp 248 (HB), $ 28
The book presents the landscape of the economy of modern New York when measured by the number of jobs, the most reliable statistics to track the city’s ups and downs. It talks of the 1950s and 1960s when New York benefitted from the long national post-war expansion, “superheated in the first Lindsay term by the Go Go Years on Wall Street.”
The jobs reached 3,797,700 in 1969 but then followed a steep plunge. This was New York’s Great Recession, which lasted eight long years, from 1969 to 1977 and cost the city 620,000 jobs. While at the end of the 1960s, the Wall Street boom played a significant role in the downturn, the precipitous plunge in manufacturing caused the most damage, as the long-term flight of factories from the city accelerated in part because of the burdensome effects of Lindsay’s 1966 business tax overhaul. The loss of 800,000 people in the 1970s also devastated neighbourhoods and eliminated thousands of retail jobs. The city’s bankruptcy created a paralysing pessimism about New York’s future while further dampening business activity.
The city’s recovery began with the election of Ed Koch in 1977 and a new attitude towards the economy and business. The new Mayor reversed the outlook by stressing on business and especially development, which was the most important factor in the health of the city. Koch’s contribution led to the 1990’s boom where Salmon Brothers at Wall Street showed how much money could be made in fixed income securities, once interest rates were deregulated.
New Yorkers understood how by mid 1980s the city had become inextricably linked to Wall Street and feared the effects of the stock market crash of October 1987, only to become complacent when the city seemed to hold its own. Securities firms and other businesses began retrenching but the losses of the crash were offset by growth in city jobs as Koch rebuilt the municipal workforce as also government funded jobs in social services and health care increased as well.
(Palgrave Macmillan, St. Marin’s Press LIC, 175 Fifth Avenue, New York, NY 10010.)