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New York City Fate Depends On Bailout

Interesting article by Amity Shlaes today concerning the role of New York City after the bailout vote. New York City has a number of pressing issues right now.

Even before this month, the New York gladiator had weaknesses. Analyst Richard Persichetti of real-estate brokerage Grubb & Ellis Co. quantifies not only vacancies in commercial buildings but also “shadow space” and subleases — the millions of square footage New York companies lease, but find they can’t themselves use. Last summer, the top 10 investment companies were holding 6 million square feet (557,418 square meters) of underused space. The shadow number, especially, was a meter of predicted growth that wasn’t happening.

A budget trap also endangered New York’s future. As E.J. McMahon of the Manhattan Institute’s Empire Center points out, that trap was laid more than half a century ago. At a 1938 constitutional convention for the state, New York progressives determined that public-pension promises should never be “diminished” — the government couldn’t renege on pensions it promised at the time of hiring.

With Wall Street having such a terrible year, it’s bound to affect New York City, which has been used to the large tax payments it’s been receiving from investment bankers and the like. If a large exodus of jobs continues, their could be dire times indeed for NYC.