Dear Jerry and James: You’re Both Wrong About New York

Dear Jerry and James: You’re Both Wrong About New York by Charles Hugh Smith for Of Two Minds

The “system” known as a city, now bloated and overgrown by decades of mal-investment, will be forced to become self-supporting.

So let’s look at the urban exodus that’s exciting so much commentary. Two essays pin each end of the urban exodus spectrum: James Altucher’s NYC Is Dead Forever, Here’s Why focuses on the technological improvements in bandwidth that enable digital-economy types to work from anywhere, and the destabilizing threat of rising crime. In his telling, both will drive a long-term, accelerating urban exodus.

Jerry Seinfeld’s sharp rebuttal, So You Think New York Is ‘Dead’, focuses on the inherent greatness of NYC and other global metropolises based on their unique concentration of wealth, arts, creativity, entertainment, business, diversity, culture, signature neighborhoods, etc.

Today I’m publishing a guest essay on the topic by correspondent R.J.:

Dear Jerry and James: You’re Both Wrong About New York, And I doubt you’ll ever be able to see why.

Fifty years ago, cartoons of New York Mayor John Lindsay were splashed across the editorial pages of American media. Pockets emptied and with a comical expression, he was depicted as a pathetic beggar, hoping somebody, anybody would loan his city the money it desperately needed to continue paying its bills.

His challenge was reflected in just about every other major city, where commercial flight, infrastructure rot, and population loss was on-going and devastating to already corrupt civic finances.

Turned out cities weren’t selling what people wanted to buy. People wanted space, property, and autonomy—the supplies of which cities are specifically designed to restrict for their leader’s own personal aggrandizement. The unprecedented prosperity of the postwar years created a large American middle class with options.

And they opted to move out.

So the city’s economic model fell apart.

Yet twenty years later after John Lindsay went begging, most large cities were experiencing a civic renaissance–with investments in world-class infrastructure, an influx of youth and talent, and rates of population growth that would rival previous heydays.

Budgets were even being balanced.

What happened?

Back when Lindsay was begging, the idea of the Federal government bailing out a city like New York was extremely controversial, even more so than bailing out individual states today.

It had never been done before. Why?

Our currency had value.

It was backed, at least in part, by gold.

Then in 1971, to prevent the last of the nation’s gold hoard from redemption and export as a result of years of trade deficits; President Nixon signed an executive order ‘temporarily’ suspending the convertibility of the dollar to the precious metal.

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