Last September, as banks were collapsing and the proverbial sky was falling, Greg David, editorial director of Crain's New York Business, electrified us with his keen insights and observations on our rapidly collapsing economy. David helped NYSAE kick off its new program year, when he addressed September luncheon meeting attendees on the current state of the economy and what might be coming down the pike.
While we have had a year of living and working in a tumultuous environment and wondering if the world we had known had ended, clearly the damage to the financial institutions of New York is less that what we had predicted, said David "It could have been a lot worse," he noted.
But all is not yet rosy. Since an employment peak in August 2008, New York City has lost 100,000 jobs. A day after we met for lunch, Crain's reported that the city's unemployment rate skyrocketed to 10.3% in August, up from 9.5% in July, reaching the highest level since May of 1993 and sending a clear signal that the recession is far from over in the five boroughs, according to a report by the State Department of Labor.
And while the rest of the country is beginning to stabilize, we are seeing a continuing downturn in the New York area. "New York went into the recession about a year later than the rest of the country," said David, and will probably recover later as well.
The New York economy is so dependent on Wall Street. In 2007, David noted, 20% of all state revenue came from Wall Street. In order for the area to fully recover, however, we need to diversify. "What I think is important here is that people don't want to change. They don't want to figure out how to put the life back together again. We all want to go back to what we know in 2007; it was comfortable for everyone."
Ultimately, concluded David, if Wall Street doesn't bounce back, we will need to diversify the economy. "This will be difficult to do, since we all focus on that business, and we cannot diversify if Wall Street thrives because we all are hooked on it." As a result, he concluded, "Wall Street will have to bounce back. It's what makes New York a rich place. Thus, we "will continue to go through boons and busts." And this bust will eventually end.