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The Big Apple’s Big Problem

'If New York City is a business, it isn't Wal-Mart,' Mayor Bloomberg once sneered. Maybe it should be.

When Michael Bloomberg stood on the steps of City Hall last week to be sworn in for a third term as New York City's mayor, he spoke in upbeat terms about the challenges ahead. The situation, however, is far more difficult than he portrays it. American financial power has shifted from New York to Washington, while global clout moves toward Singapore, Hong Kong, and Shanghai. Even if the local economy rebounds, the traditional media industries that employ many of Bloomberg's influential constituents likely will continue to decline. New Yorkers have long had an outsize view of their city; historically, its mayors have touted mottos that encouraged that view, from Rudy Giuliani's "capital of the world" to Mike Bloomberg's "luxury city." But as Bloomberg begins his new term, New York needs to reexamine its core economic strategy.

A good first step would be to recognize that the world owes New York nothing. The city cannot simply rely on inertia and the disbursements of Wall Street megabonuses to save its economy. Instead, it needs to rebuild its middle-class neighborhoods and diversify toward a wide range of industries that can capitalize on the city's unique advantages—including its appeal to immigrants; the port; and its leadership in design, culture, and high-end professional services.

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NYC also needs to recognize that the rest of NY cannot keep sustaining NYC.

NYC has lost a lot of people this year. New jobs created are good $20k below lost jobs.  ==> Major depletion in taxbase.  NYC will need to tighten belt considerably.