New York Can Reinvent Itself Again

Will New York ever be the same?

The collapse of the World Trade Center on September 11 dealt a massive economic blow to a city already experiencing an economic downturn. More than 100,000 New Yorkers are likely to be thrown out of work by the attacks, and the city will lose an estimated $90 billion in output during the next three years. And because New York plays such a vital role in the global economy, its troubles will have repercussions around the world.

New York has pulled itself back from the brink of catastrophe before. In the 1970s, the city's high crime rate and budget crises verging on bankruptcy sent many residents fleeing for the suburbs. But the city harnessed its strengths, fought its way back, and moved into an era of unprecedented prosperity, safer and cleaner streets, smaller welfare rolls, and a flourishing of culture and commerce.

Now the city faces another challenge. It will get help from the federal government, as it should: We are so quick to say that New York is a global city that we sometimes forget it is a regional city, too--a vital piece of the U.S. economy. But the federal government's contribution will fall far short of what the city will need to rebuild, to replace lost tax revenues, and to keep the trains running, the schools open, and the government functioning. So it must rely mostly on itself.

New York's next mayor, who will take office in January, must do whatever is necessary to maintain the city's global financial leadership. He should move quickly to rebuild the financial district and put the highest priority on rebuilding its badly damaged transportation system. He should enlist the help of the city's business community, which has a responsibility to contribute to the rebuilding. And while it will be difficult to balance the budget, he must not neglect the city's schools, parks, or crime-prevention efforts.

New York is a city of neighborhoods, of people working together, shoulder to shoulder. The concentration of people and interests is part of what gives the city its energy and resilience. No, the city will never be quite the same again. But New York has reinvented itself throughout its 400-year history. The task ahead is daunting, but not insurmountable. New York can reinvent itself once again.

    Before it's here, it's on the Bloomberg Terminal.