Doubt, Worry and Fear New York Faces Dramatic Consequences of Crisis

The global financial crisis began in Manhattan, and its effects are being felt far more strongly there than elsewhere. Mayor Michael Bloomberg says the situation is critical. Millions are fighting to keep their jobs. Is what is happening in New York today a harbinger of the fate of the rest of the world?

By in New York

They still remember how things used to be. That's part of the problem. New York's heroes, the men and women who only yesterday considered themselves the knights and conquerors of Manhattan, remember all too well what New York was like in the 1970s -- the era before seven-figure salaries came to the Big Apple.

They remember -- and they see the signs. That's why they're afraid.

Cathy used to be a banker. Today she is homeless and living in Tompkins Square. She thinks about the heroin and the stench. In the 1970s, Cathy had a small apartment not far from here on Orchard Street. It was broken into three times. She remembers the burning cars and broken glass, the plumes of smoke and the cops who shouted "Fuck you!" every time they lashed out.

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Restaurateur Fred Austin says he had the doors taken off the toilet stalls at Katz's restaurant because of the junkies. If they were going to shoot up in front of all his guests, he at least wanted them to feel embarrassed.

Tom Birchard, the owner of the Veselka diner, says he adopted the New York walk in the 1970s: fast, determined, always scanning two blocks ahead, looking behind you every 10 steps or so, staying more than arms-length away from doorways, and crossing the street or even turning around altogether if two or more black men came towards you.

Aside from the murders, the whores and the knowledge that areas like Harlem and the Bronx were strictly out-of-bounds for whites, Mayor Michael Bloomberg says the subway was the worst thing about New York. "The subway was hot and never on time. Everything was damp and grimy, and full of trash," that is how he recalls the days when people went in and never came out again. "It was an inferno."

Only Grace on Wall Street says she isn't afraid of becoming poor again. That was during our first conversation, six months ago. Grace Dolan Flood said her fear lay elsewhere. "I'm afraid I may have lived the wrong life," she said. "You spend so many years, put so much energy in, and suddenly you're out. And then what?"

It's the New York 2009 feeling: A mixture of doubt, worry, and fear. Fear that it won't be worth all the investment, the effort, the constant battles. Fear of drugs in schools, of playgrounds becoming crime scenes again, of broken windows, of decline. Fear of a future that feels like the past.

If you go looking for the New York feeling in southern Manhattan, on Wall Street, in the East Village, on the Lower East Side, or in Tribeca, you'll come away with more than your fair share of doubt about the city. New York City consists of five boroughs and thousands of districts. It's simply too big for gross generalities.

Epicenter of the Crisis

I speak to billionaire realtor Donald Trump is on the phone. "My friend!" he says in greeting, "New York's doing great. We have a splendid police chief, a splendid mayor, we're in splendid shape."

But Donald Trump's opinions are those of the minority this summer. Jamie Johnson sits in a café on Union Square. The 30-year-old pharmaceuticals heir and documentary filmmaker ("Born Rich") says, "The whole city is seriously in danger of losing its meaning. People feel vulnerable. An entire generation that never witnessed hardship are now realizing they'll never fulfill their dream that things will keep on getting better: Cool school, cool grades, cool job, cool money. And that scares them."

Why is this? Because since September 2008 New York has been the epicenter of the global financial crisis. This is where it all began, and this is where the effects were first seen. And felt.

Stores are closing or barely scraping by, offering "three suits for $250." No one is buying. "Food traffic" -- taxis ferrying people straight across Manhattan to the coolest restaurants -- has dwindled to a trickle. Theft, violent and drug crimes are on the rise. There are New Yorkers who pretend to be surprised if a bar only accepts cash, say they're going to an ATM, and never return. "Impulse shopping," the practice of popping down to a boutique over lunch, has died a death. 6.5 percent of all the stores in Manhattan are now vacant: a 20-year high. On Fifth Avenue, the Western world's premier shopping district, 15 percent of the shops between 42nd and 49th Street have closed. Even Brooks Brothers has left nothing but boarded-up windows. And scaffolding. And signs: "For sale," "for rent," "for free."

The city's restaurants are advertising "recession dinners": A hot dog and a beer for $5. Suddenly you can get tables again -- anywhere, anytime -- and the concierge will often ring you back and make you an offer. It feels like the end of snobbery.

Empty Apartments, Big Discounts

The potholes are getting bigger. And could it be there are more rats since the collapse of Lehman Brothers? Garbage sacks pile up because restaurants and hotels have to pay for them to be taken away, but would rather save their money. Homeless people wander the streets, apartments remain empty, landlords offer discounts -- unthinkable circumstances just a short time ago, at least here in Manhattan and over in Brooklyn.

People react differently to crisis. When Andre Wechsler from Düsseldorf lost his job on Wall Street, he opened up a hot dog stand selling German currywurst on First Avenue. City magazines praised him for his smart, tasty, "so German" idea.

A hundred yards further on, Cathy sits on a bench. "I'm exhausted," she says. "I have no insurance, no job, no place to live." Cathy sleeps in subway carriages or on the benches in Tompkins Square Park. She's a bag lady now in a raincoat, with all her belongings in a shopping cart. Cathy used to be a broker at Merrill Lynch, but she never put anything aside. Now she has nothing. When people like Cathy lose their jobs in a city without a welfare net, they fall rapidly -- and far.

It's a chain reaction. Wall Street was the city's engine, and since 1990 New York has been a monothematic metropolis. If a bankrupt Lehman Brothers puts 25,000 people out of work, it robs the city of millions in taxes, revenues that are desperately needed for education, the police force and road repairs. Children are taken out of private schools, cleaners and gardeners are let go. This affects the real estate market and all consumer activity, and taxis drive around empty save for the driver, desperately hunting for the few tourists who still have money to spend. And then AIG and Merrill Lynch cut thousands more jobs.

So could New York's current woes beset Berlin and the rest of the world tomorrow? As so often, New York could become a standard, a model, only this time of fear; a new weltschmerz in the true sense of the word?


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