So what’s more important, the short-term pain of vulnerable populations in New York City or the long-term health of the city? Actually it’s a trick question. It’s not an either/or sort of question. New York City’s vulnerable populations are just as reliant on the success of the city as the rich and famous are. More so actually. NYC has been the prime example of the “Blue Model of Government” for quite some time. Public Sector Unions own the city (and the state). The largest public housing blocks in the country are a dominant feature of the architectural landscape. There’s a lot of mismanagement and waste in the education and social services sectors, but there’s also a lot of impressive work being done, that couldn’t be done elsewhere. New York’s mix of wealth and poverty is unique.
All of this, the good and the bad, is reliant on New York retaining its position as the country’s dominant economic hub. If the golden goose flies south, the place will fall apart. Sure, the rent would get cheaper, but a lot of the social services would just evaporate. I wasn’t actually joking when I compared NYC to Detroit, the US city that has lost over half of its population over the past fifty years. For those who think the comparison is ridiculous, I suggest you take a walk through the Bronx, a part of New York City that still hasn’t recovered from New York’s last economic collapse. Today’s video may seem callous in privileging the interests of business over poor New Yorkers, but I don’t think that’s what I was doing at all. The interests are the same.
Video Transcript after the jump…
Hey there. You know what? I think Amazon HQ2 is actually pretty good for New York City. This is not a popular opinion right now. People are disgusted by the fact that New York is giving like 2 billion dollars to one of the world’s richest companies. People are outraged by the way this move is certain to raise housing costs and displace lower income communities in Queens. People are absolutely right to be concerned about these things. But focusing on them misses what really matters with this Amazon HQ2 thing. New York City is in a battle to the death with Washington DC and Washington DC holds all the cards.
The idea that Washington DC and New York City are in some kind of competition may seem laughable on its face. New York City is the capital of the world. Washington DC is just some sweaty backwater full of inbred politicians and crack smoking mayors right? On first glance the metro area population numbers back that up. Since 1950 the population of the New York Metropolitan area has almost doubled. But since 1950 the Washington metropolitan area has gone up by a factor of five or six depending on how you do the math. Also you should probably throw Baltimore’s numbers in there too so…
New York is what it is because it’s the business capital of the United States. It’s not a port anymore. Most of the manufacturing left a long time ago. New York is where you go to be close to all the biggest businesses in the US and to take advantage of the sorts of services those sorts of businesses use. The problem is that fewer and fewer of the headquarters of the businesses that matter are in New York anymore. No matter how hard they try to make Silicon Alley happen, New York is maybe number three or four in Tech.
And Tech is what matters. It’s eating all the other industries that make New York New York. The publishing and media industries are on life support and almost completely at the mercy of Facebook and Google. New York’s famous department stores are getting beaten up and commercial real estate is emptying up and down Manhattan as more and more shopping moves online. Finance is still going strong, but how long is that going to last? We are one serious financial crisis and a few rule changes from most of that business moving to Washington DC as well. Some of its already there.
For over a century now companies have had to have offices in Washington DC to bribe legislators. The city has always been sort of a laughable, corrupt backwater. Nobody really wanted to be there. But something has changed over the past couple decades. Financial crisis and endless war have both worked to make DC a much richer and much more pleasant place to be. All of a sudden it costs just as much to live in DC as it does in New York. And more power over business moves to DC with every year. As I predicted a year ago, it was inevitable that Amazon’s HQ2 would go to DC. If DC becomes the place that you have to be to do business with the US’s biggest companies then what is New York exactly?
This is not an overnight process. It is taking decades not years, and New York should stay more economically important than DC for the rest of my lifetime. But power and money are definitely draining South from New York to DC. The Amazon HQ2 results make This clear. The division between New York and DC is supposedly equal but it’s not. New York had to commit at least three times as much money for the same number of jobs. DC will have Amazon’s CEO and his pet newspaper. But New York’s politicians were right to do what they could to get Amazon in there. It might get New York into at least the second tier of tech cities. It’s a good step in NYC’s battle for tech dominance and its good for the country.
Countries with a single imperial city are just weaker. Power collects, congeals and stagnates when it doesn’t have competition. I think DC will eventually beat out New York to become America’s Rome, but the longer that takes the better. Amazon’s move to New York will keep the fight going for another couple decades. And that’s a good thing.