Even last month, those of us who don’t work in finance took wishful comfort in our Econ 101 understanding of the distinction between the financial crisis—that is, all the accumulated bad debt causing panicky global credit pipelines to tighten all at once, like so many sphincters—and an economic crisis, when people in general stop buying things and companies lay off workers or go out of business. The problem for New Yorkers, however, is that a financial crisis is an economic crisis, since more than a quarter of the wages in the city are paid by the stocks-and-bonds industry. For us, Wall Street is Main Street.
The other night, as I drove down one of New York’s more conventional and lovable Main Streets—Bleecker, west of Sixth—looking at the glowing shopfronts and bustling restaurants and strolling pedestrians, I had a sudden elegiac impulse to register the scene and its details. Because, I thought, once a Depression descended, these same blocks would look and feel very different; in 2010 or 2011, I might think back to this particular evening—autumn! Twilight!—and remember how sweet and jolly the city had felt and looked not so long ago.
But that’s just imaginative pessimism, the anticipation of grimness and sorrow to come. The last time the city experienced a great trauma, of course, there was no extended, queasier-and-queasier period of uncertainty and speculation: The planes hit, the Twin Towers fell, we knew who to blame. The horror was instant, physical, unequivocal. Whereas with this crisis—which does not yet have a name, another signifier of its baffling, nauseating open-endedness—nothing is manifestly different. There were no plumes, no stench, no ruins, no sudden gap in the skyline. It’s still hard to get reservations in restaurants. A fancy annual $1,000-a-plate gala I attended last week was sold out, and set a fund-raising record for the institution.
Yet as we discovered in the weeks and months after 9/11, there is some solace in the collective experience of disaster. Misery shared is preferable to misery alone, and an ebbing tide lowers all boats. It’s not just one overleveraged bank or brokerage in trouble, as it seemed at the start, but nearly all of them. Everyone who owns stock is watching their wealth shrink at more or less the same rate. And those of us who’ve fretted, passingly, about the growing extremes of economic inequality in America? That problem has been, um, addressed, by the free market: In just two months, the investor class has had its wealth reduced by $2 trillion or more. Thanks to the stock market, the rich got much richer, and now, thanks to the stock market, the rich are getting much poorer faster, in relative terms, than actually poor people.
A certain leveling is taking place. On the stoops and sidewalks of my Brooklyn neighborhood, there are lots of middle-aged men lounging all day long, comfortably pensioned-off former longshoremen and sanitation workers; I’m thinking that before long, the Upper East Side and Greenwich will acquire their analogous populations of robust, not-old guys without anything urgent to do every day.
“We need to reclaim the idea that in this country,” Obama wrote in August, “we’re all in it together.” But now the horrible economic weather has imposed the idea on us before we had the opportunity to reclaim it voluntarily, and we’re-all-in-this-together has become a powerful central trope of the Obama campaign in its final weeks.
We New Yorkers were already living in a very blue epicenter of Obama support, but during the last two weeks, his lead over McCain in this state (let alone this city) has essentially doubled, to 23 percent, a bigger margin than anywhere else in the country. It’s not only the economic horror show that’s made more and more Americans move in Obama’s direction. According to the aggregated polling numbers that have become the Dow Jones Industrial Average of presidential politics, support for McCain and Sarah Palin peaked four days after their convention. AIG had not yet gone to the Bush administration for its bailout, and Merrill and Lehman had not yet folded.
But without the financial terror—and our ultra-free-market Republican administration’s even more alarming response, which proved that there are no Milton Friedmanites in foxholes—the presidential race would surely be much closer now. Because even though the McCain-Palin surge started fizzling after September 8, Obama’s rise in the polls didn’t begin until a week after that, when the scale and severity of the financial chaos suddenly became plain. It was one thing for McCain-inclined centrists dubious about Sarah Palin to bet that she would never become president; as soon as wobbly John McCain himself was suddenly judged as a prospective reinventor of the 21st-century American political economy, the whole ticket began looking seriously iffy to everyone but hard-core Republicans. Obama passed McCain in the polls just as the $700 billion federal bailout was hatched and announced.