“How do you magnetize talent in a world where propinquity matters less?” asks Sexton. “Universities. World-class universities.” He acknowledges that our city and state budgets aren’t exactly skewed toward helping them; Fordham is not getting tax breaks like Bear Stearns. But one of the few new line items in this year’s state budget is the Higher Education Loan Program. “We should at least begin to use this as a social moment,” says Sexton, “to reunderstand what we once knew: that education is the ultimate public good.”
Indeed, we shouldn’t forget the political and cultural implications of a marginalized Wall Street. In her book, The Warhol Economy, Elizabeth Currid notes that the absolute number of people who toiled in the finance sector was the exact same number as those who worked in the arts, or 5 percent of the city’s workforce. If finance recedes as an economic engine in this city, it recedes as a cultural engine, too, allowing other sectors to reinsinuate themselves into the city’s Zeitgeist. In 1992, for instance, Seattle may have defined the sound of grunge, but New York enshrined its style, with Marc Jacobs producing a legendary grunge collection that reinvigorated the New York fashion world. Would his work have had the same cultural impact if Wall Street had been casting its long shadow? (And let’s not forget, his collection was about grunge, a recession-ready trend if ever there was one.) It’s hard to say. But it seems unlikely.
The reaction we most associate with periods of economic distress may be caution. But another, paradoxically, is to do what Jacobs did, and take risks. Entrepreneurs consider recessions a fine time to start new businesses. The Silicon Alley Insider recently published a list of companies that started during periods of negative GDP growth. They included Wang, Fairchild, CompuServe, Intel, Atari, Apple, Microsoft, Sun, Compaq, Cisco, 3Com, Genzyme, Amgen, Lotus, Adobe, AOL, Dell, and Cisco. Real estate and labor are cheap during recessions (hence Silicon Alley’s ability to colonize those empty buildings in the Flatiron district). Competition is low. As Gotsch points out in her observations about biotech, unemployment deepens the talent pool for small companies that want to recruit, and it liberates the unemployed to gamble on newer, looser ventures. And it’s not just businesspeople who take advantage of this opportunity to switch gears, either, but artists and craftspeople, too. “The upside of these downturns,” says Danny Meyer, “is that some chefs, having proven themselves with highly regarded cuisine, can now feel freer to do what they like, and fly in a more straightforward direction.” In his own life, he points out, the early nineties recession gave him and Tom Colicchio the chance to start a restaurant together, because Mondrian, where Colicchio had been executive chef, shut down. Gramercy Tavern opened in 1994.
There are all sorts of examples floating out there about hard-times conversations of lemons to lemonade. They’re part of recession and Depression lore. My favorite, though, comes from Suzanne Wasserman, director of the Gotham Center for New York City History at CUNY. She tells me that in 1929, a wealthy businessman named Yip Harburg, the co-owner of Consolidated Electrical Appliance Company, went deep into debt. Rather than dive off a building, he followed his dream and became a lyricist. Crazy, you say, but eventually, he did all the songs for The Wizard of Oz and Finian’s Rainbow. He also wrote the lyrics to “It’s Only a Paper Moon” and “April in Paris.” And, most apt, he collaborated with Jay Gorney to create the anthem of his day: “Brother, Can You Spare a Dime?”
In Capitalism, Socialism, and Democracy, the Austrian-born Harvard economist Joseph Schumpeter talked rhapsodically about creative destruction, a kind of Darwinian ecosystem of death and renewal in capitalist economies. You hear his name a lot now, Schumpeter. Recessions are perfect Schumpeterian moments of creative destruction. The trouble is, creative destruction doesn’t necessarily make us happy. “Creative destruction, Schumpeter said, thinking about entrepreneurs, requires people at ease about not reckoning the consequences of change, or not knowing what comes next,” writes Richard Sennett, an NYU sociologist, in The Corrosion of Character. “Most people, though, are not at ease with change in this nonchalant, negligent way.”
Here’s what’s interesting: Sennett wasn’t writing about people living through recessions. He was writing about people living in our modern boom economy. Yet that feeling of instability and painful uncertainty applies to both times. That’s what’s so odd about this moment: Today’s recession doesn’t feel all that different from the labile times preceding it. Instead, it just feels like a long-awaited manifestation of them.
But that’s probably no accident. The crash was an equal and opposite reaction to the times preceding it, yanking us down as low as the boom years propped us up. What will emerge when neither high-wire derivatives nor widespread unemployment dominates our lives isn’t clear yet. Maybe more instability and Wall Street excess. But maybe a glimmer of something new, too. New York will have its smattering of new businesses, and a few more pastors and a biotech park. Its citizens will have seen a few more paintings and donated a few more hours of their time to the needy. It’d be naïve to think we’ll become a metropolis of goody-goodies, our iPods reprogrammed to the choruses of our better angels. But possibly, we’ll remember that the Big Apple at its greenest was just that, green: not the end point of something, but on its way to becoming something else.