Friday, December 5, 2008

Book Excerpt Of The Week: "The Sky's The Limit" By: Steven Gaines

Here's an interesting excerpt on the not so distant economic cycles in NYC:

"Only a few years before, you couldn't give away apartments in New York City. After twenty years of statewide fiscal mismanagement and two liberal mayoralties, the city was in financial and social turmoil. One million citizens were on the welfare roles, crime rates were at historic highs, and the prostitutes in hot pants and the muggings in Central Park had become comedy fodder for late-night TV talk-show hosts. One million middle-class people fled the city during the 1970s, mostly into the surrounding suburbs. They called the exodus the 'squeegee effect,' after men who appeared out of the shadows on New York City street corners to wash car windows for change. In October 1975, with the tax rolls depleted and the short-term, high-interest debt over $6 billion. Moody's Investors Service downgraded all New York State and city securities and bonds, and it was thought that 100 banks might fail. That month an indifferent President Gerald Ford turned down New York's plea for a federal bailout and declared in an address to the National Press Club that perhaps the best thing that could happen was for New York City to go bankrupt and be restructured. The following day the New York Daily News ran the classic headline 'Ford To City, Drop Dead.'

'You could have brought any apartment in the city for two hundred and fifty thousand dollars,' Cave [a real estate agent] marveled.

Not for long. By the 1980s the hungriest, most powerful generation in history- the baby boomers, who were moving through time and space like the proverbial elephant in the snake- burst upon the U.S. economy. There were 76 million baby boomers, and they had turned all the idealism and pacifism of the 1960s inside out into naked ambition and greed. The most ambitious of the boomers were inevitably drawn to New York in the 1980s, where the bull market on Wall Street was a cornucopia of cash. Tens of thousands of boomers became part of the engine that made the bull market run, and the workers who tended that good-time engine- the bankers, lawyers, brokers, traders, money managers, accountants, and all those employed by the myriad tributary industries fed by greenbacks- were compensated gloriously and beyond imagination. Men and women who were only thirty or forty years old got rich quickly. Very rich.

In 1982, according to the U.S. Census Bureau, there were only 12 billionaires in America. By 2003 there were 262 billionaires-with 48 of them making their home in New York City. The rest of the nation was rich, too. At the turn of the twenty-first century there were 6.5 million millionaires in America, one-third of them under thirty-nine years of age. By 2001, according to one analysis, there was a total of 9.8 million millionaire households." -From, "The Sky's The Limit" By: Steven Gaines

No comments: