In the 1980s, the Tom Wolfe novel The Bonfire of the Vanities coined the term Masters of the Universe -- Wall Street wheelers and dealers who moved billions of dollars around the world, making economies and businesses shake, all the while taking home millions for themselves, funding their lavish lifestyles.
For the last three decades, being a Master of the Universe was something that everyone on Wall Street aspired to. Not even the tragic tale of Wolfe's hero, Sherman McCoy, could dissuade a generation of young men and women from flocking to Wall Street, dollar bill signs glowing in their well educated eyes.
But the last few years have been unkind to Wall Street. The economic crises, new regulations, the evaporation of credit, the collapse of the housing market, the Occupy movement -- a perfect storm within a perfect storm has emerged to knock Wall Street down. Bonuses are being slashed, jobs are gone and aren't coming back, and a new ethos that making money off money probably isn't the most stable of business models.
So what does this mean for NYC?
After all, Wall Street is a core of the city's identity and huge engine of our economy. This big article in New York magazine offers some insights. Among the tidbits:
- The housing boom led to a credit bubble. When it burst, it became harder for banks to get money. Banks make money off money. Go figure out the rest.
- It's a big question whether less pay and smaller bonuses will hammer the NYC economy. Hopefully not but only if the city's economy diversifies.
- One banker laments that, without Wall Street, NYC will turn into Philadelphia.
On this last point I disagree. NYC has more than Wall Street. We have Broadway, movies and TV, fashion, publishing, Silicon Alley -- and much, much more. We also have 8 million great, hard working citizens.
Even if Wall Street withers, I think NYC will be just fine.
And so will the Sherman McCoys.