Wall Street Meltdown - and Why It's Happening

Wall Street Implodes

Wow! September 15, 2008. A day that will live in financial infamy.

It may top October 24, 1929, Black Thursday, the day that triggered the Great Depression.

Lehman Brothers is being liquidated. Merrill Lynch is getting sold to Bank of America. These two titans of the American financial sector will exist no more.

The insurer AIG is getting bailed out.

Freddie Mac and Fannie Mae are no longer functional.

The Dow Jones fell by more than 500 points, its worst performance since September 11, 2001. The S&P 500, Nasdaq, and European stock markets are crashing too.

It's a big, huge, freakin' mess.

This is the kind of disaster that only people who are convinced that they're really, really, really smart -- sooooooo much smarter than your average, ordinary shlub -- this is the sort of catastrophe only arrogant fools like these could create.

But not to worry -- oh no! According to President Bush, Senator McCain, and Treasury Secretary Paulsen, the "fundamentals" of our economy are "strong." Please, don't panic. Everything will fine. Nothing to see here.

What the hell are the fundamentals of our economy anyway? And how are they strong? Somebody please enlighten me, I can't seem to figure it out.

This Wall Street meltdown will be disastrous for NYC. I don't see how it can't be. So much of the state and city economy depends on the taxes the financial sector produces (those big bonuses are vital to the city's well being). One can safely assume that tax revenues are going to plummet as a result of this.

This will mean huge, painful cuts to our city's services (schools, police, firefighters, hospitals, sanitation, etc). It'll probably mean even more painful tax increases to make up the revenue shortfalls. Don't be surprised if we find ourselves in a situation similar to the 1970s fiscal crises. It'll be a nightmare but I know New Yorkers will pull through it. After all, we'll survived much worse.

I can just see the headlines now: "McCain to City: Drop Dead."

To get a thumbnail sketch of this whole thing, check out the following:

Wall Street meltdown: your two-minute catch-up

Is Rent Control a Scandal?

According to the Wall Street Journal it is.

Rent Control Is the Real New York Scandal

I'll leave this for you to decide. I just always find it amazing how programs and policies that help the poor and middle class are always seen as the "real cause of our problems" while programs and policies that help the already rich and powerful are viewed as good and beneficial to society as a whole. But that's just my opinion, I could be wrong.

Classic Mr NYC

Last night HBO broadcast (re-broadcast?) Real Sex 32 which had a segment featuring Rachel Kramer Bussel, the sex and cupcake blogger/author/advice columnist. Last year, Ms. Bussel did an exclusive interview for Mr NYC. Read it here.

Memo from NYC

For several decades, the late great Alastair Cooke broadcast his "Letter from America" on the BBC World Service, delivering his impressions about his adopted country to his native one and the world. Needless to say, like the man himself, Mr Cooke's "letters" were classy, smart, funny, and wise. In a varied homage to Mr. Cooke, I'm starting a new feature called "Memo from NYC", one New Yorker's message to the country and world in which he lives.
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Ever since America stepped into the 21st century I've wondered: is this real?

Let me put it this way.

Remember in Back to the Future Part II, when Old Biff from 2015 goes back in time to give Young Biff from 1955 that sports almanac? We learn that Biff goes on to win millions in horse race betting and, by 1985, is rich and powerful. He's had Marty's dad killed, is married to Marty's mom, sent Marty to boarding school, and has had Doc Brown committed. Biff controls a scary and awful Hill Valley, a place where the rich and powerful run everything for themselves and everyone else lives in misery and fear.

Today, America in the 21st century feels a lot like that alternate Hill Valley of 1985. Truth is stranger than fiction, life imitates art, etc.

Sometimes I wonder if someone from the future came back in time to screw up our present so royally. We can't really have all done this to ourselves, can we?

We didn't really impeach a competent president over his sex life?

We didn't really then put a totally incompetent man into the presidency after a majority of Americans voted against him?

After we got horribly attacked, we didn't really give up on finding the person who organized those attacks and then invade a country that never attacked or threatened us?

We didn't really base this invasion on lies, did we?

And after invading that country, and committing ourselves to a long and expensive occupation, we didn't really cut taxes on the rich and explode the deficit at exactly the same time when the government needed more money to pay for that occupation?

We didn't really turn our nation's largest surplus into our largest deficit?

We don't really spy on Americans without warrants, torture people, and deny them due process of law, do we?

We didn't really elect this clearly incompetent president again, did we?

Aren't we upset that more and more people are falling into poverty, and that millions are going without heath care and are falling into debt and losing their homes when they get sick?

We don't really like the expanding gap between rich and poor, do we?

The price of gasoline can't really be $4 a gallon, can it?

We aren't seriously going to teach creationism in our public schools, are we?

We don't really think it should be any easier for criminals to get their hands on guns?

We don't really want to turn gay people into second class citizens, do we?

We didn't really politicize our justice system, did we?

We believe in some kind of social safety net, don't we?

And on and on and on and on and on.

I mean ... do we really like what America has become in the 21st century?

Most Americans say "no" but I just don't believe it any more. The real answer to this question, sadly, seems to be "yes."

Polls indicate that Americans are posed to elect a man as president who wants to maintain this status quo. Someone who wants to keep this American reality the same.

Thus I can only conclude that more Americans like the direction this country is going in than those who do not. This nightmarish America is, in fact, what most Americans seem to want their country to be. They prefer the Hill Valley of Back to the Future Part II to the Hill Valley of the other two movies.

Now some people will say that this is a stupid, unfair, outrageous, totally spurious comparison. But then why did I think of it?

Now I'd like to believe that our nation's current travails -- this alternate-reality reality -- is just the work of one bad man, some Biff from the Back to the Future movies. Some of you might be thinking that our Biff is George W Bush or his soon to be successor John McCain.

But it isn't. It's us. We The People.

And we the people have really messed things up!

We are the Martys of the world unwittingly giving the Biffs of the world the almanacs they need to wreck havoc on us. We are the ones who have created this reality. "We have met the enemy," said Pogo, "and he is us."

We were given choices -- and we made terrible ones. Why else would George W. Bush be president? John McCain leading in the polls? The economy in a shambles? The Iraq war lasting longer than WW2? "American Idol" the number 1 show on TV? We made these same grievous errors together.

And how do we deal with the consequences of these mistakes? Well ... we go on making them! Insanity is defined as doing the same thing over and over again and expecting different results. Well, I guess we figure that if we keep making the same mistakes again and again then they'll no longer be mistakes. They'll be ... reality. And this insanity, this reality, can't be a mistake, can it?

The reality that shouldn't be ... is. The reality most of us say we don't like is the same reality we most fervently embrace. Today's reality is like sweet desserts, drugs, and pornography: people are addicted to it. We don't want to like it but we do. We don't want to consume it but we can't stop. No matter how much we despair of it, we're addicted to our own reality!

I'd like to think that America can do so much better than this. For a while, it seemed like we were doing great. Just ten years ago, in the late 1990s, despite whatever problems we had then, overall it felt like America was only going to get better. We were at peace, the economy was booming, Clinton was president, and Seinfeld was on TV. The future seemed bright.

And then it fell apart.

The fiasco of the 2000 election resulting in the Bush Presidency; the tragic attacks of 9/11/2001; corporate scandals; the disastrous war in Iraq; the sputtering and stalled economy, and so on and so forth.

What happened? How did it all go so wrong? Will this nightmare ever end?

And why do so many Americans, despite what they might say to the contrary, seem to want it to continue? We say all the time how lousy things are but we do nothing to change it. We the people doth protest too much.

Now if only I could find that exact point in time, that precise moment in the last few years where it all went so terribly wrong. Like Biff in Back to the Future Part II, I'd get a time machine and go back, only I'd go armed with a copy of today's newspaper and say to everyone I meet, "You see what we're doing in the future? Do the opposite of it!"

Then our present reality might change.

But I probably wouldn't be going back in time to the 2000 election. I might go back to 1995 and tell Clinton to stay away from the frisky intern. Better yet, I'd go back to the Garden of Eden and tell Eve not to eat that damn apple.

Term Limits Save Money ... Kinda

Mr NYC neither endorses nor opposes term limits for our city, state, or federal elected officials. (I'm Switzerland when it comes to this issue.) But The New York Times has an interesting story today about how term limits actually save the city money in pension and health benefits (you get nothing if you work for the city less than 10 years and city term limits usually mean just eight years on the government dime, unless these office holders had a previous city job).

Hidden Cost Seen for City if Term Limits Are Shelved

My guess is when most voters learn about this, the term limits law will be set in stone.

Twin Towers Tightrope Walk - Phillipe Petit

When we think of the Twin Towers, we can't help but think of tragedy. But once upon a time, it was a place for magic. And on this sad day, I thought it might be nice to remember this as well.

On August 7, 1974, America was in another kind of funk. The Watergate scandal was crippling America and, two days later, Richard Nixon would resign as president. Yet on this very day, an eccentric Frenchman named Phillipe Petit walked on a tightrope between the World Trade Center towers. He didn't just walk -- he danced. He also lay down on the rope and rocked back and forth, as stunned New Yorkers watched from below. It was a surreal, unbelievable moment, something that could only happen here. Petite never repeated this feat and, looking back, it's hard to believe that anyone was ever able to do this.

So it helps to remember that, in the midst of all of the madness in the world, there can also be magic.

Astroland Commercial

And so ... another piece of what Pete Hamill might call the New York City alloy dies. Astroland Park in Coney Island shut down Sunday night and, according to the owners, it's for good. Thor Equities, who bought the park a little while, is planning to "transform" it into something bigger and more exciting. Who hoo! That probably means it'll be more expensive.

I went to Astroland last year for the final time. While it was dirty and overcrowded, it was still fun. There were lots of parents with kids, young couples, and older people having fun. I got the feeling that this was one of the dwindling number of places where middle class New Yorkers could go with their families and not have it cost a bloody fortune. And now that's gone too. It'll never be quite the same.

Here's a commercial for Astroland from, I assume from the sleazy corny music, the 1970s.

Hanna Comes and Goes

Yesterday the local media got New Yorkers all crazy with the threat of Tropical Storm Hanna. They said it would pound us mercilessly, bringing up to eight inches of rain, and the flooding would be nasty.

Fortunately none of this came to pass. The rain dumped down for a few hours, then went away. Walking the streets today, I couldn't even tell that it had rained at all. We've lived through much worse, like the storms that shut down the subways last year, and then the media hadn't given us any real warning about that.

So the lesson, I guess, is to be prepared when the media says that a major storm is coming but also don't be surprised if it doesn't turn out to be that bad, just like Gustav, thank the Lord, didn't turn out to be anything like Katrina.

Brett Delivers

Favre Wins in Jets Debut

Today was the opening day of the NFL season and the New York Jets beat the Miami Dolphins 20-14.

Obviously it's only one game and no one can possibly gauge how the rest of the season will turn out but ... it's great way to start things off. At least for now, it shows that Brett Favre was wise not to retire and the Jets were wise to snap him up.

Let's hope the Jets, under Favre's leadership, can keep up this kind of momentum. Who knows, by the end of the season, maybe New York will have two championship teams.