A murder bubble in New York City?
As much as I admire Rudy Giuliani for cleaning up New York (you should've seen it in the late 80's/early 90's), I believe that some of the credit for its amelioration belongs to the improved economy that took hold shortly after he was elected Mayor in 1992.
The CrimeStat computer system was instrumental as was the 'broken window' philosophy of police work, but nothing quells a populace more than economic prosperity. When people own stuff and see a clear path toward a future of owning even more stuff, they tend not to take risks, act out in anger or feel the need to do harmful things to their neighbors.
Well, the recession took its time in reaching New York City, but with so many in the upper class struggling to make ends meet as they used to, the trickle-down luxury-expenditure machine is on the fritz.
One closed-down hedge funder or redundant investment banker, by curtailing his typical spending patterns, can negatively impact restaurateurs, hairdressers, tailors, jewelers, personal shoppers, realtors and interior designers - so what impact can hundreds or even thousands of newly-underemployed white collar dukes and dutchesses have? A big impact, one that reaches beyond Manhattan and into the outer boroughs, which are populated with those who earn a living by servicing our now-defrocked overclass.
And that's when the muders and violent crimes begin to balloon...
According to Mayor Bloomberg, so far this calendar year:
- New York City murders are up 22%
- New York City shootings are up 21.2%
- Rapes, burglaries and felony assaults are all up between 3 and 11% in the city as well.
Bloomberg cites the fact that these numbers are still "historically low" and he believes that more cops are the elixir.
I believe he is half-right, and that more and better employment would be even more meaningful.
The trouble is, we've grown accustomed to a level of employment in NYC that was driven by the profligate spending of the chosen few - those who operated in the FIRE sector, spurred on by easy money and even easier regulation. Finance Insurance Real Estate was undoubtedly the engine of the last decade, what businesses will become the engine of the coming one? With what industry can we possibly replace that constant flush of cash and spending should it fail to fully return with markets and bank profits?
To put a lid on the recent crime spike, more cops would be nice, but more affluence and well-distributed economic activity would be even better.
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