New York politics is marked by an almost absolute dominance of the most highly ranked candidates to the left of the Democratic Party.
Over the past few years, an average of 300 people left New York each day. The profile of many of these “exiles” corresponded to the medium-high salary workers who were looking for another place of residence to pay less taxes and enjoy a more comfortable and less hazardous life.
The famous economist Arthur Laffer and his colleague Stephen Moore, experts in evaluating the mobility caused by taxes in the North American country, warned in 2018 that this trend would accelerate during the current decade. In addition to the tax burden, both authors cited the high prices of the real estate sector or the worse performance of wages and employment as some of the reasons for this exit.
New York politics is marked by an almost absolute dominance of the most highly ranked candidates to the left of the Democratic Party. In economic terms, this translates into a clear commitment to measures that are frankly far from the liberal spirit but seen in many other regions of the country: continuous recourse to unsustainable public spending, steep and repeated tax hikes, regulations aimed at restricting the degree of laissez-faire of markets, etc.
The worrying downward trend in the Big Apple has accelerated with the socio-economic collapse caused by COVID-19. It should not be forgotten that New York has been one of the territories hardest hit by the pandemic, first in terms of health and then economically. Well, these circumstances could be worse, or at least that is what the renowned fund manager and economic popularizer James Altucher believes, who has signed a devastating article on the matter.
Altucher reviews various indicators to highlight the ruin New York faces:
- The main office buildings are 90% empty. Businesses can now reopen but they have realized that they can bet on teleworking and reduce their spending, so skyscrapers are now dealing with a monumental capacity problem.
- Rents are down by 30-50% in some areas of NYC. The same goes for buy-sell prices. The real estate supply of the Big Apple, notorious for its scarcity, is now becoming excessive due to the clamorous lack of demand.
- In social networks, there are groups and communities of young people who consider mass migrations to other areas of the country. Leaving the city is no longer just a matter for senior officials or businessmen, but is already a socially accepted dynamic among many other layers of the population.
- Culture is low. Broadway theatres are not scheduled to reopen until 2021. Many of the city’s museums are operating at half gas, while others remain closed. With its collapse, the viability of the restaurant and leisure industry, where more than 60% of the restaurants would have closed, also vanished.
- The public accounts are devastated, the job market has suffered a real drain and bankruptcy is a real prospect that, in addition, will force the authorities to take unpopular measures that will only contribute to generating more disenchantment, be it by severe cuts in spending or for significant tax hikes.
There are many voices that argue that “New York will always be New York” and rely on the comeback of many of these indicators. However, it is also true that pessimism about the viability of its socioeconomic model has gone further in recent months, accelerating a long-term trend that is now suddenly manifested due to the shock caused by the pandemic.