Comedian Jerry Seinfeld and author James Altucher are tussling over whether New York City is dying. Here's why both men are right.

The famous Daily News front page from 1975's fiscal crisis era of New York City.NY Daily News Archive
  • Joan Didion-style leaving-New York essays from early in the pandemic have morphed into a narrative that "New York City is dead," newly made famous by lightning-rod blogger James Altucher.
  • When they say this crisis will be the defining one for New York, critics like Altucher are probably referring to its last big crisis: The "Bad Old Days" of the 1970s, when New York was essentially broke and riddled with crime and social problems.
  • The 1970s were also a cultural renaissance for the city, giving birth to punk rock and hip-hop, and witnessing the popularization of disco, among other still-iconic NYC cultural-reference points.
  • As bad as things are today, they still don't compare to the 1970s yet, but that doesn't mean leaders like Gov. Andrew Cuomo and Equinox Chairman Stephen Ross don't have good cause to be worried.
  • Altucher told Business Insider there are "two major differences" between now and the 1970s, when despite being broke the city actually had better prospects. But the '70s show that great culture can come from the toughest circumstances.

New York City's dead, haven't you heard?

For months now, the Joan Didion-style "Goodbye to all that" leaving-NYC essay has come back into fashion, even including my own for Business Insider. The most recent — which seems to have pissed a lot of people off, including Jerry Seinfeld — came from James Altucher, as republished in the New York Post. "NYC is dead forever," Altucher's headline blares, before going on to essentially state the bear case for the city's economy, fitting given Altucher's background in hedge funds before moving into contrarian self-improvement books and podcasts.

Altucher told Business Insider that New York City "will always attract people looking for new opportunity and looking to mix with other creatives" but that because of its current challenges "opportunity will disperse to many second- and third-tier cities."Advertisement

The urge to declare New York dead is a strange phenomenon. The whole country is suffering right now: Congress failed to pass a new stimulus against the backdrop of double-digit unemployment, schools and colleges are reopening only to shut down again, and onlookers are helpless before mass interference with the Post Office months before a probable mail-heavy election. Why, in the midst of all this, do some commentators insist that this pandemic is the thing that will kill one particular East Coast city?

There's an undeniable historical precedent for New York's current challenges, as laid out by Altucher: The 1970s, when New York essentially went bankrupt and crime skyrocketed, summed up by the famous Daily News headline: "Ford to city: drop dead." (In 1975, New York famously asked then-President Gerald Ford for a federal bailout. He said no.) When pundits declare New York city dead, maybe they're repeating Ford's advice to the city from the last time it was faced with an apocalyptic fiscal crisis. In an echo to that, the city's MTA transit service, responsible for the subway system, is now saying it will have to make 40% cuts to train and bus service in 2021 without federal aid.

Something else interesting happened in the 1970s aside from New York's death: American society changed in ways that are only starting to be appreciated. The roots of today's record inequality and social divisions, exposed so starkly by the coronavirus recession, can largely be traced back to the decade when its most important city went broke, asked for a rescue, and was left to fend for itself.
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The 1970s were America's secret turning point

Politicians Ronald Reagan (R) and Richard Nixon campaigning.Dirck Halstead/The LIFE Images Collection via Getty Images/Getty Images

Since the '70s, real, adjusted-for-inflation wages have risen only by 0.2% for the average American.

This is a sign of how something in the economy shifted: Marc Levinson argues in "An Extraordinary Time" that the decade marked the end of the long postwar boom, and politics and society have adjusted in response. "The shift came at the end of 1973. The quarter-century before then, starting about 1948, saw the most remarkable period of economic growth in human history," Levinson writes, before adding, that high unemployment and a deep recession in 1973 "changed everything," concluding that "a far more conservative age came with the economic changes, shaped by fears of failing and concerns that one's children might have it worse, not better." Other authors have supported Levinson's core thesis, notably Steven Brill arguing for a 50-year downward spiral in "Tailspin," which argues that elites ascended the ladder of success and pulled it up after them, and more recently, Spy magazine cofounder Kurt Andersen argues in "Evil Geniuses" that he was a "useful idiot" himself in post-'70s New York, asleep to the transformative effects of how society was changing and inequality was widening. (Andersen also weighed in on Altucher's essay, telling The New York Times' Ginia Bellafante that it was "foolish and shallow".)Advertisement

The business class of New York seems terrified of the 1970s scenario replaying, with billionaire Trump fundraiser and Equinox Chairman Stephen Ross teaming with a former Bloomberg deputy to find a white-knight mayoral candidate to secure New York's tenuous recovery. And with more tax revenue badly needed for the city and the state, Gov. Andrew Cuomo has said he just can't raise taxes at this point, because he's scared of more money leaving New York.

So when people say NYC is headed back to the '70s, they're not talking about either that city or that decade; they're talking about what role money should play in American culture and politics, and where this country could be headed for the next half-century. It's a loaded subject.

Anecdotal evidence already suggests a return to those days, like The New York Times report about broken subway-train windows, recalling the time of dilapidated graffiti-strewn trains, as captured in the classic "Style Wars" documentary.Advertisement

New York is already worse off than the '70s in some ways

New York City subway, circa 1980.Barbara Alper/Getty Images

The city's unemployment situation now is actually bleaker than the '70s, with the June unemployment rate for the metro area at 17%, versus a peak of about 12% in mid-1975. Both are well above the national averages of their day. Things aren't nearly as bad at the city budget level, even though they're still terrible. The Wall Street Journal reported that the city has a $9 billion deficit over the next two years, an inexact comparison to 1975, when the entire city budget was $13 billion in 1975 dollars. (Adjusted for inflation, the 1975 budget would equal about $62.6 billion today; the NYC FY20 budget was $92.5 billion.)

Looking at potential layoffs tells more of the story. The Journal reported that the current deficit could lead to 22,000 NYC government workers being laid off — about 6.7% of the total. Further, Chalkbeat New York reported that 9,000 city teachers could be laid off, which would torpedo plans to partially reopen schools this fall. In the '70s, per reporting by Forbes, city employment contracted by 45,000, or 20%, and 14,000 teachers were laid off as about 100 schools closed.

In response, another major player from the '70s crisis era is prepping for a comeback. The New York State Financial Control Board, created in '75 when the city was close to bankruptcy to oversee the budget, received three new appointees from Cuomo earlier this summer, according to The Journal.Advertisement

State Budget Director Robert Mujica told the paper that Cuomo was concerned about the prospects for the city budget. "A lot of the same things that happened in 1975 are reoccurring," he said. The control board had "control power" from 1975 through 1986, when it shifted to the review role it currently has; the state legislature would have to approve another control period.

Then there's the crime

Looted storefront after the 1977 New York City blackout.Robert McElroy/Getty Images

The New York Times reported last month that gun violence and murder rates were up this year, while also observing gun-related arrests are down and homicide rates are still near historic lows (the city is only back to its 2015 homicide totals). The data is a massive improvement from the '70s. In the decade from 1965 to 1975, the Guardian reported that murders rose from 681 to 1,690, car thefts more than doubled, and burglaries more than tripled. The next year, 1976, was a record year for crime in the city, according to a 1977 article by New York Times metro reporter Selwyn Raab, (later the author of a definitive history of the New York Mafia's five families).

The flight from New York also isn't as bad as the 1970s. The recent thousands who left the city during the pandemic pale in comparison to the demographic decline between 1970 and 1980, when New York City's population fell by about 10%. The Times estimated that about 5% of the city left between March 1 and May 1. Still, it's striking that New York seems to have gotten to half of that decade's population loss in just six months, although presumably a lot New Yorkers will return once a vaccine is available.Advertisement

In a comment to Business Insider, Altucher said the situation now was actually worse than the 1970s, for two reasons. Back then, the city never closed down and its position as the epicenter of media, fashion, finance never flagged; and the current technological advances mean that many of these industries can be 100% remote now, saying "the next generation of entrepreneurs and artists will move" to smaller cities as a result.

People are "aware of" the problems that New York City faces, Altucher said, and are "not addressing [them] in hopes that 'grit' will save all." The fact is, he went on, "there are real issues now and just shooting the messenger won't solve them." He said the city "needs a massive bailout, plus smart thinking about incentives."

The culture that emerged from 1970s New York defined the city for decades afterward — and much of it from the bottom up

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If Altucher is right and New York City approaches or even exceeds its 1970s nadir, that would be painful in many ways but perhaps not an altogether bad thing. In These Times' Hamilton Nolan has argued that "cities are not theme parks for the rich" and they can be "reborn for the better" through a change in their current gilded economic status.Advertisement

Others have been openly fantasizing about a return to the 1970s. Five years ago, when the notion of a global pandemic seemed as unlikely as the election of President Donald Trump, The New York Times' Edmund White reported on "an intense yearning for a specific five-year period" from about 1977 to 1982, when New York was an edgy but vibrant cultural capital, as opposed to the fortress of finance it was in the late Obama years. Patti Smith's romantic memoir "Just Kids" may have kicked off the craze in 2010, recalling a gritty city where legendary careers were born, including her own and that of her former partner, the late photographer Robert Mapplethorpe.

Like many children of the '80s, I grew up in the cultural shadow of that New York that was decades in the past. I grew up listening to music that largely referenced the punk rock invented on the lower east side in 1977's "summer of punk," sometimes while reading Marvel comic books set in an alternate New York where hundreds of superheroes lived in the city, yet there was always more crime to fight. In music, that era in the city also gave rise to disco and hip-hop, which formed the DNA of modern pop music.

Much of this culture was a byproduct of the city's dire economic situation. "Bottom up" forms like do-it-yourself punk or inexpensive comic books thrived when New York City was at its lowest because they didn't require a lot of capital to produce. These forms had long-lasting and wide-ranging influence — in evidence from high-end designer John Varvatos converting the old punk club CBGB's into a boutique shop and superheroes literally becoming the most popular and successful film genre of the last decade. Film can't escape the influence of these years, as shown by 2019's "Joker," set in late 1970s New York and including many direct homages to films of that period, especially Martin Scorsese's "Taxi Driver" and "The King of Comedy."Advertisement

New York going back to the 1970s, at least spiritually if not financially, just may breathe a lot of life back into it. The National, one of the bands that came out of the '70s-referencing wave of New York bands in the early 2000s, have a lyric that goes: "New York is shedding its skin again; it dies every 10 years, and then it begins again." The pandemic is most certainly remaking the balance of urban, suburban, and rural America, and New York, in some moneyed way, is going through some kind of death. Still, Apple and Amazon are two of the corporate giants placing long bets on Manhattan office space. But we may also be seeing a rebirth.

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