Sunday, December 13, 2020

Is This the Endgame for New York City?

By now you know that the Oracle Corporation is following HP and Tesla. It is moving its headquarters to Texas. Thus, the exodus from Silicon Valley is proceeding apace.

But, how are things in New York City? Not so good. You recall that Goldman Sachs is seriously contemplating moving its asset management division to Florida or Texas. And now Jamie Dimon, of JP Morgan Chase, is also thinking of moving more of his company out of the city. We recall that the bank has opened a major hub in Plano, TX.

As Charles Gasparino reports in The New York Post, Goldman Sachs is a virtue signaling liberal organization. It is, to paraphrase Hamlet, hoist on its own petard. 

As reported last week, Goldman Sachs, known for its Democratic-leaning and virtue-signaling leadership, is now looking to move a chunk of its workforce to some of the reddest states in the nation, including Texas and Florida. Brokers at several big firms tell me they are likewise heading south.

Why are they looking to get out of New York City? Gasparino explains:

“Charlie, get down here fast,” one (former) NYC financial adviser who just moved to Florida told me. “I can walk down the street without worrying about getting mugged, and I had dinner at a restaurant.”

Political ineptitude is very high on the list. But then, companies reasoned that New had a better talent pool. No longer:

It used to be said that New York City’s talent pool was second to none. Now the banks are finding that smart people are in Texas, too, and a lot of their top producers have no problem relocating to an up-and-coming city like Nashville, Tenn., where the quality of life isn’t so bad, particularly compared to the now crime-ridden streets of Manhattan.

Dimon, I am told, vetoed a plan several years back to move a swath of the bank to south Florida because he didn’t think the schools were good enough. Now he appears to have changed his mind and is considering plenty of relocations outside New York City.

One ought to notice that teachers in New York City, in the public and the private schools, have taken to promoting critical race theory. Whatever else they teach, they have not taken to indoctrinate children in anti-racism. They are telling white children that they should be wallowing in guilt. 

It does not take too much to ruin schools. It's bad enough that the teachers unions were allowed to shut down the schools, and thus, to damage, not only children but the companies whose employees were obliged to be more active parents. The teachers unions ruined the public schools and now the private schools are following apace.

Besides, if enough serious and wealthy people move to Florida, surely the schools will improve. And besides, whatever makes people think that state universities are not significantly better than Ivy League schools where they are more interested in indoctrination than in education.

Gasparino does not believe that the vaccine will solve all of New York’s problems:

The out-of-state migration to cut costs will continue even with a vaccine, because it’s simply too expensive to be in Manhattan, and the banks have lost faith in the ruling political class to protect their employees and provide their kids with a quality education.

That means tax revenues will plummet and budgets in the city and surrounding areas will get worse, not to mention the massively underfunded pension plans for municipal workers.

New York City, of course, has seen some dark times with its brush with bankruptcy in the 1970s and high crime through the 1980s, and we survived. But then again, we had a Rudy Giuliani waiting in the wings to run things, which is why big business stayed.

Not anymore.

As a side note, the press has breathlessly reported that Jared Kushner and Ivanka Trump recently bought some land in a toney section of Miami, Florida. Shortly thereafter Tom Brady and Gisele Bundchen bought a house in the same neighborhood.

Of course, the press theorized that Jared and Ivanka would not be welcomed back to New York City. After all, Jared engineered one of the most consequential transformations in Middle Eastern politics, an enormous positive for the state of Israel, in negotiating normal diplomatic relations between Israel and a number of its Arab neighbors. Now, the list includes Oman, the UAE, Bahrain, Sudan and Morocco. Naturally, the press has largely ignored the stories.

For having supported the state of Israel, and for being the son-in-law of a man who Benjamin Netanyahu called a great friend of Israel and a great friend of the Jewish people, the Kushners are now persona non grata in New York City. 

It should be obvious, but why would the Kushners would want to return to New York City. The city has very little left to offer. 

It isn’t that difficult to kill a city, even a great city. Leave it to leftist politicians and radical leftist academics.

In the meantime, Zero Hedge reports on the state of New York City real estate. As you can guess, and as we have reported, things are looking bleak:

According to Bloomberg, citing a new report from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate, the borough's median rental price plunged 22% in November from a year earlier to $2,743 a month. 

In a previous Douglas Elliman and Miller Samuel report, it was noted that more than 15,000 empty rental apartments were in Manhattan in August as the inventory of empty units hit 14-year highs. In October, the inventory was still above 15,000, with a vacancy rate around 6.14%, a record high. 

Downward pressure on rents is expected to continue well into the first quarter of 2021 as restaurant restrictions and nightlife have been muted by strict social distancing restrictions. Employers have yet to call back workers into offices as remote working pushes city dwellers out to the suburbs. 

Things are looking just as bad in Brooklyn and Queens.

Not to belabor the point, but a great city is being deconstructed. It has happened in the past, and New York has risen from the ashes. Now, however, the people who make major business decisions are looking at the political situation and doing what Amazon did-- leaving New York.


Sam L. said...

Petard. Hoist. Some assembly required. "NOW UNDER CONSTRUCTION!"

I recall the old saying, Life Is Hard. And it's harder when you're stupid.

Cuomo: Shooting himself AND NYC in the feet...with a 155mm howitzer. Bummmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmer...

trigger warning said...

Sticking with the chess motif, I doubt NYC is in the endgame quite yet. Signals of the endgame have not, as I see it, occurred: i.e., most of the pieces are off the board, promotion of a pawn, and active involvement of the king. Of course, one can lose during the middlegame.

But it ain't looking good. The City needs to elect a Capablanca, and I can't see that happening. In fact, given the exodus of the taxpaying base, it becomes less likely all the time. AOC is no chessplayer (Go Fish, maybe?). :-D

370H55V said...

Native NYers yours truly and DJT have already made the move to FL. Rudy, we welcome your arrival whenever you're ready.