Submitted by Bill Revancha, Aug 31, 2008 07:10

NY, the self-deluded "capital of the world," where luxury RE will forever rise, needs to recognize that NY has been in many ways been replaced by Charlotte, Atlanta, Phoenix, Los Angeles, Dallas, Singapore, Hong Kong, Shanghai, London, Frankfurt, Dubai and dozens of other cities. Decades of zero economic planning, decades of focusing only on the financial sector and taxing to death every other rising sector, leaves New Yorkers with a dangerously weak economy for many years to come. The silly folly of building an entire economy upon the assumption of huge Wall Street year-end bonuses to pay for real estate, restaurants, luxury boutiques, etc., etc., will suddenly cause a great local crash, because NY is not important to the financial firms anymore. These firms are teetering and will relocate or merge in order to survive. The US is a vast debtor country, and people who still have jobs on Wall Street by XMAS will soon come to be thankful that they have ANY job at ANY salary, because banks and brokerages selling off US assets can do this dirty work more cheaply anywhere else in the world, WITHOUT paying big bonuses. NY City and State govts. tax NYers to death as if living in NY were a great privilege, but if you can't get a huge salary in NYC, the prospect of paying a million dollars for a one bedroom walkup in a grimy city and state that takes half your salary will not seem sane. The RE price fall will not be for a few weeks or months or for a few years. The "correction" will only occur after a decade of falling, and only if NY leaders give up their parasitical and lazy approach to govt. and become strategic, technocratic and realistic about the real value that NY has. Then entrepreneurs will come back, will invest. Then scientists and engineers and creators and yes, bankers, will create jobs and new industries to keep NY's economy growing. NY has a lot to offer, but so do many other places. The difference is that the other cities have improved because of hard work and planning, not purely by extorting of entrepreneurs who were silly enough to think it worth staying.

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