In a January 18 article titled “The End of Banking As We Know It,” New York Times financial writer Gretchen Morgenson reported several formerly high-flying (New York) investment banks had voluntarily clipped their wings in exchange for deposit guarantees from the Feds.
Henceforth, Morgenson wrote, these investment banks would be as regulated, boring and safe as old-fashioned, F.D.I.C.-insured savings banks. No more windfall profits. No more hefty bonuses, either. With huge implications for the city’s high-end shopping, dining and habitation. Not to mention tax collection.
Morgenson’s column continued a barrage of bad-for-New-York news that began weeks before, when I heard my first broadcast media report that hundreds of thousands of the 2.5 million jobs lost in 2008 were in the financial sector (many of them on Wall Street) and were not coming back.
Contractions. Lots of them. Among individuals, families, companies, institutions and governments.
Among the public in general, a sense of urgency about government fixes. Will they work? How soon? When will things return to ‘normal’? A growing concern that no one has any idea what to do.
Among individuals, greater caution in spending and decision-making. A fear that the downturn will negatively affect their lives in ways they can’t anticipate.
All this insecurity appears to tie in with other longer-term national trends that favor cutting down on imports and buying locally grown food and locally manufactured products, and supporting local business and the local economy. More and more, you hear people nostalgic for a time they're too young to reemember, when dads carried lunchpails instead of attachés and made useful products, not abstractions called derivatives.
AND THEN WHAT?
I don’t subscribe to the “suffering only makes you stronger” prescription served up by historian Walter Russell Mead in this week’s The New Republic online. But I do believe that when traditional sources dry up, people will seize opportunities where they find them––especially opportunities created by their own imaginations.
<<<Take, for example, the two humble garlic clove rollers shown at left, one in a light beige, the other in a dark blue. With only one or two rolls across a hard surface, the highly flexible roller separates the garlic clove from its outer ‘shell,’ et voila!—it's ready to mince, chop or ingest raw.
It seems reasonable to suspect that this product wasn’t created in a boardroom or a corporate-funded lab. More likely, it was dreamed up by someone like me, sitting at a kitchen table with a head of garlic, a paring knife, and the manual dexterity of a brick.
It’s exactly the kind of product that someone unemployed and eager might have the time to come up with and bring to market.
AN NYC INDUSTRIAL REVIVAL?
Circumstances seem auspiciously aligned, so to speak, to spark a revival of manufacturing activity in the city:
--Economic stimulus dollars are about to lubricate the the local economy
--A temporary oil price reduction has only delayed an inevitable rise in the transportation costs of imported goods, notably from China, which could make locally manufactured goods more competitive
--Local commercial and industrial rents are in decline, with manufacturing space in the outer boroughs a particularly attractive bargain
--A local army of skilled and unskilled labor is hungry for work, served by what is arguably the best public transportation system in the world
Ingenious products like the garlic clove roller--and generic products manufactured nearby major customers--are the kind of developments that could help to revive the city's manufacturing sector. It wasn't that long ago, after all, that the Farber family was making Farberware in the Bronx.