NYC Economy as an Island of Growth

The lead article in today’s New York Times, “New York Gains Economic Health Faster than U.S.,” provides an encouraging picture of the New York Metro region climbing out of recession even while the rest of the nation struggles.

The rebound of Wall Street and the financial sector seems to be driving a lot of the growth as well as a continuing infusion of new residents and a growth in tourism. The managerial sector is doing well, too, posting an 11 percent gain in median weekly pay compared to a 10.4 percent drop for other workers.

This statistic represents the heart of the dilemma facing the United States, today. Even though he was a flawed messenger, John Edwards was right in his campaign theme about two Americas. As the gap between the rich and the poor continues to grow, we will eventually face an unstable, even violent, situation in the United States.

All major analysts agree — it is not the overall poverty of a nation that leads to instability. The poor in the United States would be widely considered rich in the rest of the world. It is relative deprivation in a country — the size of the gap between the rich and the poor — that is the most dangerous.

Hopefully, some of President Obama’s programs — the provision of health insurance to all, the new regulatory system to protect the public from credit card companies and financial predators, etc. — will start to ameliorate this issue.