New York Post Article: “New York City Is Dead Forever”

New York City, NY
Recently, author and former hedge fund manager James Altucher wrote an opinion piece for the New York Post with the title New York City is Dead Forever.
Despite the rather inflammatory title, the article is generally fact-based and well-argued. Whether you agree or not, he is making important points which need to be wrestled with.
Altucher shares some fascinating anecdotes:
“A Facebook group [Into The Unknown] formed a few weeks ago that was for people who were planning a move and wanted others to talk to and ask advice from. Within two or three days it had about 10,000 members.
Every day I see more and more posts: “I’ve been in NYC forever but I guess this time I have to say goodbye.””
[…]
““What do you mean?” a friend of mine said to me when I told him, “Midtown should be called ‘Ghost Town’!”
“I’m in my office right now!”
“What are you doing there?” I asked.
“Packing up,” he said and laughed, “I’m shutting it down.””
[…]
“Another friend of mine works at a major investment bank as a managing director. Before the pandemic he was at the office every day, sometimes working from 6 a.m. to 10 p.m. Now he lives in Phoenix, Arizona. “As of June,” he told me, “I had never even been to Phoenix.” And then he moved there. He does all his meetings on Zoom.”
[…]
“My wife, Robyn, was looking at listings around Miami, and then she saw an area we had never been to before. We found three houses we liked…
She called the real estate agent. Place #1. Just rented that morning 50% higher than the asking price. Place #2. Also rented — to New Yorkers (“They came from New York for three hours, saw the place, got it, went back to pack”). Place #3. “Available.”
“We’ll take it!” The first time we physically saw it was when we flew down and moved in.”
Those are anecdotes: memorable, but not systemic. There are, however, systemic problems for New York, a technological shift:
“But this time it’s different.
“One reason: bandwidth. Internet speed is no longer a barrier to remote work.
“In 2008, average bandwidth speeds were 3 megabits per second. That’s not enough for a Zoom meeting with reliable video quality. Now, it’s over 20 megabits per second. That’s more than enough for high-quality video. There’s a before and after. Before: no remote work. After: everyone can remote work.
“The difference: bandwidth got faster. […] The Time-Life building doesn’t need to fill up again. Wall Street can now stretch across every street instead of just being one building in Manhattan.
“We are officially AB: After Bandwidth.”
Breaking the 20 megabits per second barrier happened just in time for the pandemic. The capacity preceded the necessity. Then the shutdown shifted our habits.
Then there’s the fiscal picture:
“NYC has a $9 billion deficit. A billion more than the mayor thought it was going to have. How does a city pay back its debts? The main way is aid from the state. But the state deficit just went bonkers. Another way is taxes. But if 900,000 estimated jobs are lost in NYC and tens of thousands of businesses, then that means less revenue from taxes — unless taxes are raised.”
“Much of the city’s revenue comes from taxes, which will see serious pressure due to people relocating as well as a dramatically reduced number of real estate and other transactions.”
“Well, how about property taxes? More people defaulting on their properties.”
New York had already been showing serious signs of being in bubble territory. In addition, it has shifted from growing faster than national average to slower than national average, which places those bubble prices in jeopardy.
2017 – 2018 Percent Change | 2008 – 2018 Compound Annual Growth Rate | |
NY-Newark-Jersey City | 5.0% | 3.7% |
United States | 5.6% | 3.7% |
The same is true of net income after taxes:
2017 – 2018 Percent Change
NY-Newark-Jersey City, NY-NJ-PA (MSA) | United States | |
Net Earnings | 4.6% | 5.0% |
Dividends, Interest, and Rent | 9.9% | 8.4% |
Personal Current Transfer Receipts | -0.3% | 4.3% |
2008 – 2018 Compound Annual Growth Rate
NY-Newark-Jersey City, NY-NJ-PA (MSA) | United States | |
Net Earnings | 3.6% | 3.3% |
Dividends, Interest, and Rent | 4.5% | 4.1% |
Personal Current Transfer Receipts | 3.5% | 4.3% |
Does this mean that New York really is over and that there should be no allocation to New York? No one knows the future, including us. New York is an incredibly productive place, and structural tail winds are not a death sentence.
That’s why the real estate index I helped develop does allocate to the New York metro area, but nowhere near the order of magnitude of the colossal overweighting associated with cap-weighted indices.

Sources:
“New York City is Dead Forever,” New York Post, August 2020
Bureau of Economic Analysis
Originally published on Townhall Finance.
Jerry Bowyer is a Forbes contributor, contributing editor of AffluentInvestor.com, and Senior Fellow in Business Economics at The Center for Cultural Leadership.
Jerry has compiled an impressive record as a leading thinker in finance and economics. He worked as an auditor and a tax consultant with Arthur Anderson, as Vice President of the Beechwood Company which is the family office associated with Federated Investors, and has consulted in various privatization efforts for Allegheny County, Pennsylvania. He founded the influential economic think tank, the Allegheny Institute, and has lectured extensively at universities, businesses and civic groups.
Jerry has been a member of three investment committees, among which is Benchmark Financial, Pittsburgh’s largest financial services firm. Jerry had been a regular commentator on Fox Business News and Fox News. He was formerly a CNBC Contributor, has guest-hosted “The Kudlow Report”, and has written for CNBC.com, National Review Online, and The Wall Street Journal, as well as many other publications. He is the author of The Bush Boom and more recently The Free Market Capitalist’s Survival Guide, published by HarperCollins. Jerry is the President of Bowyer Research.
Jerry consulted extensively with the Bush White House on matters pertaining to the recent economic crisis. He has been quoted in the New York Times, The Wall Street Journal, Forbes Magazine, The International Herald Tribune and various local newspapers. He has been a contributing editor of National Review Online, The New York Sun and Townhall Magazine. Jerry has hosted daily radio and TV programs and was one of the founding members of WQED’s On-Q Friday Roundtable. He has guest-hosted the Bill Bennett radio program as well as radio programs in Chicago, Dallas and Los Angeles.
Jerry is the former host of WorldView, a nationally syndicated Sunday-morning political talk show created on the model of Meet The Press. On WorldView, Jerry interviewed distinguished guests including the Vice President, Treasury Secretary, HUD Secretary, former Secretary of Sate Condoleezza Rice, former Presidential Advisor Carl Rove, former Attorney General Edwin Meese and publisher Steve Forbes.
Jerry has taught social ethics at Ottawa Theological Hall, public policy at Saint Vincent’s College, and guest lectured at Carnegie Mellon’s graduate Heinz School of Public Policy. In 1997 Jerry gave the commencement address at his alma mater, Robert Morris University. He was the youngest speaker in the history of the school, and the school received more requests for transcripts of Jerry’s speech than at any other time in its 120-year history.
Jerry lives in Pennsylvania with his wife, Susan, and the youngest three of their seven children.
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