Opinion

ROADMAP TO RECOVERY

As the global recession continues to take its toll, New York City is at a crossroads — its future prosperity (and maybe more) at stake.

This week, the Manhattan Institute’s City Journal takes a close look at the city’s daunting predicament, offering ideas for the way forward in a special issue called “New York’s Tomorrow.”

Over the next days, these pages will feature adapted versions of select pieces from that issue. For those who care about the city’s future, they’re well worth the read.

It’s hard, after all, to overstate the magnitude of the crisis: For years, City Hall and Albany have relied heavily on Wall Street to carry the load for government’s lavish spending programs.

But the recession fundamentally reshaped the city’s financial sector — leaving Wall Street seriously diminished.

Today, the role of banks, brokers, insurance companies and related firms (not to mention other parts of the commercial world) in the city’s economic future remains far from clear.

But here’s the key dilemma: Just as tax revenues depend on the city’s economic performance, so too is the economy itself sensitive to tax rates.

And any effort to recoup revenue lost in an economic downturn by raising those rates will harm the economy further, chasing away more firms and folks who’d invest here.

What to do?

In their spot-on essays, MI’s scholars lay out several vital steps and potential landmines — starting with Steve Malanga’s ideas for re-shaping the city budget, to be found on the preceding page.

They offer blueprints for meeting the state’s fiscal needs, keeping mass transit healthy (and properly funded) and guarding against a slippage in crime-fighting that could see the return of the city’s pre-Rudy Giuliani, Wild West days.

Make no mistake: New York City isn’t going to vanish — or turn into a vast slum. Even long term, Gotham’s financial demise is hardly inevitable.

Giuliani — who often relied on Manhattan Institute advice — proved that not only can the city be governed, but that it can be made prosperous, too, attracting investment, jobs and commerce.

But, again, following the right course is key.

Which is why policymakers, in particular, would be wise to study the advice of the MI scholars this time around, too.