May 5, 2009 City Council packet - Laserfiche WebLink

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My father's experiences were broadly shared throughout the country. Although times were perhaps worst in the declining rural areas of the Dust Bowl, everyregionsuffered, and the residents of small towns and big cities alike breathed in the same uncertainty and distress. The Great Depression was a national crisis —and in many ways a nationalizing event. The entire country-, it seemed, tuned in to President Roosevelfs fireside chats. The current economic crisis is unlikely to result in the same kind of shared experience. To be sure, the economic contraction is causing pain just about everywhere. In October, less than a month after the financial markets began to melt down, Moody's Economy.com` published an assessment of recent economic activity within 381 U.S. metropolitan areas. Three hundred and two were already in deep recession, and 64 more were at risk. Only 15 areas were still expanding. Notable among them were the oil- and natural -resource -rich regions of Texas and Oklahoma, buoyed by energy prices that have since fallen; and the Greater Washington, D.C., region, where government bailouts, the nationalization of financial companies, and fiscal expansion are creating work for lawyers, lobbyists, political scientists, and government contractors. No place in the United States is likely to escape a long and deep recession. Nonetheless, as the crisis continues to spread outward from New York, through industrial centers like Detroit, and into the Sun Belt, it will undoubtedly settle much more heavily on some places than on others. Some cities and regions will eventually spring back stronger than before. Others may never come back at all. As the crisis deepens, it will permanently and profoundly alter the countrys economic landscape. I believe it marks the end of a chapter in American economic histoy, and indeed, the end of a whole way of life. GLOBAL CRISES AND ECONOMIC TRANSFORMATION "One thing seems probable to me," said Peer Steinbriick, the German fmance minister, in September 2008. As a result of the crisis, "the United States will lose its status as the superpower of the global financial system." You don't have to strain too hard to see the financial crisis as the death knell for a debt -ridden, overconsuming, and underproducing American empire —the fall long prophesied by Paul Kennedy and others. Big international economic crises —the crash of 1873, the Great Depression —have a way of upending the geopolitical order, and hastening the fall of old powers and the rise of new ones. In The Post American World (published some months before the Wall Street meltdown), Fareed Zakaria argued that modern history s third great power shut was already 2