By Ilya Marritz
Barack Obama took office on January 20th, 2009, amid the worst recession in decades.
Months earlier, stone-faced men and women emerged from Lehman Brothers headquarters in Midtown Manhattan, carrying the remains of their jobs in cardboard boxes. Within a matter of months, Lehman Brothers became the nation’s largest ever corporate bankruptcy, insurer AIG had a near-death-experience, and Bear Stearns and Merrill Lynch had to quickly be sold to avoid insolvency.
In New York, it felt like the earth was dissolving.
In response, President Obama took dramatic action to stabilize the economy. He got a $787 billion stimulus approved by Congress, continued the bank bailouts begun under President George Bush, proposed broad reforms to bank regulation, and introduced new programs to rescue homeowners struggling with their mortgages.
The financial panic dissipated within months. And in the long, slow road to recovery, New York generally fared better than the nation as a whole.
By August, 2011, New York City had recovered the total number of jobs lost in the Great Recession. It was almost three more years before the country caught up.
“New York City had a quick rebound partly because financial services came back,” said Robert Wolf, a former President of the UBS Global Investment Bank, and friend and advisor to President Obama. He says job losses at financial institutions would have been much worse without measures like Troubled Asset Relief Program (TARP.) In New York, one job in ten is connected to finance.
After Republicans swept Congress in 2010, Obama lost the power to make big moves on the economy. Instead, it was the Federal Reserve that tried something new, buying tens of billions of dollars of bonds every month, in an effort to flood the economy with money, a move known as “quantitative easing.” The Fed did this in 2010, and saw the need to do it again in 2013. The value of the US dollar fell. And New York felt the consequences.
“When the dollar’s weak, New York City probably benefits the most because of travel and tourism,” Wolf said. Between 2010 and 2015, the number of international visitors to New York climbed from 9.8 million to 12.3 million, according to NYC & Company, the city’s visitor’s bureau. The city became so crowded, Mayor Michael Bloomberg turned Times Square into a pedestrian plaza.
Restaurant and hotel jobs boomed, and many New Yorkers tried to get a piece of the action by renting out their homes on sites like Airbnb.
But there was another side-effect of the weak dollar: a growing appetite for expensive New York real estate. Residential skyscrapers intruded on the skyline south of Central Park. The average re-sale price of an apartment in Manhattan rose 16.6 percent over the last eight years, according to real estate appraiser Jonathan Miller.
Even in outer borough neighborhoods that were once synonymous with crime, elegant condominiums began to appear.
To Sarah Ludwig, this was dismaying. Ludwig is the founder of the New Economy Project, a group that offered help to struggling homeowners in areas with high rates of foreclosure, like Southeast Queens and Central Brooklyn. Ludwig described Obama’s policies on foreclosure as “something of a travesty,” because they demanded too little of banks, and too much of homeowners. She said few of the people she worked with were able to successfully get the terms of their mortgages adjusted, and stay in their homes. “The banks that had caused this crisis didn’t actually have to do anything to set things straight for people,” Ludwig said.
Ludwig does credit Obama for the creation of the Consumer Financial Protection Bureau, an office specifically aimed at preventing abusive lending.
Since 2010, the number of jobs in New York City has steadily climbed north of four million. And yet, many New Yorkers feel their city is becoming unaffordable.
In his farewell address, President Obama warned that “stark inequality is also corrosive to our democratic ideal. While the top one percent has amassed a bigger share of wealth and income, too many families, in inner cities and in rural counties, have been left behind.”