07/24/2009 05:12 am ET | Updated May 25, 2011

NYC: Too Big to Fail

It is the fate of every New Yorker to experience the occasional catastrophe on this otherwise charmed island. There were the Draft Riots of 1863, the Triangle Shirtwaist Factory fire of 1911, the Son of Sam in 1977, and, of course, the terrorist attacks against the World Trade Center in 2001.

This past year was not without its own nameless, yet powerfully wrenching urban disaster. Manhattan, the world's playground, is not used to taking a recess, and so a full-blown recession strikes at the very core of not only this island's prosperity, but also its pride and its purpose.

The city that never sleeps has gone into serious hibernation. Wall Street's winter of discontent is already into summer with no thaw in sight. Unemployment is at 9% with 360,000 New Yorkers--mostly from banking, real estate, publishing, and media--out of work. An empire detonated by derivatives; the collateral damage caused by all that collateralized debt--securities that created not wealth but nervous insecurity.

And to top it off, lately it won't stop raining.

New Yorkers are now more gloomy and fearful than they have been in decades. Rents are down but the city is still unaffordable. Apartments remain unsold, leaving Co-op boards with no one to humiliate. Macy's has become a museum. The Hamptons are desperate for snobs. The luxury seats at Yankee Stadium are unoccupied; the New House That Ruth Built, like all houses nowadays, was obviously over-leveraged. The hipsters from Williamsburg and Red Hook are looking like the true captains of industry after all.

The entire logic of this city has gone topsy-turvy. Its once robust entrepreneurial spirit, which never failed to lure strivers to Manhattan, has gone on indefinite hiatus. All those Masters of the Universe have seen their world shrink and their social standing disappear. Investment bankers no longer trumpet their calling cards. They merely whisper their job titles, if they even have a job. Hedge fund managers are trimming hedges for a living.

Alexander Hamilton, John Jacob Astor, and J.P. Morgan are rolling over in their graves while thousands are hoping to send Bernard Madoff to an early one.

Yet, for all the despair that comes with financial pain, New York is still the greatest city in the world. Crime is at historic lows. Central Park remains a magical urban Eden. The cultural life of the city, while surely affected by falling endowments and less charitable giving, is still vibrant, still unending in its variety, still a stunning monument to cosmopolitan virtue. Artists remain magnetized to Manhattan even while bankers have become radioactive.

Times Square, once a roller-derby of pedestrians, is now more like a pastoral asphalt green. Lounge chairs sit where cars used to collide. There are new bicycle lanes everywhere. This city of grime is going green. Poverty has brought a newfound modesty and indecision to Gotham's citizens. There is even more kindness and civility. Since when did New Yorkers become Canadians?

Gone are the days when the ethos of this city could be summed up by the movie "Wall Street." But it doesn't seem as if we are heading straight to the dog days of "Taxi Driver," either.

Hopefully this economic downturn will lead to a moral uptick, a time of new possibilities, and a renewal of values. Greed, after all, is not good. Wealth is no substitute for wisdom. Wall Street wizards placed a spell on this nation and recovery came not from laissez-faire fantasies but rather from government bailouts and stimulus packages.

This city of excess had forgotten what it was like to be poor. Apparently 2009 has been the year of making up for lost time.

People gravitate to New York because, as they say, if you can make it here you can make it anywhere. But most people don't actually make anything other than a life for themselves within these five boroughs, which is a considerable accomplishment all on its own.

Although surrounded by water, Manhattan is blessed with great buoyancy and resilience. For this reason, whatever it is we have lost over the past year, whether from market meltdowns or mental breakdowns, will one day return. Our survival and solvency is never really in doubt. New York City is simply too big, stimulating and richly talented to fail.