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Answered by Mike Wallace:
I think to answer this properly we have to back up a bit and take a longer perspective. New York became the hub of the national corporate economy around the turn of the 19/20th century, when a series of merger movements combined hitherto competing local businesses into nationwide monopoly corporations (US Steel, General Electric, etc). Largely engineered by New York City investment bankers, such as JP Morgan, the new companies were housed right next to the financial houses, in lower Manhattan. Real estate being limited, and the companies seeking to insert their building logos into the New York City skyline, the new corporations housed themselves in ever-taller skyscrapers.
Lower Manhattan lost its preeminence in the 1920s when, in the wake of the great train stations having been opened up in mid Manhattan, far more new construction went up in midtown than in downtown (via Empire State, Chrysler, etc). In the 1950s, David Rockefeller and other remaining downtown bankers and brokers, concerned that their existing real estate capital would be soon wiped out, decided to make a stand. As the film demonstrates, to do this they eventually called in the Port Authority to build the World Trade Center, using public money to shore up their private investments.
But the World Trade Center was serious overkill. While the 1960s conglomerate and early multinational boom did add significant office space downtown -- though again far more went in uptown -- when the economy tanked in the 1970s, just as the World Trade Center came online, it proved impossible to rent, and indeed sucked up tenants from competing landlords. In addition, all through the postwar period, New York City witnessed a substantial decrease in the number of big corporations headquartered here, when, as part of the general suburbanization movement, many moved to Westchester, Connecticut, or out into the country. In other words, the World Trade Center was largely extraneous to the larger course of the financial center's physical whereabouts and, if anything, fostered its ongoing relative decline in Lower Manhattan.
In the 1980s, there was a largely spurious boom, consisting of mergers and acquisitions and shuffling of paper assets, which didn't really rebuild the nation's economy, but did help boom Manhattan's. We were where the casino was; it needed a lot of croupiers; they were well paid, and could afford fancy condos, so luxury housing boomed too. (The rest of the city lived a life of quiet desperation). The 1980s brought another round of office construction downtown, though throughout the boom, corporate headquarters and, increasingly, financial and media institutions, kept leaving lower Manhattan, some for midtown, others for New Jersey, which offered lower land costs and fiscal enticements. The exodus continued despite unsuccessful (but costly) efforts by one city administration after another to slow the departure by, in effect, bribing would-be runaways to stay put with massive tax breaks and other handouts.
It's arguable, though, that what DID happen was that the World Trade Center helped 'brand' Lower Manhattan as the SYMBOLIC financial center, reinvigorating the cultural weight of the "Wall Street" image (along with films like "Wall Street"), at a time when it was increasingly undeserved. This would prove to be a deeply ambivalent triumph, as it also tied downtown and the twin towers -- in the global perceptual marketplace -- to the process of globalization, which was indeed in significant measure being run out of New York City as a whole (in tandem with Washington).
The 1980s profits came not only from paper shuffling, but also from extending the reach of New York City based financial corporations (and media and business support services) out onto the planet, accompanying the ongoing expansion of United States multinationals. And, portentously, the reach of United States oil companies. Read David Rockefeller's Memoirs and Zweig's biography of Walter Wriston, for an illuminating account of the degree to which New York financiers were fostering the expansion of United States oil concerns in the Middle East, a process underway since the 1940s when Texas oil began drying up and Saudi etc oil was discovered. The resulting expansion of American military power into the Middle East, including assorted CIA interventions and backing of local despots (like the Shah and Saddam), may have led many around the world to associate New York City, and in particular its highly visible symbolic center downtown, with policies they hated. (Indeed for a time the capital of global oil markets was in the Mercantile Exchange's auction pits, then located in the World Trade Center).
In reality, overall, downtown continued to slip. When the latest boom crashed after 1987, brokers and bankers were laid off in droves, the real estate market collapsed, and vacancy rates in lower Manhattan soared. In the early 1990s, vacant skyscrapers were being condoized, and desperate local boosters were turning to dot-commerce to offset the steady loss of financial sector jobs.
The mid-late 1990s brought another temporary turnaround -- this time even more heavily dependent on the increasing penetration of United States financial capital into so-called emerging markets. Great pools of capital sloshed into and then out of Russia and Southeast Asia, creating rampant dislocations and near global collapse on more than one occasion. Coupled with ongoing American expansion of military (and cultural) presence in the Middle East, it may have been the case that the negative associations the World Trade Center held for Islamist opponents grew steadily, as evidenced (and perhaps accelerated) by the first attack on the towers.
It was perhaps in the 1990s that the World Trade Center became indelibly etched in the global imagination -- incorrectly -- as being central to Wall Street and its policy of globalization. In fact the vast majority of work being done there had nothing to do with the globalization process, but given its size and location, it's not surprising it was taken as the symbolic center of that process. And while many in the United States, and certainly those in command of the economy and polity, argued stoutly that globalization was an unmitigated good, creating a rising tide that would lift all boats, many millions more, around the globe, experienced it quite differently.
In part, again ironically, the World Trade Center's new symbolic potency may have stemmed from the fact that it had finally become profitable. The late 1990s boom generated million dollar bonuses, more luxury housing, and -- at last -- a filling up of the existing vacancies in downtown office space, including the World Trade Center. (Which was then, after it began making money, sold off by the state to a private developer, Larry Silverstein, who put up almost no money of his own). For a (very) few years, it seemed like the original strategy had finally paid off, after twenty years of losses, rather as Rockefeller Center had taken many years to become profitable. It was precisely then that the terrorists attacked.
Make no mistake: those who took down the towers were theocratic fascist thugs, and their murder of thousands of utterly innocent civilians was as close to serving as a working definition of evil as one needs. But it is wrong and counterproductive to assume they did not have their reasons, or that those reasons were some blind hatred of modernity, civilization, liberal culture, freedom, etc. From their perspective, on 9/11, they were attacking the financial (and military) headquarters of an American empire that was, in order to ensure the steady flow of cheap oil to the United States and Europe, propping up governments in the Middle East which the terrorists detested: Saudi Arabia, Egypt, and Israel. They attacked the symbolic institutional personifications of that empire -- Pentagon and Wall Street -- not the Statue of Liberty or Times Square, as they might have if their animus had been against freedom or modern commercial culture. We must understand this dimension of what we're up against if we are to have any hope of preventing a repeat.
But to return to your question: in reality the World Trade Center was in fact largely irrelevant to Wall Street's position as financial center, and had it never been built things would not, I believe, have been much different. That is because, in truth, lower Manhattan in 2001 was NOT the financial center, and hadn't been for decades; rather it was one of a network of 'centers' -- of which midtown was the biggest, with important outriggers in New Jersey, Westchester and Connecticut. But in the realm of symbols, it might be the case that had the towers not been built, or had they gone up in midtown, the course of events might conceivably have gone very differently.
What about the future? Will the towers' absence dramatically affect downtown's long-term trajectory? That depends in part on how we respond. Remember that in 2001, the 1990s boom had crashed before the trade center attack, precipitating yet another round of layoffs, tax losses, and another crisis for the city and lower Manhattan in particular. Even after the violent subtraction of so much office space there remains a huge commercial vacancy rate down there. And despite spending a small fortune in federal money on handouts to big companies to stay downtown, and to entice others to join them, the exodus has continued, spurred now by fear. There's every chance that with significant infrastructure (especially transport) improvements, and a new strategy (or rather the old late 1980s early 1990s strategy) of diversified development, downtown can hold its own and even flourish. But it's a fantasy to assume it will ever be the financial center again though it will, I hope, remain one of the key hubs.
The danger is that given Silverstein's efforts to rebuild ten million square feet of utterly unneeded (now or in any foreseeable future) office space, we're back to where we were in the 1950s-1960s, when, as the film's beginning pointed out, there were many who warned that the World Trade Center would dump vast quantities of unwanted space on the market. Many in the real estate community know this, but seem reluctant to point it out, lest they cross Governor Pataki, who appears to be staking his hopes for a post in the next Bush cabinet on showing the assembled Republican conventioneers that he's a can-build kind of guy.
The only way out of this looming mess, it seems to me, would be for the state to exercise its authority and condemn Silverstein's lease and the Port Authority's ownership, and allow the city to take control of development (using the proceeds from the insurance settlement, which would then not flow to a private leaseholder in one of the great unearned windfalls of this history of the world, but to the city itself). Bloomberg has presented some interesting programs for diversified development, but seems unwilling to challenge Pataki, which seems essential if they're ever to get built, and in any event his administration appears to be far more interested in developing (overdeveloping?) the far west side of Midtown. For all the encouraging outburst of citizen participation in the rebuilding process, which blocked the original six designs and led to some decent architects getting involved in the process, the wheels of real estate business seem to be grinding on as usual. Only the intervention of an aroused public is likely to make a difference.
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