President Trump held three rallies in Minnesota and Wisconsin on August 17. They were not his usual rallies in an arena in the downtown of a big city, with 20,000 people. Those arena rallies won’t be back for a while because of the China virus crisis.
Today’s Trump rallies are held at the airports where Air Force One lands, and they have small crowds, perhaps 1,000 or less. This is very convenient since the president does not have to get in his motorcade and go to a downtown location, which consumes valuable time, as does the trip back. Yet he still gets to hold a rally.
The airport rallies avoid another problem. Anti-Trump protesters tried to disrupt his Tulsa, Oklahoma rally in June that was held downtown in an arena. These protesters probably would have disrupted every Trump rally this Autumn if they were held in downtown arenas. These airport rallies are more tightly controlled and closed off so the rioters and thugs cannot disrupt them. There are no side streets for the thugs to hide in.
Trump also is giving shorter speeches – one hour or less versus 90 minutes in the old format. And so all in all, these new rallies consume less time but are just as effective as the stadium rallies. After all, it is the very presence of the president in a state or city that creates the media buzz that is the most important product of the rallies during this re-election campaign.
One of his Minnesota rallies was in the small city of Mankato, which has only 40,000 people. Mankato probably does not even have an arena besides the gym at the high school. And so the president can reach out to “the people” in smaller cities with these airport rallies.
This format gives the president much greater flexibility. He can hop from city to town to city. He even visited Minneapolis, which generally hates Trump. But since the rally was held at the airport with a limited crowd, he was able to address the people of Minneapolis without the protests that he and his supporters certainly would have faced if he had had to go downtown to an arena.
Watch for these rallies to multiply as election day approaches. The president could cut his speeches to 30 minutes and cover 5 or 7 rallies in a day, multiplying his effectiveness greatly simply by multiplying the number of appearances.
New York City is Collapsing
Nikitas3.com lives 150 miles from New York City. I lived in New York for 13 years from 1985 to 1998. It was a wonderful experience. You should never sell that city short.
Today, New York appears to be in a death spiral. Its far-left mayor has been dragging the city into the abyss since 2014 with his policies which are socialistic, anti-capitalist and anti-police. His permissiveness has allowed the homeless to loiter and sleep wherever they please. Crime is way up.
So there were problems already. Now with the virus lockdown and the riots, reports are coming out of the city of a mass exodus of residents. Even among people who love New York, there always is a cohort that wants to move out because the city is expensive and living quarters are small. This exodus has intensified in the last few months.
Moving companies are reporting a huge amount of business like they have never seen before. People are simply abandoning the city; some even have fled to their vacation homes and are hiring movers to clean out their apartments.
But if you own property in New York like an apartment, row house or condominium, you may be out of luck if you want to leave; there are so many people fleeing so suddenly that large amounts of real estate have fallen onto the market at the same time, pushing values way down. If your row house or brownstone in Brooklyn or your apartment in Manhattan was worth $1 million in 2019, it may be worth half of that today. It is shocking. Nobody ever expected it.
A gentleman named James Altucher recently penned a commentary about what is happening to New York. It is excerpted below with a Nikitas3.com comment after each excerpt:
Altucher writes: I love NYC (New York City). When I first moved to NYC, it was a dream come true. Every corner was like a theater production happening right in front of me. So much personality, so many stories.
Every subculture I loved was in NYC. I could play chess all day and night. I could go to comedy clubs. I could start any type of business. I could meet people. I had family, friends, opportunities. No matter what happened to me, NYC was a net I could fall back on and bounce back up.
Now it’s completely dead.
“But NYC always always bounces back.” No. Not this time.
“But NYC is the center of the financial universe. Opportunities will flourish here again.” Not this time.
“NYC has experienced worse.” No it hasn’t.
A Facebook group formed a few weeks ago that was for people who were planning a move and wanted others to talk to and ask advice from. Within two or three days it had about 10,000 members.
Every day I see more and more posts, “I’ve been in NYC forever but I guess this time I have to say goodbye.” Every single day I see those posts. I’ve been screenshotting them for my scrapbook.
Nikitas3.com comment: Shocking. There are no words for it. To think of an entire city turned upside down so quickly is stunning. It is as if it were hit by a neutron bomb.
Altucher writes: Midtown Manhattan, the center of business in NYC, is empty. Even though people can go back to work, famous office buildings like the Time-Life skyscraper (on 6th Avenue) are still 90% empty. Businesses have realized that they don’t need their employees at the office.
In fact, they’ve realized they are even more productive with everyone at home. The Time-Life Building can handle 8,000 workers. Now it maybe has 500 workers back.
“What do you mean?” a friend of mine said to me when I told him Midtown should be called Ghost Town. “I’m in my office right now!”
“What are you doing there?”
“Packing up,” he said and laughed, “I’m shutting it down.” He works in the entertainment business.
Another friend of mine works at a major investment bank as a managing director. Before the pandemic, he was at the office every day, sometimes working from 6 a.m.–10 p.m.
Now he lives in Phoenix, Arizona. “As of June,” he told me, “I had never even been to Phoenix.” And then he moved there. He does all his meetings on Zoom.
I was talking to a book editor who has been out of the city since early March. “We’ve been all working fine. I’m not sure why we would need to go back to the office.”
Nikitas3.com comment: This pandemic does have a very few silver linings. But destroying both the commercial and residential real estate markets in New York City is not one of them. This is going to have effects that are felt for decades. Even president Trump will be affected since he owns many properties in the city.
Altucher writes: I’ve been living in New York City for about 10 years. It has definitely gotten worse and there’s no end in sight.
My favorite park is Madison Square Park. About a month ago a 19-year-old girl was shot and killed across the street.
I don’t think I have an answer but I do think it’s clear: it’s time to move out of NYC.
I’m not the only one who feels this way, either. In my building alone, the rent has plummeted almost 30% — more people are moving away than ever before.
It’s not goodbye yet. But a lifelong New Yorker is thinking about it.”
I picked his post out but I could’ve picked from dozens of others.
People say, “NYC has been through worse,” or “NYC has always come back.”
No and no.
First, when has NYC been through worse?
Even in the 1970s, and through the ’80s, when NYC was going bankrupt, even when it was the crime capital of the U.S. or close to it, it was still the capital of the business world (meaning, it was the primary place young people would go to build wealth and find opportunity). It was culturally on top of its game — home to artists, theater, media, advertising, publishing. And it was probably the food capital of the U.S.
NYC has never been locked down for five months. Not in any pandemic, war, financial crisis, never. In the middle of the polio epidemic, when little kids (including my mother) were becoming paralyzed or dying (my mother ended up with a bad leg), NYC didn’t go through this.
This is not to say what should have been done or should not have been done. That part is over. Now we have to deal with what IS.
Nikitas3.com comment: This is really heartbreaking. No matter what you think about the city’s politics, it always has been a vibrant city and it was great fun to live there. It has been a haven for the arts and business, full of talented people. That appears to be ending. Nikitas3.com used to joke and laugh with my co-workers about our political differences. Today there is no joking. There is hostility. Everything has changed and turned very mean. Maybe God is punishing the city for becoming so left-wing, strident and atheistic, for instance in its hatred of president Trump.
Altucher writes: In early March, many people (not me), left NYC when they felt it would provide safety from the virus and they no longer needed to go to work and all the restaurants were closed. People figured, “I’ll get out for a month or two and then come back.”
They are all still gone.
And then in June, during rioting and looting, a second wave of NYCers (this time including me) left. I have kids. Nothing was wrong with the protests but I was a little nervous when I saw videos of rioters after curfew trying to break into my building.
Many people left temporarily but there were also people leaving permanently. Friends of mine moved to Nashville, Miami, Austin, Denver, Salt Lake City, Dallas, etc.
Nikitas3.com comment: This is not only disturbing but it is frightening. But then again, Manhattan (the main part of the city) voted 90% for Hillary. And they re-elected their militant mayor in 2017 with 67% of the vote. So what do they expect? We conservatives have been warning about this extremism for decades.
Altucher writes: Businesses are remote and they aren’t returning to the office. And it’s a death spiral — the longer offices remain empty, the longer they will remain empty.
In 2005, a hedge fund manager was visiting my office and said, “In Manhattan you practically trip over opportunities in the street.”
Now the streets are empty.
I co-own a comedy club, Standup NY, on 78th and Broadway. I’m very, very proud of the club and grateful to my fellow owners Dani Zoldan and Gabe Waldman and our manager Jon Boreamayo. It’s a great club. It’s been around since 1986 and before that it was a theater.
I love the club. Before the pandemic I would perform there throughout the week in addition to many other clubs around the city and, in the past few months, clubs in Chicago, Denver, San Jose, LA, Cincinnati, all over the Netherlands, and other places.
I miss it.
We had a show in May. An outdoor show. Everyone socially distanced. But we were shut down by the police. I guess we were superspreading humor during a very serious time.
The club is doing something fun: It’s doing shows outside in the park. This is a great idea.
In a time like this, businesses need to give to the community, not complain and not take.
That said, we have no idea when we will open. Nobody has any idea. And the longer we remain closed, the less chance we will ever reopen profitably.
Nikitas3.com comment: Shocking. And we conservatives could say sarcastically that this collapse couldn’t happen to a more deserving population (urban liberals), but that is short-sighted. For instance, if half of the business owners in your town are Democrats, that does not mean that it would be good if they went out of business. It is bad for the town if they go out of business.
And if New York City fails, then it will be bad not only for the city itself but for the entire Northeastern US where New York is the economic anchor. Nikitas3.com lives 150 miles from the city in an area that gets many year-round tourists from New York, and especially a big Summer crowd. Thus the troubles in New York are going to significantly affect my area too.
Meanwhile, New York’s loss is someone else’s gain. Housing markets are booming in places like Florida, Nashville and other places like the New Jersey suburbs where New Yorkers are fleeing to.
The rest of Altucher’s commentary is here if you want to read it. It is very troubling, that a great city can so quickly be ruined. He writes:
Broadway is closed until at least the spring. The Lincoln Center is closed. All the museums are closed.
Forget about the tens of thousands of jobs lost in these cultural centers. Forget even about the millions of dollars of tourist-generated revenues lost by the closing of these centers.
There are thousands of performers, producers, artists, and the entire ecosystem of art, theater, production, curation, that surrounds these cultural centers. People who have worked all of their lives for the right to be able to perform even once on Broadway, whose lives and careers have been put on hold.
I get it. There was a pandemic.
But the question now is: What happens next? And, given the uncertainty (since there is no known answer), and given the fact that people, cities, economies loathe uncertainty, we simply don’t know the answer and that’s a bad thing for New York City.
Right now, Broadway is closed “at least until early 2021” and then there are supposed to be a series of “rolling dates” by which it will reopen.
Most Americans have only their salaries to provide their income, and often times that is not enough to live the life they want..
It can feel hopeless…
But is that true? We simply don’t know. And what does that mean? And will it have to be only 25% capacity? Broadway shows can’t survive with that! And will performers, writers, producers, investors, lenders, stagehands, landlords, etc. wait a year?
Same for the museums, the Lincoln Center, and the thousands of other cultural reasons millions come to New York City every year.
The hot dog stands outside of the Lincoln Center? Finished.
My favorite restaurant is closed for good. OK, let’s go to my second favorite. Closed for good. Third favorite, closed for good.
I thought the PPP was supposed to help. No? What about emergency relief? No. Stimulus checks? Unemployment? No and no. OK, my fourth favorite, or what about that place I always ordered delivery from? No and no.
Around late May, I took walks and saw that many places were boarded up. OK, I thought, because the protesting was leading to looting and the restaurants were protecting themselves. They’ll be OK.
Looking closer, I’d see the signs. For lease. For rent. For whatever.
Before the pandemic, the average restaurant had only 16 days of cash on hand. Some had more (McDonalds), and some had less (the local mom-and-pop Greek diner).
Yelp estimates that 60% of restaurants around the United States have closed.
My guess is more than 60% will be closed in New York City but who knows.
Someone said to me, “Well, people will want to come in now and start their own restaurants! There is less competition.”
I don’t think you understand how restaurants work.
Restaurants want other restaurants nearby. That’s why there’s one street in Manhattan (46th St. between 8th and 9th) called Restaurant Row. It’s all restaurants. That’s why there’s another street called Little India and another one called Koreatown.
Restaurants happen in clusters and then people say, “Let’s go out to eat,” and even if they don’t know where they want to eat they go to the area where all the restaurants are.
If the restaurants are no longer clustered, fewer people go out to eat (they are on the fence about where so they elect to stay home). Restaurants breed more restaurants.
And again, what happens to all the employees who work at these restaurants? They are gone. They left New York City. Where did they go? I know a lot of people who went to Maine, Vermont, Tennessee, upstate, Indiana, etc. Back to live with their parents or live with friends or live cheaper. They are gone, and gone for good.
And what person wakes up today and says, “I can’t wait to set up a pizza place in the location where 100,000 other pizza places just closed down.”? People are going to wait awhile and see. They want to make sure the virus is gone, or there’s a vaccine, or there’s a profitable business model.
Or… even worse.
If building owners and landlords lose their prime tenants (the store fronts on the bottom floor, the offices on the middle floors, the well-to-do on the top floors, etc.) then they go out of business.
And what happens when they go out of business?
Nothing actually. And that’s the bad news.
People who would have rented or bought say, “Hmmm, everyone is saying NYC is heading back to the 1970s, so even though prices might be 50% lower than they were a year ago, I think I will wait a bit more. Better safe than sorry!”
And then with everyone waiting… prices go down further. So people see prices go down and they say, “Good thing I waited. But what happens if I wait even more?!” And they wait and then prices go down more.
This is called a deflationary spiral. People wait. Prices go down. Nobody really wins. Because the landlords or owners go broke. Less money gets spent on the city. Nobody moves in so there is no motion in the markets. And people already owning in the area and can afford to hang on have to wait longer for a return of restaurants, services, etc. that they were used to.
Well, will prices go down low enough everyone buys?
Answer: Maybe. Maybe not. Some people can afford to hang on but not afford to sell. So they wait. Other people will go bankrupt and there will be litigation, which creates other problems for real estate in the area. And the big borrowers and lenders may need a bailout of some sort or face mass bankruptcy. Who knows what will happen?
There are almost 600,000 college students spread out through NYC. From Columbia to NYU to Baruch, Fordham, St. John’s, etc.
Will they require remote learning? Will kids be on campus? It turns out: a little bit of both. Some colleges are waiting a semester to decide, some are half and half, some are optional.
But we know this: There is uncertainty and there is hybrid. I don’t know of any college fully coming back right away.
That’s OK, you might say, so in a semester or two it might be fine.
Not so fast. Let’s say just 100,000 of those 600,000 don’t return to school and decide not to rent an apartment in New York City. That’s a lot of apartments that will go empty.
That’s a lot of landlords who will not be able to pay their own bills. Many bought those student apartments as a way to make a living. So now it ripples back to the landlords, to the support staff, to the banks, to the professors, etc.
In other words, we don’t know. But it’s going to be a lot worse before it’s better.
Yes it does. I lived three blocks from Ground Zero on 9/11. Downtown, where I lived, was destroyed, but it came roaring back within two years. Such sadness and hardship and then quickly that area became the most attractive area in New York.
And in 2008/2009, there was much suffering during the Great Recession, again much hardship, but things came roaring back.
But… this time is different. You’re never supposed to say that but this time it’s true. If you believe this time is no different, that NYC is resilient, I hope you’re right.
I don’t benefit from saying any of this. I love NYC. I was born there. I’ve lived there forever. I STILL live there. I love everything about NYC. I want 2019 back.
But this time is different.
One reason: Bandwidth.
In 2008, average bandwidth speeds were 3 megabits per second. That’s not enough for a Zoom meeting with reliable video quality. Now, it’s over 20 megabits per second. That’s more than enough for high-quality video.
There’s a before and after. BEFORE: No remote work. AFTER: Everyone can work remotely.
The difference: bandwidth got faster. And that’s basically it. People have left New York City and have moved completely into virtual worlds. The Time-Life Building doesn’t need to fill up again. Wall Street can now stretch across every street instead of just being one building in Manhattan.
We are officially AB: After Bandwidth. And for the entire history of NYC (the world) until now, we were BB: Before Bandwidth.
Remote learning, remote meetings, remote offices, remote performance, remote everything.
That’s what is different.
Everyone has spent the past five months adapting to a new lifestyle. Nobody wants to fly across the country for a two-hour meeting when you can do it just as well on Zoom. I can go see “live comedy” on Zoom. I can take classes from the best teachers in the world for almost free online as opposed to paying $70,000 a year for a limited number of teachers who may or may not be good.
Everyone has choices now. You can live in the music capital of Nashville, you can live in the “next Silicon Valley” of Austin. You can live in your hometown in the middle of wherever. And you can be just as productive, make the same salary, have higher quality of life with a cheaper cost to live.
There won’t be business opportunities for years. Businesses move on. People move on. It will be cheaper for businesses to function more remotely and bandwidth is only getting faster.
Wait for events and conferences and even meetings and maybe even office spaces to start happening in virtual realities once everyone is spread out from midtown Manhattan to all over the country.
The quality of restaurants will start to go up in all the second- and then third-tier cities as talent and skill flow to the places that can quickly make use of them.
Ditto for cultural events.
And then people will ask, “Wait a second, I was paying over 16% in state and city taxes and these other states and cities have little to no taxes? And I don’t have to deal with all the other headaches of NYC?”
Because there are headaches in NYC. Lots of them. It’s just we sweep them under the table because so much else has been good there.
NYC has a $9 billion deficit. $1 billion more than the mayor thought it was going to have. How does a city pay back its debts? The main way is aid from the state. But the state deficit just went bonkers. Then is taxes. But if 900,000 estimated jobs are lost in NYC and tens of thousands of businesses, then that means less taxes unless taxes are raised.
Next is tolls from the tunnels and bridges. But fewer people are commuting to work. Well, how about the city-owned colleges? Fewer people are returning to college. Well how about property taxes? More people defaulting on their properties.
What reason will people have to go back to NYC?
I love my life in NYC. I have friends all over NY. People I’ve known for decades. I could go out of my apartment and cross the street and there was my comedy club and I could go up onstage and perform. I could go a few minutes by Uber and meet with anyone or go play PingPong or go to a movie or go on a podcast and people traveling through could come on my podcast.
I could go out at night to my favorite restaurants and then see my favorite performers perform. I could go to the park and play chess, see friends. I could take advantage of all this wonderful city has to offer.