By AMANDA RIPLEY
Posted Sunday, August 29, 2004 time.com
Print issue: September 6, 2004
This year, for the first time since the towers crumbled, New York City's economy outperformed the nation's. The average price for a Manhattan condo or co-op broke the $1 million mark, a new record. Norma's, a midtown restaurant, introduced a $1,000 omelet. (Hardly anyone ate it, but it hearkened back to the '90s in an oddly comforting way.) And the tourists returned, God bless them, one and all.
But Manhattan is still not the same as it was. Yes, it has pulled back from the precipice with remarkable speed. But jobs are missing, the kinds of jobs that have historically made it more resilient than other U.S. cities. So far, the recovery has been in tourism and health care. Good jobs but not fantastic—not Wall Street jobs, that is.
Looking back, it's clear the trouble actually began eight months before 9/11, when the city's recession started. But unemployment stayed below 8% until the attacks cratered tourism and finance, two pillars of New York's economy. The hits that came next—war, corporate scandals, declining stocks and low consumer confidence— prolonged the slump. From September 2001 to January 2004, the city lost some 138,200 jobs. Unemployment rose to 8.6% in January 2003, when nationally the rate was 5.8%.
The finance sector is now slowly recovering—but not so much in New York, as firms hire elsewhere. "Wall Street is not coming back as an industry," says Martin Kohli, a regional economist for the Bureau of Labor Statistics. That's alarming because finance workers make a lot of money—so much money that the city's economy more or less depends on their success. Between 2000 and 2002, 1 of every 4 Manhattan jobs lost was in finance or insurance. In fact, the only industry to have truly rebounded is hospitality and leisure. This year, 39.4 million visitors are expected—an all-time high. In June, hotel occupancy was at nearly 88%—higher than before 9/11. But the tourists are spending less. While Americans have been thronging New York, 2 million fewer foreigners visited in 2003 than in 2000. And they are the really big spenders. Ultimately, economists say, a rehabilitated Manhattan may require things money can't buy: less war and more global stability.
New York City is engaged in America's first experiment with a mass-casualty disaster that has no end point. Manhattan residents say they are using more cigarettes, alcohol and marijuana since 9/11, and they remain worried about new attacks, according to research by the New York Academy of Medicine. But although free counseling is available, the people using it are largely the ones who saw therapists before 9/11. Most New Yorkers believe they can endure on their own. And many are doing a good job of it. LifeNet, the main mental-health referral hotline in the city, is getting 600 calls a month related to 9/11, down from 1,000 a month last year.
But as with Vietnam vets, the ability of New Yorkers to process a trauma depends largely on how close people were to the carnage. Researchers have created a matrix called the World Trade Center Exposure Scale to measure this. They've learned that exposure can mean having watched the towers collapse through a window—or on TV, over and over.
Still, psychologists say the most overexposed—and underrecognized—victims may be the nearly 20,000 New Yorkers who walked, ran and crawled through smoke, fire and body parts to escape the buildings. "People cannot understand. We saw things," says Tania Head, who was injured while evacuating. "We had to make life-or-death decisions. The higher the floor, the more lonely you were. I can't get rid of my fear that it's going to happen again."
Months after 9/11, even survivors who weren't injured became physically ill. "I'd have high fevers. I'd go to the hospital. They couldn't figure it out," says Elia Zedeno, a financial analyst. One day, Zedeno saw a man run by her on the street, and without thinking, she started running behind him. "Then I realized no one else was running," she says.
Recently, these survivors have started to organize, as the families of victims have done. Last year Gerry Bogacz, who escaped from the 82nd floor of the north tower four minutes before the south tower collapsed, invited a few other evacuees to dinner. "We found that everybody was pretty much stuck," he remembers. "The rest of the world, even New York, has kind of moved on. But with each other, we can talk about anything." They formed the World Trade Center Survivors' Network.
They now have 130 members. The group meets monthly and has adopted a platoon in Afghanistan. The survivors make adjustments in their lives, some very small. One woman no longer wears heels in the street, in case she has to run. Bogacz is getting training in emergency preparedness. On Sept. 11 this year, a group of these survivors will, for the first time, officially join the families in the pit at ground zero to memorialize all that they lost and all that they witnessed.
After 9/11, anytime Americans encountered a really hard problem, someone would nominate Rudy Giuliani to solve it. There were calls for him to take over WorldCom, the SEC, the state—even the country.
But by January 2002, Giuliani had already reinvented himself as a businessman. The experiment has been extremely lucrative. Giuliani Partners, the consulting and investment firm that he started by transplanting key members of his administration into a dark-wood-paneled office on Times Square, is bringing in just over $100 million a year in revenue, according to a source close to the company. That would mean the firm is collecting over $2 million per employee, which is phenomenal. (By comparison, Goldman Sachs, the Wall Street banking giant, takes in roughly $1.2 million per employee.) Companies like Nextel, Purdue Pharma and the nuclear-power-plant operator Entergy hire the firm to advise them on logistics and security. And, of course, for the name Giuliani.
The office is decorated with framed magazine covers about Giuliani—including a larger-than-life reproduction of TIME's 2001 Person of the Year cover. At a staff meeting last week, Giuliani's new world appeared seamlessly woven into his old. His former fire chief, former emergency-management commissioner and longtime spokeswoman all sat at the table. One employee briefed him on a client, and another told him how well a summer camp for children of 9/11 victims had gone. At the end, someone handed him pictures to autograph for fans.
"It's roughly the same amount of work but not the same amount of pressure," Giuliani says. Still, he occasionally misses the adrenaline. "I remember the first couple of times I heard a siren [after leaving office]. I was getting ready to go, and I realized it wasn't my job anymore."
Giuliani continues to be one of the country's most trusted voices on terrorism. And his leadership after the attacks—along with his old stubbornness—still shield him from criticism. When asked if it was a mistake to put the city's emergency command center in 7 World Trade Center, which collapsed on 9/11, he doesn't budge. "No. It was placed there because that's where the Secret Service was, that's where the CIA was," he says. "You had to put it somewhere."
Meanwhile, Giuliani has been speaking across the globe for fees of $75,000 and up—sometimes way up. He has campaigned for Republicans in 35 states since leaving office, and he's a prime-time speaker at this week's Republican convention.
Still, he is guarded about the idea of a Cabinet post in a new Bush White House. "It would be presumptuous to rule something out that no one has offered. But it's not something I'm seeking, not something I particularly want." It is hard to imagine, though, that America's mayor will be satisfied with being America's CEO indefinitely.
"How Are the Survivors Doing?"