Behave or We'll Smile at You

Policy Innovations intern Warren Wilczewski writes in from Moscow:

In the Moscow city guide for foreign visitors, Mayor Luzhkov’s team advises: “Mind your manners, and nobody attacks you. As every megalopolis of the world, Moscow has got its problems. .. For your safety, just avoid walking alone in dark and empty places, be careful in crowded places, don’t talk or answer questions of strange people, try not to carry handbags with cash and documents late at night… Terrorism: This trouble may occur in Moscow.”

Not very reassuring for a first-time visitor to this, the largest of European cities. As if that were not enough, news of murdered journalists seem to be coming out of Moscow on a regular basis. Last week, it was Ilyas Shurpayev, a reporter originally from the restive republic of Dagestan. Combined with stories of the Russian mafia, breakdown in the rule of law, and the persecution of foreigners, give the impression that Moscow is not for the faint of heart.

While preparing for my trip, the torrent of advice from all who heard of my destination was consistent: watch yourself. This advice was made all the more relevant by my being mugged just two weeks before departure, at a New York City subway station no less. If one can’t be safe in a city experiencing record lows in crime rates, what of one that is bigger, meaner, and harsher than most. Traveling by taxi in the most expensive city in the world was simply out of the question, so like 9 million other Muscovites, I’ve been moving around by subway since day one.

The first, and most powerful impression one gets of the Moscow Metro is just how clean and, frankly, glamorous it is. Rather than the utilitarian, gritty look of New York City stations, many of those in Moscow are museum-like, with crystal chandeliers, marble tiling, and elaborate statues throughout. What’s more, in this land of risk-takers and go-getters, no babushka or kindergartner will be allowed to stand on the metro--even the meanest looking brute will yield a seat. How, then, has a culture of such proper manners survived the upheaval of the past two decades? New York, a city much richer, and by all accounts safer, than Moscow, has a subway system infamous for delays, flooded tunnels, and muggings. After my own experience an oft-repeated moral booster was "well, you’ve had your New York experience." Looking at Moscow, I wonder if that is the way things should be.

What, then, is the lesson to be drawn from this comparison? Is there a way to introduce a kind of civility to New York that seems to be present in Moscow? Stateside, comparisons are often drawn between the relatively low crime levels of New York and other American cities, yet for a world city, such standards should not be enough. As the global financial capital, the bar should be set higher. Whether a question of culture, policing, or economics, the most prosperous city in mankind’s history should not suffer from rat-infested subway stations and muggings as part of "the experience."

Though time may still tell, perhaps Yokohama is onto something. There, authorities have just introduced a legion of “Smile-Manner Squadron” onto their mass transit system, complete with green-vested seniors with their younger sidekicks, in case their polite pleadings meet with not-so-polite responses. City Hall has already adopted the Prius, and two of our newest museums are designed by Japanese architects (MOMA by Yoshio Taniguchi and the New Museum of Contemporary Art by Sejima and Nishizawa)--could manners be next?

Bloomberg for Governor (of Globalization)

What does the resignation of Elliot Spitzer as governor of New York have to do with globalization?

Well, potentially a lot.

If you live outside of New York, you may not have thought much about the rumors surrounding Mayor Michael Bloomberg's now ruled out run for the White House. Conventional wisdom held that Bloomberg fancied his chances as an independent candidate in a three-way race against Rudy Giuliani and Hillary Clinton, but wouldn't entertain a run against either John McCain or Barack Obama. Almost immediately, his decision not to run gave way to a new set of rumors. Namely, that billionaire Mayor Mike, the Democrat-turned-Republican-turned-Independent, has set his sights on Albany instead.

A just released Quinnipiac University poll found that fully three-quarters of city residents want him to run for governor in 2010. Although the survey was conducted prior to the Spitzer revelations, someone created a Bloomberg for Governor page on Facebook one hour after the story broke on Monday.

So what does this all add up to?

David Paterson, the current Lieutenant Governor who is slated to become Governor March 17, will serve out the remainder of Spitzer's elected term. This will likely impact Bloomberg's 2010 decision calculus. As divisive a figure as Spitzer was, Paterson is said to be a great guy with many friends on both sides of the aisle in Albany. Bloomberg may not deem a run against Paterson as appealing as one against the snarling sheriff of Wall Street.

Which brings me to the globalization element. Bloomberg is a businessman. As Mayor, he has long had an eye trained on the emerging challengers to New York as the world's undisputed financial capital. These include London, Hong Kong, Singapore, Dubai and even Chicago.

How David Paterson will approach the issue of New York's status as a leading financial center is unkown. But he has extremely close ties with organized labor through his father, Basil Paterson, a former New York Secretary of State who is now a lawyer for many of the state's most powerful unions. Will this impact Governor Paterson's policy tilt on the globalization issues that are of concern to New York's financial community? Maybe. Would a Governor Bloomberg be more likely to support New York's continued prominence as a world financial center? Probably.

But as we saw this week, anything can happen.

There may be blood

For best performance in the face of a total disaster, the nominees are…

The twin faces of America’s global economic power stared into the abyss Tuesday morning. Profound fears about the possibility of a U.S. recession dovetailed with unfolding internal crises in the American financial and entertainment sectors, casting doubt on the status of each as dominant global industry players.

In Los Angeles, concern over the ongoing Writers Guild of America (WGA) strike overshadowed the normally festive Oscar nomination ceremony. The potential cancellation of the Academy Awards broadcast in February has cast a pall over the American film business since the WGA went on strike November 5. For industry insiders, one nightmare has already come to pass. Earlier this month, the Golden Globes awards ceremony was reduced to a press conference when actors and actresses refused to cross the WGA picket line.

"I could never cross a picket line. I think there's a lot of people who feel that way," Tony Gilroy told the Associated Press. Gilroy was nominated for Best Director for his work on the film Michael Clayton, starring George Clooney.

The Oscars are often the second-most-watched television program of the year following the Super Bowl. The film industry sees these broadcasts as more than an opportunity to promote individual films – they are commercials for the Hollywood brand name. According to the Motion Picture Association of America, worldwide box office receipts reached $25.82 billion in 2006, an all-time high. The big film studios see the loss of the awards season showcases as damaging to more than just the short-term bottom line.

Potential competitors could conceivably take advantage of this moment of weakness in Hollywood. In 2006, India's film industry had gross revenues topping $2 billion worldwide. But not everyone is convinced that the time is right for Bollywood to make a power move.

“There is a reason that Hollywood movies travel so well all around the world,” Dan Petrie, Jr., one time president of the WGA told me last week. “The best people – the writers, the directors, the actors – come to Hollywood to work. Any labor dislocation would have to go on so long that international talent would decide to stay at home.”

And how long would that be? The last writer’s strike, in 1988, lasted 5 months, costing the industry $500 million in lost revenue. But in Hollywood, hope springs eternal as nowhere else. News that talks between the WGA and the Alliance of Motion Picture and Television Producers would resume on Tuesday cheered Academy president Sid Ganis. “[The February 24th Academy Awards show] will be a night to remember!” he pronounced.

Meanwhile, three thousand miles away, the other pillar of U.S. soft power was threatening to come unmoored. Wall Street market traders, fed watchers and financial professionals watched from the sidelines Monday as news of massive stock market sell-offs in international markets trickled in. Triggered by a 5.6 percent plunge of the Tokyo Stock Exchange, the threat of global economic recession moved quickly westward across the globe. Equity valuations fell like dominoes in Hong Kong, Seoul, Mumbai, Frankfurt, Paris and London. U.S. markets, closed for the Martin Luther King, Jr. holiday, were temporarily spared.

The worldwide market tumble grew out of concerns that the ongoing housing downturn and credit crunch could lead to recession in the U.S.. Overnight, central bankers and Ministers of Finance around the world struggled to enact emergency policy measures. In an early morning statement designed to cushion the impact on U.S. markets, the Federal Reserve announced it would slash interest rates by 75 basis points to 3.50 percent. This was the largest single rate cut in the U.S. since 1982.

The Federal Open Market Committee, the Fed’s monetary policy brain trust, released a statement explaining the historic move: “The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth.” Like Sid Ganis, Treasury Secretary Henry Paulson put on a brave face during a morning press conference. “This [rate cut] shows the world that our central bank is nimble and able to move quickly to respond to market conditions. That should be a confidence builder,” he said.

But reactions to the rate cut were mixed. The Dow Jones Industrial Average fell 400 points after the opening bell. London’s FTSE 100 eked out a positive performance while Asian markets trended downward for the second straight day. The VIX, the Chicago Board Options Exchange Volatility index, often referred to as the “fear index,” rose to its highest level since 2002.

“The Fed has been lagging the curve in cutting rates up until now. This borders on panic,” David Jones, President and CEO of DMJ Advisors told Bloomberg Radio.

And whether in Hollywood or on Wall Street, panic is not a word that markets like to hear. Indeed, there has been considerable recent speculation – some would call it panic – that the world center of global finance could be shifting away from New York. For twenty years, London has been prepping for a return to international glory as the world’s money capital. Hedge funds and financial services firms have clustered in its city center. The London Stock Exchange has benefited from companies seeking to avoid onerous U.S. regulatory statutes, such as the Sarbanes-Oxley legislation, when listing their initial public offerings. The British capital also derives an advantage from its relative proximity to the emerging markets of Asia and Russia.

"New York is in danger of becoming a secondary city instead of the world capital it deserves to remain," said Dan Doctoroff, New York Mayor Michael Bloomberg’s Deputy for Economic Development, in 2007.

Recent news does not bode well for the continued global dominance of the U.S. film and financial industries. The risks to both are mounting by the day. If the Fed hopes its interest rate cut will stave off more than a damaging short-term recession, it would be well advised to keep its word by continuing to “act in a timely manner as needed to address those risks.” Otherwise, in New York and Los Angeles, there will be blood.

cc photo by jasonepink