The Hawk Comes to Hooverville

Indeed. It could be a long, cold winter in New York City.

Although it took The New York Times until this past weekend to notice, and although the financial media (with the exception of the always-excitable James Cramer) is still hesitant to come out and use the R-word except to refute it, it should be clear to anyone in New York City that the Recession is here, not "on the horizon," and that it came creeping into the city months ago.

The signs have been everywhere. The denizens of Silicon Alley, so very recently masters and mistresses of the universe, have seen their ranks decimated over the last several months, and it's not over yet. Internet ventures continue to fail at a daily rate. The entire tech sector is tumbling. At the end of last week, the NASDAQ had plummeted 35 percent for the year (a month earlier, it was "only" down 14 percent), and few of the experts are willing to say it's yet to touch bottom. New computers are gathering dust on store shelves, wreaking havoc at recently heralded companies like Gateway and Apple. And if they can't sell them in December, there's going to be a lot of inventory sitting around in January and February, which will mean slowdowns and layoffs in production.

What do Gateway's problems have to do with New York City? The bottom falling out of the technology sector will have a ripple effect in some key New York City businesses, including publishing and media (as computer and Internet advertising dry up), real estate (though there, because the market still seems obdurate, the effect could be a wash, if other types of firms snap up vacated e-business spaces) and all the ancillary lifestyle retailers and services, from restaurants to shoe stores to housemaids, that have been enjoying the outflow from the Silicon Alley boom.

Consumer spending, a major engine of the strong economy, has dropped precipitously. Holiday retail business is soft. "Leading economic indicators" have just declined again. If it's the cold winter it promises to be, natural gas prices will soar. As the economy slows down, large businesses may start defaulting on "troubled" debts, damaging the financial sector.

The more grownup Dow is stumbling along behind the NASDAQ. The expected October selloff carried over through November and, despite rally days like this past Monday, analysts do not predict a traditional December buying spree this year. Expect instead to hear stories coming out of Wall Street about paper millionaires running amok in their managers' offices when they can't make their margin calls. And, like Silicon Alley, Wall Street's doldrums will trickle down through other sectors of the local economy. Enjoy your Schadenfreude (to cop one of the season's most overused buzzwords) while you still have a job.

There's more anecdotal evidence. During the Depression, homeless people?not "hoboes," but rather unemployed people forced out of their homes?built shantytowns on the edges of major cities. They were called Hoovervilles, after Herbert Hoover.

At Broadway and 27th St., a mini-Hooverville sprang up this fall under the construction barn that runs a block and a half. Maybe two dozen homeless men have been appearing there every night after the shops close, to line the sidewalk with boxes and packing crates to sleep in. More than the isolated panhandler, this tiny, makeshift community was a startling reminder of bad times past, and maybe future.

Complaining that Mayor Giuliani has "lost interest" in the city and is "allowing" these homeless people to trickle back into everyday public view misses the larger point: The Hawk has come to Hooverville. It will take a greater agency than City Hall to turn back this downward trend.