Tale of 'Three-Cities'

They tend to be an optimistic lot, the bankers and business leaders, politicians and pundits, who every year make their way to the annual meeting of the World Economic Forum in Davos, Switzerland.

This year's meeting, which starts on Jan. 23, might be a little different.

Thoughts may be in the valley rather than the hills. A year ago, subprime had not entered the lexicon of the nightly news, and most Americans probably thought that "credit crunch" was a breakfast cereal.

Whatever the chance of a recession this year, the U.S. has experienced what the economist and former Under Secretary of the Treasury for International Affairs John B. Taylor of Stanford University calls a "long boom".

For nearly 30 years, Taylor points out, the few downturns the U.S. has suffered have, in historical terms, been both short and shallow.

How did the world come to this happy position?

You can list the usual reasons: two decades of decent macroeconomic policymaking, the triumph of markets and the collapse of command economies, the dissemination of transforming technologies and tools such as the Internet.

One overlooked aspect of a generation's worth of global growth: the extent to which New York City, London, and Hong Kong, three cities linked by a shared economic culture, have come to be both examples of globalization.

Go back nearly 30 years, and few would have thought that any of the three cities were about to remake the world for the better.

In 1981, London had seen some of the most bitter riots in a century. New York almost went bankrupt in 1975; by the early 1980s, its streets were potholed, filthy and dangerous. In September of 1982, the Hong Kong stock exchange lost a quarter of its value after Margaret-Thatcher, flush from her victory in the Falklands War, annoyed the rulers of communist China.

Challenge and change
The network of international trading and contacts that shape New-York, London and Hong-Kong facilitate their key industry. If the 19th century was the age of empire and the 20th one of war, so the 21st century, is an age of finance.

Great cities, of course, are about more than money and finance. They are messy agglomerations of talent and culture. That is how they attract men and women in the financial sector who could choose to live anywhere.

Yet these are places that know how to meet a challenge. They've done it before.

From being dismissed as long past their prime a quarter of a century ago, New-York, London and Hong-Kong have gone on to extraordinary heights.

Via Time-Magazine