Silicon Alley, of course, is the favorite symbol of the city's rebirth. "Wall Street's influence in the economy has steadily declined for the past half-decade, mainly because of the growth in new media," says Clark Halstead, founder of the real-estate brokerage that bears his name. "A huge part of the growth in employment in New York is in all kinds of things related to the Internet. We don't live or die at every twitch on Wall Street anymore."

Silicon Alley's financial clout, however, has been oversold, and besides, the city's New Economy business is heavily dependent on good old Wall Street. The New York New Media Association says the industry employed about 140,000 people in the city last year, with a total revenue of $9.2 billion -- about what Morgan Stanley Dean Witter reports in a quarter. (Forget about earnings.) To stay afloat, New York's new-media firms raised $6 billion over the past three years in venture-capital funding and public stock offerings. Both forms of support have already begun to evaporate in the face of the market's recent turbulence. "It would be hard to imagine a downturn on Wall Street that didn't have a serious effect on the new-media business," Bram says. (And vice versa -- technology companies were 65 percent of the stock-underwriting business last quarter.)

Meanwhile, many of the city's other core industries never reversed their recession-era declines. New York's previously fast-growing health-care industry abruptly stopped expanding in the nineties with the advent of managed care. Public employment fell during the recession, too, and Republican administrations have kept it down. Government accounts for 14 percent fewer jobs today than it did in 1987, according to the Bureau of Labor Statistics. Manufacturing employment fell by 44 percent as factories left New York City to save on real estate, transportation, labor, and taxes. Commercial-banking employment shrank by 62 percent, and the printing and publishing businesses also reduced their payroll by 17 percent. Other areas did offset the losses -- notably the entertainment industry. The movie business in New York has doubled its payroll, to 44,000, since 1987. Advertising, law, and accounting grew, too. But Wall Street remained the lead horse pulling the sled, adding 13 percent more jobs in New York.

Perhaps it's unseemly that so much of the city's earnings ends up in the hands of so few. Far more significant for the New York economy is that many of us, in one way or another, are working for Wall Street firms and their well-paid staffs. The U.S. Department of Commerce estimates that every new job on Wall Street creates two other new jobs in New York. When times are good, investment banks and brokerage firms spend billions on other city industries even before they cut their first bonus checks. From 1995 to 1998, brokerage firms in the U.S. increased their spending 29 percent (to $5.82 billion) for computer and data services, 21 percent (to $2.36 billion) on accounting firms, 162 percent (to $5.32 billion) for real estate, and 408 percent (to $3.37 billion) for law firms. In 1998, firms spent $459 million at restaurants and bars. And for the first time, the brokerage business started spending heavily on advertising: $2.96 billion in 1998. Now we in the media are susceptible to a bear market, too.

Then there is the rising tide of all that compensation. Wall Street's paychecks pour into car dealers, parking lots, clothing and jewelry stores, construction contractors, nannies and child care, Broadway theaters, upscale food markets, restaurants, and bars. The impact of Wall Street's spending is everywhere, but it is most glaring in the exorbitant run-up in real-estate prices -- owing to the limited supply of 3,000-square-foot Park Avenue co-ops. "Wall Street is still the main motor driving the city," says Alan Rogers, chief executive of the residential brokerage firm Douglas Elliman.

What crushed New York in the months after Black Monday wasn't the national recession, which didn't set in until 1990. Nor was it the decline in stock prices, which didn't last long. It was the cutbacks on Wall Street after trading volumes plunged. As it turned out, the crash's impact on the market proved short-lived, but its effect on New York was profound. The securities industry immediately began slashing bonuses and soon started cutting payrolls too, and by 1989 the whole city was mired in cutbacks and layoffs.

The city and state governments suffered the worst: Wall Street's portion of city income is also its share of the city's income taxes. When Wall Street's income dropped, both governments scrambled to raise taxes in order to meet spending obligations, and by raising taxes they exacerbated the recession. Within a few months of Black Monday, housing prices in New York began falling and eventually dropped 25 percent, on average, far further than in the rest of the country. The real-estate market didn't reach 1987 levels again until 1996. Associates at law firms had seen their pay bid up by 40 percent over the two years before 1987; after Black Monday, the pay increases stopped, and by 1990 there were layoffs. Horace Mann, Dalton, and other elite private schools scrambled to help parents meet tuition payments. Donations to Catholic Charities fell off by about 30 percent and didn't recover for about 40 months, just as the city's slowdown increased demand for its programs.

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