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“FORD TO CITY: DROP DEAD” read a 1975 New York tabloid headline as America’s largest city faced bankruptcy and had its request for federal aid rebuffed by the then president. Thirty-four years later, it seems nearly everyone qualifies for assistance. But New York’s glorious ascent from the crime and filth of the 1970s is fading fast and its vital financial sector has become a punchbag for Washington’s politicians. On Friday President Obama summoned the heads of 15 New York-based financial institutions – an invitation these former masters of the universe, however busy, dared not refuse. The nexus not only of political but now also financial power has shifted 230 miles to the south of Manhattan.

New York’s financiers earned $97bn in 2007, the last boom year. Their dwindling numbers and pay cheques may cut the city’s income tax haul by 30 per cent by fiscal 2009, sparking fears Gotham will become dangerous and dysfunctional once again. Local landmarks Bear, Lehman and Merrill are gone and bureaucrats are armed with a mandate to write “ new rules of the game”. Bankers can only grit their teeth and remember that: he who has the gold makes the rules. The financial muscle of a cumulative $5,400bn in bail-out cash packed by Washington is so massive it can only be described in comparative terms: seven Vietnam wars, 23 Apollo programmes or 47 Marshall plans, adjusted for inflation.

If history is any guide, though, New York will come back bigger, better and brasher than the comparatively provincial capital city it dwarfs. Someone, after all, will have to trade all the new Treasuries and repackaged toxic assets. And, as bloggers at Gawker put it: “Cheer Up, DC Will Never Be Cool.” Washington may control the cheque book but “they’re not going to enjoy the spoils of obscene imaginary wealth with the same flash as our bankers once did”.

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