Countless visitors
flock to New York City's Madison Square Park
to gaze upon and take selfies with
some of the world's most famous buildings.
But even native New Yorkers probably missed
one of the most interesting stories in the city's skyline,
located here, and that's because most of it doesn't exist.
During the major economic expansion of New York City,
in the late 19th and early 20th centuries,
demand and prices for prime real estate in Manhattan soared.
Thanks to advancements in construction
and elevator technology,
developers could suddenly build vertically
to increase usable space,
essentially creating land in the sky.
Skyscrapers, as these mega-projects were called,
started popping up in the priciest parts of the city,
often named after the companies
that funded their construction
in a clever form of brand marketing.
In the latter half of the roaring 1920s,
the Metropolitan Life Insurance Company
wanted to construct a new skyscraper
to house its growing staff,
alongside its existing landmark headquarters on 24th Street.
The ambitious plan called for
the tallest building in the world at the time,
around 100 stories,
incorporating the distinctive setback look
that was required by New York City's
recently adopted zoning code.
There was one problem, however,
during the same week of the plans being announced
the U.S. stock market had collapsed,
signaling the end of the roaring '20s,
and the beginning of the Great Depression.
With funding scaled back the grand design,
much like the decade of excess in which it was conceived,
was cut off.
Eventually topping out at barely a 1/3 of the height
of the previous design, leaving behind a stump
that some might say is a monument to economic hubris.
Fast forward to today and New York City skyline
is again dotted with impressive
and record-breaking skyscrapers.
Many nearing completion, as the global economy sputters.
Some economists insist the timing of these skyscraper booms
and economic downturns is more than just a coincidence.
In fact, some have called it.
The skyscraper curse.
This is Mark Thornton, who, in 2007,
I applied an economic model called the skyscraper index
to suggest that the construction
of the world's tallest building, the Burj Khalifa in Dubai,
meant that a global financial crisis was coming.
Which it did a year or so later.
The model he used is based on an idea proposed in 1999
by a real estate analyst named Andrew Lawrence.
He looked at all the records setting skyscrapers
beginning with the Singer Building in New York City
which correlated with the Panic of 1907,
and then you go to the late 1920s
and you see the Chrysler Building
and the Empire State Building setting records consecutively.
And then, of course, the crash of '29.
And then you fast forward until you get to 1970,
when World Trade Tower one, World Trade Tower two,
and the Sears building all set new records.
And then, of course,
we had the long stagflation of the 1970s.
Fast forward from that you get
new record-setting skyscrapers in the late 1990s,
and early 2000s, and of course, right in the middle of that
was the tech stock bubble bust.
The correlations holding up very well.
And some see those warning signs
on the rise again.
Entrepreneurs did great.
Everybody was making money for so long.
But we're gonna see is that there's going to be
this cluster of areas where companies have to cut back,
retrench, go bankrupt, foreclose.
We're certainly not looking forward to it
in the sense of being a joyful event.
But the skyscraper index
is, to put it lightly, controversial.
No offense to you but skyscraper curse,
I really wish we would put this to bed.
This is Jason Barr,
an economist and author specializes
in what he calls skynomics,
and he co authored an empirical analysis
of the skyscraper index and found that.
It's an example of what I call broken clockism. Okay?
If you're looking to pair a skyscraper boom
with a downturn it's easy
because the downturns are happening all the time.
You can just say, "Oh, here's the peak
"of the skyscraper cycle. Oh, here's the business cycle.
"Oh, yeah, they must be connected in some way."
Although Barr's research called into question
the forecasting potential of record-breaking skyscrapers,
it did confirm that skyscraper construction waves
typically rise when economic conditions are favorable,
sometimes to the point of a bubble,
and then slow is the project's make less financial sense
and funding dries up,
much like the case of the Metropolitan Life North Building.
It's kind of a herding mentality.
When the getting's good, everybody,
all these developers they rush to get their buildings online
as soon as possible, and then you have a glut.
You can conceive of a project based on the economics today
and then when it comes online, four or five years from now,
anything could happen.
In other words, skyscrapers simply take
a long time to build and some end up being completed
after the next downturn has already begun.
This timing, if anything, is more like a lagging indicator,
then a leading one.
I guess, I just wish the skyscraper curse thing,
that people would stop using it
because there's zero evidence that it actually exists.
But what makes something
like the skyscraper index so alluring in the first place?
For one, unlike many other economic indicators
like consumer price indices, unemployment rates, or GDP.
Skyscrapers are so visible.
They are super visible. They're ultra visible.
I mean, the skyline is very notion and identity
of the city in a lot of ways.
Skyscrapers are a marvel of technology.
When you think about symbols of civilization,
a skyscraper is one of them.
But ultimately skyscrapers are simply products
of our economic system,
or as skyscraper historian Carol Willis has called them,
"the ultimate architecture of capitalism."
Fundamentally, skyscrapers are a part
of the larger story of human urbanization.
That all the forces that draws to cities,
create this need to build offices and high rise buildings
that accommodate all of these people who wanna
be at the same place at the same time.
This demand for access to urban space
has fueled a global skyscraper boom during the past decade.
And according to the Skyscraper Center database,
over 130 super-tall construction projects
are currently underway worldwide.
But as social distancing and remote work
call into question the demand for dense urban life,
skyscrapers may be taking on an entirely new meaning.
After all, if a full busy skyscraper
can represent power and prosperity,
an unfinished or empty one can stand in
for economic transition.
Take Detroit, economic crisis of the 1960s and 1970s.
We saw for a long time skyscrapers with very little value.
I don't think there's any indication, yet,
that we can expect this on some mass scale
across the United States but at the same time,
the ravages of COVID-19 are totally unchecked.
So it's very hard to predict
the full economic consequences of what's happening.
As always, the future remains to be seen.
But one thing does seem likely,
if the skyscraper boom does come to an end
as the economy shifts, don't be surprised if some say
the curse may be striking again.