No two US cities have had a greater impact on each other, the country, and the world as New York City and Washington, DC. They are each largely industry towns – the centers of economic and geopolitical power and influence, respectively.
The US is on a surprisingly long list of countries/regions (including Canada, Australia, Germany, Switzerland, Brazil, the UAE, etc.) whose center of commerce is not also its capital city. And New York has long been considered one of the three “command centers” for the world economy, along with London and Tokyo. But the current economic crisis and the federal government's evolving response may have effectively co-located our two capitals, temporarily removing New York from both aforementioned lists.
The banking sector is now intricately intertwined with the federal government in heretofore unimaginable ways. In recent months, the Treasury Department announced it will assume stakes in several of the US' largest private financial institutions and President Bush signed an executive order to hasten the formal administration transition process due to the growing complexity of the government. Further actions taken by the new Congress and administration will only add momentum to the tidal shift of economic influence from New York to Washington. Meanwhile, recent estimates by the New York City Comptroller's chief economist project a loss of 165,500 jobs over the next two years, including 35,000 in the financial sector.
So what does this shift mean for public affairs pros who will be relied upon for their counsel in this rapidly evolving environment?
First, we must be honest with ourselves and our clients and acknowledge that this is a new playing field with no time-tested playbook to rely upon. For example, the federal government is now a direct stakeholder in the financial sector. How will our traditional regulatory and oversight models be revamped to preclude an obvious conflict of interest?
Next, we must accept that the financial crisis will impact every facet of the next administration's agenda. Therefore, it is incumbent upon us to help our clients who are stakeholders in these industries set clear, realistic priorities and adjust their business models accordingly.
Clear messaging and creative communications are vital components of effective public affairs efforts. But before one can implement a messaging platform, key audiences must be identified. That will prove challenging in the coming months as the DC decision-maker deck is reshuffled by the change in administration, Congress, and the overall new fiscal responsibilities of the government.
Nobody knows how long this crisis will last. Just as Section 3 of the 25th Amendment specifies procedures for voluntary transfer of power from the president to the vice president when the former is “unable to discharge the powers and duties of his office,” the federal government has assumed temporary stewardship of our economy. Until that power is transferred back to New York City, public affairs pros should adjust their communications plans to reflect DC's new role as the financial capital of the world.
Derek LaVallee is VP of the US public affairs practice at Waggener Edstrom Worldwide.