Another factor in the surprising equanimity with which New Yorkers are dealing with the crisis is politics. The 4 November election is a bigger subject of conversation than the meltdown that seems likely to have a catastrophic effect on the financial health of both city and state. In particular, there is widespread joy at what is seen as the near certainty of an Obama victory in the presidential election - and contempt for Sarah Palin. Indeed, outside some conservative circles, even a mild statement of sympathy for the Republican candidates can prompt a dinner-party-killing torrent of abuse. The ferocity of anti-Republican feeling now is greater than anything I experienced in 13 years of living in New York.

This includes rants about "Republican deregulation" being responsible for the financial crisis. Republicans reply that this formulation ignores the role of left-wing Democrats like Congressman Barney Frank in pushing Fannie Mae and Freddie Mac to offer mortgages to poor people with bad credit, or the fact that many of the big New York investment banks are run by Democrats who backed Clinton and now back Obama. People on both sides tend to forget that much of the American and New York boom grew out of deregulation of telecommunications, air-travel and interstate trucking - all deregulation that began during Jimmy Carter's Democratic administration.

New Yorkers are also pleasurably distracted by a controversy about Mayor Michael Bloomberg. Recently, he revealed that he wanted to overturn the city's term-limits law and stand for a third time in 2009. As Fred Siegel, a Cooper Union professor and former adviser to Mayor Rudy Giuliani, points out, Bloomberg is more powerful than any New York mayor of the modern era. "He's our Berlusconi." Despite breaking his promises never to raise taxes or challenge the term-limits law, despite his obsession with imposing nanny-state bans on smoking and trans-fats, Bloomberg remains spectacularly popular among New Yorkers of all backgrounds, with an approval rating of over 75 per cent. Nevertheless, he may be regarded as a failure in years to come, or at least as the mayor who failed to use the bonanza that once came in from Wall Street to repair the city's ageing infrastructure.

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