Here’s Edward Glaeser in City Journal on New York’s capacity for self-regeneration:

Today, Gotham’s strengths—competition, diversity, access to the world, and, most of all, human capital, made even more potent through proximity—will enable the city to reinvent itself, as it has done several times in the past, and survive the current economic storm.
Over the centuries, New York City has survived crisis after crisis—the British defeat of the Dutch, Leisler’s Rebellion, the 1863 draft riots, the 1929 crash, the attack on the Twin Towers. But none of these shocks struck as hard as the American Revolution. New York’s recovery from that shock stands as a testament to the importance of human capital in reinventing a city.

He also notes, however, that the city’s most precious resource is threatened by its mounting tax burden, which is among the heaviest in the country and an “incentive to leave” for many of its most productive citizens. It’s also an incentive for many never to come in the first place. Anecdotally, I’ve lost count of the number of bright and energetic friends and acquaintances who are eager to start their careers, but have cited city taxes as a reason to stay away.