>Also from an economic standpoint shrinking NYC is a good idea. We are better off spreading investment to other areas than trying to build ever taller buildings and ever deeper subways. People look at the 'big dig' as horribly wasteful, but large projects in huge old city's are simply vastly more complex.

This is mostly wrong, but partly right.

In theory, larger cities are better: they have a lower carbon footprint, they're more efficient overall (people spend less time commuting when they're closer together), quality of life can be better (not spending all your time in a car, walking around a lot makes you healthier), plus economically you get big network effects from having everyone concentrated on one area. It's why Silicon Valley is so successful: all the companies are there, all the workers are there, creating a feedback loop.

Also, you can't just "spread investment" elsewhere. If you somehow convince one big finance firm to relocate out of NYC to Omaha, guess what? They're probably going to fail, hard. They need to be in that location because of those network effects I mentioned above. It's the same reason so many tech companies insist on staying in Silicon Valley: leaving causes them to miss out on the talent pool available there. For some, it's worth it: they're not doing anything all that cutting-edge, and the significantly lower salaries make it work. For others, it just isn't: they need the talent, no matter the cost.

However, you do have a point about "huge old cities". It's definitely much, much harder to build stuff in a densely-packed old city than just going somewhere unspoiled and building there. You have to secure rights to the land somehow (like eminent domain), you have to not mess up other stuff that's already there, etc. Unfortunately, though, "build it and they will come" doesn't work in real life most of the time. Sometimes it does, like in Oak Ridge TN with the Manhattan Project, but a normal city isn't like that where it's built solely to support some giant government project. Cities are organic in nature, and get that way mainly by historical reasons. There's no real reason so much of the finance industry needs to be in NYC, as opposed to Fargo ND. However, it's already there: all the buildings are there, all the people are there, all the computer systems are there, all the rest of the city needed to support all those people is there, all the infrastructure needed to support those people is there. Moving it all would be a monumental task. Even moving it to another large city that has more of the infrastructure in place would be a huge task, and would probably end up breaking things because so much of our economy is reliant on that industry and it can't handle being shut down for a year while we get everything moved.

Anyway, NYC is actually a pretty decent place to build taller buildings and deeper subways: geologically it's extremely stable and sits on a lot of bedrock, so you can build extremely tall, and dig very deep. Lots of places aren't like that; the ground isn't solid enough to do those kinds of projects. The main problem with NYC is that its elevation is very low and it easily floods in places. That could be fixed with some sea walls, plus maybe improving transit links to other places (like Brooklyn and Queens and Jersey City) so that more building moves over there where it's safer.