There is an understandable amount of hand-wringing in New York City these days, as the fate of the city’s financial industry remains unclear. It will persist, I think it’s safe to say, but it will be smaller and less lucrative than before, with implications for the city’s economy and for the financing of public services.

I think Mayor Bloomberg has been wise in being proactive about retaining former financial workers and in attempting to re-purpose them as entrepreneurs. But I think the city’s best bet over the long term is to use this crisis as an excuse to make some hard choices that have, until now, proven difficult to make. One obvious example is on the revenue side. While Wall Street was booming, it was easy to rely on the financial sector to pay for government spending, and this gave city politicians room to oppose things like congestion pricing in Manhattan. But as the MTA faces severe cutbacks now, that seems like an incredibly foolish decision.

New York can do basic things to improve transportation in the city that will also shore up the budget; congestion pricing and performance parking are the obvious examples. Those are politically tricky things to get done, but with Wall Street in deep recession, the city can’t afford to ignore things that would improve life in the city and raise revenue.

New York should also come to grips with the fact that high real estate prices may have cost it some economic vitality. The expense of homes and business space no doubt led to a loss of talent to other metropolitan areas. It’s difficult to take a professional risk when one has to work all out to pay the rent.

In one sense, then, the crisis creates a direct opportunity for the city. Assuming that basic public services can be maintained, the decline of real estate prices in New York could help new industries to flourish. It’s impossible to overstate the advantages the city has available in terms of talent and institutions. But New York leaders should learn from their heavy dependence on Wall Street, the wealth of which crowded out other industries — an unbalanced income distribution is risky for a city. To prevent this from happening in the future, New York needs to focus on affordable housing, and should work to make it easier to build a lot of new housing. It should also stay focused on services that make middle-class city life possible: good public schools, good public transit, good public safety, and good public amenities, like parks and museums.

But New York is just one small (geographically) city. If it manages to foster a diverse economy and maintain good public services, real estate prices will simply rise again as demand grows. In the end, there has to be a national effort to build better, to do public services better, and to fund those services better. The nation became too dependent on uneven growth in wealth. That’s not going to cut it in the future, and so it’s important to use the crisis as an excuse to make some difficult decisions.