Simple file recurser
I don't like how you use static field to indicate level of indentation, I think it would be better if you passed it down the recursion in parameters of the methods.

And while you're at it, you should probably separate your concerns: don't have everything in your Program class, but have one class that recurses directories, and one that writes them out. That way, you can reuse them if you want to write the output in a different way (say in a GUI app) or if you want to recurse through something else than files (say, registry entries).

Also, there is no need to check whether a collection is empty before iterating it, it just unnecessarily clutters the code.

And you should think about handling exceptions: there might be directories you don't have access to. And there's also a chance that a directory was deleted while you were iterating its siblings, so you should handle that too.