The Wall Street bonus pool for 2012 expanded by 8 percent, but remains well below the peak levels of a few years ago, according to a release today by state Comptroller Thomas DiNapoli.
Wall Street bonuses and the state’s personal income tax receipts are tightly correlated, as shown below.
Wall Street, the goose that laid golden eggs for New York’s public sector for more than 25 years before the Great Recession, is “still working through the fallout from the financial crisis,” as Comptroller Thomas DiNapoli reported earlier this week. The problem, as the Manhattan Institute’s Nicole Gelinas writes in the Post today, is that “both the state and city governments, which depend on Wall Street to pay the bills, are still partying like it’s 2007.”
“Unless they sober up soon,” she adds, “they’re in transition to nowhere.
The latest mergers & acquisitions figures are out, and they’re not pretty.
According to mergermarket, an M&A data watcher, the year’s global slowdown is not only continuing but accelerating. New York can hang on to a thread of good news only in that its rate of decline is not accelerating. (more…)
The national housing crisis is over.***
New York should worry.
The fact that markets are flat after la crise JPMorgan Chase came to light — and that JPM stock is down only 7.3 percent as of this writing — shouldn’t be a comfort to anyone.
The takeaway isn’t that the financial and economic worlds are more robust than they were four years ago and better able to handle such shocks.
Nor does this massive and purportedly unexpected loss prove that the Obama financial regulations are working. Taking that angle, a few people are saying that the mess points up the need for Dodd-Frank’s Volcker rule, which would ban proprietary trading by banks.
(Under this line or reasoning, the problem with the Volcker Rule is only that regulators haven’t implemented it yet — banks may have until 2014 to comply — and that the rule may contain too many exceptions.)
What the calm markets prove is that people and companies have gotten used to the fact that the global financial system remains utterly broken. It’s priced in, as they say. (more…)
Wendy Long, a lawyer who is trying to oust fellow lawyer Kirsten Gillibrand from the Senate, has a piece in the WSJ today with a compelling headline: “Financial Regulation is Hurting New York.”
True enough. But the 70 percent of the details that Long gets wrong eclipse the 30 percent that she gets right. A more fitting story might be “Pols Who Don’t Understand the Financial Crisis are Hurting New York.” (more…)
The Securities Industry and Financial Markets Association (Sifma) held its annual meeting today. Speakers’ outlooks on the financial industry bode poorly for New York’s economy.
“I think we will see a lot more cost cutting,” said Toos Daruvala, director of banking and securities for McKinsey. “I think we are in this for a few years yet.” But, he added, “you cant cut your way to greatness. It’s not possible.” (more…)
State comptroller Tom DiNapoli has a new report on Wall Street out, and it isn’t pretty.
One piece of information shows just how New York — City and State — grew dangerously dependent on an ever-growing Wall Street over the past three decades.
In 1981, before Wall Street took off relative to the rest of the national economy, each securities-industry job in New York City paid twice as much as the city’s average private-sector job outside of finance.
Last year, each securities job paid five point five times the average private-sector job. (more…)
In response to the Occupy Wall Street protest, a pair of Democratic state lawmakers from New York City is repeating some flagrantly inaccurate data about taxes in New York State. In an essay at Huffington Post, Senator Daniel Squadron of Brooklyn and Assemblyman Rory Lancman of Queens support a permanent extension of the so-called millionaire tax. Their version of the “fairness” argument:
For decades, the Republican Party has pursued a long-term strategy to undermine government’s ability to protect workers and the environment by shifting its costs to those who can least afford it: From 1977 through 1997, New York’s top income tax rate was repeatedly cut to the point where married couples in New York making $40,000 a year paid the same income tax rate as someone making $10 million a year, and families making $55,000 a year paid a 22% higher share of their income in combined state and local taxes than did families making over $3 million a year.
"Republican" anti-tax zealots
Wrong. Wrong. And wrong.
1. Most of the reduction of New York’s top marginal income tax rate between 1977 and 1997 was enacted under Democratic governors. Gov. Hugh Carey dropped the top rate from 15.35 percent to 10 percent, and Gov. Mario Cuomo signed legislation taking it down to 7 percent, before changing his mind and freezing at 7.875 percent. These cuts were supported by solid majorities of Democrats in both houses of the state Legislature, including one-sided Democratic majorities in the state Assembly. Republican Gov. George Pataki was a tax-cutting piker by comparison. His 1995 tax reform cut the top rate by barely a percentage point, generating marginal savings of 13 percent for the wealthiest New Yorkers, while expanding other tax benefits to generate an average cut of 25 percent for middle-income families. As for “shifting its costs to those who can least afford it,” Squadron and Lancman have it backwards. It was the lone Republican out of New York’s last six governors who spearheaded a massive expansion of the Earned Income Credit (EIC). As a result, over a million of low-income workers pay little or no income tax at all but get an annual EIC check from Albany, with the largest amounts reserved for those who earn the least and have the largest families to support. (more…)
Someone asked Mayor Bloomberg what he thinks of Occupy Wall Street, and he had this to say:
What they’re trying to do is take the jobs away from people working in this city. They’re trying to take away the tax base we have because none of this is good for tourism. … If the jobs they are trying to get rid of in this city — the people that work in finance, which is a big part of our economy — we’re not going to have any money to pay our municipal employees or clean the blocks or anything else.