You hear a lot of talk about the panoply of problems facing Wall Street, from the Volcker Rule to derivatives regulations to today’s Congressional hearing on whether exchange-traded funds are going to blow up the economy (answer: maybe).
But here’s a simple numbers comparison that points up the challenge for Wall Street (and New York). From the New York Times’s Dealbook today on Goldman Sachs’s second-ever loss as a public company: (more…)
Nicole Gelinas has a must-read op-ed in the New York Post today on the sinking fortunes of New York City’s financial sector. Her message:
Thanks to Washington’s support for big banks, New York City has been a cocoon of prosperity compared to the rest of the nation over the last three years.
But banks can’t stay on the dole forever — and the city’s done nothing in the 37 months since Lehman Bros. collapsed to prepare for a leaner Wall Street.
The city’s independent budget office (IBO) has released a report on New York’s post-9/11 disaster and recovery spending. So who got the Liberty Bond money?
As part of its $20.5 billion aid package, remember, Washington gave the city $1.2 billion to support $8 billion worth of “Liberty Bonds” — bonds that private companies could issue for real-estate development projects. No level of government (federal, state, or local) guaranteed the bonds’ repayment, but the bonds are exempt from federal, state, and local taxes, meaning that investors demand a lower interest rate on them.
Reporting today on New York City’s plan to lay off 780 school employees in October, an article in The New York Times explains: “The layoffs are a direct consequence of budget cuts to schools, which have occurred in each of the last four years, forcing principals to make tough decisions about what and whom to do without.”
In fact, while city agencies have endured a series of mid-year reductions, annual spending on city schools has not been cut over the past four years. The Department of Education (DoE) budget has increased every single year since fiscal 2008, rising a total of nearly 15 percent during that period. The chart at right tells the story for the past decade. Those pending layoffs aren’t occurring because the budget was cut, but because this year’s increase of 2.6 percent isn’t enough to cover rising costs (and, according to the mayor, because DC 37 refused to make concessions that might temporarily have saved their jobs).
… ‘cuz they’re doing Mayor Bloomberg’s job as well as their own (and the mayor gets paid $1 a year).
Some background: Michael Mulgrew and Lillian Roberts head up New York City’s United Federation of Teachers and the city’s largest civilian union, DC-37, respectively. The two unions’ members make up the bulk of the New York City workforce.
During this year’s budget season, ended last Friday, Bloomberg left it entirely up to Mulgrew and Roberts to decide how many employees New York City needs to deliver adequate public services to taxpayers and citizens.
New York City’s monthly economic-conditions reports has some good nuggets of information about the local economy.
The report is yet another reminder that since the credit bubble burst, the city has done better than the rest of the country in losing fewer jobs and getting them back faster.
On Wednesday, in an apparent move to appease open government advocates and curious taxpayers, City Comptroller John Liu announced that the New York City Employees’ Retirement
Mr. Unprecedented Transparency?
System (NYCERS) Board of Trustees had adopted three resolutions that would “provide the public with unprecedented access to information concerning the pension system.”
One of the resolutions will make “all pension payroll information, including names” available via a Freedom of Information Law (FOIL) request.
In fact, that information was already available via FOIL request. The Empire Center acquired a list of city pensioners in 2009 and posted the data at www.SeeThroughNY.net. It wasn’t until we requested the data again, for 2010, that NYCERS decided to withhold the names.
City Council Speaker Christine Quinn and the chairman of the Municipal Labor Committee, an umbrella group of labor unions, have broached the idea of tapping a union-controlled health care slush fund to prevent 4,100 scheduled scheduled teacher layoffs and 20 firehouse closures proposed by Mayor Michael Bloomberg as part of New York City’s budget for the fiscal year that begins in two weeks.
NYC's current budget outlook
The money in question (estimated at a half-billion dollars in all, technically known as the Health Insurance Stabilization Fund) is a rainy-day reserve within a larger pot of 81 different union-administered “welfare funds,” into which the city contributes about $1 billion a year. The funds pay for benefits such as prescription drugs, optical and dental care, and other extras above and beyond services covered by the employee health insurance coverage.
Teacher and firefighter unions obviously would lean towards favoring such a move, but District Council 37, the largest municipal union, reportedly is opposed. ** UPDATE: Unions today reportedly shot down the deal at a private meeting of the Municipal Labor Council. **
Nicole has an op-ed in today’s New York Post exploring the fiscal and economic implications of the agenda being pushed by the union-led “May 12 Coalition,” which is sponsoring a big demonstration in Manhattan today to demand big increases in state and city taxes.
Government entities are the six largest employers in New York City, Crain’s NY Business reports in its latest annual employer ranking. Some are suggesting that this means the city’s economic recovery hinges on preserving government jobs. They’re wrong. The data actually suggest quite the opposite.