NY's financial health in jeopardy

From the NY Times:

New York State faces long-term budget problems that are compounded by the teetering finances of its local governments, an aging infrastructure and the possibility of severe cuts in federal funding, a panel of fiscal experts said Tuesday.

The State Budget Crisis Task Force, a nonpartisan group, said that New York’s problems had been “papered over with gimmicks” for decades, and that while Gov. Andrew M. Cuomo had taken some steps to rein in spending, the state was still saddled with burdens that would leave it unable to make ends meet in the long run. Over the past decade, the report said, New York had postponed a reckoning by using one-time measures to produce $25 billion in revenue.

Former Lt. Gov. Richard Ravitch, a co-chairman of the group, said the math spoke for itself. “There are expenditures that are growing at a rate faster than revenues,” Mr. Ravitch said. “As long as that happens, then we are on an unsustainable course.”

A report released on Tuesday by the panel, which was also led by Paul A. Volcker, a former chairman of the Federal Reserve, offered a sobering assessment of the state’s finances, raising concerns about its outsize spending on health care and education, its vulnerability to the ups and downs of Wall Street, and the struggles of its local governments to pay retirement obligations.

As one major area of concern, the report highlighted the state’s enormous Medicaid budget, which is larger than those of Florida, Pennsylvania and Texas combined. The report said that while the Cuomo administration had put in place a cap on annual increases in health care spending, it was not certain the measure would drive down costs over the long run.

More manufacturing lost under Bloomberg

From the Village Voice:

This month, City Limits magazine reported that under Mayor Bloomberg's watch, manufacturing jobs in the city disappeared twice as fast as in the rest of the country. Almost 64,000 blue-collar positions vanished, a decline of 46 percent. It is the worst eight-year slide in city history, says Sarah Crean, who has kept an eye on these statistics for the New York Industrial Retention Network. Land rezoning is one reason, says Crean. Indifference is another.

Bloomberg skipped this hemorrhage of entry-level jobs in his own economic slideshow last month in Brooklyn, where he insisted that the president should follow his example if he wants to fix the nation's economy. Of course, if not for all the federal stimulus funds pumped into Wall Street banks and investment firms over the past two years, the city would be just as flat on its back as the rest of the country. This fact was also omitted from a presentation intended to stoke more of the mayor's White House dreams.

Well isn't that special?

From the NY Post:

Rep. Joe Crowley, a Queens Democrat under investigation for raising campaign cash from Wall Street within a day of last year's vote on financial reform, has been tapped as a finance chairman of his party's Congressional Campaign Committee.

A big part of Crowley's job will be more fund-raising -- even as a House Ethics probe continues into his earlier efforts he calls perfectly legit.

This article from the NY Times explains how Crowley got to Washington in the first place.

Bloomie's guy may be banned from Wall Street

From the NY Times:

As it investigates a suspected kickback scheme in New York’s pension system, the Securities and Exchange Commission has been pushing to bar Steven L. Rattner, a prominent financier and former adviser to the Obama administration on the auto industry, from working in the securities industry for up to three years, according to three people told of the discussions.

But Mr. Rattner has fiercely resisted the proposed penalty, setting up a face-off with the federal government, according to these people, who spoke on the condition of anonymity because the negotiations are intended to be confidential.

It would be the most severe penalty for any of the Wall Street executives ensnared in the wide-ranging pension investigation, and it would carry a significant stigma for Mr. Rattner, whose rise in high finance catapulted him to the top of New York’s social and political hierarchy.

Even being barred temporarily would be a blow to Mr. Rattner’s career and could endanger several of his pursuits. He will soon publish a book about his experience trying to restructure the American auto industry, which was widely praised. And he is playing a vital role in creating an investment office for Mayor Michael R. Bloomberg of New York, which will oversee billions of dollars for the mayor’s ambitious new philanthropic foundation.

Under the proposed S.E.C. settlement, Mr. Rattner, 57, would most likely be barred from advising Mr. Bloomberg on his finances, people briefed on the matter said. A spokesman for the mayor declined to comment.

So who owns Weiner?

From the NY Post:

That was some temper tantrum the terminally excitable Anthony Weiner threw on the floor of the House of Representatives the other day.

It was a trademark rant on alleged GOP obstructionism on ObamaCare: "The Republican Party is a wholly owned subsidiary of the insurance industry -- that's a fact," Weiner declared.

Rep. Dan Lungren (R-Calif.), who -- like every other Republican -- appreciates that his party is no such thing, understandably objected: He asked that Weiner's tirade be stricken from the record.

Weiner sulked for a few seconds and then retracted his words, changing them to: "Every single Republican I've ever met in my entire life is a wholly owned subsidiary of the insurance industry."

And then he stalked off, smirking.

Typical.

But who owns Weiner?

The unions, for starters. Over the years, according to Federal Election Commission records, he's taken more than $631,000 from just about every Big Labor outfit imaginable.

Or the trial lawyers.

Well, they don't call themselves that anymore -- they're the American Association for Justice. And their political action committee has forked over $43,000 to keep Weiner in Congress.

Or groups like the AMA, the American Hospital Association and lobbying outfits for radiologists, cardiologists, podiatrists, surgeons, anesthesiologists, psychiatrists, pathologists -- even veterinarians. They've been good for $122,500.

Wall Street -- you know, those financial companies that Democrats love to bash -- has kicked in $92,750.

Then there's the home builders' lobby ($22,500), the auto dealers' lobby ($25,000), the Realtors' lobby ($41,000), casino companies ($20,500) and the beer wholesalers ($12,500).

As for the evil insurance industry, Weiner has glommed up at least $20,300 from such companies as John Hancock, Met Life, MONY, New York Life and Prudential, as well as from the American Council of Life Insurers.

Sort of makes you wonder why all these special interests think that Anthony Weiner is so . . . well, special.

The laughingstock of all 50 states

From the Wall Street Journal:

Move over, New Jersey, you're getting a run for your tax money as the nation's most dysfunctional state from the once great mecca of commerce and finance known as New York. Politics in the Empire State has become a carnival of spendthrifts, sexual miscreants and the all-purpose ethically challenged.

In the latest sign that the Apocalypse is upon Albany, New York Governor David Paterson announced yesterday that he won't seek election to a full term in November only two weeks after he had announced that he would. Mr. Paterson, a Democrat who became governor in March 2008 after Eliot Spitzer resigned in a prostitution scandal, has spent the past two years lurching from one fiasco to the next.

He's currently being investigated for awarding a lucrative casino contract to a political backer. And this week he was accused of contacting a woman who was seeking a protective order against one of his aides. State police are reported to have pressured the woman to drop her complaint.

Mr. Paterson's troubles have been catnip for "Saturday Night Live," but the state's voters are laughing to keep from crying. New York's budget deficit is an estimated $8.2 billion, due in no small part to state spending that has risen by nearly 70%, or $35 billion, over the past decade. The recent financial crisis has exposed the state's overreliance on tax revenue from Wall Street.

Mr. Paterson has promised several times to stop this, only to give in to the legislature and tax and spend again. He'll now be the lamest of lame ducks, and if he wanted to do the public at least one good turn he'd resign early and let the state be run through next year by his Lieutenant Governor, Richard Ravitch, who is at least competent.

This mess is all part of the culture of Albany, arguably the most corrupt legislature on Earth.

Bloomberg calls for larger Wall Street bonuses

From the Village Voice:

Bonus awards on Wall Street are expected to be up almost 20% this year, and Mike Bloomberg thinks they should be higher. Mayor Mike announced Friday on his radio show that New York City workers should do something about that: "Our cops, firefighters, teachers -- all municipal workers -- should be down there screaming: 'Pay Wall Street people more.' That's where their salaries come from, not the reverse." Per the Post, he was being puckish.

Presumably he was also being puckish about this: according to Bloomberg, it's just not fair that everyone's picking on Wall Street, because the biggest bailouts last year were AIG (which, actually, is here in New York) and the auto industry. Payments to both, of course, were dwarved by the payments made to Wall Street, but they took place the year before.

He's killing us with taxes

From the Daily News:

Today, New York City faces a frightening economic future because it has priced itself as a luxury product dependent on a narrow set of customers, namely Wall Street firms and those businesses which lived off the once-thriving work provided by the finance industry, like corporate lawyers or high-powered consultants. But with Washington eyeing a flurry of new regulations and taxes on financial firms that could limit future profits and growth in the industry, New York may be hard-pressed to find other industries that can boost its fortunes.

Let’s start with property taxes. Thanks to the mayor’s tax increases, as well as sharp boosts in assessments, firms located in Midtown Manhattan pay, on average, $15.20 a square foot in property taxes, up 53% since 2001, according to research by the Studley real estate firm.

That bite is more than triple the national average of $4.48 a square foot for major cities, and it’s five times the average of commercial property taxes per square foot in northern New Jersey, resulting in millions of dollars of extra taxes for big companies The bottom line: Since 2002, total real estate tax collections in New York have almost doubled, from $8.6 billion to $16.1 billion — a rate of growth nearly three times the rate of inflation.

Even more troubling is that the city taxes have grown under Bloomberg, who constructed the city’s budget as if the housing and finance bubbles of a few years ago would go on forever. A previous IBO study estimated that the local tax burden in 1997 was 79% higher than other cities, but the burden then shrank because of tax cuts enacted by the Giuliani administration and the City Council in the late 1990s. Between 1997 and 2000, the burden declined by about 8%, before starting to rise again under Bloomberg.

We can't afford 4 more years!

From the NY Times:

Continuing layoffs on Wall Street drove New York City’s unemployment rate to 10.3 percent in August, a 16-year high that underscores the need to retrain former financial services workers for other jobs, state officials said Thursday.

In the year since the Lehman Brothers investment bank collapsed and others had to be rescued from failing, the number of unemployed city residents has risen to more than 415,000, the highest total on record. The still-shrinking financial sector, which had been the main engine of employment growth in the city before the downturn, has essentially been declared to be in a state of emergency.

City tries retraining financial workers

From the NY Times:

Under a program unveiled on Wednesday by Mayor Michael R. Bloomberg, the city wants to invest $45 million in government money to retrain investment bankers, traders and others who have lost jobs on Wall Street, as well as provide seed capital and office space for new businesses those laid-off bankers might create.

The plan is intended to stem a potential exodus of banking professionals from the city during the restructuring of the financial services industry, which has been the city’s economic engine for decades, and to speed the industry’s recovery, which will take at least several years, officials said.

City officials also plan to try to lure big banks and financial companies from Asia and elsewhere to set up operations in New York, filling some of the void created by the implosion of large American firms like Lehman Brothers and Bear Stearns. They hope the federal and state governments will let them use $30 million in federal money to attract those companies and other financial firms to Lower Manhattan.