Jason Riley wrote a compelling piece – the first I’ve seen of its kind – analyzing Mayor Bloomberg’s “financial acumen” in the Wall Street Journal: “New York Will Survive Without Bloomberg.” He states, “The mayor never bothered to prepare the city for any lean years” and outlines how our CEO Mayor might actually have handled the city’s finances correctly and wisely.
With the editorial boards of the New York dailies, heads of NYU and Time Warner, other billionaires, and every politician who it serves to have Mr. Bloomberg in office insisting that we might not survive changing the captain at the helm because the captain is that financially astute, I was curious to read what Mr. Riley had to say, coming from the pages of the Wall Street Journal.
Mr. Riley does not mince words and pops a gigantic pin into the illusion of Mayor Bloomberg’s economic brilliance. He writes: “Obviously the mayor believes that he’s indispensable to Gotham’s well-being, which will come as no surprise to any journalist who’s met with him. What’s passing strange is that so much of the local press seems to share the mayor’s inflated view of himself.”
It’s probable that the composition of the Times/Post/Daily News editorial boards are not economists but those who are emboldened by the gains they’ve made with our Mayor, which are economic. The New York Times after all took over a building that was functioning quite fine in Times Square via eminent domain and didn’t hear a negative word from the Bloomberg Administration. In fact, I would surmise that they supported the move.
Mr. Riley continues:
But the argument for extending the two-term limit for Mr. Bloomberg — a self-made billionaire who got his start on Wall Street — is that the city needs someone with his financial acumen to help weather the fallout from the banking crisis. The biggest problem with that argument is that Mr. Bloomberg hasn’t been very adept at managing the city’s finances, even though he’s had record revenues to work with.
Between 2000 and 2007, New York’s tax receipts grew by 41% after inflation. … This windfall had everything to do with the Wall Street bull market, and everyone knew that the rate of growth was unsustainable. Instead of using the flush-year surpluses to put New York’s fiscal house in order, however, Mr. Bloomberg mostly squandered them.
Instead of cutting other parts of the budget and using the city’s swollen coffers to service debt and pay for capital projects out of operating spending, Mr. Bloomberg chose to increase borrowing. … By increasing the city’s debt obligations while doing nothing to decrease the city’s overdependence on income tax revenue from Wall Street wages and bonuses, Mr. Bloomberg has exacerbated a bad situation.
In addition, Mayor Bloomberg’s 2008 City budget is “50% larger than the one he inherited from Mr. Giuliani in 2001. That far outpaces inflation, which rose 21% over the same period.”
In conclusion, Mr. Riley writes: “There is something deeply undemocratic about legislatively overturning the will of the people without giving voters a say in the matter. And there’s something deeply disturbing about a local press corps that lets the political class get away with it.”
Interesting article, but I’d like to challenge the idea of Bloomberg (or anyone) as a “self-made billionaire.”
Bloomberg, like most other rich folks whose fortunes are not due to inheritance, “made” their money off of the labor of others, and with the generous assistance of abatements and tax breaks.
Let’s not fall for this peculiar notion that Bloomberg worked his fingers to the bone, lived on the streets and went hungry while scrimping and saving every penny he earned for himself. He didn’t “make” his billions by squirelling away a portion of his weekly salary, as most folks try to do. (At banking, say, $200/week, it would have taken Bloomberg 5 million weeks, or roughly 96,000 years, to stash his first billion dollars (not including interest) off of his own labors.