It Sounded Like A Good Idea At The Time

Yes, they pay taxes and whatnot:

It’s hard to know just how badly a crippled Wall Street will affect life in the city. New York is a better place to live than it’s been in decades, and Harvard economist Edward Glaeser has noted that the city’s long-term vitality is assured by its concentration of bright, creative people. But what are all these smart people going to do while the financial world remains in intensive care? One of the Street’s leading obituary writers, Michael Lewis, contends that any industry that pays young, clueless college grads exorbitant salaries to do things they have no idea how to do — like it once did him — must be doomed.

But he’s wrong. Wall Street paid well to lure the callow hordes away from other career choices. It was, for the big firms, a relatively cheap way to ensure a deep talent pool from which to pluck the brightest and most ardent moneymakers. The vast majority of junior employees at Goldman Sachs don’t make partner, or ever come close. They end up seeking their fortunes elsewhere, like Lewis did. Wall Street has a warped incentive ecosystem, but it’s evolved that way because, over the years, it’s worked.

One solution is for the city to simply not gamble on Wall Street for tax revenue. Another thing they could do is a rainy day fund, which New York City doesn’t have (blame Boss Tweed, I’m told). Until then there’s not much incentive for the City to either change the way they collect taxes or spend them.

Does Anyone Really Believe The Media Is Out To Get Bloomberg?

Regrets of some reporters aside, the major papers’ uncritical support of the mayor’s suspension of term limits sort of makes Bloomberg’s complaint that it’s hard to “get his message out” seem rather Palin-like:

Yesterday, Bloomberg defended his right to spend unlimited amounts of money on his campaign, saying, “It is very difficult to get a message out to the public” and “sometimes some reporters don’t accurately describe what we have done.”

Campaign spokesman Howard Wolfson elaborated, saying that Bloomberg’s wealth gives him independence unmatched by candidates who are dependent on donor money.

In an email, Wolfson wrote, “The mayor has never taken a dime of special interest money. He has never taken a dime from lobbyists. This November NYers will again have an opportunity to vote for a candidate who is unbought and unbossed and beholden only to the public.”

Bloomberg’s campaign spending has been an issue even before he won his first term. In a Nexis-able 2001 interview on the Today Show, host Katie Couric speculated that Bloomberg may wind up spending “$45 million more than, perhaps, your opponent?”

In the interview, Bloomberg replied: “Well, that’s not a fair comparison because if you had been a politician for a long time, if you’ve been in government, you have all the visibility that that office has created. You have the use of your staff that’s paid for by the taxpayers for getting out, working, and manning phones, and sending out faxes and mails. And if you’ve run many times, my opponent’s run for office 11 times, he’s used that, rightly so, to build up name recognition.

A-Fraud Steroid Allegations: The Sports Equivalent Of A $500,000 Cap On Executive Pay

With the Yankees set to dominate baseball this year, we needed something to level the playing field:

The legend of “A-Fraud” grows.

Joe Torre took a lot of heat last week over excerpts from his new book. Among the myriad of skeletons he exorcised from the Yankees closet, he said the idea that Alex Rodriguez may not be the most genuine soul in the world had always been a running joke inside the Yankees locker room.

Well, it looks now like A-Rod’s words and actions are going to have to be good for more than just his teammates. With Saturday’s bombshell CNN/SI report that Rodriguez tested positive for steroids back in 2003, he now finds himself in the unenviable position of having to choose his words carefully because if indeed failed that test what he says next will go a long way toward determining if the rest of baseball — and the sports world for that matter — will be as forgiving with him as they were with players like Jason Giambi and Andy Pettitte.

If Rodriguez doesn’t play this thing perfectly, he’ll be the East Coast version of Barry Bonds and the Yankees’ 2009 traveling zoo will be inhabited by far more than its usual cast of 800-pound gorillas.

Whether or not you buy the apologies from Giambi and Pettitte, those guys are generally very likeable, players you rally behind because they appear to be good people and good teammates. New Yorkers are a forgiving bunch. They want to see their heroes fight back from adversity, even if the hole they have put themselves in is because of their own doing.

New Yorkers are the polar opposite of fans in a city like San Francisco, where despite every single piece of evidence suggesting Bonds is as guilty as O.J. Simpson, the people who buy the tickets continue to turn the other cheek and actually support the guy, almost to the point where they have convinced themselves that Bonds is the victim and that this is all one big witch hunt.

Woodside Is The New Tribeca

For laid off Wall Street employees, it’s PBR squared:

But for Ms. Adamski and other young women (they are mostly women) in the glamorous world of New York’s auction houses, the downturn has hidden benefits in the form of a social correction that puts them on more equal footing with their friends working — or formerly working — on Wall Street.

Art professionals said that Ivy Leaguers with master’s degrees typically earn $19,000 for a junior position to $50,000 for a midlevel specialist at an auction house, perhaps a fifth of what peers make working in law or banking. Now, with so many who chose the more lucrative paths unemployed, Ms. Adamski and others say there is less pressure to spend, spend, spend.

“Now we have an even playing field,” said Lydia Wickliffe Fenet, an affable 31-year-old who heads special events at Christie’s and says she has cut back on the number of nights she goes out and is choosing less expensive places. “My friends say, ‘Let’s go have a beer instead of a $40 drink.'”

Brooke Lampley, who is 28 and has been at Christie’s for four years specializing in Impressionism and modern art, said her college classmates who were laid off from their Wall Street jobs now follow more pedestrian pursuits. Most recently some of those friends went to a rodeo.

Passaic Is The New Fairfield

The Times puts to the test whether executives would actually be able to live on $500,000:

Private school: $32,000 a year per student.

Mortgage: $96,000 a year.

Co-op maintenance fee: $96,000 a year.

Nanny: $45,000 a year.

We are already at $269,000, and we haven’t even gotten to taxes yet.

Five hundred thousand dollars — the amount President Obama wants to set as the top pay for banking executives whose firms accept government bailout money — seems like a lot, and it is a lot. To many people in many places, it is a princely sum to live on. But in the neighborhoods of New York City and its suburban enclaves where successful bankers live, half a million a year can go very fast.

“As hard as it is to believe, bankers who are living on the Upper East Side making $2 or $3 million a year have set up a life for themselves in which they are also at zero at the end of the year with credit cards and mortgage bills that are inescapable,” said Holly Peterson, the author of an Upper East Side novel of manners, “The Manny,” and the daughter of Peter G. Peterson, a founder of the equity firm the Blackstone Group. “Five hundred thousand dollars means taking their kids out of private school and selling their home in a fire sale.”

Sure, the solution may seem simple: move to Brooklyn or Hoboken, put the children in public schools and buy a MetroCard. But more than a few of the New York-based financial executives who would have their pay limited are men (and they are almost invariably men) whose identities are entwined with living a certain way in a certain neighborhood west of Third Avenue: a life of private schools, summer houses and charity galas that only a seven-figure income can stretch to cover.