Fallout: The Financial Crisis

Bloomberg wants your business in NYC

Ashley Milne-Tyte Feb 19, 2009
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Fallout: The Financial Crisis

Bloomberg wants your business in NYC

Ashley Milne-Tyte Feb 19, 2009
HTML EMBED:
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TEXT OF STORY

Tess Vigeland: Looks like California will avoid a plummet off the high cliffs off the state’s central coastline. As today dawned, the legislature approved a new budget. Months of bickering finally came to an end, with the state narrowly averting bankruptcy because of a $42 billion deficit. The plan includes some $12 billion in tax hikes plus cuts to all kinds of state programs.

And what about all those delayed tax refunds and welfare payments? Controller John Chiang says there’s no word on when the state’s money machine might start cranking again.

JOHN CHIANG: The real test is when the actual cash comes in. ‘Cause at the end of the day, you can’t pay the bills when you don’t have the cash in the state treasury.

But don’t try to use that excuse when your bills are due.

Meanwhile, in New York City, the mayor has announced a plan to use millions in government money to re-train Wall Street workers who’ve lost their jobs to the financial crisis. In 2007 there were around 350,000 people working in the banking and investment industry. The city believes by the end of this year that number will be down about 18 percent. Ashley Milne-Tyte has more on Mayor Michael Bloomberg’s resurrection plan.


ASHLEY MILNE-TYTE: Worst case scenario: 65,000 financial workers will be jobless by the end of this year.

SETH PINSKY: We’re gonna turn those lemons into lemonade.

Seth Pinsky is president of the New York City Economic Development Corporation.

PINSKY: And we’re gonna figure out a way to get those people to create new, diversified sectors of the city’s economy.

Pinsky’s talking about Mayor Bloomberg’s $45 million plan to keep New York’s financial talent at home. The mayor wants to attract international financial services start-ups to the city. And even develop a venture capital industry here. But Bettina Damiani, director of Good Jobs New York, says these Wall Street-ers don’t need City Hall’s help.

BETTINA DAMIANI: The biggest concern that we have is the amount of resources and political capital that the mayoral administration is willing to put into an industry that has the ability to train itself.

She says unlike other kinds of workers, traders and bankers have the money and education to work out their next moves on their own. Seth Pinsky says it’s not about helping individuals.

PINSKY: And our goal at the end of the day, and we’re pretty confident that we’re gonna achieve this goal, is not to create a bunch of one-person companies. It’s to create companies that create the next generation of Google, the next generation of Facebook, the next Bloomberg.

Well, maybe. The Mayor started his company with a $10 million severance package from Saloman Brothers in 1981. This generation of budding entrepreneurs probably won’t get that lucky.

In New York, I’m Ashley Milne-Tyte for Marketplace.

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