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So life’s not fair, we knew that. Droves of working class folks and hopeful college grads still hanker for elusive jobs. Many retirement accounts are still in the tank. The climate’s still changing, Deepwater Horizon is still gushing, most of the world is not in recovery.
So against that backdrop we find out that Wall Street firms are again so profitable that they are on a hiring spree. According to the New York Times, profit for members of the New York Stock Excahnge gleaned — I simply refuse to say earned — a combined $61.4 billion last year, an all-time record. And they’ve added 20,000 jobs since February, and all the experts are predicting many more hires in the next few months. And please don’t think that compensation packages aren’t again through the roof. They are.
So much for suffering aftermaths of the economic implosion that they caused.
But I can’t pretend that I’m not heartened by the news anyway. I’m a New Yorker — and this city has long dependended on tax revenues from Wall Street to fund services that reach people who don’t even know where Wall Street is (unless they’re cleaning Goldman’s bathrooms). And business travelers to Wall Street tend to spend big, staying in plush hotels, eating in fancy restaurants — more economic boosts in terms of sales taxes as well as corporate income taxes.
Each job in the securities sector generates two additional positions in New York City, according to the federal Bureau of Economic Analysis. In part, that is because the average salary is much larger, with Wall Street employees earning an average of $392,000, compared with $63,875 for other workers in the city.
“It’s a big deal for both the city and the state,” said Robert D. Yaro, president of the Regional Plan Association, a leading independent planning group. “This is a significant turnaround.” Twenty percent of the state’s tax revenue comes from the financial sector, he said, while Wall Street accounts for about 12 percent of the city’s budget.
new bottom line 
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I grew up in a steel town. When the mills were no longer useful to the rest of the nation, they shut down. Nobody outside the rust belt shed a tear. The people of New York need to learn how to make a positive contribution to society instead of siphoning money out of the economy without adding commensurate value(or suffer the same dislocation my people did). New leadership is needed (not the Lloyd Blankfein variety).
Wait a minute. Your last sentence is the only thing I agree with here.
The whole country bemoaned — and mourned — the demise of the steel industry. And the whole country has bemoaned the relentless march of manufacturing jobs overseas. The problem, of course, is that the national grief stopped short of people boycotting cheaper goods from Asia in order to patronize more expensive ones made here. Why do you think the unions rant about Wal=mart, but stop short of asking members to boycott the store?
Wall Street is as crucial to Main Street as any economic sector I can imagine. The stock market lets middleclass people participate in corporate profits. The banking arms makes business loans, home loans, etc.
Because of bunch of greedy SOBs subverted the entire system does NOT mean that the system as originally intended isn’t necessary and brilliant. All I want is stiffer regulation — and yes, new leaddership — so that banks et al get back to the business of being the economic engine of commerce and society.
(and I’m going to let you get away with “the people of New York” as synonymous with corrupt bankers…once.)
You are what you eat. You wrote that the entire economy of New York eats at the trough of Wall Street. Wall Street let America down, just like the dopes that ran steel along with the meat-headed union bosses across the table from them. Now Chrysler runs TV ads showing electric hearth furnaces and people working in factories inferring that buying a Chrysler product is synonyms with something good and wholesome. The wife and will continue to buy American made Japanese cars that don’t fall apart in 3 years. Chrysler products are garbage. Wall Streets propensity to perform acts of alchemy has been along a 30-year trendline. The nationwide bullshit has to stop. The end of the line has finally been reached. Financial services is not an industry. Calling it one is oxymoronic. If banks are the “engine of society”, we are all in bigger trouble than we know.
I don’t know what business you’re in, or whether you own a home, or whether you have kids in college, anything about you — but if any of those situations apply, then loans and financing have played a big part in your life. Yes, I think finance is an industry, and an important one. The fact that some amoral greed hounds have subverted it makes me want to turn back the clock, to when it was bankers serving commerce. But it doesn’t make me want to deny the need for a thriving finance industry.
Your analogy works here, too. I, too, drive a Corolla that was made in California, I believe (bought it in 2001, don’t truly remember — but it’s holding out beautifully). And I, too, will not patronize companies that I think are trying to get me to pay top dollar for bad workmanship. But I’m not going to deny the value of a car, nor the industry status of those who make them
Back in 1976, when I was a college student that didn’t shave every day, the consensus on the Chrysler bail-out was: “time will tell”. It took over 3 decades, but time has told. Bailouts are BS, loaded with moral hazard. I run a factory and have worked for 32 years on the shop floor. For my entire work life, I have been contending with knucklehead accountants that think what they do is some big damn deal. The “financial services” (sic)industry similarly has an over-sized view of their overall importance. My mortgage and car loans originated at local S&Ls, not Wall Street. Paul Volker got it right when he said that banking needs to become boring again. As this is written, the financial geniuses in investment banking, that you so admire, are choking off credit to small business. Compare the Russell 2000 chart to the S&P. It’s a sign of the times that Obama, and his Wall Street benefactors are tilting toward greater corporatism and liberty-stifling neo-liberal economics. It sucks! But the nightmare may end before 2012. Love your writing! Can’t you tell?
Aha, LeonKelly, it all boils down to semantics. When i say financial services industry, I am including the local S&L, GE Capital, all kinds of entities that are nowhere near Wall Street. And you’ll recall, btw, that 30 years ago the S&L crisis threatened to bring down the economy — and that industry — as well.
In other words, we both agree with Paul Volcker — and apparently, with each other. I have little patience for people who spend their days creating and trading exotic financial instruments that are of no use to anyone but themselves. I’d like to see CDOs and CDS’s and all kinds of derivatives wiped off the face of the map. People need to hedge? Put money in an interest-bearing escrow account to cover losses.
Yea! We usually do end up agreeing.
The “financial crisis’ of the here and now will pass just like the S&L crisis. Politicians will keep repeating errors and refuse to learn from history. Viva Volker!
Minor editoring: Business folk will continue to find ways to game the system, and politicians, even the honest ones (is that an oxymoron?), will always be one step behind. Ah well…