The Bloomberg administration is bullish on the future of Wall Street.
Bob Lieber, the deputy mayor for economic development and a former Lehman Brothers executive himself (he left when times were still good), was asked at a New York Building Congress forum on Tuesday morning what the Bloomberg administration was doing to look past the financial industry as the main driver of the city’s economy.
His response: “I’m very bullish about financial services."
“We’ve seen boom-and-bust cycles around this industry before,” he added. “Simplistically, I think the model for financial services is sound. I think the model of a publicly owned propriety trading firm taking huge bets with incredible leverage is not a good model.”
This seems to be a common line these days among city officials, who often repeat a refrain that goes something like this: downturns have hit New York many times before, and every single time, New York has rebounded, stronger than ever each time.
This was the main focus of a speech at the start of the month by Dan Doctoroff, Mr. Lieber’s predecessor in City Hall. Now the president of Bloomberg LP (and therefore manager of much of Mayor Bloomberg’s wealth), Mr. Doctoroff compared the financial industry to a forest, filled with large trees. “Some may topple,” he said, “some may whither, but from them come dozens of new offshoots—new saplings pushing up a groundswell of new life.”
Those “saplings” are the small private capital firms that have apparently been springing up via traders who have left large financial firms.
More generally, while mayor after mayor has talked about diversifying the local economy beyond Wall Street, the sector offers a temptingly large contribution to the city’s tax base. Speaking at the Building Congress, Mr. Lieber rattled off some stats about the sector: 9 percent of the residents of New York City generated 35 percent of the payroll tax.
“It’s going to be hard to replicate that kind of revenue,” he said. “But we’re very bullish about replicating those kinds of jobs.”