Regulating Wall Street

Friday, April 23, 2010

Nicole Gelinas, a contributing editor of the Manhattan Institute's City Journal and author of After the Fall: Saving Capitalism from Wall Street and Washington, argues - somewhat counter intuitively - that President Obama's proposal to reign in Wall Street doesn't go far enough. Hear her make her case for even stricter bank reform.  Also joining the discussion is Harry Moroz, research associate with the Drum Major Institute for Public Policy, who says finanical reform will strengthen New York's economy.

Comments [38]

ken from Australia

Looking from the outside (Australia) having just visited your country. it is essential Obama presses ahead with this reform, mayor Bllomberg sends an awful message about fear of acting because of profit. Time to rebuild confidence in waht is right not rewarding poor behaviour by financial institutions

Apr. 23 2010 07:22 PM
amalgam from nj-nyc

So, it seems to me that the critics of financial reform will have us believe that the "40%" estimate of NYC tax revenue will drop to 0.00000000000%.

Methinks the the drop will not be so precipitous: Tax receipts will probably decline a few percentage points in the short term, the NYC economy will adjust to the difference and CREATE NEW JOBS in the void, and life will go on in a slightly less financially risky way. My goodness...

The financial industry has NYC as one of its great nodes in the globalized capital world, and no matter what people might say, it will still exist in a big way but in a slightly different form.

Apr. 23 2010 02:35 PM

yes i know he didn't know about it. but that's not the point (after all i needed to "stay on topic")

Apr. 23 2010 11:25 AM
Robert from New York

Eli is clearly out of his mind.

Wall Street creates wealth only for Wall Street. One of the greater of the elements that makes this possible is, again, the relatively low tax here (as compared to the other jurisdictions in which it makes sense for these traders to live and operate). In fact, nothing Wall Street 'creates' is 'created' independently of the conditions created and sustained for Wall Street by its ultimate Nanny -- the Federal Government.

As a society we really need to see through the self-serving narcissistic analyses developed and promoted by Wall Street's self-styled masters of the universe. They ain't all that smart and they ain't all that tough -- but they are VERY good at whining. And for some reason we give them credence.

Apr. 23 2010 11:07 AM
Mike from NYC

hjs11211 opines: "yesterday obama didn't just go after wall street he said no more bikes in the city
i hope brian gets to the bottom of this one soon!"

Obama probably didn't know anything about this. Someone in the security field, whether Secret Service or NYPD, decided this was a good idea. I think you're right, though, it's ridiculous and they should be held accountable.

Apr. 23 2010 10:53 AM
Dan from Jersey City

The NYC economy depends on vacuuming up vast sums of money from municipalities and corporations throughout the rest of the country. I think you could argue that most Americans pay a "tax" to NYC so that their own city can finance sewage systems or maintain roads. While restoring financial regulations might hurt NYC, in the short term it will help the rest of the country, with the exception of Birmingham, AL, which has been brought to ruin by two NYC firms (with the help of a few corrupt locals.)

Apr. 23 2010 10:53 AM
BrettG from Astoria

Eli from Toms River has some fact-checking to do.

One of the reasons the bubble burst is that Wall Street has not created as many jobs as he would like. Per Simon Johnson, David Leonhardt & others, well paying jobs were not created in sufficient quantity to pay for the successive housing booms, 80s, 90s & 00s. Not enough people saw their income rise, especially since 1980, to support the price rises spurred by the top 1% of income group + their commodity market plays in gas, real estate, CDOs, etc.

Apr. 23 2010 10:46 AM
Mike from NYC

I didn't catch the name of the last caller, but he was a complete moron. The government isn't a wealth generator? Who built the roads, ports & airports that commerce uses? Who defends the borders so that your wealth isn't stolen? Who provides a legal system so that contracts are enforceable? Who provides an education so that workers are available? The list goes on. People like him should be expelled to a place where their is no government.

Apr. 23 2010 10:46 AM

eli sure got all his talking points in.

but FYI if the fed government fails there is no USA

Apr. 23 2010 10:43 AM
JD from Jackson Heights

The Federal Government is a "bailout" for taxpayers? This guy is beyond ignorant. And I'm sure he had nothing to say about this during the eight free-spending (on the military) years of the Bush Administration.

Apr. 23 2010 10:41 AM
Susan from Greenwich

I am disgusted with the business schools in this country. Harvard Business should just float down the Charles River and be gone. They have not taught or inspired our businesses to be thoughtful and honest for God's sake!!!!

Apr. 23 2010 10:41 AM
Edward from NJ

If something is considered risky, unethical and bad for society, does it matter if it's good for the tax base?

Apr. 23 2010 10:41 AM
Tonky from Red Hook

Well I'm a tax and spend liberal.

Ask Eli, your ranting caller who hates the federal government and taxes who he would prefer collect his garbage, build his roads, and protects his family.


Apr. 23 2010 10:41 AM

Eli is a bozo!!! Wall Street bailout is them just getting their tax money back????
Well Eli, how about giving me my tax money back???

How wrong is that guy, let me count the ways. ... oops just to many to go on.

Apr. 23 2010 10:40 AM

I beleive language not only defines society but also creates social behavior, so lets use the correct names the market is the casino so lets call it that.

Apr. 23 2010 10:40 AM

Great another trickle down theorist.. sorry that is nonsense get real!!!!!!!!!!!!!

But do agree with this idiot's view on the ilegal use of money.. wars in Irag and Afganistan being a great example

Apr. 23 2010 10:40 AM

Gosh, Eli. Try de-caf. Never mind if he is in touch with his anger. I don't think he is in touch with reality.

Apr. 23 2010 10:40 AM
Paul from R

Credit card issuers complained about "loss of income" when their bad behavior was slightly curtailed, but they had no moral right in the first place to impose excessive overcharges, for instance.

The same goes for Wall Street. Reasonable regulation is the only correct response to repeated bad behavior.

Apr. 23 2010 10:39 AM

Wow. Great caller. What a shill for Wall Street.

Apr. 23 2010 10:38 AM
Felicia from Manhattan

The banking reform dialogue feels like a deja vu with Wall Street and the banking industry using extortion to maintain their political power. Once again New Yorkers and the nation are being threatened with more job losses if the government doesn't knuckle under. A checks and balance system needs to be instituted to deal with these unfair practices.

Apr. 23 2010 10:37 AM

To add to Steve and Julian's points, didn't we "re-hire" Bloomberg -- in an appalling end run around the voice of the people, on the topic of term limits -- because of his business expertise?

It is a crying shame that we did this exactly as everything crashed around us. There are a range of high value industries that we could attract to NYC. It should be our priority to be developing them, alongside the financial sector.

Apr. 23 2010 10:34 AM

To add to Steve and Julian's points, didn't we "re-hire" Bloomberg -- in an appalling end run around the voice of the people, on the topic of term limits -- because of his business expertise?

It is a crying shame that we did this exactly as everything crashed around us. There are a range of high value industries that we could attract to NYC. It should be our priority to be developing them, alongside the financial sector.

Apr. 23 2010 10:33 AM
Dan from Fair Lawn, NJ

Re Bloomberg's preferences to keep big banks free: I trust we're all grateful to the robber barons of the late 19th century, because their fortunes paid for lots of cultural activity. I trust Bloomberg will also push to legalize prostitution and narcotics so long as the city could tax them and reduce our tax burden. Think of the boon to tourism! Could we extend that to gang activity?

On whether Goldman Sachs is culpable: I tend to think so, and yet in every trade the seller thinks the item will mot increase, but tries to convince the buyer that it will.

Apr. 23 2010 10:32 AM
Robert from New York

All this stuff about the bankers leaving New York is horse****.

The tax rates here are significantly lower than those in other places where it makes any kind of sense for them to operate and live. That will always be their real bottom-line.

We should call their bluff. All or most of them will still be here -- even after the only way they can make money is the good old fashioned way (by EARNING it). The ones who leave we can well afford to lose.

Apr. 23 2010 10:31 AM
Adam Holland from Bay Ridge

Finance needs to be regulated on an international basis. President Obama should call for an international conference to start establishing legal standards which can contend with current problems.

Apr. 23 2010 10:27 AM
Liam from East Elmhurst

Let'um loose Bruce! This is what Mayor Bloomberg (a name rapidly becoming a new york curse word) advocates. Well, remember then who posted NO WARNINGS of upcoming economic problems as he mayored the greatest financial metropolis in the world!!! Let him have term number 4-5-6-7- IT'S GOOD FOR BUSINESS!

Apr. 23 2010 10:26 AM
James Bond from New York

Can you regulate your Boss?

Niether can the politicians...

Apr. 23 2010 10:26 AM

Proprietary trading can be a risk-management tool. From time to time, a firm may find that it has more exposure to a particular risk than it wants. It can then go out and place short-term investments/bets through its proprietary trading desk to balance overall risk.

Apr. 23 2010 10:20 AM
Nico from Crown Heights

I don't understand how we can be talking about tax dollars from financial services in a vacuum. Is it a surprise that this sector contributes so much to the city's tax coffers? It, along with real estate, has come to dominate the local economy, crushing other sectors that used to be the foundation for the middle class – all thanks to the preferences and policies of the mayor and his cronies. And then Bloomberg & Co. whine about how we're taking money away from the arts and social programs. I'm sure if he could get away with it, he'd end all taxes and just depend on the wealthy to donate to "worthy" charities, you know, noblesse oblige.

Apr. 23 2010 10:19 AM
Hans from Brooklyn

The act of selling something to you is a bet against it. Anyone who sells you a stock, bond or anything else - would not do it if they believed that this thing would be worth a lot more tomorrow!

Apr. 23 2010 10:19 AM

What about the tax incentives the financial sector get to stay in New York?

Apr. 23 2010 10:17 AM
Cory from Planet Earth

Can we please be a little more sophisticated? The purpose of the Volker Rule is to prevent banks from using 0% loans from the Fed Window for proprietary trading. If they want to stop being Bank Holding companies so that they can't borrow from the Fed Window at 0% and have to pay for the money they gamble with, they would be free to gamble to the hearts of their stockholders' content. It's a simple matter of equity. You shouldn't be able to use free taxpayer money for gambling.

Apr. 23 2010 10:16 AM

would they move? NY is NY and there is no other. there's a reason corps want to be here and it isn't because it's cheap here.

Apr. 23 2010 10:15 AM
Calvin from Manhattan

How is selling a investment that you're betting against different from a real estate agent selling property that has defects in it?

Seems to me that as long as the investor as all the same information as the seller, like a buyer of real estate sending in a inspector to determine the problems of the property.

Apr. 23 2010 10:14 AM
Julian from Manhattan

Any investor knows a diversified portfolio is the best hedge against future debacles. It's a tragedy that we have allowed the financial industry to provide 40% of our tax revenues. Was it such a good idea to let our waterfront jobs, our manufacturing neighborhoods (like Soho in the 70s), and many other aspects of a diverse local economy disappear? If Bloomberg's own wealth (and the wealth of his buddies in finance and real estate) didn't so depend on the Financial industry, he might even admit to this. If we keep going on our present path, where will all the "menial" workers who actually make this city run come from? They've already been pushed far from the center, and will be pushed further away as soon as the economy improves enough to allow more gentrification.

Apr. 23 2010 10:14 AM
Steve from Manhattan

If Wall Street leaves (or is reduced), what will be left in New York City to support jobs and the tax base? And please don't tell us tourism and the fashion and entertainment industries.

Apr. 23 2010 10:05 AM
Calvin from Manhattan

Personally, I don't think I need to be convinced that we need stricter regulation. But one must also weigh in what's "politically" possible.

Apr. 23 2010 09:23 AM

yesterday obama didn't just go after wall street he said no more bikes in the city
i hope brian gets to the bottom of this one soon!

Apr. 23 2010 01:06 AM

Leave a Comment

Email addresses are required but never displayed.

Get the WNYC Morning Brief in your inbox.
We'll send you our top 5 stories every day, plus breaking news and weather.