Lisa Chow is the economics reporter at WNYC. She tries to explore in her stories surprising aspects of New York’s many economies—in plain view or hidden, in neighborhoods or sectors.
New York, NY –
New York City's financial industry witnessed yet another historic day. As the U.S. House rejected a $700 billion plan to rescue Wall Street, stocks plunged. The Dow lost more than 770 points, its biggest one-day point-drop ever, and New Yorkers felt conflicted about the outcome. WNYC's Lisa Chow reports.
REPORTER: It was a quiet morning at the New York Stock Exchange until the voting on Capitol Hill started. When the "NAY" votes started rolling in, stocks took a nose dive. Within six minutes, the Dow had dropped nearly 350 points. Mike Berger is a trader with Walter J. Dowd.
BERGER: Certainly we were on the edge of our seats with the votes, and counting the votes like everybody else. So disappointment and a lot of anxiety.
REPORTER: And another trader Jerry Valles blamed the bill's defeat on the ignorance of opposing House members.
VALLES: I think it is a lack of knowledge, basically. I don't think they understand it as well as they should and they are probably afraid of it.
REPORTER: One of the members who voted no is Bronx Democratic Congressman Jose Serrano.
SERRANO: I represent the poorest district in the nation.
REPORTER: Serrano was one of 228 representatives to vote against the rescue plan, but the only New York City member to oppose it.
SERRANO: When Wall Street was doing well, when those boys and some girls were giving each other $50 million bonuses, showing greediness and all kinds of misbehavior, I didn't see a dramatic change, if any change, in the lives of people in the South Bronx for the better. So now while I understand an economic crisis could have an effect, I'm not sure a blank check to Wall Street will mean that people will get better in the south Bronx.
REPORTER: And yet as home to the nation's financial industry, New York City would likely be a big winner in any rescue package. Congressman Anthony Weiner represents parts of Brooklyn and Queens. He voted for the bill, saying there's too much at stake.
WEINER: Too many of my colleagues, unfortunately, chose to put their head in the sand instead of confront the seriousness of the problem at hand.
REPORTER: Over and over again, during testimony before a House committee last week, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke were asked to make the case to Americans who don't work on Wall Street on why they should care, how is this going to affect them, and why must we act now?
ANG: They did an atrocious job of that.
REPORTER: Andrew Ang is a professor at Columbia Business School. He says there's a time lag between shocks to the financial sector and the rest of the economy.
ANG: Ramming down a bailout in the space of a couple of days and saying that this is of extreme urgency to Main Street and the rest of the economy is just not true. It's an extreme urgency to the financial sector but I don't see its urgency to most of America.
REPORTER: Ang says now there's time for Congress to rework the plan to make it more transparent, more accountable to taxpayers, and include provisions that get at what he believes is the root cause of the crisis - declining housing prices. But there's not unlimited time. He says if members of Congress fail to come to an agreement reasonably soon, the U.S. will likely see a very depressed period for consumers and small businesses on Main Street. For WNYC, I'm Lisa Chow.