Richest Man in Gotham: Mayor Mike

I've always felt, for some reason, that it can't be a healthy sign when the elected leader of any jurisdiction is its wealthiest citizen. How could he relate to the common people? Would he even try, or would he be biased towards his fellow "-illionaires"?

For example, when Silvio Berlusconi was first elected prime minister of Italy, he was already the country's richest man. But Italy is probably a special case; it has never really coalesced since its consolidation as one country back in the 1870s, as evidenced in its parade of governments since the abolishment of the kingdom after World War II. Italian leaders can see their coalition fail because the PM sneezed without covering his mouth or used the wrong fork at a state dinner.

Then we come to Mike Bloomberg, mayor of New York City. He was already a billionaire when he was first elected, so in order to not threaten his holdings in Bloomberg LP he agreed to take a salary of $1 a year. Immediately I began to figure that NYC residents should only expect a dollar's worth of governance. But my assessment looks like it might have been wrong, at least in the beginning. He actually turned out to be, if not a great mayor, at least pretty good at seeing issues that need to be addressed and actually doing something about them. I guess years of experience as a CEO, rather than as a politician, will do that for a guy.

But it also seems me that years of being a billionaire CEO has distanced him from the common people. He can come across as very callous when speaking of the difficulties that working people might have with his policies.

Now it comes out in Forbes magazine's latest poll of the richest Americans that, apparently, Bloomberg is now the richest man in NYC and the eighth richest in the US. In fact, he is now one of the twenty richest people in the world. Not just New York City, or New York State, or even the United States. The world. But during 2008, when the bottom was falling out of the housing market, the credit market, and the financial sector, leading to people losing their jobs and companies closing down in all kinds of industries, what was Bloomberg doing?

He was busy working on a way to get around term limits, which the people of New York City had voted to keep in place. Twice. And now he's busy slashing the budget on services that New Yorkers need. Where's the concern for the people who put him into office? Where's the common touch? You would think he would at least be a little concerned how it looks when the richest man around is playing Scrooge with the public's money while swimming in his own.

It's pointed out in the comments to the first article referred to above that "if Bloomberg were to give each New Yorker $1000 out of his own personal coffers, he would still have $10 billion left." Not that anyone is seriously expecting the mayor of New York City to start bailing out ailing New Yorkers from his own huge stash of cash, but then he did say that, when he left office, he was going into philanthropy. (Oh yeah, but that was back when we thought he was going to honor the people's wishes and go away after his duly elected terms were up...)

Disclosure: I am not a resident of New York City, but of neighboring Westchester County. I am also not running for office anywhere, or giving support to anyone running. I just had to put this out there.

MORE Bonuses for AIG?!

Let's see...
The federal government (that is, We the People) owns 80% of AIG...

AIG is in the process of doling out $165 million in more bonuses...

And, according to the Treasury Department, nothing can be done about it?

That's ridiculous. AIG got over $100 billion in federal bailout funds. That means the people charged with managing the company did not do a good job, by any measure. Bonuses are supposed to be a reward for doing a good job. So, why are these people getting bonuses? More to the point, why is AIG getting federal money?

I say, cut off the bonuses, and let it be known that that's just the way it is. If these people want their bonuses that bad, well, since AIG (standing in for We the People) claims to be contractually bound, make the execs sue the government for the money. Such a lawsuit is bound to be covered as much as possible by the media. Maybe the extra scrutiny is all that's needed to make them fall back and make do with the millions they've already been paid.

AIG also says they'll "work on reducing bonuses in future years by 30%," but they can and should be made to do better than that. As long as the government has a stake in the company, in fact, there should be no bonuses. Make that their motivation for getting the company back on the right track.

To be fair, AIG did not fall into such a deep hole only because of the stupid bets they made with their policyholders' money -- the hole got deeper after AIG started falling, but the company itself dug the original hole. AIG insures the banks and financial service companies that all fell so hard throughout 2008, so they would have landed hard no matter what. AIG is also one of the companies that has to cover the loss for airlines whenever a plane goes down. AIG actually insures ("reinsures") insurance companies. But they wound up falling into the hole in the first place, not because of any of that, but because they violated a cardinal rule of the insurance business: do not risk policyholders' money. When an insurance company begins making high-risk investments in the same mad grab for cash that endangered Wall Street, well, we've all seen the result. In this case, it means the government winds up owning 80% of what should by most accounts have been a private company gone bust. After all, AIG may be a huge company, but it's not the only reinsurer. If it had gone under, there are plenty of insurers that could have taken up the slack. The interim would have been quite bumpy for the policy holders, particularly for the airlines (at least it seems that way for me). Watching such a big company go bust, though, would have sent a message to other companies -- namely, that they shouldn't think they're somehow entitled to a bailout from the Feds. Now, of course, because of all the money that's been handed out, there's that much more anger from the public, because the fat cats have been bailed out but the general public, the ones who are out of work and competing with millions more people for the few jobs available, are only getting crumbs.

And then Dick Cheney goes on TV and says that the Bush administration shouldn't be blamed for the mess "that was handed to the Obama administration." Well, who handed it to them? And who made the policies that created the mess? Cheney also said that the previous administration "achieved all its goals in the campaign in Iraq." Well, that can be true only if its goals included enriching Cheney's friends in the military-industrial complex, companies like Halliburton, and Bechtel, and of course the oil companies that are making billion-dollar deals in Iraqi Kurdistan (I'll add the link when I find the Forbes.com article).

Naming Rights vs. Bailout

I see that I'm not the only one who thinks it's wrong that Citibank and others can give out tens or even hundreds of millions of dollars to sports arenas for naming rights, then turn around and beg the federal government for bailout money. As far as I can tell, the furor seems to be contained to the New York area, since Citibank has agreed to pay the NY Mets $400 million over twenty years for the naming rights for the Mets' new stadium, set to begin use this year. But I wouldn't be surprised if it goes farther than that. This bears some research...

Mets' chief operating officer Jeff Wilpon says Citibank is right in continuing to pay the money. Of course he says that, he and his team are getting those millions. But I can't help thinking that his perspective is corrupted by the estimated half-billion dollars that the Mets' parent company, Sterling Equities, is rumored to have lost in the Bernie Madoff scandal.

It looks to me like the Feds are paying Citibank to replace what the Mets lost to Madoff. Pretty good deal, if you can arrange it...