On 10 January, New York City mayor Bill de Blasio gave a rousing speech outlining his plans for the year ahead. It included many bread and butter social democratic proposals that most Europeans take for granted, such as statutory paid vacation for private-sector workers and access to medical services for those without private health insurance.
But it was his criticism of the city’s wealth distribution that got the most coverage.
“There’s plenty of money in this city. It’s just in the wrong hands.”
Speaking to a packed crowd of supporters, de Blasio stated:
Brothers and sisters, there’s plenty of money in the world. There’s plenty of money in this city. It’s just in the wrong hands.
The New York Times said that he was “cast[ing] himself as an aspiring Robin Hood”. The right-wing press, meanwhile, predictably waxed lyrical about the supposed evils of redistribution and high taxes.
Poverty and homelessness vs greed and excess
But de Blasio raised an important point. The reality of New York (like other financial capitals) is that there is more than enough wealth to provide all residents with a good standard of living. Yet the city has huge problems with poverty and homelessness (which, again, is typical of other financial capitals).
New Yorkers who work for the city’s major financial institutions, meanwhile, make outrageous salaries and bonuses. Some examples of the exorbitant amounts of money Wall Street CEOs got in 2017 include:
- Jamie Dimon (JPMorgan Chase) – $29.5m
- James Gorman (Morgan Stanley) – $27.1m
- Lloyd Blankfein (Goldman Sachs) – $24m
- Michael Corbat (Citigroup) – $23m
- Brian Moynihan (Bank of America Merrill Lynch) – $23m
Remember their crimes
Keep in mind that these are some of the same financial institutions whose reckless behavior plunged the global economy into its worst crisis since the Great Depression of the 1930s. The ‘Great Recession’, as some call it, led to millions of ordinary Americans losing their jobs, homes, and/or pensions.
But there’s more to it than that. Simply put, the financial industry has grown far too big. In his recently released book The Finance Curse, Nicholas Shaxson points out that once the financial sector grows beyond a certain point, rather than helping the rest of the economy, it actually harms it by sucking money out of its productive sectors. As AlterNet wrote in 2011:
Banking, like trucking, is known as an “intermediary good” — nothing is produced by the industry – and if any other intermediary good represented around 10 percent of the U.S. economy, people would consider that a major problem.
A pressing need for fundamental change
De Blasio has hit the nail on the head. But words aren’t enough. He needs to not just implement a strong redistributive program, but confront the power of the financical sector and rebalance the city’s economy.
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