Pre-emptive nostalgia grips Wall Street as Bloomberg gets ready to go
FEW constituencies will miss Michael Bloomberg as much as Wall Street when he steps down as mayor of New York City at the end of the year.
For 12 years, Bloomberg has gone from tireless cheerleader for the financial services industry after the September 11 attacks to its strident defender against Occupy Wall Street protests over economic inequality and calls for higher taxes on the wealthy.
But now the business elite has reason to pause. An unabashed liberal, city official Bill de Blasio, is leading opinion polls to replace Bloomberg in the November 5 election while pounding a theme of “a tale of two cities” — one rich and one poor.
“There is a great deal of wistfulness and pre-emptive nostalgia for Bloomberg in the industry,” said a Wall Street executive.
The sense that victory is inevitable for Democratic Party candidate Mr de Blasio over Republican Joe Lhota, a former investment banker and mayoral budget director, was reflected in a Quinnipiac University poll last week showing Mr de Blasio ahead among voters by 66% to 25%.
While Mr Bloomberg’s critics have attacked him for a tough policing strategy they see as discriminatory, and bemoaned growing inequality, many on Wall Street say they see a city that is safer, cleaner, more prosperous and more livable than ever.
Former American International Group (AIG) chairman and CEO Robert Willumstad said the industry is concerned about change “because there is such a concentration of financial firms” in New York “and any bad legislation or bad governance could be dramatic because the bulk of (the) big players are here”.
Interviews with a dozen Wall Street executives and others in business revealed concerns that the city’s transformation will be threatened under a new mayor, and, at worst, that Mr de Blasio will create a city that is unfriendly to Wall Street.
Mr Lhota is a Harvard Business School graduate who served under Mr Bloomberg’s predecessor, Rudolph Giuliani, the man many New Yorkers credit with changing the city’s image in the 1990s from crime-ridden to welcoming tourists and businesses.
Mr de Blasio, who for the past four years has had a budget of just $2m as public advocate, an intermediate official for residents and city agencies, is campaigning as “the anti-Bloomberg”.
He has criticised Mr Bloomberg for allowing hospitals in underserved areas to shut and proposed a tax on the city’s highest earners to pay for more pre-kindergarten programmes.
Another executive said while Wall Street would be happy to support Mr Lhota, many people “need some sign that this is a winnable race”.
Mr Bloomberg arrived in City Hall in 2002 already a Wall Street insider — he began his career there, and was a self-made billionaire who financed his own campaign. His financial data and news business, Bloomberg LP, could count every major Wall Street bank as a significant customer. But it was the attacks of September 11 2001, two months before his election, and Mr Bloomberg’s efforts to keep business from fleeing lower Manhattan that cemented the bond.
Weeks before Mr Bloomberg’s January 2002 inauguration as mayor, he invited American Express chairman and CEO Kenneth Chenault to his office to convince him that extra police and an array of security measures would ensure that lower Manhattan was again safe for the company’s employees.
American Express’s headquarters had been in the World Financial Center, just across from the smouldering remains of the World Trade Center’s twin 110storey towers. Nearly 5,000 employees had been moved to offices in Connecticut and New Jersey, and American Express was wrestling with what to do.
“Overwhelmingly our decision to go back to lower Manhattan was Bloomberg’s reassurances that this would be a liveable and safe place,” said spokeswoman Marina Norville.
That marked the start of a uniquely close relationship between the Bloomberg administration and Wall Street that would stretch over three terms and weather the worst economic crisis since the Great Depression of the 1930s.
On his first day in office, Mr Bloomberg made the rare gesture of appearing at the New York Stock Exchange to ring the opening bell, cheers resounding from traders on the floor.
Years later, when being a cheerleader for Wall Street was an unpopular stance during the financial crisis, Mr Bloomberg was not afraid to publicly defend employees of AIG and others.
“When much of the federal government … was set to vilify everybody on Wall Street without depicting the good guys from the bad guys, Mayor Bloomberg on more than one occasion said that did not make sense,” Mr Willumstad said.
Executives at Goldman Sachs Group recall a similar tale. In March last year, the day after a Goldman vice-president Greg Smith publicly resigned from the firm with a scathing opinion piece attacking the bank’s culture in The New York Times, Mr Bloomberg visited the investment bank’s trading floor, shaking hands along with Goldman chairman and CEO Lloyd Blankfein.
Mr Bloomberg is occasionally spotted in the halls of JPMorgan Chase, , Citigroup and Goldman Sachs.
An avid golfer, he plays with the likes of former US Securities and Exchange Commission chairman Arthur Levitt, who is on the board of directors of Bloomberg LP, and former JPMorgan CEO William Harrison.
The mayor, who declined to be interviewed for this article, remains the majority owner of Bloomberg LP and the company has continued selling terminals to Wall Street. Bloomberg LP is a competitor of Thomson Reuters.
Mr Bloomberg’s vast personal wealth has given him tremendous independence, freeing him from having to curry favour with donors and allowing him to pursue an aggressive public health agenda, including a ban on smoking in public places, and to make significant changes to public education.
His largesse often benefited the city. During his first term, he reached into his own pocket to help make up a city budget shortfall, and has since helped to fund various city projects. Mayors Against Illegal Guns, a group he co-founded in 2006, is largely funded with Bloomberg money.
But Mr Bloomberg’s wealth has also opened a rift with advocates for those on lower incomes. Earlier this month, he said the city’s income gap could be explained by the number of billionaires in the city and said it would be a “godsend” if more billionaires came to town.
“They are the ones that pay a lot of the taxes. They’re the ones that spend a lot of money in the stores and restaurants, and create a big chunk of our economy,” he said on a radio show.
Even Mr Bloomberg’s fiercest critics acknowledge his sound fiscal management of New York. His move to set aside a rainy day fund when the city was still running a strong surplus was widely seen as buffering city agencies from more severe cuts once the recession hit in 2009.