Bloomberg Throws Lehman to the Lions; Praises City, Self
Mayor Bloomberg skipped a California trip today to give a press conference on the recent financial debacles. It had three major messages: New York is strong, Bloomberg is great, and Lehman is on its own.
Bloomberg let reporters know that he had been involved in such high-level crisis meetings ("I personally spoke many times with government leaders and financial executives here in the U.S., and also in Europe and Asia") as befit a head of state, or at least a head of city with his own large cash reserves.
He talked about the jobs that would be lost with ominous certainty, all but stating that the 12,000 local Lehman Brothers jobs known to be at risk were already lost ("I had hoped Lehman Brothers could be saved, along with the jobs...").
He laid out some Bloombergian political economy, starting with what we might call a compassionate-capitalist tone -- "Our financial system cannot continue to stand this game of speculators preying on the weakest firms and trying to destroy them for profit" -- then suddenly turning ruthless: though he'd approved the Bear Stearns bailout, Lehman got his thumbs-down: "The reality is that the federal government cannot save every failing company, nor should it try... Capitalism is based on risk..."
Mostly Bloomberg praised the city's financial condition, and attributed it to his administration's heroic spending restraint. "In spite of those wishing to spend now and pray that God will provide in the future," he said, he and his people had held spending growth to 1.6 percent, less than the rate of inflation. Also, "the streets are cleaner than they've been in 30 years, the waterfront is coming back," etc.
The idea was to show the world that New York once again stands firm in the face of disaster. That's clear enough from Bloomberg's boosterism of both the city and himself. And we suspect it also explains his change of heart on bailing out big financial firms: it was meant to convince nervous investors that Bloomberg, advisor to government and financial leaders, is willing to kick anyone overboard to keep the ship afloat.