De Blasio Gets Wall Street Praise Even After Tax Proposal
After 12 years of Mayor Michael Bloomberg boosting New York’s finance industry, Wall Street is adjusting to the almost inevitable election of Bill de Blasio, who is campaigning against income inequality and calling for higher taxes on the rich.
De Blasio, 52, has been wooing the investment community since winning the Democratic mayoral nomination Sept. 10, assuring bankers, real estate developers and corporate executives that he understands their importance. He held three meetings with business leaders in the first week of October.
“He’s a smart man who understands that New York is in global competition for jobs, investment and talent and that all New Yorkers, particularly those most in need, are uplifted by New York winning that competition,” said Ralph Schlosstein, 62, a co-founder of BlackRock Inc. (BLK) and now chief executive officer of investment bank Evercore Partners Inc. (EVR), who attended one of the meetings.
The securities industry drives New York’s economy, employing 168,000 and accounting for 8.5 percent of its $45 billion in tax revenue. Bloomberg, 71, who began his career as a Salomon Brothers bond trader, served as Wall Street’s cheerleader-in-chief, even in the darkest days of the financial crisis.
William Mulrow, 57, senior managing director of the Blackstone Group LP, the world’s largest alternative-asset manager, said he was impressed with de Blasio at a meeting this month with about 20 executives, including Lloyd Blankfein of Goldman Sachs Group Inc., News Corp. Chairman Rupert Murdoch and Daily News publisher Mort Zuckerman.
“He was very well received; he looked and sounded like a mayor, in charge of the facts,” Mulrow said. “He was a smart and capable guy who was completely realistic about the job he was about to assume.”
De Blasio has held a lead of about 40 percentage points in polls over Republican Joseph Lhota, 59, a top aide to former Mayor Rudolph Giuliani. As head of the Metropolitan Transportation Authority, Lhota got the subways running within days after Hurricane Sandy flooded the system last year.
If de Blasio wins on Nov. 5, he would be the first Democrat elected mayor since David Dinkins became the city’s first and only black chief executive in 1989.
Bloomberg’s tenure included zoning changes that stimulated investment to build offices, apartment towers and parks on underused waterfronts; new baseball stadiums in Queens and the Bronx; and an arena that brought professional basketball to Brooklyn. He closed multibillion dollar budget gaps in the recession that coincided with the Sept. 11 terrorist attacks and after the 2008 financial crisis. The city’s credit rating was raised three times by Moody’s Investor’s Service.
The mayor, the billionaire founder and majority owner of Bloomberg News parent Bloomberg LP, will leave office Dec. 31. He is legally barred from seeking a fourth term.
“No one can replace Mike Bloomberg as Wall Street’s knowledgeable champion,” said Kathryn Wylde, president of the Partnership for New York City, a civic group of about 200 chief executives that includes Blankfein and Laurence Fink, CEO of BlackRock, the world’s largest money manager.
After accepting that the next mayor won’t be their bully-pulpit lobbyist, “what Wall Street wants is a mayor who will keep crime low, get the garbage picked up, pay attention to the schools and balance the budget,” Wylde said. “There’s also awareness of the difference between election-year rhetoric and the realities of governing.”
De Blasio says there’s no contradiction between his signature proposal -- taxing annual incomes over $500,000 to pay for universal pre-kindergarten and after-school programs -- and what most Wall Street professionals want. Spending on such programs is a long-term investment that will pay off by creating a better educated, more highly skilled and socially adjusted workforce, he says.
“Even folks on Wall Street may come to realize that if we don’t educate our children better through early childhood and after-school programs and if we don’t build more affordable housing and create more opportunity, this won’t be as strong a city,” de Blasio told reporters Oct. 4, after addressing 400 executives at a Manhattan breakfast hosted by the Association for a Better New York, a business-funded civic group.
Such talk hasn’t persuaded everyone.
“New York voters are about to elect the Occupy movement to run America’s largest city,” the Wall Street Journal wrote in an Oct. 29 editorial. Referring to Catholic-church sponsored relief work de Blasio did in Central America 30 years ago, the newspaper said he “romanced the revolutionary Marxism of Nicaragua’s Sandinistas, Castro’s communism and even Mugabe in Zimbabwe.”
Lhota has attacked de Blasio for those activities, and run television ads warning that de Blasio would return the city to the pre-Giuliani days of more than 2,000 homicides a year. The Democrat has “handcuffed police” with his criticism of stop-and-frisk tactics, which a federal judge found unfairly targeted minority youths, Lhota said.
Homicides have declined 78 percent since Giuliani took office; 36 percent of that drop came under Bloomberg.
“People are scared of de Blasio,” said Joel Isaacson, 55, an independent voter on Manhattan’s Upper East Side whose investment advisory firm, Joel Isaacson & Co., helps oversee about $5 billion. “I don’t want to go back to the days when you walked around the city looking over your shoulder.”
Isaacson donated $4,600 to Hillary Clinton’s campaign for the Democratic presidential nomination in 2007 and $1,000 to Democratic U.S. Senator Charles Schumer of New York in 1997, according to the Federal Election Commission.
Donald Marron, 79, founder of Lightyear Capital LLC, a private-equity firm, and former CEO of Paine Webber Group Inc., expressed less concern. He called de Blasio “a smart guy who’s straightforward” and who “recognized that Wall Street and finance in general is a key industry for New York.”
Marron has given $63,200 to the National Republican Senatorial Committee since October 2012, according to the nonprofit Center for Responsive Politics in Washington.
The test for de Blasio, Marron said, will be in who he appoints as his deputies and commissioners, and how he resolves expired contracts with all city unions.
“Bloomberg brought in very accomplished people who probably wouldn’t have come into government without him,” Marron said. “The key question is where do you find the talent with experience and know-how to manage a city? Mike was able to do that.”
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