One of the pet villains of this site, Kathryn Wylde of the New York City Partnership (now apparently calling herself “Kathy” to seem more of a woman of the people) has returned to her highest and best use: saying things on behalf of the rich and Big Finance that they’re too circumspect to say themselves. As we’ll see shortly, Wylde is doing her official water-carrying for the preservation of the standing of the well-off by launching an “alert” opposing New York State plans to raise taxes to shore up the city’s shaky finances.
Wylde has a history of telling howlers to defend the funders of her business lobby, as a quick gander through our archives show. Recall that we supported Eliot Spitzer’s run for New York City Controller, since that would put him in charge of the city’s pension system, where he would be ideally positioned to take on the way private equity grifts at investor (and ultimately taxpayer) expense. Of course Wylde was not happy about the idea. From a 2013 post:
The amusing part is that the Spitzer enemies list on Wall Street alone is enough to curry votes for him. The almost cartoonish defender of the 1%, Kathryn Wylde of the New York Partnership, claimed that the comptroller’s required, in the words of the Times, “intense collaboration and diplomacy with the mayor’s office, the business community and municipal labor unions.” Translation: a lapdog.
Matt Stoller did a longer-form takedown of Wylde in 2011, with the centerpiece her advocacy of selling the US out to China (this is no exaggeration). From his preamble:
The elite consensus in American politics is held together by a small group of well-paid and well-connected insiders who are marbled throughout the world of corporations, banks, government service, and elite nonprofits. Who are they? And what do they believe?
One way to start is to look at who is being recruited to attack Eric Schneiderman, the liberal New York Attorney General going after the big banks. Normally these people stay behind the scenes, but in this case, we’re getting a nice peak behind the curtain. The best example so far is Kathryn Wylde, the chief of the nonprofit Partnership for New York City, a big bank/corporate-funded lobbying group that advises political officials on how to build a more business-friendly New York.
Wylde, importantly, sits on the Board of the New York Federal Reserve as a Class C Director, the group that is supposed to represent “the public”. Yet, after Schneiderman got into a contentious legal fight with Bank of New York Mellon over foreclosure fraud, the bank literally referred reporters to Wylde for her comment. She even went so far as to confront Schneiderman at a funeral. Because she’s a director of the New York Fed, her actions reflect on the Fed. Let’s start there. Wylde is appointed, and can be fired, by the Federal Reserve Board in Washington, DC, according to Section 11(f) of the Federal Reserve Act (these Board members are Ben Bernanke, Janet Yellen, Elizabeth Duke, Dan Tarullo, and Sarah Bloom Raskin)….
Wylde’s open opposition to New York attorney general Eric Schneiderma’s objecting to a proposed $8.5 billion Bank of America mortgage settlement appears to run afoul of these NY Fed bylaws.
“As a Reserve Bank directorship is a form of public service, directors also must limit their participation in partisan politics. Specifically, directors should not engage in any political activity or serve in any public office where such activity or service might:
associate the Reserve Bank with any political party or partisan political activity;
raise questions as to the director’s independence and ability to perform the duties of his or her position with the System; or bring embarrassment to the Reserve Bank or the Federal Reserve System.She’s violated these quite clearly. Meddling in the work of a law enforcement officer is obviously embarrassing and risks the independence of the system. That Bank of New York Mellon is openly referring reporters to her shows that she is not operating independently, or even on behalf of the public. Whether that’s a firing offense is up to Bernanke and company.
Just checking into Kathryn Wylde’s background shows that she’s a standard issue Rubinite who wants to sell out America to bankers and Chinese elites. As head of the Partnership for New York City, she went after unions by attacking education expert Diane Ravitch (aligning her with Obama Education Secretary Arne Duncan to complement her alliance with HUD Secretary Shaun Donovan). Wylde opposes a living wage for New Yorkers, as well as paid sick leave. Not letting employees go home when they are sick is unsanitary, dangerous and authoritarian. These positions are literally pro-poverty.
A brief shellack of Wylde’s substantive assertion, that lots of big corporations moved their headquarters out of New York City in the 1970s due to taxes. Help me. Anyone old enough to remember those years will recall first, that urban centers were universally in disfavor due to crime and underinvestment, which was made worse by the stagflation of the 1970s weakening tax receipts. New York City was in particularly bad shape on both the crime and the infrastructure decay fronts. The graffiti-covered subway trains, where women were at risk of having necklaces yanked off their necks, were a visible symbol of the city’s fallen state. Second, the 1970s were an era of corporate mergers, not as frenzied as the 60s, but busy enough that Morgan Stanley pioneered the hostile takeover.
By Greg David (gdavid@thecity.nyc). Originally published by THE CITY on February 17, 2021
The city’s big-business leaders say they find themselves caught between a rock and a hard place.
The rock is the suggestion from leaders in Albany that the only way to stem momentum for an income tax increase on the wealthy is for the city’s leading CEOs to go public with threats to move thousands of jobs. CEOs see this as impossible: It would anger their employees and might set off the very exodus they are seeking to avoid.
The hard place is seeing a tax hike go through, which, they argue, would have the same effect.
“I was here in the 1970s when we lost 800,000 people and half our Fortune 500 companies,” Kathy Wylde, CEO of the Partnership for New York City told THE CITY. “We face a similar threat today.”
The latest salvo from the Partnership, issued in an “alert” sent out Wednesday, argues that federal aid in the Biden administration pandemic assistance plan likely to be approved by Congress soon provides more than enough money to solve the state’s budget problems — at least in the short term.
The alert also notes that city and state tax revenues continue to exceed projections. And it calls any increase “punitive,” designed to penalize people who supposedly got richer during the pandemic. That could threaten New York’s long-term health, business leaders and Gov. Andrew Cuomo say, since the top 1% of taxpayers pay more than 40% of all the income taxes collected in the state.
State Senator Robert Jackson (D-Manhattan) speaks at a vigil in Inwood for several homeless people who were stabbed on the subway, Feb. 15, 2021.Ben Fractenberg/THE CITY
The Partnership alert came on a day when a bill was introduced in Albany to hike taxes on individuals making more than $300,000 a year. Previous proposals had been targeted at those making at least $1 million. Supporters of the latest proposal include Senate Deputy Majority Leader Michael Gianaris (D-Queens), city Public Advocate Jumaane Williams and the Working Families Party.
“Someone making $50,000 and someone making $1 million should not pay nearly the same tax rate, as they do now,” State Sen. Robert Jackson (D-Manhattan) told The Associated Press.
Some supporters say that the higher taxes are needed to help shore up the state budget at a time when many New Yorkers are grappling with job, food and housing instability while Wall Street is strong. Others, like Invest in Our New York, want to use the money for a major expansion of the state budget.
Swoon Over Miami
The current language in the $1.9 trillion Biden aid package contains more than $50 billion for New York, according to a letter House Speaker Nancy Pelosi sent members of the New York Congressional delegation. Included is $12.6 billion for the state, $10.6 billion for local governments, almost $9 billion for transit, $12.3 billion for education and $3 billion for Medicaid.
Cuomo has said $15 billion would solve the state’s budget problem for this year and allow for an expansion of programs for the fiscal year that begins April 1. Mayor Bill de Blasio’s executive budget for the fiscal year beginning July 1 is balanced without any of the aid.
Meanwhile, revenues continue to outpace estimates: Data from the state comptroller released this week showed state tax receipts for the first 10 months of the fiscal year are $1.7 billion higher than anticipated by the governor’s budget office last month — an estimate that already had been revised upward.
All state tax receipts in January totaled $11.4 billion, which actually exceeded last year’s take by $550.5 million.
The threat that rich New Yorkers and the companies they run would flee has been spotlighted in recent headlines with an eye on Florida.
“Join Us in Miami! Love, Masters of the Universe” in The New York Times detailed how Silicon Valley tech founders and Wall Street titans have moved south. The Wall Street Journal’s “Low Taxes and High Temperatures Lure Finance Firms to Miami” talked about two major private equity firms opening offices in the Sunshine State.
Anecdotes of the richest New Yorkers moving to Florida, which has no state income tax, abound, including a CNBC piece headlined, “Leaving New York: High Earners in Finance and Tech Explain Why They Left the ‘World’s Greatest City.’”
The New York Stock Exchange has publicly said it may move if a proposed stock transfer tax is revived.
“Looking at it from an employer’s perspective, we have a situation where we have a lot of employees working outside the city, there are a number of companies in New York that are portable like investment firms that could pick up and move somewhere else,” said Steven Swartz, CEO of the Manhattan-headquartered media company Hearst and co-chair of the Partnership. “It is important from a business and city and state perspective on welcoming all the people back and showing them we want them to come back.”
‘Other Options’
The Citizens Budget Commission agrees with the Partnership on the sharply improved financial picture and the risks of a tax hike.
“The fiscal reality is that we are in good enough shape in the short and medium term, we have other options and we do not need to raise taxes,” said CBC President Andrew Rein. “And raising taxes can hurt our economy.”
The CBC recently said that the state’s budget could be balanced without a tax increase by borrowing for capital projects that are currently paid from the operating budget and reducing what it has long argued is wasteful economic development spending.
It said the amounts saved — about $2 billion over each of the next three fiscal years and another $1 billion in 2025 — equal the total raised from both an income tax increase and delaying middle class tax cuts scheduled for next fiscal year.
The state needs to use the federal aid to restructure its budget because the economic recovery here is expected to be much weaker than in the rest of the country, Rein said.
Swartz said while this is not the time to raise taxes, when the long-term revenue outlook is clearer business, labor, community leaders and government officials should come to a consensus on whether more money is needed.
Changing Political Tide
Democrats gained a super-majority in the state Senate last November to go with one in the Assembly, meaning the party can override a veto from Cuomo. The governor’s budget proposal included an income tax increase, only if federal aid is insufficient.
Even moderate Democrats, especially in the suburbs, fear a primary challenge from progressives, which drives them to support a tax increase, Wylde said. In addition, legislators don’t believe companies will leave, leading to whispered suggestions from Albany power brokers that CEOs publicly say they are considering moving out.
“It would be a terrible thing for companies to start threatening to leave,” she said. “It will upset their employees and it will create the potential for momentum that makes an exodus inevitable.”
A spokesperson for the state budget office said the Cuomo administration did not want anyone to threaten to leave New York.
“The Partnership rightly points out that the issue is getting New Yorkers to return after leaving at the height of the pandemic’s toll on the city,” said the spokesperson, Freeman Klopott. “We’ve said from the start that tax increases won’t be necessary if the federal government provides $15 billion in funding, following through on its promises to provide funding that offsets devastating revenue losses caused by the pandemic.”
Others think going public makes sense.
“You speak up and then what? You get criticized on Twitter? There’s a protest in front of your apartment or even your beach house? So what?” asked former Bloomberg administration aide Bradley Tusk, whose consulting firm is now advising mayoral candidate Andrew Yang.
The fact that business leaders are paralyzed by such intangible fears is a good reminder of how politically impotent the business community is in the first place,” he added.
This story was originally published by THE CITY, an independent, nonprofit news organization dedicated to hard-hitting reporting that serves the people of New York.
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“We’ve said from the start that tax increases won’t be necessary if the federal government provides $15 billion in funding…”
Socialism for the rich.
I say let them go to miami then pray for a massive climate change induced hurricane to wash it all into the sea ala atlantis then we could have a nice wake for them.
I was thinking the same thing. Not too much of a stretch to see this happening.
Its curious isnt it? But then maybe they plan to rent places. In which case when Florida is uninhabitable they will just move on.
@Harry
Yup, you’re right. Take a drive past PBI sometime. The private jets are lined up and ready to outrun any weather event. Of course, “The Help” such as yours truly, won’t be so fortunate.
The problem is that the rich are always the first to flee – the moment the full extent of the rising sea levels hits Florida, the rich are gone.
The same thing happened a few years back with the hurricanes.
I don’t suppose that the name Kathryn Wylde is actually a pen name for Larry Summers by any chance, is it?
The Times ran an article last year on how leading business lobbyists urged the city and state to move slowly on a pandemic response, not to rush into a shut down. I seem to remember Wylde being part of it, but can’t remember for sure and can’t locate the article now. Does anyone else know?
If CEO’s worry about angering their employees by going public with threats to move the business, doesn’t that suggest they don’t want to move the business?
Mariner Eccles, FED chair 1934 – 48, observed what the capital accumulation of neoclassical economics did to the US economy in the 1920s.
“a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped”
This is what it’s supposed to be like.
A few people have all the money and everyone else gets by on debt.
Is that why Keynes added some redistribution?
Yes, it stopped all the wealth concentrating at the top and gave rise to a strong, healthy middle class.
The arc of progress.
When you realise it looks like a U-turn, it all becomes clear.
The idea is that you go forwards, but we went backwards after the Keynesian era.
Dodgy, old, 1920s neoclassical economics.
How bad is it?
BAD
An economy actually works better with low housing costs.
It’s in classical economics.
It’s in Keynesian economics.
It’s not in neoclassical economics.
Everyone that uses neoclassical economics trips up over the “cost of living” including the Chinese.
Disposable income = wages – (taxes + the cost of living)
Taxes and the cost of living sum together in the same brackets, so it shouldn’t be hard, but today’s policymakers don’t have the equation.
Ricardo was part of the new capitalist class, and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.
“The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist
What does our man on free trade, Ricardo, mean?
Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employers pay the cost of living through wages, reducing profit.
Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord’s rents in wages reducing profit.
Ricardo is just talking about housing costs, employees all rented in those days.
Low housing costs work best for employers and employees.
What was Keynes really doing?
Creating a low cost, internationally competitive economy.
Keynes’s ideas were a solution to the problems of the Great Depression, but we forgot why he did, what he did.
They tried running an economy on debt in the 1920s.
The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn’t look at private debt, neoclassical economics.
Keynes looked at the problems of the debt based economy and came up with redistribution through taxation to keep the system running in a sustainable way and he dealt with the inherent inequality capitalism produced.
The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living
Disposable income = wages – (taxes + the cost of living)
Strong progressive taxation funded a low cost economy with subsidised housing, healthcare, education and other services to give more disposable income on lower wages.
Employers and employees both win with a low cost of living.
Keynesian ideas went wrong in the 1970s and everyone had forgotten the problems of neoclassical economics that he originally solved.
Disposable income = wages – (taxes + the cost of living) plus change in debt
Fixed it for you.
“The New York Stock Exchange has publicly said it may move if a proposed stock transfer tax is revived. Looking at it from an employer’s perspective, we have a situation where we have a lot of employees working outside the city, there are a number of companies in New York that are portable like investment firms that could pick up and move somewhere else,” said Steven Swartz, CEO”
Yves, I’m confused. Isn’t this what the free market wants? If business can be more profitable by relocating (such as all of manufacturing moving to Mexico, away from those evil unions) then isn’t that a good thing? But these quotes make it sound like they don’t want to leave. Ya know what they sound more like, are threats. ‘If you don’t bow to what we want, we are gonna stomp our feet & leave’. But why now? Are they at a tipping point? “We can pay $50 in taxes, but if we have to pay $51, Goldman Sachs will have to close its doors.”
I am a bit bias, coming from Michigan. I would say “fine, move to florida Wall Street”. If that makes Wall Street grow my 401k bigger, then good. No one felt sorry for Flint and Detroit while their local economies were being nuked by losses of hundreds of thousands of jobs. One guy did a movie about his hometown of Flint being destroyed and he was attacked & claimed to be a fraud & had made up stuff in the movie.