The trickle-down effect

Behind The News
September 17, 2008 12:40:46 PM PDT
I ran into a neighbor of mine last night; she's a real estate broker - quite successful, but she had the look of dread all about her. "Some news, eh," she said, as she passed.

It wasn't Hurricane Ike she was lamenting.

And I knew it wasn't the commuter train crash in Los Angeles either.

There's only one story that would drain all the life from the face of a real estate agent in New York City.

Say what you will about the folks who rake in the big bucks on Wall Street, but one thing is undeniable: They are hugely important to the economy, as currently structured, of New York. The Times had some great stats today about these people: they produce an estimated 23% of the income earned each year in New York City; and their average income of $280,000 is about five times as high as the average of all other workers here.

So go ahead -- laugh at them, mock their work-all-the-time schedules -- but the hard truth is that Wall Streeters keep so many of the rest of us employed. They eat in restaurants, take their expensive clothes to dry cleaners, go to movies, tip service workers, hire town car drivers - in short, they spend their money. And if they don't have money -- like the thousands who have been laid off, and the thousands more who are likely to lose their jobs -- then they won't dole out the cash. That's the trickle down, and it will have a horrible effect on all those who depend on investment banker types to make their livings.

It also affects everyone else. The taxes generated by these people are a huge and disproportionate percentage of government revenue, and without that money, services will be cut, and government payrolls slashed. Talk about a snowballing situation.

Having said all that, what's emerging from this upheaval on Wall Street is disturbing to say the least. These huge investment firms seem to have leveraged themselves out of business. Billions in debt that can't be repaid, and interest payments that are drowning their cash flow. If we operated our family budgets like this we'd be on the streets.

One wonders what would happen if this weren't an election year. To bail out these companies at taxpayers' expense, when the economy is already suffering, doesn't seem politically viable -- especially for a government that increasingly tells us it's up to the individual on their own to make it or break it in this society.

The two Presidential candidates are also battling over this Issue Number One. McCain is attacking the greedy folks on Wall Street, while Obama is blasting the policies of the Bush Administration.

We'll have the latest on the economy and the campaign, tonight at 11.

One other campaign note: The Obama campaign has filed a federal lawsuit in Detroit, claiming there's an attempt to keep people who are facing foreclosure from voting. They claim that the Republican Party in Macomb County is trying to prevent people on foreclosure lists from voting.

This is no small issue in Michigan. In Macomb County, one out of ever 285 households have been foreclosed on.

And one more note from the campaign trail: A Jewish advocacy group claims that Jewish voters in Florida are getting targeted by a telephone "survey" that's trying to tie Obama to Palestinian causes.

It's called "push-polling" - where voters are asked questions that aren't really questions, but are instead statements designed to influence them.

For example, a caller might ask the voter, "Would you change your opinion of Sen. Obama if you learned he donated money to the PLO?"

Obama didn't do that, but the question would become propaganda. A dirty trick, in other words. Who's doing this? That's the issue.

We're also in Texas again tonight, as the clean up efforts from Hurricane Ike try to get off the ground. We have three reporters in the area - Carolina Leid, N.J. Burkett, and Jim Dolan.

We'll also have any breaking news of the night, plus Lee Goldberg with his AccuWeather forecast, and Scott Clark with the night's sports. I hope you can join Liz Cho and me, tonight at 11.

Oh, and one other item. We are looking for "undecided" voters to watch the upcoming Presidential debates with us. I'll be interviewing people the nights of the debates, and we're looking for folks who may want to participate. If you're interested, please click HERE.

BILL RITTER


Load Comments