Payback: Could New York City Squeeze Big Banks For $120 Million?

A coalition of groups planning a coming rally against Wall Street bankers has hit upon an straightforward, if perhaps overly optimistic, solution for a sizable slice the city's budget shortfall.

Just force the big banks to take 20 percent cut on city contracts and New York can save big, they say. The city stands to gain up to $120 million, based on the estimated $600 million in deals it has with JPMorgan, Bank of America, Morgan Stanley and other corporations to perform tasks like disbursing child support payments and managing income tax remittances.

The May 12 Coalition's proposal calls for the banks to take the cut as "a modest concession to the public good in light of their enormous taxpayer funded bailouts." That money is just one part of an eye-popping $1.5 billion the coalition estimates the Bloomberg administration could save by taking the bankers and others to task for sending the country into a recession.

The idea is intriguing -- but not very realistic, according to Charles Brecher, the research director for the Citizens Budget Commission. Brecher says smaller deals have happened in the past, pointing to the MTA's success last year in negotiating $40 million in concessions from vendors.

But the May 12 proposal, Brecher said, "is not being presented in the same collaborative manner; this is about blaming people and saying it's 'payback time.' This will not work."

"Overall this is not a very realistic or sensible set of proposals," he added. "Instead of the May 12 Coalition, this should be called the April 1 Coalition -- it's foolishness."

But Michael Kink, executive director of the of the union-backed Strong Economy for all Coalition, said, "It's going to be hard, but I think it's nowhere near unprecedented."

Kink presented a slightly less confrontational program than the coalition's report does, saying that the Bloomberg administration needs to bring the banks to the table and see what happens. "I think you've got to create an environment where you're discussing the issues."

So far, Kink asserted, Bloomberg's office has taken a far too complacent approach. "Bloomberg is zeroing in on services for working people and poor people, and is not going anywhere near contracts and subsidies for big banks," he said.

That's not surprising, he added, since former bankers like Robert Steel work for the mayor.

The May 12 Coalition's report also calls for ending subsidies for banks that have not lived up to job-creation promises, and for an extension of the state's so-called millionaire's tax.

Comments

[altohone]

04:04 PM on 05/15/2011

Payback would imply the award equals the losses, and the losses were way higher.

120 million is not even ten percent of what the banksters stole from NY.

[corwin]

10:35 AM on 05/15/2011

I'm not sure after reading the article whether tin cups or SalvationArmy kettles would be better.
StillI must give a warning of sorts th HP.Many of the rich are also ,well,smart. (To some of you , I know ,it's akin to explaining color to the blind.) But,Smart People,are Smart enough to leave-and take their Smartness with them California is currently determining whether there is a critical mass of, um, Smartness , that is needed to survive.Now, I have no objections to a parallel experiment.And,for many of you,"Smartness" ,is an illusory concept,like ,say phlogiston. Yet, I want to assure you that it exists Perhaps, you don't know any Smart People. (After all,this is HP.) No problem.Simply go to the nearest community college,and ask for the math dept. They probably won't even notice you.
Now,some of you are going to ask, "Why do this if I'm never going to be Smart?"
Because you can train yourself to be less Non Smart.
One of the first steps to identifying a Non Smart person is they think (using that loosely) capitalizing letters is impressive.
Well, a little research to finish.

[Patricia Krickeberg]

12:49 PM on 05/14/2011

EAT THE RICH

[mary abbate]

11:46 AM on 05/12/2011

Why not ask banks to "payback"? The article's tone suggests this is ludicrous, but does not state clearly why or why not. Is it because banks, Wall St., wealth and politicians are too entwined? I guess corporate welfare is acceptable, but senior centers, day care, after-school programs and adult literacy programs should continue to do with less and seniors, low-income families, youth and immigrants do without. Should not the response to the social, politicall and financial elite be mass demonstration? Is the author suggesting to those who see access to health care, our children's access to higher education and our modest retirements slip from reach, to sit back and take it on the chin? Its time to make noise! If local communities are going to go down, then lets go down with a bang.

[Paulie21]

07:58 AM on 05/12/2011

Bloomie bring the banks to the table.... I'm laughing so hard I can't get off the floor!

[ANGEL53545]

08:45 PM on 05/11/2011

OR THEY WILL JUST LEAVE?

[truman1022]

08:30 PM on 05/11/2011

What a condescending article. Whenever those on the Left vocalize their opinions and thoughts, this is a predictable response to brush off any progressive thought as unrealistic.

I've been on this planet for 27 years, and there hasn't been a single year in my existence when my country hasn't occupied a foreign land. Let's begin to think of our communities, our neighbors, our families. Now more than ever we need to band together and push for changes that make our society more equitable and just.

[lohu]

08:16 PM on 05/11/2011

I wonder if people like Bloomie and Soros would give up their billions and live like a regular american? I know those eltist dems won't do it, because they enjoy using their billions to control us.

[Paulie21]

07:59 AM on 05/12/2011

YEah? and us elitist deems in BLUE states are tired of Red State WELFARE!

[holyghostie]

08:09 PM on 05/11/2011

Private sector businesses negotiate these type of concessions all the time.

[Ernie Evil]

08:00 PM on 05/11/2011

$150M is just one CEO's bonus. They should just get together and have a lottery. I'm sure Bloomberg will pay for dinner.

[pep1]

07:47 PM on 05/11/2011

One can only hope this is going to happen

[AbstractImp]

07:40 PM on 05/11/2011

Kewl.
Like to see someone squeeze them,
Yeah!

[gaubladt]

07:25 PM on 05/11/2011

$120,000,000.00 Chump change

[KC Williams]

07:13 PM on 05/11/2011

Schools, homeless shelters, centers for senior citizens, youth programs, adult literacy programs, fire departments, the sanitation department, libraries, CUNY, and hundreds of other vital programs and services have already taken cuts in City funds, often in excess of 20%.

Why should the banks who recieve City funds, be exempt from the cuts?

[makebofapay]

07:05 PM on 05/11/2011

$120m is nothing for these banksters. It's some campaign funds for a couple local yokels...
Yet, it's a big help to NYC.