As comebacks go, Wall Street’s is a helluva story.
In a death spiral just a decade ago, its giants toppled one by one by their own greed and hubris and leverage piled atop the homes where a nation of little guys struggled to keep the American dream alive.
Now, 10 years after the collapse of Lehman Brothers, the government buyout of insurer AIG, the banks’ rescue by JP Morgan Chase, a pile of capital from Treasury and swift rate cuts from the Fed, New York’s financial industry pulses with energies nearing past heights, powering the economies of both city and state with renewed luster.
This is a revival for Gotham to celebrate. And it has a strong supporting role played by federal regulation assailed by the likes of President Trump.
The latest report on the financial sector from state Controller Tom DiNapoli bursts with evidence of how much it all matters to New York’s success:
To employment, where every one of the 197,300 jobs on Wall Street spurs the creation of three others.
To prosperity, with the average industry salary reaching $422,500.
To state and city tax collections, contributing a record $18.2 billion in 2017, enabling recent expansions of school, police and social service funding.
All this while the sector evolved to comply with the Dodd-Frank reform law, designed to stop reckless risk-taking with other people’s money and end lending practices that set mortgage borrowers up to fail.
Meantime, the city and state’s economies have diversified, so even as Wall Street’s total tax contribution has grown, its share of the total has shrunk since the bubble’s peak — meaning that New York leans less heavily than it did on the fortunes of this single, cyclical sector.
Yes, super-earners bid up the price of housing and exacerbate nagging economic inequality.