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January 30th, 2009
11:18 PM ET

You look so beautiful I can hardly keep my eyes on the meter

Michael Schulder
CNN Senior Executive Producer

Please look carefully at these two photos and ask yourself which you’d rather click on. Today’s Paris couture fashion show, above, or New York Mayor Michael Bloomberg, below. The choice reminds me of the line in the movie Manhattan, when Woody Allen tells his female companion in a cab: “You look so beautiful I can hardly keep my eyes on the meter.” As I was watching the Paris video feed in to CNN headquarters, I found myself drifting over to Mayor Bloomberg. He was explaining how New York’s financial meter was quickly running down, not up.

Bloomberg gave us a lesson about the economic domino effect that’s threatening to crush so many American cities and towns. He explained, in clear, simple terms, why he, and many others, believe a major infusion of federal government money is essential to keeping the dominoes at bay. Take just one example, education. Bloomberg explained that New Yorkers are expected to lose nearly 300 thousand jobs through next year. That’s 39 billion dollars in lost wages. Which translates into 4 billion dollars in lost tax revenues. Continuing to connect the dots, Mr. Bloomberg told us that a sharp reduction in tax revenues has led New York’s Governor to cut New York City’s education budget by 770 million dollars. That amounts to 14,274 teacher jobs. Schoolchildren cannot afford to lose that kind of ground.

The new federal stimulus bill would send more than a billion dollars in aid to New York State for education. Mr. Bloomberg is asking, pleading is more like it, for the Governor to send much of it to the city. A similar story here in Atlanta on the hunger for federal money, where the banner headline in the Journal-Constitution’s reads “Ga Schools Could Get $1 Billion.” Whatever your assessment of the entirety of the stimulus plan, the money schools are losing from reduced tax revenues will have to come from somewhere. Virtually every state government is required to balance its budget. So don’t look there.

New York’s problems are like the rest of America’s. People are afraid to spend said the mayor. Many stores are closing. And the stores that remain open are seeing less traffic. Again, connecting the dots, Mayor Bloomberg says the rents those store owners pay to their landlords are tied to the amount of business they do. Less volume. Less money for the landlords. Consequence: many landlords will begin defaulting on their loans. Big banks will be hit again by more heavy losses. The dominoes keep falling.

Some fell in Dallas today. At the very moment I was writing this story (and this kind of thing is happening every day), CNN got an email from the Belo Corporation, which owns major newspapers, web sites, and television stations, including CNN affiliate WFAA. With ad revenues dropping, Belo told its employees, the company has an “urgency of rethinking its business model.” That’s a word you’re going to hear a lot of. Urgency. Belo will cut 500 jobs. It will eliminate the company match for its employee savings plan. That move alone will save about 5 million dollars a year. No more free parking for employees in downtown Dallas either. 40 dollars a month from now on. That, and the elimination of some other small perks, will add up to another half million dollars, a half million that employees will have to come up with. For now, Belo will not force workers to reduce their hours or issue across the board paycuts as so many other companies and government agencies are doing. Mayor Bloomberg’s words apply. This is not a case of “go fix the economy, I’ll be back at lunch time.” It’s hard to balance urgency and patience.

As for the latest in Paris couture – it’s an easy punching bag in these painful times. Designers who create 10-thousand dollar outfits may seem like they’re from a different planet. And yet, high-end fashion aside, even during times like this, especially during times like this, we’ll have to keep our creative spirits alive.

The slogan at that Paris show was “The Capital of Creation.”
At the moment, I’m more drawn to “The Creation of Capital.”
Ultimately, they need each other.


Filed under: 360° Radar • Economy • Michael Schulder
soundoff (10 Responses)
  1. Michael "C" Lorton, Virginia

    Bloomberg states how New York’s financial meter was quickly running down, not up---and believe the financial meter of the American taxpayer will soon be inoperable. Everybody wants a financial infusion--and they want the IV therapist (government) to provide them with a fix-almost like a drug additct--–just one more fix and I will quit.

    February 2, 2009 at 8:45 am |
  2. Paul

    No doubt that "education" is a of significant importance to any society and their is plainly a return on investment for putting our money into it. What I don't understand is why there are such disparities between federally/state funded schools and parochial schools in the same towns. Perhaps the current financial crisis will bring a greater degree of accountability to the current public education system. No doubt it has largely fallen short to so many so often.

    January 31, 2009 at 8:59 pm |
  3. William of Iowa

    Much has been written and spoken of legacy. President's create libraries as testamonials. Some have great stadiums, statues, roadways, mountains named for their contributions. Local heros receive accolades that are manifested as buildings, gyms and schools. But for 99% of common citizens, the only real monument to society and the future, is the local school. They are our legacy. They are also the primary target for public vehemence when tax adjustments are called for. The majority of tax increase, bond and other financial requests posed by local school boards nationwide are defeated. So, it stands to reason politicians on state and federal levels will move to reduce spending in difficult times for education because most American taxpayors will not complain. After all, when we are dead and gone, what will we care. As for the pictures – I'll take the fashion show, gives me one more excuse to ignore the pain of the other.

    January 31, 2009 at 6:29 pm |
  4. KIm

    Cut the golden parachute string bail outs and the black belt that matches the butter cup sleeves. The education budget and 770 million ? 14,274 teachers ? Scary ! Call the fire department ! We gotta get a marching band for Public Education and end the NCLB mandates !

    January 31, 2009 at 1:02 am |
  5. Janet SC

    Big business is crying about the clause in the Stimulus package to Buy American. Accusing the house of protectionism. I hope the Senate does not take out that clause!
    Why shouldn't they want to protect the American people? I don't understand.
    Do "they" just want America to dry up? Is it the greed of that funnel money they get by way global trade? THEY are the protectionist of their own greed, seems to me!!

    They have the workers as slaves all over the world and exchange money with other’s like themselves..they sure don’t want the middle class to get anything. “They” are Un-American pompous devils.

    January 30, 2009 at 10:23 pm |
  6. Bev Hallowell

    I have watched CNN bring home the news to me about wall street, the campaign, the bail out, the election and the never seeming ending
    heart breaking stories of loss of jobs everyday.
    I have heard the stories that jobs need to be created and that we need to stimulate the economy. Many are scared that we may nationalize our banks. We have so many brilliant minds working on solutions however; what I have not heard is why our goverment is not offering to give larger tax breaks to companies that have taken their business overseas to bring the jobs back to all the out of work Americans. You want to stimulate the economy? Provide tax breaks for these business while you create jobs back here in America for the people who will fill them. When do we take care of Americans? Providing Medicaid and longer terms of unemployment is not the answer......bring the jobs back home!

    January 30, 2009 at 9:05 pm |
  7. Rebecca

    Education is the single most important thing to every American family. I myself a 17 year old who resides in florida does not understand why education is always the first cut and cut the deepest out of all the programs that exist. The men and women in our government want us to compete with other nations academically but that is impossible if we keep cutting education. Give a lot of money to the schools so they can get new books and much needed supplies. And pay those who educate and prepare the children for their future a higher salary. Because if it weren't for them we the children couldn't read, write, or perform well at school and in life in general. Help the high schools and us teenagers. After all we are the country's future leaders!

    January 30, 2009 at 8:43 pm |
  8. jarrod

    i am no economist but after the bailout is voted and passed and this money is divided up bloomburg started to touch on tax issues what are states going to do after april 15 when all of the small businesses that did not save for taxes or used it to survive and are going to give the IRS a IOU and then since it is obvious that government don't change much to stimulas packages passed by our leaders and the expected by tax revenues aren't there what then

    I don't think the american meter can take many more cashing out .....paris won't be very attractive if people can't see her...if you think she is attractive

    January 30, 2009 at 8:39 pm |
  9. Annie Kate

    Why is it when a budget gets cut the first thing cut or the major thing cut is education? Education is vital for not only what it teaches but what it helps build – socio-cultural ideas and the way to play well with others. I guess we are all going to have to either cough up more tax money out of an already empty wallet or home school – either way we are falling behind the rest of the world and slowly but surely raising a nation of morons. You'd think we'd learn – oh yea, that teacher got cut first.

    January 30, 2009 at 8:02 pm |
  10. Garren

    I think the best thing the president can do to help reduce the impact of this recession is to tell the people that they need to take action. The government can only do so much to stop a recession. People can stop the recession. If people stopped listening to how bad things are and stopped trying to save every penny in fear of a looming recession there wouldn’t be a recession. It takes money to make money and nobody has more money then the people. We can stop the recession and save jobs. Simplest way spend money it keeps the economy going. That’s what the people need to hear. Sometimes good news goes along way in helping things report about companies hiring. Do your part as an american news station and help save america.

    January 30, 2009 at 8:00 pm |