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.
Anderson Cooper goes beyond the headlines to tell stories from many points of view, so you can make up your own mind about the news. Tune in weeknights at 8 and 10 ET on CNN.
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