Former New York Mayor Rudy Giuliani has an interesting trickle down theory. According to Giuliani, the outrageous bonuses for Wall Street figures (many paid for by public funds) are a vital part of economic recovery for average New Yorker. According to Giuliani, the relatively few super rich recipients are a major source of money for the thousands of people who serve their whims and fulfill their wishes for exotic foods, fast cars, and impeccable service. It is basically the same economic theory advanced by that pre-Friedman scholar Marie Antoinette in the eighteenth century but under Giulianiomics, we don’t let the peasants actually eat the cake . . . just serve it.
Giuliani insists: “If you somehow take that bonus out of the economy, it really will create unemployment, It means less spending in restaurants, less spending in department stores, so everything has an impact.” Indeed, these people support many New Yorkers, including some former mayors unable to find regular work.
In the meantime, even Republicans in Congress are outraged by Wall Street bankers receiving $18.4 billion in bonuses in 2008.
Giulianiomics goes something like this:
“Wall Street has $1 billion, $2 billion in bonuses, the city had a deficit. Wall Street has $15 billion to $20 billion, New York City had a $2 billion, $3 billion surplus, and it’s because that money gets spent. That money goes directly into the economy. First of all, it gets taxed as income. Secondly, it gets taxes again when somebody buys something with it.” In other words, all those Botox doctors, skin pealers, and food tasters who rely on Mr. Guiliani’s friends for employment need us to continue to fund these windfall checks. Then there is Guiliani himself, who appears equally dependent on the super rich of Wall Street.
In the meantime, New York city is facing cut to meet a $4 billion budget gap in fiscal year 2010 and the city will lose 300,000 jobs, including 46,000 from Wall Street.
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