Santa Claus comes to town
Rob Price

Anyway you cut it, $24 billion is a lot of money.

And it’s a lot of money that’s about to hit New York’s economy — New York state in general, and New York City in particular. It’s all the money that Wall Street investment banks are about to distribute as end-of-year bonuses to their top employees.

Reported by the Associated Press, this is a cheery Christmas story in reverse, a photographic negative of “Miracle on 34th Street” in which the bounty of the season bypasses loving family relationships and instead just percolates through the economy.

Twenty-four billion dollars does a lot of percolating. The Associated Press last week described a wine merchant who, after learning of the upcoming bonuses, bought a two-page ad in The New York Times announcing the availability of a bottle of 1995 Dom Perignon, for only $14,950.

That’s a nice chunk of revenue for The Times. If he sells the bottle, it will be a nice end-of-year chunk of change for the wine merchant —assuming he marked up the cost of the wine by 30 percent. The State of New York and New York City will also get a piece of the action through sales tax.

How much action? According to the AP, the Wall Street bonuses should generate $1.6 billion in tax revenues for the state and $500 million for New York City. I haven’t seen any estimate of how much federal income tax the end-of-year bonuses will generate; however, it has been reported the bonuses are 19 percent higher than last year’s. The U. S. Treasury should receive some handsome checks in April.

For the inner child in every Wall Street investment banker, $24 billion buys a lot of toys. A BMW dealer in Manhattan was reported to have opened a new showroom on Wall Street, expecting the bonuses to clear the lot. After all, a $40,000 BMW isn’t going to feel expensive if you’re one of the top 25 bankers at Goldman Sachs, each of whom will earn more than $25 million. Lehman Brothers and Bear Stearns expect to pay out about $12 billion in bonuses — an average of $300,000 per employee.

Real Estate? Apartments in New York are steep; try to find a two-bedroom in a good neighborhood for under a million. Yet one real estate broker was reported to have sold 11 apartments earlier this month. She has listed about 200 others ranging from $500,000 to $6 million. Many will go to Wall Street’s bankers looking for their first home or to upgrade their current pad.

Clothing? A good suit — hand tailored, of course — will easily run to $1,500. No problem: A million-dollar bonus can fill a closet. You could even afford to splurge on a few doublebreasted numbers!

And the money will continue to trickle. Every million-dollar bonus in turn helps pay for the cash donation given to the doorman; it turns into tips for waiters and waitresses. “Wall Street jobs create jobs,” said a spokesperson for the state comptroller’s office. “They are pumping money into the economy. They’re going out to restaurants, they are purchasing all kinds of consumer goods.”

I have two reactions to all this news of seasonal riches.

The first is a message to all the folks at Goldman Sachs, Lehman Brothers and Bear Stearns: Come visit the Southern Tier. I can assure you, a million dollars goes a lot farther up here than it does downstate. You don’t have to pay a million dollars for a nice house in Steuben County. You can pay less than $100,000 and have a great house and five acres all to yourself.

Better yet, I could show you an old elementary school building on the corner of Liberty and East Washington streets in Bath that desperately needs some tender loving care. A lot of folks in the area don’t want to see this old school torn down, but they also have their doubts as to the cost of renovating and converting the structure into some self-sustaining use.

So after you’ve bought your BMWs and new suits, come look at the Dana Lyon and give me a call over here at The Courier-Advocate. I’ll put you in touch with some good folks who really know how to put a few million dollars to good use.

My other reaction to the Wall Street bonuses is to go home and watch “Miracle on 34th Street” with my family. This movie says something we could all stand to hear: There really is a Santa Claus, and he’s not interested in buying a BMW.