Has The New York City Council Caught The Progressive California Disease?

Much as cities in California have made mistakes when it comes to their finances, it appears here on the East Coast the city of New York is about to shoot itself in the foot, but in a different fashion.

While New York also has problems with its public employee unions, it's nowhere near the level seen elsewhere. Instead, the City Council is proposing rules that will help drive the last surviving industry out of the city – the financial industry.

For the life of me I can't figure out how making it too difficult and too expensive to remain in New York City is going to help the city's finances. Is it possible the City Council has been infected with the “California disease”? After all, California's state and local level governments have been doing their best to drive businesses out of business or out of state. They have succeeded. That's why California is in the fiscal mess it's in. And now New York City wants to do the same thing?

Yet in the wake of JP Morgan’s massive losses last week and the continuing controversy surrounding the Wall Street bailouts, the New York City Council is debating a measure that would require city banks to publicly disclose their efforts at “socially responsible” banking.

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Many bankers, as well as Mayor Michael Bloomberg, have voiced their opposition to the new plans. The regulations, they say, would add another burdensome layer to the web of regulations that already exist at the federal and state levels. The Council, however, appears unmoved, and support of key council leaders...give it a fighting chance at making it into law.

If it does, its supporters on the Council will hail it as a major victory, but it will be a loss for the city as a whole. The financial industry is the one industry keeping the city alive, yet New York’s blue politicians seem unconcerned about the risks of antagonizing their major cash cow.

This is the same attitude held by many politicians in California and we've seen how well that's worked out for them. The City Council doesn't seem to understand that the banks and other financial institutions will have no problem departing the city for greener pastures. As the post linked above states, Fortune 500 companies have been leaving New York for decades. Wall Street firms will have no problems following them to places with better business climates. And with today's telecommunications infrastructure, those greener pastures can be anywhere, even here in New Hampshire.