Let's say the New York State legislature is representative of what New Yorkers really are, as opposed to what they would like to think or tell others they are. Then which team really represents New York? I'd like to nominate either the Isaiah Thomas Knicks or the Mets.
From the New York Times: "Robert Boland, who teaches sports law at New York University’s Tisch Center, said that Wilpon, his partners and their families looked more vulnerable than ever and were unlikely to find relief from any substantial improvement in the financial performances of the team or Citi Field."
Just as the State of New York is facing ruin even if the economy improves. In fact New York has suffered less than other states in this recession, and has the highest state and local tax burden as the share of its residents' personal income in the country, except in years when taxes on mineral exploration pump up the revenues of Alaska and Wyoming.
"The team, the stadium and the SNY network have considerable debt — about $1.5 billion in all by some estimates — and two analysts said there might not be enough money available to Wilpon to settle with Picard and make bond payments, including $52 million a year for the stadium. The Mets also have hit their limit on borrowing from Major League Baseball’s credit line."
New York is heavily indebted, and has also handed out lots of retroactive pension enhancements that it claimed would be free, and thus did not pay for — leading to a compounding debt over a decade.
"In some ways, Madoff was the team’s personal banker, making sure that the Mets could withdraw cash, when needed, to cover the team’s day-to-day operations. That ever-ready honey pot helped the team’s owners meet payroll, pay for stadium operations and provide for deferred compensation to players, according to the lawsuit. The Mets owners also seemed to benefit from the consistently high and steady nature of the returns they appeared to be enjoying from Madoff when they refinanced the team’s lending arrangements in 2004. It was then that the owners represented to banks that Madoff provided 'a safe alternative to unattractive money market yields” and that over the previous 25-year period, Madoff’s average returns were 18 percent, with a standard deviation of 4 percent.'"
New York State has benefited from taxes on the excess profits Wall Street has earned by, well, ripping off the rest of the country. That has allowed union leaders to claim they were really "fighting to win benefits" against Wall Street, not against the less well off rest of the state's people. Wall Street hasn't become as exposed as Madoff, but it is not the honey pot it was. So now public services will be gutted instead, as the retired public employees head for Florida rationalizing all the way.
Many of the pension enhancements were rationalized based on the stock market bubble of the 1990s. It is now more than a decade later, but you still read reports saying concerns about public employee pension funds are unfounded because those funds were fully solvent in 2000. Meanwhile, it appears that many Mets and Sterling Enterprises employees had their 401Ks invested with Madoff.
Now the Wilpons can sell the team, and the team can recover with new ownership. And New York has also sold itself. Or rather it has sold the future income of everyone who will live in New York in the future, who will pay taxes with vastly diminished services as money is sucked into the past by Generation Greed. A generation that always believed its their world, and everyone else is just living in it.
I wouldn't buy property in New York until I found out what the future would hold. Those who bought houses in the 1970s bought into a city with sky high taxes and very few services, but they paid little enough in many cases to avoid private schools and not have to use mass transit.
By the way, to complete the analogy, politics in New York State, for all but a few very high offices, is something like a family business. The people who have re-destroyed New York through debts and retroactive pension enhancements are the direct descendents, by blood or other ties, of those who similarly wrecked the city in the 1970s. This particular tribe has largely left New York City, somehow still holding most of its state legislative offices (and City of New York jobs that pay the most money even as they live elsewhere). They have gone on to work their magic on the state as a whole.
Given that they have done the exact same thing a second time, the “knew or should have known” exactly what the consequences would be.