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Michael Bloomberg: A Businessman Takes On New York

Mayor-elect Michael Bloomberg talks with CARIBBEAN BUSINESS about the economy and what lies ahead for both New York and the nation as he prepares to take on ‘the second toughest job in America’


December 6, 2001
Copyright © 2001 CARIBBEAN BUSINESS. All Rights Reserved.

Citizen Bloomberg: In a wide-ranging interview, the financial news mogul is cautiously optimistic about an economic recovery next year, predicts interest rates will remain low, and proposes a common sense solution to rebuild lower Manhattan

It’s not often that businesspeople–particularly spectacularly successful ones such as Michael Bloomberg–decide to enter public service in order to give something back to society.

It’s even rarer for businesspeople to make a transition of the magnitude that Michael Bloomberg has: from founder and chief executive officer of worldwide media empire Bloomberg, L.P. to mayor-elect of New York.

He first revealed his interest in running for office in "The World According to Bloomberg," an exclusive CARIBBEAN BUSINESS interview last year.

"At my age, you don’t go into a business where longevity matters, so I can’t imagine wanting to be a senator," Bloomberg told CARIBBEAN BUSINESS in February, 2000. "And the executive branch involves either George Pataki’s job, Bill Clinton’s job, or Rudolf Giuliani’s job. I just missed the chance for Bill Clinton’s job. [But] the mayor’s job comes up next."

In Puerto Rico for a visit last week to stay sensitive to the interests and concerns of New York’s more than 1.3-million member Puerto Rican and Dominican community, Bloomberg talked with CARIBBEAN BUSINESS editors and reporters about the nation’s economy, his unconventional approach to government, and what’s ahead for New York.

Tough times

As Mayor-elect of the city that received the brunt of the impact of the Sept. 11 terrorist attack on the U.S., Bloomberg says the year 2002 will be a tough one for the city and the rest of the nation.

This January, Bloomberg will take the reigns of a city now facing an estimated budget deficit of between two and four billion dollars, and which faces a daunting recovery effort.

More than 10 weeks after the attack, workers are still in the process of clearing debris from the fallen World Trade Center towers, just a few blocks away from City Hall. The clean up of the area is expected to take at least another year. The city’s tourism sector is still reeling from the aftershocks.

Road to Recovery

However, as the mayor-elect puts it, it’s far from all gloom and doom in Bloomberg’s New York.

"Let’s face it, 9/11 was an unusual event," the mayor-elect points out. "And post-Sept. 11, there’s no reason to think that the world situation is more dangerous," he continues, "quite the contrary. America is arguably making some real progress against terrorism and that should make America and the world safer."

The mayor-elect is also seeing some early signs of economic recovery. "The theatre visiting public–not yet the tourism-driven theatre, but the theatre that resident New Yorkers go to–is coming back, as is a lot of the restaurant business," Bloomberg says.

Publishing industry sources are telling him that advertising is picking up again, and is beginning to compare favorably to last year.

The Economy

As someone who knows the market inside and out, he’s also seen the early signs of a recovery in the performance of the stock market in the last few months. "If you believe that the stock market is a prognosticator of the future, the financial markets are saying that we’re going to come out of this reasonably healthy and reasonably short-term," Bloomberg said.

"I think you’ve got to be a little bit skeptical, however, simply because there’s been so much money sitting on the sidelines that is now being pumped in to the system. You may very well be seeing that, and by P/E [price/earnings] ratio measures, the stock market is still at an all time high and it hasn’t come back that much," Bloomberg said.

Bloomberg says that an economic downturn such as the current one is healthy for businesspeople who use it to review and rationalize their operations.

"This was essentially a natural downturn, coming out of an eight- to 10-year period of boom times that saw the built-in abuses that come with boom times, such as excess capacity, gradually increase," Bloomberg says.

While downturns necessarily force that rationalization process upon all companies, Bloomberg says that smart companies self-correct on their own, without being forced to by outside influences.

Bloomberg sees interest rates remaining low into the foreseeable future, and expects to see a gradual economic recovery, which he notes should be more sustainable than a sharp turn-around.

Accountability in government

As Bloomberg prepares to take on what many call "the second toughest job in America," he says he will be focused on the kind of businesslike truth-telling and difficult decision-making that a normal politician might shun, but that are necessary for the long-term good of the city.

A signal that Bloomberg may really mean what he says is that he confessed that he may even forego re-election, if that’s the price to pay for making the kinds of decisions that he thinks are necessary in city government.

Bloomberg says he’s committed to transferring a lot of the management style that’s served him so well in the past to his new job.

He says he is going to try to not be influenced by criticism in the media and do what he feels is necessary for New Yorkers.

"Business depends on good numbers, on the measure of results," Bloomberg says. "I’m going to be bringing that same focus on measurement of results and accountability into the Mayor’s office."

"A great challenge in any organization--and I think especially in government--is cross-coordination," the mayor-elect said, referring to the need to get departments and agencies work together in an integrated fashion. Bloomberg L.P., he points out, has been particularly successful at this.

In addition to his results and accountability-oriented leadership, Bloomberg says he’s determined to build by consensus and motivate the city’s employees to work hard to meet their service objectives.

"People sometimes think that government is unlike business because a company head can say ‘jump’ and people will ‘jump.’ That may be true, but he will not necessarily get the best results. In my experience, in leading a company it is important to build consensus, and so it is in government."

Bloomberg’s NYC to-do list

Bloomberg sees his first task as mayor of New York City (NYC) to keep companies from even considering leaving the city.

"It is not the short term we have to worry about but rather the long term. Before Sept. 11, there were always a few companies considering leaving NYC. Today, more companies are talking about leaving, and some actually did find space outside of NYC," said Bloomberg. "The city’s crime rate is down, so that helps the city’s image," he added.

But how does a city recover from a devastating blow as NYC suffered on Sept. 11? "First you hold your breath. Time to a great extent does mitigate a lot of the initial reactions. And companies just don’t pick up and leave at a moment’s notice."

But, besides patience, the mayor-elect has a plan ready to set in motion.

Bloomberg will work on financial incentives, such as tax breaks, to encourage companies to stay. "Right now, downtown Manhattan is a nightmare for anyone who works and lives down there. While the subway may take a few years to repair, we can do other things with traffic and ferries to get down there."

Bloomberg is also putting together a group of executives who head companies that will stay in Manhattan. This group will meet and work with companies who may consider leaving New York City and help find solutions to their problems.

The Mayor-elect remains optimistic about the city’s future. As he sees it, multinational companies will always be attracted to New York City for at least two reasons: its great workforce and geographic location.

"In this day and age, companies go where the workforce is, not the other way around. That’s a fundamental change in the past 50 years. As to geographical proximity, companies must be able to interface with its competitors, customers, suppliers, or the media.

"I don’t believe any major law firm or headquarters of investment banking firms is going to move out of Manhattan. Someone getting out of law school will want to live and work in mid-town or downtown Manhattan because of the cultural pace, the excitement, the chance to meet others like them, someone they might even marry."

He does recognize that these companies’ support offices, their back office services, may want to move out of the city. Bloomberg’s company itself has 2,000 employees working in New Jersey. Employees who provide these services are not particularly interested in living in the city, or experience what Bloomberg calls, "its fast paced, multicultural meritocracy."

Rebuilding Ground Zero

Up until now, no firm plans have been set for rebuilding the World Trade Center (WTC) towers, particularly with the upcoming change of command in New York City’s government. But Bloomberg will form a committee to help the process along, and he says he trusts that the current leaseholder will make the right decision for the site.

"One thing is sure: we will not build two more 110-story towers--you couldn’t rent them! The last two weren’t commercially rentable, which is why there weren’t major brokerage firms there. But we will build some kind of memorial, although not on a 20-acre site," he said.

"Larry Silverstein’s consortium has a lease on the WTC site for 99-years and must pay $116 million annually to the New York Ports Authority. He has the legal obligation and is paying it with the business interruption and casualty insurance policies on the property.

"He also has a legal obligation to rebuild the site under his lease. So, we are trying to put together the ideas, and he has already said he is willing to build on spec. I think that will be very favorable for the city," said Bloomberg.

The city’s Battery Park area will also get some attention from City Hall. Bloomberg’s suggestion is to connect the West Side highway and Battery Park City to what will eventually be built in the disaster area. This will make the area more attractive for the thousands who live there, and promote a community feeling to what used to be a typical business center--crowded by day and deserted at night.

Bloomberg would like to see the area rebuilt as soon as possible, though he remains sensitive to the feelings of the families of the thousands who died there. "I have sympathy with those who say that their loved ones are there but there is nothing I can do to bring them back. On the other hand, as mayor of New York City I have to worry about the people who live and work around there—they need jobs too. I can do something to help others and that requires the use of the land."

He is not depending on the financial services industry to repopulate the area. Even before Sept. 11, financial companies such as Lehman Brothers and Merrill Lynch, among others, were making plans to move their offices uptown or out of the city.

Bloomberg is open-minded to other industries that will take advantage of the two factors he so treasures for the city–its workforce and geographic proximity to global corporations. The fashion industry, a biotechnology or information technology complex, with more entertainment venues and small and medium- size support services could be the answer to rebuilding the disaster site.

As he faces his four-year term as the leader of the world’s greatest city, Bloomberg ponders about security. "Only in retrospect do you know whether you had too little and you never know whether you had too much. Society has to make a reasoned but imperfect decision or decision based on instinct, more than fact, as to what level of security and interference in our personal lives we are willing to tolerate."

"Those are the kinds of decisions you have to make and it is hard to argue that New York City did not take appropriate steps, even though Sept. 11 happened. In retrospect, we could say we should have had stinger missiles pointed out every window of the World Trade Center. But in the aggregate, the streets of New York City have become safer and safer every year for the past eight years, so the city is doing something right."

. Bloomberg Grateful For Hispanic Support

Hails their contribution to his election victory on first trip abroad to the Dominican Republic, Puerto Rico


A triumphant Mayor-elect Michael Bloomberg traveled last week to the Dominican Republic (D.R.) and Puerto Rico, first and foremost, to express his sympathy to the families of the victims of the American Airlines crash Nov. 12 in New York, but also to meet with D.R. President Hipolito Mejia and P.R. Gov. Sila Calderon, and demonstrate his appreciation for Hispanic support in the recent mayoral election in New York.

Traditionally, New York politics have always been greatly influenced by the three Is— Ireland, Israel, and Italy—foreign countries with which large voting blocks in the city have always related. In the past mandatory pilgrimages by most politicians to those three countries were often pivotal to their election.

Bloomberg has added two other letters to the political alphabet soup—D and P—for the Dominican Republic and Puerto Rico. Their elevation in front of the traditional Is resulted primarily from the tragic American Airlines crash Nov. 12, which claimed 175 Dominicans as victims, but also by his desire to demonstrate his appreciation to the many Hispanics who voted for him.

"One-third of the population of New York City is Hispanic and 50% of Hispanic voters and 25% of Black voters supported me, a Republican," said Bloomberg. "A majority of Hispanics and Blacks in New York City have traditionally voted Democratic but surveys indicate that’s changing."

Indicating that he "wants to make sure the Latino community in New York feels I recognize them and am sensitive to their needs," the mayor-elect said "the purpose of my trip is two fold. I wanted to express my personal sympathy to the families of the victims of the plane crash as well as the terrorist attack on the World Trade Center because many of them were not only from New York but from the D.R. and Puerto Rico as well. In addition, in my new job I want to expand my dialogue with Hispanics."

Trip to Caribbean related to Democratic Party confusion

The political dynamics of Bloomberg’s Caribbean journey were quite noticeable to observers and reflected the state of disarray in the Democratic Party in New York City that contributed to his victory along with other significant factors like the endorsement of his candidacy by outgoing Republican Mayor Rudy Guiliani and Bloomberg’s supportive role of Guiliani following the Sept. 11 catastrophe.

Although Bloomberg’s visit to the D.R. was only six hours long. He was hosted by President Mejia, Mayor of Santo Domingo Johnny Ventura, famed Dominican fashion designer Oscar de la Renta and Tourism Minister Rafael Subervi Bonilla. Received at the National Palace by the president, Bloomberg met privately with relatives of 24 of the victims of the tragedies in New York.

In Puerto Rico, Bloomberg’s only visit to a government official was to Gov. Sila Calderon. Resident Commissioner Anibal Acevedo Vila went to greet him on his arrival at the airport.

But who was accompanying Bloomberg on his private plane told a lot about the political situation in New York. In addition to veteran Rep. Charles Rangel, the most powerful elected Democrat in New York, were the two highest elected Dominican-American elected officials in New York—New York State Assemblyman Adriano Espaillat and New York City Councilman Guillermo Linares—as well as Councilman Jose Rivera and Councilmen-elect Miguel Martinez and Ruben Diaz, all Democrats.

The victory of Bloomberg says a lot about his own dynamic personality and the success of his campaign as well as the chronic difficulties facing the Democratic Party. New York City is so Democratic that former President Bill Clinton won it by 2 million votes, Presidential candidate Al Gore by 1 million votes and former First Lady Hillary Clinton was swept into the U.S. Senate.

But the recent mayoral elections clearly indicated that the Democratic Party in the city is in a state of great turmoil and a lot of it has to do with the alienation of Hispanics and Blacks. After Fernando Ferrer was defeated, Mark Green emerged as the Democratic mayoral candidate in the runoff. Green’s rude treatment of Hispanic and Black leaders like opponent Ferrer and Rep. Rangel saddened them, and Rangel, for example, left town during the last days of the campaign to receive an honorary doctorate in the Caribbean rather than support Green who had turned his back on the most powerful elected Democrat in the city.

"Hispanics stayed home en masse on the runoff election day, and many that did turn out voted for Bloomberg," said a New York political observer. "They just couldn’t vote for Green. Green blundered and it cost him the election. He alienated and insulted a lot of people and made enemies. They were just sick and tired of the Democratic Party taking minority voters for granted and they couldn’t take it any more."

Politicians like Rangel sent a message to the party. The Democratic Party couldn’t take minority voters for granted any longer. While observers indicate that Blacks will probably continue to vote Democratic in high percentages, the problem is more complicated. The majority of Blacks that come out to vote, vote Democratic. The problem is that the Democrats are not registering new Black voters.

While most in New York indicate Bloomberg "will have a very long honeymoon," one observer said "his major challenge is going to be how to please new minority voters without alienating the traditional center. The Democrats took the minorities for granted in their quest for the middle and then ended up abandoning them. It’s a whole new ball game now. Maybe Republicans have a chance with minorities after all."

After Economic Development–Education, Education, Education!


New York City Mayor-elect Michael Bloomberg stands firm about the use of technology in education: the Internet and technology have no place in the classroom.

"There isn’t a technological theory that you could possible teach a kid that will be valuable when they get out of school. Technology changes much too fast. It’s a babysitting device," said Bloomberg to CABIBBEAN BUSINESS during a visit last year (CB 2/17/00).

He was severely criticized during the mayoral race for his reluctance to buy computers for students in primary and even high school levels of education. And even though Bloomberg admits that the city does not have a final decision-making role in its educational system, he cannot stop emphasizing the need for education.

"Apart from my role in the economic development role of NYC, I will also be involved in education, education, education. But I don’t favor the use of computers if I have to choose one instead of a book or a teacher for the students," said Bloomberg.

Time and time again he has emphasized the need to find available, skilled, and talented workers. Among his plans are to encourage companies and unions working on the former World Trade Center site to hire NYC residents. Also, that graduating students be able to join the famously tough-to-enter NYC unions through the creation and implementation of training programs.

But education based on the three Rs (reading, writing, and arithmetic) remains a vital element of his political platform.

"A [computer created] presentation does not substitute for the thought process. That’s the mistake we all make. The thinking process and the three Rs have to come first. I don’t know any company that would first ask about technical skills when hiring a candidate. And no one can say I don’t know what I am talking about after having managed 8,000 employees.

"Companies can teach technical skills. But you need to be able to read, to write, do math, present ideas, formulate problems. Technology, what they taught you in school? Every school is so far behind the real world [in technology] that it is absolutely meaningless! It would be better if you never had a course, because you would not be stuck with the old stuff. Technology is changing every few months, but the basics are always the same.

To say that kids in the sixth grade need computers; for what, so they can use a Play Station 2?"

Bloomberg is not shy on speaking out about the future of NYC and his plans to affect it. So he is targeting corporations that will partner with the Board of Education, City University of New York, and more than 90 of the city’s higher learning institutions. Together, they can help determine what the best course of training for future skilled workers will be.

This Caribbean Business article appears courtesy of Casiano Communications.
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