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Mike Bloomberg on Corporations

Mayor of New York City (Independent)

 


Business have big cash reserves & need no tax cuts

A Wall Street Journal editor asked a room full of CEOs to raise their hands if the corporate tax cut being considered in Congress would lead them to invest more. Very few hands went up. Attending was Gary Cohn, President Donald Trump's economic adviser and a friend of mine. He asked: "Why aren't the other hands up?"

Allow me to answer that: We don't need the money.

Corporations are sitting on a record amount of cash reserves: nearly $2.3 trillion. That figure has been climbing steadily since the recession ended in 2009, and it's now double what it was in 2001. The reason CEOs aren't investing more of their liquid assets has little to do with the tax rate.

The largest economic challenges we face include a skills crisis that our public schools are not addressing, crumbling infrastructure that imperils our global competitiveness, wage stagnation coupled with growing wealth inequality, and rising deficits that will worsen as more baby boomers retire.

Source: OpEd by Michael Bloomberg in Bloomberg News , Dec 15, 2017

Reduce 35% corporate tax by eliminating loopholes

I'm in favor of reducing the 35 percent corporate tax rate as part of a revenue-neutral tax reform effort. Right now, the corporate code is so convoluted, and rates so high relative to other nations (thereby creating an incentive to keep profits offshore), that the real rates companies pay can be wildly divergent. This is neither fair nor efficient. Eliminating loopholes and reining in the offshoring of profits can and should be done in a revenue-neutral overhaul of the tax code.
Source: OpEd by Michael Bloomberg in Bloomberg News , Dec 15, 2017

Rezoning old manufacturing sites led to construction boom

Bloomberg oversaw the most massive rezoning in more than 40 years, recognizing the city's changing face, especially the diminished role of its once thriving manufacturing base. That left acres of industrial moonscapes to be reclaimed once the city government decreed that housing, office buildings, hotels and stores could rise where factories and plants once stood. The new zoning did not guarantee new building, it only cleared a path for more and more building during and after what had already become the biggest construction boom in 30 years. The cranes worked overtime until the Wall Street meltdown and recession of 2008.

The new rules also restrained some development in congested residential neighborhoods and provided for some manufacturing and affordable housing at various sites, though nowhere near enough to satisfy critics who argue that too many of Bloomberg's plans favor the wealthy.

Source: Bloomberg: Money, Power, Politics, by J.Purnick, p.207-208 , Sep 28, 2010

Wooed Goldman Sachs to NYC with $1.65 billion in tax breaks

Bloomberg described how he lobbied the CEO of Goldman Sachs to build the company’s new headquarters across from Ground Zero. Bloomberg says, "This is where the best want to live and work. So I told him, 'We can help with minimizing taxes. Minimizing your rent. Improving security. But in the end, this is about people.' " The city's workforce has plenty of admirable qualities, but even Bloomberg can’t spin the fact that Goldman got more than $1.65 billion in city and state “help” in the deal.
Source: Chris Smith, New York Magazine , Oct 3, 2005

Built up a $1.3B company from scratch over 20 years

It had been 20 years since we started the company--refugees from Wall Street motivated by an idea that we could build something new that just might make a difference in the world of money and investing. We were too young and too insignificant for anyone to warn us then that we were crazy to think we could create a company that could challenge the giants of financial media. So we didn't hesitate. Within a year, we had our 1st customer and 5 years later, our 1st overseas office. By 1989, our annual sales were approaching $100 million and there were now more than 400 of us selling a machine that had a small, growing following.

We added magazines, radio, and television--all tethered to the 24-hour machine--that made us unique as a multimedia company catering to the people with the most at stake. We were never satisfied and that drove us to work harder and build more. By May 1997 we were able to install our 75,000th Bloomberg computer terminal, bringing our annual sales to $1.3 billion.

Source: Bloomberg by Bloomberg, by Mike Bloomberg, p. v , Aug 27, 2001

Open physical plant at Bloomberg Press encourages creativity

I know little about book publishing and take zero credit for either its initiation or success at Bloomberg Press--except that I did institute the system where new ideas and the best people get together.

The leverage we gain from employing creative people and letting them do their own thing is incredible. Our open physical plant encourages innovation, and our flat management structure guarantees a well-functioning meritocracy. Fortunately, for us, others do it differently. Typical company politics elsewhere stifle the most free-thinking employees and discourage risk taking. The accounting oversight in most corporations prevents trying in a year the diverse creativity we institute in a month. Thank goodness. We've got enough competition as it is. Of course, not everything we try works.

Source: Bloomberg by Bloomberg, by Mike Bloomberg, p.122-3 , Aug 27, 2001

Making change in difficult, in companies or technology

At age 28, I was finding out an eternal truth: making change is difficult. I was fighting the interdepartmental computer wars. In every organization, each group wants its own automation needs filled independently--a "we need it now" issue. Separate development, being more limited, is much faster. Each department fights to go it alone, pick its own computers, write its own programs, collect its own data, hire its own consultants.

In short the history of computing, this process has played out repeatedly. Users get tired of the formal information-processing department. Those faceless bureaucrats want justification for spending money on hardware. They insist on setting priorities other than "all of the above."

From the old big mainframes, to limited-function, distributed PCs, to centrally managed networked resources, no one's ever satisfied except the hardware manufacturers. For users, it's politics, not engineering. For the vendors, its sales. For me at Salomon Brothers, it was a nightmare.

Source: Bloomberg by Bloomberg, by Mike Bloomberg, p.137-9 , Aug 27, 2001

Ludicrous to pay CEO bonuses when stock value rises

Compensating top management appropriately, particularly vis- -vis the rest off the employees, also influences how hard everyone works together and how well a company does. How much to pay the CEO? Try roughly the amount other competent managers make in our fields. Management skills generally are fungible across industries. The argument that someone is worth tens of millions of dollars in compensation per year is because his or her company's market value went up many times is so ludicrous that I've always been amazed anyone can espouse it as fair with a straight face. No one suggests the CEO reimburse the owners when a stock goes down.

My salary is equal to the lowest-paid full-time employee we have (currently, $19,000 per year). Everything else I get is from my share of the firm's earnings (and income tax regulations encourage me to reinvest most of that in research and development).

Source: Bloomberg by Bloomberg, by Mike Bloomberg, p.199 , Aug 27, 2001

Given $10M upon being fired from Salomon Brothers in 1981

So there I was, 39 years old and essentially hearing, "Here's $10 million; you're history." One summer morning, the managing partners told me my life at Salomon Brothers was finished. On Saturday, Aug. 1, 1981, I was terminated from the only fulltime job I'd ever known, and from the high-pressure life I loved. This, after fifteen years of 12-hour days and 6-day weeks. Out!

For a decade and a half, I'd been an integral part of the country's most successful securities trading firm, even of Wall Street itself. Not just in my head. If my press was to be believed, in everyone's. Suddenly, though, needed no longer. I was a general partner. An owner rather than an employee. Nevertheless: Fired!

The Salomon Brothers Executive Committee had decide to merge the 71-year-old partnership with a publicly-held commodities trading firm, Phibro Corporation. For 63 of us, it was our last meeting as Salomon partners.

Of course, there was the $10 million I was getting. America's a wonderful country.

Source: Chapter 1 of "Bloomberg by Bloomberg," by Mike Bloomberg , Aug 10, 2001

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Other big-city mayors on Corporations: Mike Bloomberg on other issues:

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Rahm Emanuel (D,Chicago)
Bob Filner (D,San Diego)
Steven Fulop (D,Jersey City)
Eric Garcetti (D,Los Angeles)
Mike Rawlings (D,Dallas)
Marty Walsh (D,Boston)

Former Mayors:
Rocky Anderson (I,Salt Lake City)
Tom Barrett (D,Milwaukee,WI)
Mike Bloomberg (I,New York City)
Cory Booker (D,Newark,NJ)
Jerry Brown (D,Oakland,CA)
Julian Castro (D,San Antonio,TX)
Rudy Giuliani (R,New York City)
Phil Gordon (D,Phoenix)
Tom Menino (D,Boston)
Dennis Kucinch (D,Cleveland,OH)
Michael Nutter (D,Philadelphia)
Sarah Palin (R,Wasilla,AK)
Annise Parker (D,Houston)
Jerry Sanders (R,San Diego)
Antonio Villaraigosa (D,Los Angeles)
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