NYT: You Need $1.6 Million A Year To Live In New York City

It might be one of the silliest stories I have read in a long time. On Friday, Allen Salkin of the New York Times wrote a piece entitled “You Try to Live on 500K in This Town” in which he argues that a family of four needs to earn around $1.6 million just to cover living expenses in New York city.

The article is aimed at criticizing the Obama administration’s proposal to limit the base salary of top executives at AIG, Bank of America, and Citigroup to $500,000 per year as long as their companies are staying afloat thanks to government aid. The argument is kind of short-sighted anyway, given that the executives in question already have net worths in the tens (or even hundreds) of millions of dollars, and therefore forgoing huge salaries for a couple of years is not going to result in their lavish Manhattan apartments being foreclosed on.

Nonetheless, the idea that the very executives who are largely to blame for the financial crisis should not have to make any financial sacrifices, like the rest of the country is being forced to, is pretty ridiculous. I highly doubt the content of this article is going to win any sympathy from the vast majority of people reading it, but maybe that’s just me. What do you think of Mr. Salkin’s argument?

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2 Thoughts on “NYT: You Need $1.6 Million A Year To Live In New York City

  1. Without having read the article in reference I can’t comment on it, but I have an issue with the selective CEO penalties imposed by the government.

    If anything, they must not be stopped at the CEOs and those banks alone.

    One thing I learned first hand is that it may take ONE bad company in an enviornment that allows it to conduct [bad] business unsanctioned to push the good ones to bad practices too.

    Facing unfair competition, a company would have to choose between fighting the offender, losing market to them or leveling in order to keep up.

    It’s an easy choice if you consider you’re in for the profit, not for the moral. Especially when customers actually want to be lied, but that’s another story.

    It’s not as if I am advocating for AIG or City executives.

    All I am saying is that it would be naive to think they alone are to blame.

    The government’s controlling and regulation bodies are just as faulty, if not even more.

    As is everyone who thinks there is a free lunch, i.e. most of the consumers who took credit they couldn’t afford.

  2. shepherd on February 10, 2009 at 4:49 PM said:

    Chad,

    I found it particularly telling that the article mentioned that many of these people end each year with a zero balance after raking in millions. Is it any surprise that such people aren’t good stewards of other peoples’ money? Or that they took exceptional risks?

    Good money managers should run a tight ship at home. They don’t need any aura. I know one, for example, who has plenty of “sureness in his stride.” He earns a lavish salary, but he can tell you what market in his area has the best price on milk. He has a beautiful office, but he often takes public transportation because he dislikes sitting in traffic. He would never pay $8.50 for a cup of hot chocolate. And this may come as a shock, but his clients accepted his explanation of the market crash and they’re well positioned to profit from the recovery.

    I think the people mentioned in that article would be much better at their jobs if they were all forced to live on much less than $500K per year. For a while.

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