Wall St. Crisis Boosts Profile Of Paterson
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It took the near-collapse of the world’s largest insurance company, the demise of an internationally known investment bank, and a wild Wall Street ride that erased billions of dollars of profits to transform an accidental governor into New York’s chief executive.
After a week of economic convulsions, David Paterson has emerged as a governor determined to seize the moment, establish his authority, and put to rest lingering doubts that a formerly obscure lieutenant governor could flourish on the national stage.
Between his administration’s bold maneuvering to protect American International Group from a disastrous credit downgrade and his blitz of public face-time, Mr. Paterson inserted himself into the whirlwind of the financial crisis with confidence. He has come out with a significantly higher profile and wider respect from partisan opponents, which will come in handy next year when he contends with what will surely be a grueling budget battle.
On Monday, his administration’s decision to give AIG some breathing room by allowing it to borrow $20 billion from its subsidiaries topped the news. Between Monday and Wednesday, Mr. Paterson gave individual interviews to more than a dozen television and radio outlets.
He appeared on Fox Business, CNBC, and ABC’s “World News Tonight.” On Monday, he recorded interviews from the communications room of his Manhattan offices with radio stations across upstate markets. On Tuesday, in one four-hour stretch, he taped or gave live interviews with seven national and local stations.
In comparison, Mayor Bloomberg, while holding daily press conferences this week and being in constant communication with regulators and heads of banks, did not grant a single one-on-one interview. He’s scheduled to appear on “Meet the Press” on Sunday.
With his trademark ornate vocabulary, Mr. Paterson, in his public statements, offered sympathy and reassurance that New York would survive the trauma. “It’s very sad for America, but it’s lugubrious for New York State,” he told Fox Business.
He vented the frustration, anger, confusion, and fears of the average New Yorker. He was able to take credit for buying AIG some time before the federal bailout and for helping to persuade the federal government to come to the rescue of the insurance giant. The moment also provided the governor, who had been criticized by some for his doom-and-gloom economic outlook, with vindication.
“What I had believed from last fall, when I was part of the administration, was that the market was going to face a severe downturn,” he told an Albany radio station. “The indications had been all over the place. If you say it … you get ridiculed as an alarmist. And I’m sure people on the Titanic said stuff like that when they first felt the waves.”
Political observers say the governor’s aggressive press strategy was effective. “Public officials tends to be blamed for bad economic times, and he wants to get in front of the story,” a Democratic political consultant, Henry Sheinkopf, said. “He’s becoming the defender of the people.”
A spokeswoman for the governor said Mr. Paterson was simply trying to “reassure people that the state is addressing the impact of this economic crisis” and to “make sure everybody understands the ramifications of what’s happening on Wall Street.”
Mr. Paterson’s elevated prominence called to mind the trajectory of another political leader. President Bush. Elected with a minority of the popular vote and battling doubts about his legitimacy in his first months in office, he was able to assert his command in the months after the September 11, 2001, attacks, and was rewarded, at least temporarily, with bipartisan support and an approval rating that soared to historic highs.
The governor’s performance this week has won him accolades from unusual quarters. “I think he handled himself well. He did a good job. His delivery was good. His timing was good and his understanding of the market forces was good,” a Republican senator of Brooklyn, Martin Golden, a feisty politician who rarely doles out compliments to Democrats, said.
What remains to be seen is if Mr. Paterson, who plans to run to keep his office in 2010, will be able to capitalize on a successful week. The market crisis only magnifies the central challenge before his administration: how to do more with less. Governors of New York historically have asserted their relevance and conveyed their priorities by increasing budgets, not trimming them — whether it’s pumping money into public education or bankrolling economic development projects.
The governor’s office yesterday estimated that the financial storm would wipe out 40,000 private sector jobs and cost the state $3 billion in tax revenues. Despite the scarcity of resources, lawmakers and interest groups are unlikely to ease their demands for a fresh supply of more funding. Public school education advocates, for example, say they expect Mr. Paterson to follow through on his promise to hike school aid by $2 billion next year.
Albany’s memory is notoriously short-term. In a budget battle in which few winners will prevail, Mr. Paterson may not be able to bank on the goodwill he built up this week.
“Crisis is what elevated David Paterson, and crisis is what will keep him in office, if handled properly,” Mr. Sheinkopf said.