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City & State Budgets Divide On Wall Street Pessimism. Are Both Too Optimistic Anyway?

Speaking of blind men, Governor Patterson’s budget office doesn’t think things on Wall Street will be that bad, at least compared to Mayor Bloomberg’s budget office.* Budgeteers in Albany and City Hall are both warning of fiscal calamity but Bloomberg’s are far gloomier than Patterson’s, the New York Sun reports.
City officials are far more focused on Wall Street than state officials, in part because Wall Street accounts for far larger percentage of city revenues than state revenues.

A key difference, [city officials] said, was the city's assumption of a decline this year in Wall Street bonuses per employee, and also its anticipation of a greater number of Wall Street layoffs. The mayor's office is anticipating that Wall Street will shed 25,000 jobs over the next two years, causing wages to fall more steeply.

Our reaction to this news was: only 25,000? That number seems far too low. A recent study from the New York state Department of Labor puts the possible job cuts on Wall Street at 36,000 employees, which is around one fifth of its entire work force. That 20% figure is also what the Wall Street Journal reported Wall Street executives were predicting in March.
In short, even the pessimists sound a bit too optimistic.
City, State Gap Emerges on Pessimism [New York Sun]
* Editor note: Yesterday a cyclone joke. Today a crack about the blindness of blind men. We’re definitely going to Hell for this.