When the late Speaker of the House Thomas P. "Tip" O'Neill uttered his famous line about all politics being local, he wasn't saying that's always a good thing.

It certainly was not in New York last week, as evidenced by the parochial political uproar over - strangely enough - an evolving network disaster-recovery plan.

As my colleague Ellen Messmer reported Oct. 21, a quartet of regulatory agencies led by the Federal Reserve has drafted a blueprint designed to assure that any future catastrophic terrorist assault does not put the nation's financial capital out of business for as long as the last one did. Wall Street trading was halted for a week after Sept. 11, and, according to the movers behind this initiative, back-up plans and facilities proved woefully inadequate throughout the financial district.

Among the corrective measures being proposed is that central and back-up facilities for the most important financial institutions be separated by at least 200 miles. The thinking is that only such separation will provide the necessary assurance that an attack will not disable both locations.

After the New York press caught wind of this suggestion last week, howls of anguish erupted from New York Gov. George Pataki, New York City Mayor Michael Bloomberg and the city's Chamber of Commerce.

The reason is the prospect of lost jobs and a diminished tax base. Pataki, Bloomberg and the Chamber cheerleaders are apparently convinced that this regulatory mandate, should it come to pass, will decimate the already-depleted employment rolls within New York's financial district. They even ginned up an estimate of the economic carnage: 25% of 155,000 jobs. (Rule of thumb when dealing with politicians: Divide such "estimates" by at least five . . . 10 to be safe.)

"It's a horrible, horrible concept," Pataki told New York's Daily News.

How horribly horrible? Well, the governor says, the requirement will not only drive these jobs out of New York City but clear out of the country. . . . It's not clear why.

"We all want to make sure we have back-up facilities," Bloomberg harrumphed. "But splitting a company into two parts and moving one 300 miles away is, No. 1, giving in to the terrorists, and No. 2, it just doesn't work."

Giving in to the terrorists? I suppose you could make the same argument about extra security screenings at the airport . . . if you want to be the butt of late-night jokes by Leno and Letterman.