State Comptroller Tom DiNapoli ad mitted Tuesday to giving remarkably generous raises to members of his staff – despite a state economic environment that some characterize as a catastrophe in progress.

His explanation for doling out double-digit pay hikes back in December for 21 of his in-house investment strategists – 13 of whom got raises of more than 20 percent?

“We’re in New York; we’re competing with Wall Street.”

Huh? “Competing?” Where exactly?

The subprime mortgage meltdown was well under way in December: The not-long-for-this-world Bear Stearns had already slashed 10 percent of its workforce. Banks had laid off 10,000 employees.

Far from being the all-powerful private-sector magnet drawing people with investment backgrounds that it may have been a few years ago, Wall Street is hemorrhaging jobs.

Which means there are two possibilities here – each troubling in their way:

The man supposedly adept at providing oversight to an already bloated state budget – and who is the sole trustee for the state’s $150 billion pension fund – is sloppy with his office’s budget and bids against himself, by not understanding Wall Street’s economic woes.

Or, back in December, DiNapoli decided to give out huge wage hikes – but couldn’t figure out how to justify them, so he’s offering up an unlikely story now.

Neither option is exactly reassuring behavior in a comptroller.

Who’s watching the watchdog?