The Streets Were Paved with Gold (38 page)

The nation’s largest “Dial-A-Ride” mass transportation system was inaugurated in San Jose, California, in 1974. For 25¢ a ride—10¢
for senior citizens and minors—each of the county’s 1.2 million residents could telephone and receive door-to-door chauffeured service within a 200-square-mile radius. Not surprisingly, Dial-A-Ride was successful. Too successful. Six months after the inaugural, reported Robert Lindsey in
The New York Times
, the “county supervisors voted to kill the unusual mass transit system because experience had shown more than twice as many buses—and double the original budget—were necessary to make it work, and the county did not think the cost was worth it.”

Imagine a similar experiment in New York. It is practically inconceivable that once in operation the Dial-A-Ride would have been terminated. Attempts to curb the buses would be greeted by outraged protests. Public officials would be condemned for making secret deals with the highway lobby. Or the oil interests. The poor and the public employees, it would be chanted, were sold out by the politicians! The issue would have been not cost but convenience, not what was affordable but what was desirable.

New York’s special political culture would not have tolerated it. Why is New York different? Unlike anywhere else in America, New York is a city of renters—75 percent of its residents pay rent. Many receive housing subsidies. A homeowner usually sees a direct connection between government spending and property taxes—as California’s 1978 Jarvis Amendment proved—creating popular support to hold down costs. But in New York the property tax leans on unpopular landlords and commercial interests. Residents came to believe that services were “free.” They also believed that government was a friend, and it was. New York is the capital of liberal compassion and concern. New York was the entry point and the social laboratory for the country. New York is also blessed with an unusual number of Jews—about 25 percent of its population and half the country’s total. The Jewish tradition stresses that government is a friend of the needy; government work, an honor; education, a necessity; compassion, a badge of virtue; voting, an obligation of citizenship. Because Jews overwhelmingly identified with the Democratic party and voted in greater numbers than any other group, until recently the liberal Jewish tradition dominated New York Democratic primaries. Since primary victories were usually tantamount to election, more conservative and numerous Catholic and Protestant voters lacked similar clout.

New York’s politics were invested with a moral mission. Not only did we wish to do good, we wanted, as Irving Kristol once
wrote, to
feel
good. Immediately. Questions about cost or budget limitations were often equated with the voice of right-wing reaction.
Either you want to help people or you don’t.
The question was
whether
, not
how
; whether you were pro or con, good or evil. In New York, a city with four registered Democrats for every Republican, there was no two-party system to constrain the debate, no organized home owners, no coordinated business community. The press, more often than not, focused on the conflicts; on what was said, not what was done. Not surprisingly, people feared being attacked, being called heartless, reactionary, perhaps evil.

“The fundamental causes of the fiscal crisis are shared by many cities,” says Donna Shalala, Assistant Secretary of HUD, whose responsibilities include urban research. “But the way New York dealt with its declining economic base was unique. Other cities had declining economic bases. They all raised taxes. They all begged the state and federal government for more money. Or they cut services. New York did all of those things, except it really didn’t cut services. We pretended we did. Instead we borrowed and borrowed. That was our unique contribution to the urban crisis.”

She continued: “New York has a different political philosophy about what the role of government is. When I was a kid growing up in Cleveland [where there are no Republicans on the thirty-three-member City Council], we didn’t expect our garbage to be collected every day. It was, and is, good politics in other cities to have a balanced budget. It wasn’t in New York. In New York, we saw the role of government as helping to redistribute income from the rich to the poor. Places like Seattle and San Francisco didn’t view their city government that way. New York constantly searched for money and revenues to do the things they wanted to do.” Even if it meant printing money.

No other city offered the same range of services. None had a city university bigger than most state universities, with free tuition and open enrollment.
^*
None has a vast municipal hospital system or provides similar housing subsidies. Only one other state—Rhode Island—has a law requiring companies to pay unemployment compensation to their striking workers; if there’s a strike, the affected company subsidizes it. No other city pays such high taxes. No other city was allowed to borrow so much. Few states
have New York’s constitutional prohibition against amending employee pensions. Only nineteen offer full collective bargaining rights to public employees. Unlike most cities, New York has operated with less actual state control of its affairs, removing a potent check on fiscal abuse. In neighboring New Jersey, for instance, since 1938 a constitutional ban has forbidden local deficits and required each of the state’s 558 counties and municipalities to submit detailed budget estimates to a special state agency. Borrowing is strictly limited and monitored. By law, New York budgets are supposed to be balanced, but unlike New Jersey they had not been carefully checked.

New York’s labor relations have been, well, unusual. Like forty-two other states, New York prohibits strikes by public employees. However, when city employees strike, the penalty provisions in the law have rarely been invoked. Unlike Texas, New York has not treated its workers as serfs. New York has a different tradition. Labor is the good guy, the aggrieved party fighting management and bosses. John Lindsay became a hero to the country—but a leper in New York—when he proposed that the National Guard be called in to break a 1968 sanitation strike. Lindsay was forced to cave in. A similar strike in Atlanta in 1977 was handled very differently. Mayor Maynard Jackson acknowledged that fairness would dictate a rise in the average sanitation man’s $7,400 salary, but the city couldn’t afford it. He pleaded with the 943 sanitation workers, many of them black like their mayor, to return to work. When most refused, he fired them. “I’m not going to be the first mayor since 1937 to take us to the bank,” he vowed. “Before I take the city into a deficit position, elephants will roost in the trees.”

In New York, to grant teachers a pay raise in 1975, the Board of Education agreed to shorten the school week, sacrificing the children to the demands of organized teachers. New York’s municipal workers in 1975 chose layoffs of less senior workers and service cuts over substantial cutbacks in benefits. Some of their members—a disproportionate number being women and minorities—were laid off so that the survivors could continue their benefits and pay increases. Neighboring Yonkers, with its own Control Board, followed New York’s example. Sidney Hillman would twist in his grave, as would most true Socialists. In Pittsburgh, former Mayor Peter Flaherty promised voters he would reduce city employment, increase city services and reduce city taxes. He did. Blithely ignoring the fiscal crisis, in early 1978 New York cops demanded 22 percent
raises. A few years ago, New York’s 4,000-member bricklayers’ union agreed to a 14 percent wage cut to save jobs and construction companies from bankruptcy. Why? I asked a major construction union leader. “The difference with my workers and city employees,” he said, “is that we know that if the contractor goes under, we lose our jobs. In the city, they think their job is a right.”

A perspective on New York’s unusual political culture was given by Newark’s Mayor Ken Gibson at a 1975
New York Affairs
symposium. For years, people have worried aloud that New York might become another Newark. A jobless city, a poor city, a black city. Yet Newark—just sixteen miles from New York—has a balanced $220 million budget and a very tough-minded black mayor who doesn’t have to prove anything. Newark doesn’t have free tuition or open enrollment, extensive housing subsidies, or seventeen municipal hospitals. Gibson would like these, no doubt, but he does not confuse what he would like with what his city can afford. “I firmly believe,” he told the symposium, “that the purpose of city government is to provide basic services to people. That has to start with those services that are absolutely necessary in the city and progress to another order of priority, and once you define what those basic, absolutely needed services are in the city and you go to some point where you’re going to say, ‘At this point we stop,’ then you have to decide where you get that money to provide those basic services. There’s not much beyond that.… Now, New York’s budget is near the top when you look at any government structure in this country, about third to the federal government. You’re not talking about a big city any more at that level; you’re talking about a budget that is larger than most countries in the world. You have to look very carefully at what services the city should be providing, because it is still part of the state and still part of this country.”

Reflecting the view prevalent in New York, Peter Salins, Chairman of the Urban Affairs Department of City University’s Hunter College, challenged Gibson. The purpose of a city, he said, is not just “the maximization of the economic output of the city”; the city is “an upward mobility machine.” A city has “to make sure that all of those activities that contribute to upward mobility are kept intact. Now what that means is that, in some ways, conventional housekeeping is the least important. I’m not saying that I like a city littered with garbage or a city with inadequate fire protection, but in terms of the very essence of the city’s responsibilities and the ultimate well-being of its residents, some of the social services
which are considered so expendable are the least expendable.” Presumably, balanced budgets get in the way of this egalitarian goal. The city becomes a substitute for the national government. Business comes to be viewed as provider of taxes rather than jobs; middle-income people have an obligation to stay—despite reduced services—so that the poor may move upward. Whether it works matters less than whether you try to make it work.

This philosophy, embedded deep in New York’s political culture, helped break the city’s economy. But this breakdown of a political culture has occurred elsewhere. On the “right” side of the social and political scale, states such as Mississippi and Texas choose to ignore their poor, preferring surpluses, huge profits and low taxes to people services. Many Southern states ignore the unfair labor practices of companies such as J. P. Stevens. New York firemen, unlike those in Dayton, Ohio, never went on strike and watched, callously, as buildings burned to the ground. Despite the Civil War, segregation was legally sanctioned by many states into the 1960’s. Despite balanced budgets and labor peace, the poor and other citizens of Chicago paid a steep price for Mayor Richard Daley’s autocratic rule. Whether in the city of Detroit, where collection boxes are pilfered, or in the medieval village of Auletta, in southern Italy, where the crucifix and saints in its tiny hilltop church have been stolen, our churches are no longer shrines.

In this sense, New York is not unique but is a metaphor for the nation and the world. Or, as former Treasury Secretary William Simon argues in his book
A Time for Truth
, “New York is not disconnected from America. It is America’s premier city and its intellectual headquarters. It is America in microcosm—America in its most culturally concentrated form. The philosophy, the illusions, the pretensions, and the rationalizations which guide New York City are those which guide the entire country. What is happening to New York, therefore, is overwhelmingly important to all Americans, and it is imperative that they understand it … [or] New York’s present must inevitably become America’s future.” Steep taxes, huge deficits, burdensome debts, high energy and pension costs, placating interest groups with public money, industries that can no longer compete, the declining work ethic—are common elsewhere. “I find it very unsettling these days,” Felix Rohatyn wrote in a
Business Week
guest column, “to see that many of the same elements that led New York City close to financial catastrophe exist on the national level, and on a larger scale.” Taxpayer
dissatisfaction with government waste and spending is spreading, as is resentment toward government employees and bureaucracy—not just in New York. The average pay of a federal worker in 1977—$16,936—is one-third higher than that of the average American in the private sector ($12,232).

Ironically, many national conservatives and city liberals have a stake in proving that New York is not unique. But despite the self-serving admonitions—Simon’s to make a conservative point, Governor Carey’s to make a case for federal aid—New York is not America. “A favorite alibi of those who have presided over the disaster of New York City government over the past decade is that ‘all urban America’ is in crisis,” Senator Moynihan proclaims, in one of his many lucid moments. “This is not true. Indeed, it attains to the condition of a political lie. It may make us feel better to tell this lie to one another, but in the end it is mere self-deception. Our urban problems are not unique, but neither are they general. At most they are Northeastern.” And, as we’ve seen, New York’s fiscal and economic ills are more chronic than the Northeast’s. “It is important to recognize,” Richard P. Nathan and Paul R. Dommel state in their study
The Cities
, “that the United States does not have what can be called a ‘national urban crisis.’ Many large cities are well off. Moreover, most city dwellers live in suburbs or in relatively small cities. What we face, in short, is a situation in which some—though by no means all—central cities and a few large suburban cities are experiencing what can be called ‘urban crisis conditions.’ ” The Congressional Budget Office buttresses this view. After surveying the city’s unique deficits, debt and rapid economic decline, their study found: “All of these peculiar aspects of New York’s situation should make one pause before concluding that the city’s crisis is but the forerunner of those that will occur widely elsewhere.”