The Streets Were Paved with Gold (40 page)

Another potential check—the two-party system—also didn’t work. In New York, Republicans, like the bald eagle, are an endangered species. There are four Democrats for every one Republican. In the 1977 mayoral contest, the Republican candidate got less than 5 percent of the vote. Out of forty-three members of the City Council, only five were Republicans in 1978; of the sixty-five members of the State Assembly from New York City, four were Republicans; of the twenty-six state senators, eight were Republicans. Were the number greater, it might not have mattered. There was scant ideological difference between the leaders of both parties. Governor Rockefeller, the gray eminence of state Republicans, had an alliance with Democratic Mayor Robert F. Wagner, even offering him the Republican nomination for mayor in 1973. His brother, David Rockefeller, later contributed money to Democrat Abe Beame’s 1973 campaign. John Lindsay captured the mayoralty in 1965 as a Republican, but he won with less than 50 percent of the vote in a three-way race in which he was positioned as the most liberal. When such conservatives as William F. Buckley or John Marchi raised their voices to protest city spending, borrowing or tax policies, they were dismissed as loons or reactionaries. In a sense, a nonideological “permanent government,” as Jack Newfield christened it, ruled in New York.

“There are classified Pentagon documents that get more press coverage than the Republican party,” complained Barry Farber just days before voters sentenced his 1977 mayoral campaign to oblivion. “The disease in New York is a one-party system. Whether it exists in the Soviet Union or New York, it’s a disease. I want a party of opposition, like in England and Israel, where the bony finger of indignation is thrust regularly into the face of power. Martin Luther King used to declare, ‘I have a dream.’ I have never heard of a higher local Republican dream than ‘Let’s get a judge.’ ” To get judges and other patronage appointments, the local Republican
party often became a wholly owned subsidiary of the local Democratic party.

Whatever two-party system existed in New York was the result of a civil war within the Democratic party. Reformers vs. regulars. Reformers constructively opened the political process and checked the iron power of political bosses, but they didn’t serve as a check against the fiscal and economic abuses of New York officials. After defeating the last boss of the Democratic party, Carmine De Sapio, in the early sixties, the attention of reformers remained fixed on procedural party matters rather than government—they continued fighting the last war. When local procedural squabbles didn’t drain their energies, ending the war in Vietnam, dumping Lyndon Johnson or impeaching Richard Nixon did. Like most of us, reformers were attracted to the larger issues. Besides, Robert Wagner was against the “bosses,” as was John Lindsay. They shared a common liberal philosophy: taxes were good because they redistributed income from rich to poor; spending was good because it helped people; unions were the good guys, business the bad guys. Management was a “conservative” issue.

Ironically, the success of the reform movement—as well as the advent of television—removed the strong party organization as a potential check on the abuse of power. No longer was there a coherent party apparatus through which citizen complaints could be filtered, sorted out, disciplined. In 1959, Sayre and Kaufman observed, “no single ruling elite controls the politics and government system of New York.” But as Professor Raymond Horton of Columbia observed in a recent unpublished paper—
Sayre and Kaufman Revisited
—they assumed, as did James Madison, that the many competing special interests would balance each other, creating stability. In theory. In fact, city officials grew politically more dependent for their power and reelection on the very forces they were to regulate, on those who shared a public-profit motive and benefited from the growth of government. Instead of being dependent on one political machine that practiced the art of political trading, they were now dependent on many smaller machines that got more than they gave. “The result,” Francis Fox Piven writes in
The Fiscal Crisis of American Cities
, “was a virtual run upon the city treasury by a host of organized groups in the city, each competing with the other for a larger share of municipal benefits.… The cities are unable to raise revenues commensurate with these expenditures; and
they are unable to resist the claims that underlie rising expenditures. And that is what the fiscal crisis is all about.…”

Of course, the city was profligate under the bosses. In the mid-nineteenth century, during the last four years that Boss Tweed ruled New York, the city’s debt tripled. In 1933, after bosscontrolled Jimmy Walker was deposed as mayor, Governor Herbert Lehman was forced to step in and submit to a “Bankers Agreement” obliging the city to accept a stern fiscal regimen. It is at least possible that a strong citywide party, immune from Republican or factional attack, could have policed and curbed the demand for more when there was no more to give. Mayor Richard Daley presided over a corrupt party but not a bankrupt Chicago. “He can and does say no to demands for spending,” wrote Terry Nichols Clark in 1976, “because he is strong enough to say no.” New York’s fractured political system made strong leadership difficult.

The mayor had power to say yes. It was harder to say no; easier to gimmick the budget than to cut it. With the passage of a new city charter by a two-to-one margin in 1961, another check was removed by granting the mayor sole power to estimate revenues. No longer would the comptroller, the City Council and the Board of Estimate share this power. Also, unlike many states which check the fiscal abuses of their local governments, New York State did not play cop. To avoid new state aid, the Governor and state legislature preferred to see the city increase its revenue estimates, taxes or borrowing. The permissive state parent, which created “moral obligation bonds” and its own array of budget gimmicks, had little moral authority or inclination to prescribe medicine they themselves abhorred as if it were poison. “Public discussion of state finances,” a September 26, 1973, audit by state Comptroller Arthur Levitt declared, “now includes such phrases as ‘rollovers,’ ‘reverse rollovers,’ and ‘accelerations.’ What these terms have in common is that they represent manipulations of the financial reporting process and tend to reduce public understanding and public confidence in government operations.” Levitt was one of the few public officials to regularly warn of city and state fiscal practices, but his audits were usually issued a year or two after an event. He rarely mounted public campaigns, seeing his role as a detached referee. A press release sufficed. Levitt, not surprisingly, continued to be invited back to stay at Governor Rockefeller’s mansion in Albany. City comptrollers certainly didn’t blow the whistle. Abe Beame, who was comptroller for eight
critical years, would have had to blow the whistle on himself. For him, like most city officials, it was good politics to play the game.

The banks and bond counsel, which also could have blown the whistle, played the game, too. They belonged to the same community of interest. More borrowing meant more profits, more legal fees. They had a good thing going. And the city had a good thing—access to its own money printing plant. To question city or state officials was to risk government retaliation or public abuse. For what? Their friend Nelson said it was okay. The city certified that its books were balanced. Why make waves when business was thriving?

Society’s official whistle blowers—the press—did not do their jobs, either.
Wall Street Journal
editorials were on target but were read by the wrong audience. On fiscal matters,
Daily News
editorials should have been read but weren’t. The paper that thinks of itself as the city’s conscience—
The New York Times
—abdicated. Its editorial bleats—claiming that servile acceptance of new business taxes was “a civic responsibility,” warning of the dire consequences of budget cuts—would appear even more ridiculous if it were not not fatuous New York
Post
editorials. The editorial page editors of both papers, John Oakes of the
Times
and James Wechsler of the
Post
, were too close to Lindsay, serving as advisers. They were not only politically but ideologically coopted. They supported the city’s tax and spending policies. Instead of viewing what the city was doing as harshly as they would Defense Department cost overruns, they permitted their liberal ideology to sway their judgment. Or, as Louis Rukeyser, in a devastating critique of past
Times
and
Post
editorials in
MORE
magazine, once wrote, “New York’s editorialists would often have been more astute if they had forgotten about ‘liberal’ and ‘conservative,’ and remembered to check their addition.”

The reporting press, which would have had more effect on the public and its officials than the editorial writers, paid little attention. The
Times
never assigned an investigative reporter to go through the city’s books (nor have they since). The
Herald Tribune
, which might have, folded in the mid-sixties, leaving New York with three citywide dailies—there were six in 1847 and eleven in 1952. With little competition, and less interest, a big story was neglected. Yes, the papers dutifully reported statements from the Citizens Budget Commission, an occasional bleep or dissent—usually on page 63 or down deep in paragraph 26. However, the
“pattern” of their coverage, as Martin Mayer once scolded the
Times
in the
Columbia Journalism Review
, was to report what officials said, not what they did; to cover their ass, not the story. Even as late as the winter of 1975, when Mayor Beame claimed the deficit would be $641 million, the press reported this as a fact, with no qualifiers. Any challenge of the figure was usually reported as “an allegation.”
^*

Reporters often filtered the story through their own prism. “No matter how critical we were in the Lindsay years and how we appeared to be in an adversary relationship,” says Richard Reeves, former City Hall Bureau Chief of the
Times
, “we allowed him to focus the direction of our coverage. And the directions he chose were: Washington was short-changing the city; Albany was anticity; and any questioning of Lindsay’s actions was somehow connected to racism.” Covering the city administration from room 9, the City Hall press room, it is difficult not to allow the mayor “to focus the direction of our coverage.” Undermanned, often overworked, a City Hall reporter becomes a fireman—there’s a twoalarm fire in the Municipal Building, with the comptroller charging waste and mismanagement, the mayor is holding a two o’clock press briefing, the Board of Estimate a press conference at three. Instead of just printing excerpts from relatively worthless press releases, journalists often allowed their sources to determine what was news. They too often covered fires, not the workings of government. Little time was left to tell the reader what was really going on. Editors, who had the time, often didn’t give the direction. They were generalists, and the subject demanded specialists. Besides, city finances and budget intrigue and management were also, well, boring. “The big mistake I made,” reflects one former City Hall bureau chief, “was in willingly letting certain reporters cover finances. The reason I didn’t was because I was bored.” Those who weren’t bored—at
The Wall Street Journal
or other specialized publications—were easily ignored. Those who covered City Hall for TV or radio couldn’t do the subject justice in two minutes or less—even if they understood it. The academic community, which could have understood it, produced little evidence that they tried.

And, finally, in managing the city, the mayor lost the ability to
check the burgeoning power of the municipal unions. The adversary relationship that is supposed to exist between boss and employee collapsed. The mayor became a supplicant, seeking political support, with no weapon in his arsenal to equal the atom bomb of a paralyzing strike. Unions exercised a veto over the appointment of certain commissioners. The civil service system insulated workers from political control, but, also, from mayoral control. Unionization reached up into managerial ranks, claiming all but 2,000 managers. Workers and managers were often brothers and sisters in the same union. Mayors come and go; their unions remained and expanded. A mayor, elected by the people to manage the city, could not easily do so.

When the city’s revenue base rapidly deteriorated, starting in 1969, first Lindsay and then Beame wouldn’t wrestle with the municipal labor tiger. “So resistant to contraints posed by the deteriorating fiscal environment was the labor relations process,” Ray Horton wrote in the
City Almanac
, “that real compensation for most City employees increased more rapidly in the 1970–1975 period than in the 1965–1970 period. The political power of organized workers … effectively insulated the labor relations process from the effects of resource scarcity.” In the 1971–75 period alone, the Temporary Commission found, while police services and hours worked declined, the compensation of cops rose by an average of 51 percent—more than in the prosperous sixties. The city’s tax levy budget, according to the Budget Bureau, expanded more rapidly between 1970 and 1975 than during any other five-year period since 1960, soaring 15 percent annually.

The power of organized constituents was on display when the city government, in the spring of 1977, tried to withdraw its contribution to the Medicaid program, which pays the doctor’s fees of its retirees. Retirees already receive free medicine under Medicare. Normally, the medical fee is paid by the individual. But for years the city sent an annual check—about $80 in 1977—to each of its 40,000 retirees. The yearly cost was a relatively modest $4.4 million, but with increased retirements city officials worried it would quickly escalate. Acting like the statesman he can be, labor leader Victor Gotbaum agreed to terminate this fringe benefit to help pare the budget. The Beame administration introduced the necessary legislation before the City Council in February. By early March, Brooklyn Councilman Robert Steingut warned Labor Commissioner Anthony Russo that the bill was dead because of pressure
from constituents. By March 31, the bill was an orphan. The Mayor, running hard for reelection, pretended defeat was victory and issued a press release, claiming: “We were able to avoid imposing this hardship on retirees.” Russo put it differently: “Abe collapsed. There was too much political pressure on him. City Council President Paul O’Dwyer has even introduced a bill to
increase
the reimbursement to match the increase in premiums.”