The Streets Were Paved with Gold (41 page)

“I do not rule Russia,” Czar Nicholas I moaned; “ten thousand clerks do.” After just six weeks in office, Mayor Koch learned the same lesson. On February 7, 1978, the Mayor issued his sixth executive order, which abolished the Office of Service Coordination, terminating 186 workers, saving $2.2 million. Koch had good reason to pick on the agency. It was supposed to coordinate neighborhood services; instead, during the Lindsay and Beame years, it protected out-of-work basketball players and between-campaign advancemen. Still shaking his head, James Capalino, the young man Koch chose to command and dismantle the agency, says, “There were forty-five supervisory and assistant Youth Service specialists who were paid to play basketball games.”

A month after the Mayor issued his executive order, they were no longer playing basketball on city time—but that’s about all that changed. The 186 workers were still being paid. Owing to strict civil service regulations, 125 of them bumped non–civil service provisionals in other agencies, leaving 61 of the original 186 to be fired. But because of the fail-safe duplicative protections of the collective bargaining system, even this number was uncertain. Under state law, the union had two weeks to invent new job titles. If these titles matched other titles of workers with less seniority, the surplus basketball players get to bump other employees with less seniority.

All a mayor elected by the people could do was issue an executive order. All Capalino could do was send 186 individual notes warning people that they would be off the payroll as of March 8. All hard-working junior clerks could do was pray that their number wouldn’t be called. “The provisional could be a top guy and yet get bumped by some banana,” snorted Commissioner Russo. The system takes over. “After six weeks in office, I’ve come to the conclusion that Boss Plunkett wasn’t all wrong when he talked about the civil service,” said Koch of the boss who preferred the spoils system. “One shudders to think what it would be like to take on a big agency,” said Capalino.

A leader committed to change must first calculate the political price he has to pay to achieve that change. In a pluralistic trading system of government, Koch might win legislative approval to amend civil service laws—but lose his battle to gain control of the Board of Education.

Political leaders make choices and trade-offs. The system bogs down as the problems spread more quickly than government’s ability to cope with them. Entrenched interests or “factions” check the ability of a mayor to represent what the Founding Fathers referred to as the “common good.”

The problem is universal. Conrail claims one reason it loses money is because members of Congress—who control the purse strings—insist that trains stop in their little out-of-the-way hamlets. The President determines that thirty-two water projects around the country are wasteful of taxpayers’ money, but the outcry from the affected states reaches such a roar that he can cut only nine. One Senator, Russell Long of Louisiana, Chairman of the powerful Finance Committee, can bottle up tax reform or energy legislation. The American Medical Association succeeds in killing a hospital cost containment bill. Wasteful military bases remain open because powerful constituents protect them, including representatives of unhealthy local economies (like New York’s) who protest the loss of needed jobs. HEW Secretary Joseph Califano announces plans to discourage unhealthful cigarette smoking, and tobacco-growing states smoke that their economies will be razed. Local governments pay fees to tie into computers which tell them not what programs they need, but what they can get from the federal government.

“It may just be a sign of old, or at least upper-middle, age,” declared Otis G. Pike of New York’s Suffolk County after announcing his retirement from Congress, “but people bug me more than they used to. They are asking their government to do more for them and are willing to do less and less for themselves.… In our all-consuming effort to get reelected, we kept telling the people we’d do more and more for them, and they’ve come to expect it.”

It gets pretty expensive. In 1965, President Johnson struggled to hold the federal budget at $118.4 billion. By 1978, the budget reached $453.5 billion. Even when there are sound reasons to terminate benefit programs, as was the case with Medicaid reimbursements for city retirees or federal water projects, a public-interest constituency does not exist to counter the organized voices of special interests.

This leads to logrolling. Urban members of Congress, for instance, promise to support inflationary farm support programs in return for pro-city votes. You scratch my back, I’ll scratch yours.

“Frank, that speech yo’ made wasn’t one bit helpful,” President Johnson once reportedly said to Senator Frank Church.

“I’m sorry, Mr. President, the headlines exaggerated what I said,” Church sheepishly responded.

“The headlines were all Ah read, Frank, and they’re all the people read.”

“But I didn’t go any further than Walter Lippmann.”

“Well, Frank,” LBJ retorted, feigning sorrow, “the next time you need money to build a dam in your state, you better go to Mr. Lippmann.”

That’s how the game often works. Ed Koch, like Jimmy Carter, is called a confrontationist if he speaks out and threatens to take his case to the public; if he doesn’t heed the counsel of the domestic equivalent of the military/industrial complex—the banks, unions, landlords and other organized-interest groups who profit from government. Government spending grows. Conservatives like Nixon and Ford didn’t stop it, and liberals don’t try. As spending rises, so do expectations. Parents demand tuition tax credits. Teachers demand more school aid. Farmers demand guaranteed prices. Cities demand more programs. Scientists demand more study grants. The airlines demand more subsidies. Chrysler and gas stations and the steel companies demand federal loan guarantees. Government becomes a giant commissary where free lunch is served. Politics becomes an arena not just where competing interests clash but where gifts are exchanged, often in return for votes—legalized vote buying. For years, many of us said the federal government could afford this because, unlike cities or states, it could print money. And yet in recent years we have learned federal spending does contribute to inflation, just as local taxes contributed to the flight of people and jobs. We have learned there are limits to growth and what government can do. Newton’s law—for every action there is an equal and opposite reaction—applies to government, as well as physics.

There are also political limits to growth. As citizens pay more for government and receive less, a taxpayer revolt becomes inevitable. Taxpayers will simply refuse to pay the bill, turning off to all government, all reforms that cost money, all belief in progress. Government becomes the enemy; politicians and public unions will become scapegoats—they’re all a bunch of crooks! Escalating publie
cynicism thus poses a threat to democratic government because citizens will not trust their elected officials to make decisions. This attitude toward government threatens the “social contract.” But it is, we shouldn’t forget, a reaction against another kind of cynicism. In New York, politicians lied about their budgets; the police, sworn to uphold the law, broke state law by going on strike; Mitchell-Lama tenants lie about their incomes to remain in subsidized housing. Landlords rip off high rents from the city, nursing home owners rip off Medicaid, hustlers rip off welfare. City workers assume expensive perks are really prerequisites for a good life and that a government job is a right. The public becomes an abstraction. Gimme. Gimme. Why not? Everybody in America’s doing it. The rich usually don’t pay their fair share of taxes. Legislators get rich off lucrative law practices. Politicians buy votes with public money. College students don’t repay their National Student Loans. Secretaries ask to be fired to collect unemployment insurance for a year. Farmers get money not to farm.

Democracy in New York—America, the world—is suspended between what it wants to do and what it can do, between its divergent political and economic goals. New York cannot cope with its powerful “factions.” America cannot cope with its energy or balance-of-payments woes. Italy cannot cope with terrorism; Japan, with corruption; France, with the rich who don’t pay taxes; England and Sweden cannot cope with their unions; Canada, with Quebec. No nation has learned to cope simultaneously with inflation and unemployment. In addition to not working, the tension between our social goals of equality and our economic systems’ ability to pay the bill pulls government in opposite directions. To further social justice, New York City undertook tax, spending and borrowing policies which undermined its economy. The requirements of social democracy and greater equality clashed with the requirements of a free market (capitalism) and the liberty of people to move.

“Liberal democracy’s crisis is real,” Alan Wolfe, author of
The Limits of Legitimacy: Political Contradictions of Contemporary Capitalism
, has written. “Its roots lie in the fact that in Western societies the economic system is liberal and capitalist while the political system is formally democratic and therefore potentially socialist. This is why some … argue that the political system must be revamped to bring it in line with the economy. It is also the reason why others work to transform the economy according to the principles
of democracy. The impasse of liberal democracy will not be resolved until one side or the other has its way.”

The clash was obscured as long as there was a growing economy—
more
for everyone. But in New York, as is becoming evident in America and around the world, everyone cannot be satisfied. For many, there is no more
more.
There are limits to what New York can spend, tax or borrow. There are limits to what the federal government can do or spend to reduce unemployment or curb inflation. Coal miners cannot capture 39 percent pay hikes without affecting consumer prices, including the prices that they themselves will have to pay. There are limits to what the growing Sunbelt will spend to rescue the lagging Northeast, to what the middle class will voluntarily pay to help the poor. Private capital expansion may not be possible under a socially just tax system, just as true tax reform might threaten capital formation. Alaska cannot enjoy unrestrained growth and an unspoiled environment. Japan and the Western European democracies cannot reduce America’s balance-of-payments gap without harming their own economies, at least in the short run. Someday, we know, the warming of the earth’s surface will melt the ice caps, the oil wells and coal mines will lie fallow. Eventually, the light from the sun will be extinguished.

We know all this, and yet even when we know what to do we can’t or don’t know
how
to do it. Peter Jay, the British Labor government’s ambassador to Washington, wrote some years ago, “Democracy has itself by the tail and is eating itself up fast.” With the exception of England, New York was one of the first to complete the meal.

D
URING A LONG
, weary night in autumn of 1975, when it appeared the city would plunge into bankruptcy, Mayor Beame’s Contingency Committee on bankruptcy was summoned to Gracie Mansion. The Mayor, just returned from the Alfred E. Smith dinner, was wearing white tie. Some of the borough presidents were in sweat shirts. Together, a large contingent waited out the clock to learn whether the teachers’ pension fund would lend the money necessary to meet the next day’s bills. “By 4
A.M.
or so, we were all getting a little hysterical,” recalls Beame’s former press secretary, Sidney Frigand. “Ira Millstein [one of Beame’s SEC attorneys] came over to me and said we should have an announcement of bankruptcy ready. How do you write a release that the city is going under? It’s like saying, ‘We announce today the end of the world.’ I said, ‘Who the hell will take the blame for this?’ ” Those in attendance roared when Frigand showed them his draft press release. It began: “City Comptroller Harrison Jay Goldin announced today.…”

Goldin, not Beame, would be the messenger of the bad news. Frigand says it was all a joke, and that they would not have issued a release in Goldin’s name. But, he admits, “It’s not out of the question.” The point—as Alexander the Great’s messenger tragically learned—is to take credit for good news and avoid delivering bad news. The game among politicians is well understood by Charles Rosen, the charismatic leader of Co-op City’s 60,000 tenants. “Most
politicians want to come out clean,” he says, his voice perched between a squawk and a shriek. “They don’t care who wins, as long as they come out clean. Everyone wants to be there for the bar mitzvahs, just as everybody wants to avoid the funerals.” To take credit and avoid blame.

Avoiding blame has an inglorious tradition in New York politics. Beame obviously cared deeply about avoiding bankruptcy, silently suffering humiliation to avoid it. Yet when it appeared the dreaded announcement had to be made, he preferred not to make it. Hiding behind the slogan “The Second Toughest Job in America,” John Lindsay sought reelection in 1969 by suggesting the city was ungovernable. Robert Wagner, his predecessor, won reelection in 1961 by blaming the failures of his first two terms on “the bosses.” In early 1975, Beame blamed Lindsay, Goldin, Republicans, the press, and then the banks for the fiscal crisis. When the 1977 SEC report blamed him, the Mayor’s remarkable response was that everyone was guilty. Therefore, no one was. Throughout the sixties, New York politicians blamed Vietnam and misplaced national priorities for urban failures. When the war ended, they blamed Richard Nixon, the banks, Washington, Robert Moses, the Sunbelt.