The Streets Were Paved with Gold (43 page)

The same melody—
politics
—flows through the short-term decisions that helped bring New York to its knees. There are reasonable explanations for many of these. The word
moral
derives from the word
mores
, which means “customs.” During the sixties and early seventies, spending, borrowing and taxing were the accepted custom in New York. There was no organized opposition. “We would always report what the Citizens Budget Commission said in a little sidebar deep inside,” recalls former
Times
man Richard Reeves. “We thought the budget tricks were clever.” The same point was made by former Budget Director Fred Hayes in an interview with the
Times
: “The newspapers created the impression that we had phony problems and real solutions. Actually, the problems were real but the solutions were phony.”

“The presence of so much media skews New York politics,” Special Deputy Comptroller Steve Clifford told me just days before leaving his post in late 1977. “Media is all politicians come to care about. If you can get a shot on the six o’clock news, it’s more important than changing pension benefits.… Politicians see their job as running for office, not providing vision or persuasion. Part of
the blame, though, is the public’s. We have the most irresponsible electorate anywhere.” As Clifford suggests, many of these past decisions were popular, or appeared to be. Rent control was popular, as was free tuition, subsidized rents, school aid, the anti-Arab boycott bill, business taxes, spending now and paying later. “Democracy is a device that insures we shall be governed by no better than we deserve,” observed George Bernard Shaw. Citizens complain about garbage collection—but it is, after all, our garbage. Critics complain about television executives who offer braless Charlie’s Angels—ignoring the public, which gave the show its number one rating.

When he was about to depart city government after five long years, former Deputy Mayor John Zuccotti told a reporter, “You know, if you ever worry about America becoming socialist, it’s an interesting idea. I’ll tell you why. You believe in the American dream, private enterprise, etc. You’re raised on that. You work hard. You’ll get somewhere, etc. That’s the whole series.… You get in the government five years and you begin to see that people want you to solve all their problems.”

Politicians come to judge themselves, and be judged, by whether they deliver the pork; whether they offered grants rather than their own best judgment and wisdom; whether their decision was in the immediate interest of their district or city rather than the long-term interest of the nation. Wisdom and good management are not easily quantified. Hard cash counts. More grants, more programs, more roads, more dams, more malls. John Lindsay baldly justified his seconding speech in behalf of Vice President Spiro Agnew in 1968, saying it guaranteed the city would have a friend in Washington. Abe Beame justified his 1976 support of candidate Jimmy Carter on the same grounds. The unspoken assumption was that from these political acts would flow public monies. That legitimized their decisons.

Obviously, it’s not always easy to be a leader. The fundamental tension between a democracy and a republic, between our social and our economic system, is reflected in our politicians. Should they follow what voters want or their own best judgment? Polls or their conscience? Most of us are not immune to this conflict. During the early stages of the Vietnam war, like others of my generation I protested that the war was immoral, no matter what Lyndon Johnson’s pocket polls said about “popular” support. Yet in the latter stages of the war, when the polls reversed, we demanded that Nixon terminate this “unpopular war.” Many of us are enraged at
members of Congress who follow their constituents and vote against federal loans to New York—and at imperious politicians who ignore popular campaign finance reforms. It is in New York’s long-term interest to drastically reduce taxes. But how do you tell a worker to sacrifice a raise in order to increase business profits?

The public doesn’t help. The word “politician” has come—particularly in the post-Watergate period—to carry more negative freight than it should. We forget that a free society presupposes consent, which in turn presupposes compromise. Abe Lincoln, we forget, was a politician. He made deals, compromised, trimmed his sails, worried about tactics. So do reporters who try to seduce sources through flattery. So do business executives who ingratiate themselves with their bosses; teachers, with their principals; principals, with their superintendents; union leaders, with their members; lawyers, with juries. Americans suffer a double standard. On the one hand we resent politicians for “compromising,” and on the other we all compromise. In theory, the only people who don’t are dictators.

All of us like to feel morally superior. Unfortunately, New York politicians make it easy. Over the years, most have flunked Publius’ test. They failed to distinguish between what was popular and what was in the public interest, between immediate political gratification and the city’s long-term interests. Most of us can be selfish, foolish, hypocritical. But we’re not paid public money; nor are we granted a public trust. In this sense, politicians should be held to a higher standard. It’s not enough for them to explain that everyone was doing it; that it was the times, the pressures, the public thirst. Public officials are elected to lead, as well as follow. “Your representative owes you, not his industry only, but his judgment,” Edmund Burke admonished the Electors of Bristol; “and he betrays instead of serving you if he sacrifices it to your opinion.” Democracy requires that the electorate exercise self-restraint, the famed Austrian economist and philosopher Joseph Schumpeter wrote in
Capitalism, Socialism and Democracy
; but democracy also requires that when institutional checks fail, the ultimate check be the restraint and good judgment of leaders.

After completing his survey of fifty-one cities, the University of Chicago’s Terry Nichols Clark concluded, “The most consistent message of these findings is that local leadership can make a substantial difference. Fiscal strain is greater on local officials with weak tax bases and large numbers of poor residents. But some cities
are fiscally healthy (like Pittsburgh, Schenectady and St. Louis) even though they share many socioeconomic problems with Boston and New York.”

Mayor Wagner wasn’t being a leader when he muddled his way out of crises and commenced deficit financing; neither was John Lindsay when he surrendered huge labor settlements and accelerated local spending while the economy declined; or Abe Beame when he ballooned short-term debt and treated the gathering fiscal storm as if it were a public relations crisis; or Nelson Rockefeller when he crafted “moral obligation” bonds and approved or winked at city budget gimmicks; nor a generation of city and state politicians who spent, borrowed and taxed more than the city could afford.

After a two-year study of the city, the Temporary Commission on City Finances concluded its 17th and “Final Report” with this observation:

To excuse these leaders is to accept the assumption that no one is responsible for their acts, that we are all victims. On this point, at least, two opposing devil theories of the fiscal crisis merge. One—advanced by Beame and others—argues that the fiscal crisis proves the city is ungovernable, the victim of social and historical forces beyond its control; the other—advanced by the left—argues that the city is the victim of Washington or the banks. Both implicitly assume there is little New York could do for itself. Both accept what might be called the trapped insect theory—offering moral support to public officials who spend careers avoiding blame.

Long after he had left City Hall and after spending a tranquil summer in England reading Anthony Trollope, former Deputy Mayor John Zuccotti shared a drink with me and reflected on his time in City Hall. Did
politics
explain many of the bad decisions made by New York over the years? He thought a while, looking rested but older than his forty years.

“It’s hard to generalize,” he said. “I suppose you could say New York tried to do too much, and possibly for the wrong reasons. It’s fair to say New York tried to solve its social problems. On the other hand, officials tried to help their own political position. It wasn’t all for uplifting moral reasons. They were trying to get votes.… There’s nothing surprising about it. If you read Trollope, you know it’s the oldest game in the world.”

I
F
politics
IS THE MELODY
of the fiscal crisis,
liberalism
provides the chorus. New York City is liberalism’s Vietnam. Their traditional weapons—more money, more programs, more taxes, more borrowing—didn’t work here; just as more troops, more bombs, more interdiction, more pacification programs didn’t work there. And as that miserable war should have instructed military adventurists on the limits of American power, New York’s fiscal war, unavoidably, teaches the limits of government intervention.

The domino theory did work in New York. Goaded by liberalism’s compassion and ideological commitment to the redistribution of wealth, New York officials helped redistribute much of the tax base and thousands of jobs out of New York.

Yes, the city was, to some extent, the victim of federal policies, of historical and migratory patterns beyond its control, of local and state decisions whose origins were political, not ideological. But many of its wounds were ideologically self-inflicted. New York was not compelled to create a vast municipal hospital or City University system, to continue free tuition, institute open enrollment, ignore budget limitations, impose the steepest taxes in the nation, borrow beyond its means, subsidize middle-income housing, continue rigid rent control, reward municipal workers with lush pension, pay and fringe benefits, graduate kids who couldn’t read, pay too much attention to “issues” and too little to management and the delivery
of services. These decisions were designed not just to win votes. They sprang as well from a genuine sense of compassion, a desire to help people. That is what the liberal tradition is about.

“New York has been the laboratory for social innovation in this country,” observes urban historian Richard Wade, a City University professor. “The welfare state was invented in this state.” Led by Governors Al Smith, Franklin Roosevelt, and Herbert Lehman, New York pioneered social legislation to help poor people. Inspired by a New Yorker, FDR, the federal government helped put people back to work and saved the country from the chaos of unfettered capitalism. Liberalism spurred the successful effort to replenish the South’s lagging economy, introduced Social Security, outlawed sweatshops and child labor, strengthened antitrust laws, fathered the progressive income tax and social legislation to care for the old, the sick, the infirm, the poor. The Wagner Act, named after New York Senator Robert Wagner, Sr., granted full citizenship to beleaguered labor unions. The left was in the forefront of two of the most important movements of this century: civil rights and the women’s movement. States like Texas do indeed enjoy budget surpluses and pro-business climates, but they also ignore their poor and often treat workers as indentured servants.

New York, the Statue of Liberty city, has been home for courageous immigrants fleeing oppression or poverty and seeking freedom and new opportunity. “America”—New York—“was in everybody’s mouth,” wrote Mary Antin, who immigrated here in 1891. It was, she said, “this magic land.” The streets were paved with gold. The dreams and energy of immigrants charged New York’s unique sense of compassion, built and infused the world’s capital of culture, commerce, ideas. New York’s melting pot boasts more Jews than Tel Aviv, more Irish than Dublin, more Italians than Florence. Long before FDR or the New Deal, we learned a different lesson from the one taught by our skeptical, aristocratic Founding Fathers: government could be a friend, an ally, an agent for social reform. We learned to identify with the underdog. As the West incubated an individualistic frontier spirit, New York incubated social idealism.

“I do not exaggerate when I say that New York is unique in the history of human kindness,” Mayor Koch eloquently declared in his inaugural address. “New York is not a problem. New York is a stroke of genius. From its earliest days, this city has been a lifeboat for the homeless, a larder for the hungry, a living library for the
intellectually starved, a refuge not only for the oppressed but also for the creative. New York is and has been the most open city in the world and that is its greatness and that is why in large part it faces monumental problems today.… Without question, this city has made mistakes. But our mistakes have been those of the heart.”

Over the last twenty years or so, New York often thought with its heart. Suffused with a commitment to help people, when the federal or state government wouldn’t, the city reached to do the job alone. To comfort black and Hispanic immigrants from the South, it offered the most generous welfare benefits in the nation, encouraging more immigration. When private jobs began to disappear, it expanded the public payroll. When labor unions asked for more than the city could afford, they were viewed not as another special interest but as the underdogs of another era. When more revenues were needed to pay for mushrooming costs, the city assumed it was the obligation of the wealthy to pay, and hiked business and personal income taxes. When the budget was unbalanced, we obeyed Mayor Wagner’s incredible dictum—“I do not propose to permit our fiscal problems to set the limits of our commitments to meet the essential needs of the people of the city”—and borrowed or tricked the budget. Open enrollment at the City University was instituted to achieve a more egalitarian society, with scant attention paid to cost or academic standards.