The Fall and Rise of New York

New York City is facing a social, political, and economic crisis far more serious than the fiscal crisis of the 1970s. This is reflected both in the life of the city itself and in the attitudes toward the city in Washington and in the rest of the country. Fifteen years ago President Ford gave a speech on New York which was accurately summarized by the Daily News as FORD TO CITY: DROP DEAD. In fact after the headline appeared President Ford did not do as well as the city did. Many of us believe that his remarks cost him the state’s electoral votes and the presidential election in 1976, whereas the city managed to make a recovery and went on to a decade of considerable prosperity.

A few weeks ago President Bush, in a speech to New York Republicans, said that “life in New York, especially in the city, is becoming more expensive, more difficult and more dangerous than ever before.” New York City, he went on, is a “city that lives in fear.” He spoke of “bad schools, dangerous streets, big deficits, open-air drug markets and muggings,” without mentioning that a decade of neglect of urban problems by the Reagan and Bush administrations helped to bring this situation about. But while his description generally was accurate, the way the city is perceived is even worse than the reality, not only in the United States, but also abroad.

The statements of the two presidents, and the reactions to them, suggest some of the main differences between the fiscal crisis of 1975 and the far deeper crisis that the city is now facing. In 1975, the New York press attacked Ford relentlessly for his antagonism to the city’s needs. The coalition of city businessmen and labor leaders who were then working effectively on the city’s financial problems lobbied furiously in Washington for the appropriations that Ford wanted to deny them; so did a political coalition of northeastern states led by New York. President Giscard d’Estaing of France and Chancellor Helmut Schmidt of West Germany personally urged President Ford to provide federal credits to the city.

Finally, although grudgingly, the president and the Congress decided that it was better to help New York City than to bury it; and this decision was, to a large extent, made easier by what New York was doing to help itself. New York State put its credit behind the city’s. New York’s labor leaders agreed to far-reaching concessions on such matters as salaries and hiring; New York’s banks, many of them with a significant part of their capital at stake, agreed to contribute to refinance the city’s debt; a new city administration, with the help of the Emergency Financial Control Board and the Municipal Assistance Corporation, brought the city back to financial equilibrium. The city both helped to bring about and benefited from the financial boom of the early Eighties. Despite the departure of a number of businesses …

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