The Social Democratic City

THE HABOR ECONOMY

Prince of the City

Bloomberg's Next Challenge

Bloomberg's Bedfellows

STUCK IN THE 60S or NEW YORK’S TOPSY-TURVY POLITICS 

THE PRINCE OF THE CITY

Rudy Awakening

Hold the Champagne

Reinventing Government

Harboring Greatness
 
 
 

The Social Democratic City

(from summer 2000 PUBLIC INTEREST)

-  Fred Siegel
 

Joshua Freeman,   Working Class New York: Life and Labor since World War II, New Press, New York

James Jacobs with Coleen Friel and Robert Radick, Gotham Unbound: How New York City was Liberated from the Grip of Organized Crime, New York University Press, New York

Evan Mandery,  The Campaign: Rudy Giuliani, Ruth Messinger, Al Sharpton, and the Race to Mayor of New York City, Westview, Boulder

Samuel Delany, Times Square Red, Times Square Blue, New York University Press, New York

Anthony King ed.,  Re-Presenting the City, New York University Press, New York

Janet Abu-Lughod, New York,  Chicago, Los Angeles: Americas Global Cities, University of Minnesota Press, Minneapolis
 

-  Fred Siegel
 

        In 1950, three years after Jackie Robinson had broken in with the Dodgers and well before the rest of the country had begun to face up to the issue of racial integration, New York’s City College basketball team showed America the way to the future.  The team won game after game after game in Madison Square Garden, the same arena that was used for the city’s numerous political rallies on behalf  of  the CIO, the Communist Party, Negro freedom, freedom for the European colonies and numerous other left-wing causes. City College’s academic reputation as “the Harvard of the poor” suggested that egalitarianism and excellence need not always be at odds.  But it was the basketball squad  that made the school and  the Garden’s parquet arena the center of basketball in America much as the New York left hoped to take center stage in national politics. 
       The  team, which was compose of  the children of the city’s Jewish and Black working class, bested the all-white University of Kentucky squad  to win both the NCAA and NIT championships.  Coach Nat Holman and his players were local and national heroes.  In the neighborhoods of New York the victory was seen as a vindication of  the big city’s solidaristic social morality, a tale of how  the team ethic at CCNY overcame not only racial and ethnic barriers but class barriers as well.  This was surely New York at its best: the city, which like the country saw itself as representing an ideal, serving as a beacon for the entire nation.
       A year later college basketball and CCNY were rocked by a point shaving scandal.   At the behest of  bookies the players had not thrown games but they had altered the winning margins.   Here was the other side of New York, the city of hustlers, con men, mobsters and low lifes.  It was a time of shame and yet the response from the streets of New York was remarkably clear.  There was no psychologizing, rationalizing or special pleading about how the outlanders were out to get the city boys.  Instead the cry went up that  “they (the players)  betrayed us,”  “they had let us down.”
        The social solidarity of 1950s New York, complete with images of Willie Mays playing stickball in the streets of the Bronx, has exerted an extraordinary sway over the city’s imagination.   New York, at its finest, seemed to represent the best that a left wing political culture had to offer;  it was both egalitarian and, despite a substantial Communist presence, deeply democratic. 
      Almost all of the many new books on post war New York - there are so many as to be almost an avalanche- either explicitly or implicitly play off  the glory of  the post-war city.  None of them however do the two things that are essential for understanding the city’s political culture over the last half-century.   They neither  explain how and why New York came to represent an alternative ideal to much of the nation, nor do they show why that ideal broke down and what happened when it did. 
      Western European politics took a left turn at the end of World War II.   The political and economic failures which produced the war discredited traditional elites.  For the most part the  U.S. was different.   World War Two restored  America’s faith in big business and revived American exceptionalism, except in New York.  For most Americans, fears of big government limited the size and scope of New Deal programs.  In Gotham, Mayor Fiorello La Guardia planned for the post-war years on the basis of a permanent New Deal, policies  which largely continue down to this very day. 
       The broad support for La Guardia’s civic vision drew on the experience of several generations which because of immigration restriction hadn’t been roiled by the massive arrival of new  immigrants and had bonded together in the common struggle  against the Great Depression and fascism.  In the early 1940s while the US and USSR were allied in the war against fascism, a trade delegation from the Soviet Union, dressed in  its diplomatic finery, went to visit New York's  Mayor,  Fiorello La Guardia.  Something of a socialist himself, La Guardia looked at the Soviet diplomats and then at his own baggy paints and frayed shirt:  "Gentleman," he said, “I represent the proletariat." 
       In the 1930s it was joked that New York was the one part of the Soviet Union where open debate was possible.   At the war’s end that open discussion had produced an accommodation, if not with the whole of America, than at least with the left-wing version of the New Deal. "There's no need talking about Leninism, Trotskyism, and other theories and theoreticians,” explained Sidney Hillman, the head of the Amalgamated Clothing Workers, confidante of FDR and a force in New York politics. "Organized labor,” he went on,  “represents the hard core around which all progressive action must be built. But it (labor) has no program and objectives which are not shared by the great majority of forward-looking Americans."

       Joshua Freeman’s Working Class New York: Life and Labor Since WWII, is probably the most important of the recent books on Gotham.  It barely mentions La Guardia and Hillman  but it picks up the story in 1945 as W.W. II ends and a wave of strikes began.
With London, Paris and Berlin left devastated by the war, New York,  stood at perhaps the peak of its power.  Yet it was still something of a 19th century city, frozen in time by the Depression and its aftermath.  Freeman describes a city where pot bellied stoves for home heating and ice blocks delivered daily for refrigeration were still common.  New York was  honeycombed with unions large and small like the Russian Bath Rubbers and the Wholesale Paint Salesman.  Three weeks after the war ended one of the smaller unions, the elevator operators, went out on strike.  And thanks to a show of solidarity by the city’s 250,000 garment workers who shut down their own industry, the elevator operators won highly favorable terms at a cost to the city economy of $100 million. 
       Fretting under the restraints of the war time price controls which were still in place, strikes by telegraph operators, truckers, bakers, motion picture projectionists, meat packers, dock workers and most devastating of all the tug boat operators followed.  At a time when there were no pipelines connecting New York to the Texas oil fields and large scale imports of oil had not begun, the tug boat operators,  who delivered 65% of the city’s coal and 95% of its fuel oil  controlled one of the city’s lifelines.  Mayor William O’Dwyer, a friend of both labor and elements of the mob, closed the public schools, ordered homes to be kept at 60 degrees, shut the restaurants and theaters and eventually brought the city through what the Times called “the most drastic disruption in the city’s life since the Civil War draft riots.” 
       O’Dwyer is a fascinating figure who Freeman unfortunately slights.  He was mayor from 1945 to 1950, the moment when both left wing politics and mob influence were at their peak.  A former Brooklyn D.A., O’Dwyer, as Jim Jacobs notes in Gotham Unbound: How New York was liberated from the Grip of Organized Crime,  played a hand in bringing down the Jewish mob.   O’Dwyer built on the case made by  crusading prosecutor Thomas E. Dewey to win  the conviction of  prominent labor racketeer Jacob “”Gurrah” Shapiro for murdering a truck driver in the garment district.  This open the door for the Lucchese crime family to gain control of trucking in the garment industry.
      A fervent left wing New Dealer,  O’Dwyer governed as if the return of the Depression was imminent.  “The country,” he warned, “is in the midst of a titanic struggle between those who believe in the people’s welfare and those who believe in big business and special privilege.”  He won reelection in 1949 by boasting that in his first term he had staved off the economic tides with a public works program that built a new school and a new housing project in every month of his first term.   A year later he suddenly resigned to become President Truman’s ambassador to Mexico.   He had  had been forced out of office as his connections with a variety of  Italian mob figures from Albert Anastasia to Frank Costello, (a kingpin in both Tammany and on the waterfront) came under scrutiny. 
         Like the New Dealers who were both loyal Americans and sympathetic to the Soviet union,  O’Dwyer was  a good leftist  and entangled with the mob.   Both as the almost simultaneous CCNY scandals suggested, were integral parts of  the city’s working class political culture.   And often there was little contradiction between the two. 
      In his classic essay “Crime as an American Way of Life” Daniel Bell notes that one reason that urban machines could take left wing stances is that they sometimes allowed the mob to finance their campaigns rather than becoming beholden to “moneyed interests.”   Both the mobs and the unions took advantage of  New York’s geography.   A fast-moving but congested city built on an island of narrow streets and tall buildings, Gotham’s innumerable bottlenecks were opportunities for the unions to apply economic pressure and for the mob to engage in shakedowns.   At the time it seemed not to matter all that much.  New York, said  author John Gunther in 1948, was with one million people employed in industry,  “incomparably the greatest manufacturing town on earth.”  O’Dwyer’s fears not withstanding, post-war  New York was on top of the world.
        Freeman  is better, though contradictory at times, in describing the city’s first left-wing civil war between the Communist and the anti-Communist left; the second civil war within the left would come in the 1960s.    Freeman, a man of the left himself, clearly admires the sheer militance of the Communists particularly when it came to their pathbreaking role in the struggle for black freedom.  But  Freeman takes a miniaturized  view of the fight between Communists and anti-Communists when he tells us that  “nominally the fight over Communism concerned ideology” but it was really about a “local struggle for jobs, political influence, and cultural hegemony.”  A few pages later he changes course and argues that “the CP and its allied groups - as liberals and socialists bitterly discovered - threatened at all times to hijack mass organizations and manipulate coalitions while remaining invulnerable to counter-measures short of all-out anti-democratic action.”
       The book breaks new ground  when it describes the relatively limited impact of the Communists defeat in New York’s civil war.   “Once ties to Stalinism became unacceptable,” he notes,  “many of the CP militants were quickly reintegrated back into the left-wing of the labor movement after only a perfunctory break with” Communism.  The upshot was that ”even at the height of the Cold War , the Communist party-left and the” anti-Communist-liberals “put forth similar positions on most domestic issues like national health insurance, rent control and federal aid to education,” black rights and cultural pluralism.  “The greatest threat of the Communist Party-left,” he concludes, “lay not in its program but in its structure, in its Leninism rather than its Marxism.”
      The city’s “Marxism” was based, not as Marx’s economism had assumed on the common experience of work in massive mills, mines and manufactories, but on an ideology, often ethnically inscribed, of politics as ceaseless struggle.   It expressed itself in  the belief as one union official put it that “our food bills are not a solely economic but also a political matter” subject to militant action.  In practical terms this asserted itself in the politicization of prices.  War time rent controls, which sometimes kept landlord incomes below the price needed to maintain their property, were made permanent.  Similarly, after the city took over the once private subway lines, fares were kept at a nickel even though that meant that as with housing, repairs were either delayed or ignored.
      With the civil war over, the largely reunited left went about creating social democracy in one city.   Gotham, says Freeman, had a “hybrid form of municipal social democracy . . . that included state action, an ever increasing range of services provided directly by unions, and huge labor linked (housing) co-operatives and service organizations.”   The achievements were impressive.  The ILGWU (International Ladies Garment Workers Union) had pioneered in the development in workers co-operative housing built by the UHF (United Housing Foundation), just as NYCHA (the New York City Housing Authority) led the way in developing public housing nationally.   In health, the ILGWU was similarly in the forefront.  Its first health clinic was established in 1913, while the co-operative movement with which the ILGWU was associated established the first group health benefits plan GHI ( Group Health Insurance) in 1939.  For its part, the city , led by La Guardia offered the first pre-paid health insurance plan, HIP, in 1944.   HIP  practiced preventative medicine with a fixed fee plan that encouraged doctors visits.  If hospital stays were necessary  the city’s 22 municipal hospitals were available.   Between the collective or cooperative provision of housing and services and the rising wages  unions won for their workers, New York’s working class dramatically improved its lot during the 1950s; even if in  the midst of all the acronyms they sometimes lost sight of the private sector economic growth that made it all possible.
       If Freeman had stopped in the early 1960s, Working Class New York would have been a strong candidate for the short shelf of books on twentieth century New York.   But just as the city fell apart in the late 1960s, so does the book. 
       New York’s hybrid social democracy was based in large measure on a balance between mutuality and militance.  Mutuality meant more than the fact that people should stand up for another.  Mutuality was demanding, it required reciprocity so that people who took without giving were likely to be assailed as bums or free-loaders.  And since freedom was seen in part as a co-operative enterprise, the chislers who didn’t carry their weight, (an economist, would have described them as free-riders), were a threat to the entire social order.  Militance, on the other hand, was a one-way street.  It was what you were entitled to.  It abided by few rules and it was what you demanded of others, of bosses, or racial oppressors, not what you also asked of yourself. 
       What Freeman can not come to grips with is that  the mid-1960s and early 1970s in New York can be best described as a period when the institutions of mutuality created by the civic vision of La Guardia and the unions were torn apart by racial, union  and tenant militancy in what amounted to an ongoing series of  suicidal civil wars within the left.   The Co-Op City story is a case in point of the left’s relentless militance turning against its own institutions.  This vast housing complex in the Bronx begun by Nelson Rockefeller and Robert Moses was built by Abraham Kazan of the United Housing Foundation which had been building cooperative projects since the 1920s. The UHF built  40,000 units of housing from the 1940s into the 1960s.  The sense of solidarity fostered by depression and war was already weakening, Kazan noted, when he and others in the UHF found that Co-Op city residents had carried their sense of entitlement, their “rent control mentality” cultivated in years of battling with landlords into what was fated to be the last of the co-operative projects.   The tenants,  “philosophically attuned to the idea that rents are political,” extended the class struggle into the homes they owned in common.  Led by the Maoist Charles Rosen, a group of militants pulled the tenants into a prolonged rent strike.  When the UHF was forced to withdraw and hand the development over to New York State, Rosen celebrated the phyrric victory by announcing “we beat the bastards.”  It was the beginning of decades of financial struggles for the deluded tenants and the end of the city’s co-operative housing tradition. 
      The irony eludes Freeman, who is much enamored of militancy, and the notion  that “power could be found in the streets.”  Even in retrospect, Freeman is heartened by the Harlem riots of 1963, and 1964, which he sees as the signs of a “a rebirth of mass politics.”  They were also  a sign of the explosion in crime which would rend the city and push even those who didn’t want to leave to the suburbs. 
       Beginning in his chapters on the1960s Freeman ceases  writing history and begins what is at best reductionist pamphleteering.  Crucial elements in the decline of the social democratic city - the explosion in violent crime, the enormous expansion of the welfare rolls, and the collapse of the public school system are systematically ignored.   We get an account of how in 1965 the city social welfare workers went out on strike asking not only for higher salaries, but higher benefits for  the clients as well.  But there is literally not a word on how or why in a rapidly growing economy where New York unemployment ran at 4% or less, well below the national average, the welfare rolls roughly doubled to one million between 1965 and 1970.   Leaving aside the long term calamitous effects of the welfare expansion on those it was supposed to help, this is no  small matter.   The militancy, that is the threat of  renewed riots which lay behind the explosion of the welfare rolls in a time of labor shortages only intensified the widespread sense among the white working class that the city’s social contract was being violated. 
      The Lindsay administrations’ successful attempts to recruit new people on to welfare left many baffled.   While Mayor John Lindsay’s welfare commissioner Mitchell Ginsburg announced that  he had “always viewed the cost of welfare to be whatever it is,” taxes were rising rapidly not to meet the harshness of the business cycle but to pay for a planned disaster.  Much of white and black working class New York could not understand why the city’s elites would encourage welfare over work.   “Pulling ones own weight,” explained the residents of working class Canarsie to sociologist Jonathan Reider, “was a natural complement to a co-operative society in which all shouldered their burdens.”
       The black leaders of the early 1960s like the Reverend Milton Galamison were justifiably angered at what they saw as the white hypocrisy of proclaiming New York an open and egalitarian city when racial if not racist practices excluded blacks from positions in the fire department and the skilled construction trades. But such exclusion was more the exception  than the rule.   Freeman, like many historians of the period does not recognize that African-Americans, who had not been able to vote in the South and had limited experience in practical politics,  brought some of  the violent Southern traditions of  winner take all politics to New York.  New York, which had had a civil rights movement well in advance of the country,  was nonetheless described as “upsouth” by people like Galamison.
       The city’s broad and vigorous attempts to integrate the schools were defeated less by racism than by the concatenation of a  vast black in-migration and the movement of upwardly mobile whites, seeking greener pastures, into the suburbs.   Galamison, who sent his son to a private school, insisted that rather than back off from his vaguely stated demands for total integration, he "would rather see it (the public school system) destroyed."   He got his wish.   At a time when violence inside the schools was rising at a frightening rate, Galamison brought the threat of violence to demonstrations that were supposedly held to save the schools.   Galamison notwithstanding, few were prepared for the violence that accompanied  Mayor John Lindsay’s Ocean-Hill Brownsville experiment in what were essentially black nationalist schools. 
       The Ocean-Hill Brownsville controversy  began as a  Ford Foundation inspired  and  United Federation of Teachers supported effort to give black neighborhoods greater control over their schools.   But when the local Superintendent in the designated Brooklyn district, Rhody McCoy, a follower of both Malcom X and the Afro-fascist Marcus Garvey, peremptorily fired a group of white teachers, the experiment provoked a series of  strikes that left the city bitterly divided 
      The sin of the white teachers was not that they were racist in any conventional sense. The teachers union long a part of labor-left politics in New York had been an active supporter of both the civil rights movement in the South and black causes in New York.  Their failing according to the black nationalists of McCoy’s district was that they supported an integrationist and acculturative curriculum designed (with mixed success) to bring children a half generation removed from the backwoods of the American South into the New York economy.    The teachers were intimidated and beaten for their troubles by students inspired by the thugish Sonny Carson.  The mayhem was an inspiration for the young Al Sharpton.
       Neither the New York Times nor John Lindsay, who told teachers union president Al Shanker that he was afraid of a riot if the thugs were restrained, were at the time willing to acknowledge the violence.  Freeman has no such excuse, yet he too ignores it.  The upshot of the strikes and confrontations that followed is that what was probably the best big city public school system in the U.S. fell apart, never, tragically for the fate of New York’s school children black and white, to be repaired.   The fall of City College came close behind as the threats of violence brought an end to entrance requirements and flooded the college with ill-prepared students of all races.
       In the name of remedying racism, one by one the institutions which had allowed the white working class to rise in relation to the city’s economy, and might have worked decently for blacks as well, were torn apart.  Under the best of circumstances absorbing a vast population of new arrivals, even had they been white, would have been extremely difficult.  But in almost every case the militants cures for the city’s racism proved worse than the disease. 
       What black nationalists abetted by white liberals were doing to the schools, the public sector unions were doing to New York’s economy.  Beginning in 1958 when the city public employee unions were granted the right to unionize by Mayor Wagner - Chicago wouldn’t grant these rights until the 1980s  - the militance once aimed at private owners targeted the city treasury.
       New York, for all of its many social democratic institutions, had kept  costs and hence taxes in check.  But after Wagner came to depend on the municipal unions for re-election in 1961 caution was thrown to the winds.   Government employment, the vast bulk of which was local, grew from 347,000 in 1950 to 408,000 in 1960 on to 563,000 in 1970.   It grew by 92,000 just between 1966 and 1970 as 4/5th of all new jobs were in government.  By 1970, Freeman approvingly notes  that “there were more employees in city government than the garment, banking and longshore industries put together.”   As the number of workers grew, their militancy intensified.  Freeman proudly describes the late 60s and early 70s as the golden age of strikes.  In “strike city” transit workers, teachers, sanitation men, the performers at the Metropolitan Opera, and  postal workers all walked out, while the police and firemen engaged in systematic slowdowns.   The higher pay and shorter working hours won by the municipal workers compared favorably with private sector employment.  And when work rule changes and the superior health (fully paid for  by the city), pension, and vacation packages were added in, city expenditures jumped dramatically so that the city was paying more to get less.
       La Guardia, who pledged to make New York a “one hundred percent union” town, and was the first to project a civic vision of the worker’s city, nonetheless had doubts about public employee unions.   “I do not want any of the pinochle club atmosphere to take hold,” he exclaimed.  City workers, he hoped would be the peoples workers setting an example of dedicated service for everyone else.  Had he been alive, he no doubt would have been horrified in the June heat of 1971 when Barry Feinstein and Victor Gotbaum of AFSCME instructed their workers at city waste treatment facilities to walk off their job, allowing  raw sewage to pour into the city’s waterways. 
      "There is no question about it," Gotbaum boasted, we ( the municipal labor leaders) have the ability to elect our own boss." 
They did, and as they voted themselves more money and shorter hours they, along with the vast expansion of the welfare rolls, drove  taxes up and business out of New York.  In the aftermath of the militant 60s with its threat of riots and its  strike wave,  New York lost 35% of its manufacturing and 16% of its overall jobs, roughly 700,000 in all.
       New York’s precipitous collapse, borne by an unhinged militancy, both sped up and deepened the decline of manufacturing.   With a few exceptions like Los Angeles manufacturing has declined sharply in most  of America’s cities.  But no city did so much to actively drive manufacturing away. If Freeman had done a better job of class analysis, he would have observed that the city’s financial leaders had, without conscious coordination, been doing their share along with the municipal unions to drive manufacturing from the city.   In the 1950s while new highways and non-union low tax  states were luring away the city’s manufacturers, Gotham’s financial elites led by the Rockefellers and informed by the Regional Plan Association were doing everything they could to push manufacturing out of Manhattan and downtown Brooklyn.  New York, it was argued was going to become a white collar services town and the sooner the better
      The 1970s were the end of New York’s white working class as more than a million fled the city during that decade.  What remained was the dual city much decried by standard-issue leftists like Freeman.  In the dual city there are two primary types of employment; first there are the high end businesses like financial services, which much to Freeman’s regret had avoided unionization, and were able to weather the city’s high costs; and then there was the vast array of government social services and health care jobs which employed the bulk of the black and Latino working class.  Manufacturing. which had been for so long the means to working class mobility,  was not just reduced but virtually eliminated under the heavy costs of  the city’s oversized public sector.
      If  Freeman’s view were merely those of an eccentric academic they would be of little import.   But his totemization of  struggle represents one of the few strong currents in New York’s often stagnant politics.  What has happened is that while  over time the objects of militance have changed, the lure of “activism” remains largely unabated.  Alex Rose of the Hatters Union was one of the first to see that the idea of struggle took on a new meaning when public sector "workers are not extracting a share of the profits but rather a share of taxes."   Over time the idea of struggle became almost a reflex.  When Bella Abzug, then out of Congress, was attempting one of her political comebacks in the 1980s, she was asked what she would do about the need to raise subway fares to repair a system in near collapse.   She responded indignantly that she would fight the fare increase by leading a protest.  In fact, she suggested that despite her advanced age she might lead a mass movement to jump the turnstiles.  Actually there was no need since the system was already losing millions of dollars from fare jumpers.
        In a number of new books that deal with New York the object of  struggle becomes even more elusive.  In an essay on the global city in Re-Presenting the City, a collection of postmodern essays edited by Anthony King, Saskia Sassen transposes the now not-so-visible class struggle into contemporary “contestations” over space.  Displaying a remarkable ability to sniff out class conflict in the most unlikely places, she espies it in the clash between lower middle class and upper middle class shoppers on 14th street.  In Janet Abu-Lughod’s book America’s Global Cities,  the class struggle is similarly given a spatial interpretation.  This xerox of a xerox of a xerox of a Marxist argument which is, according to the author, organized around “landscapes of terrain” and “inherited armatures of passage,” not surprisingly gets the story exactly backward.   In this postmodern but heavily footnoted tale, New York’s welfare state has fallen victim to the new international geography of finance capital.  Actually it's the wealth of the financial services sector which indirectly funds the city’s vast array of social services. 
       Samuel Delany a native New Yorker and sometimes professor of English see a contemporary class war raging in “the structure of discourse.”  But Delany, a student of Marx and Foucault, sees gay casual sex in 42d street movie theaters as the source of interclass healing and as the quintessence of democracy.  In Delany’s Times Square Red, Times Square Blue,  the Midnight Cowboy days were the areas finest moment and redevelopment is excoriated as a capitalist plot against homosexuals. 
       New York activists and academics are engaged in a relentless search for substitute proletarians and their anger generated energy.   They’ve never come to grips with what 60s militance wrought.  In the 1980s, the Coalition for the Homeless and its allies inspired by the “success” of the campaign to expand the welfare rolls in the 1960s, tried to duplicate that feat.  They presented drug and alcohol-addicted "homeless" New Yorkers as hard working average folks who had lost her apartment after being downsized by heartless corporations.  Their aim, as in the 60s, was to capsize the city’s budgets and social service agencies with a vast expansion of programs and housing.   If these needs were not met, warned advocate Jonathan Kozol, riots were imminent.  "This many poor families, mothers, fathers and children,” he intoned, “ are not going to remain silent and passive forever.  There is an enormous anger building up in these shelters and the streets." 
      The great difficulty of talking about class conflict in New York, other than the fact that it’s been largely absent in recent years, is that race has replaced class as the focus of political conflict.   After the relative social peace of the Koch years, the  sort of  anger Kozol referred to burst open again along racial lines with riots in Washington Heights and Crown Heights during the early 1990s when David Dinkins was mayor. 
      When young Evan Mandery signed on to be the research director of the Ruth Messinger campaign for Mayor against the incumbent Rudy Giuliani in 1997, the idealistic  suburbanite was surprised to discover that “the idea of addressing New Yorkers as citizens with potentially common public interests, rather than as members of various constituencies (blacks, gays, Latinos), seems to have been vacuumed out of today’s Democratic Party in the city.” In his book The Campaign: Rudy Giuliani, Ruth Messinger, Al Sharpton, and the Race to be Mayor of New York 
Mandery notes that while Messinger is nominally a member of the Democratic Socialists of America, she is more of an  heir to the traditions of  the 1960s when  race became the “Rosetta Stone” of  city politics.   Mandery quotes Jim Andrews, the veteran political consultant who ran the Messinger campaign, on the real meaning of Giuliani’s effort to clear the bridge and tunnel approaches - the motorists bottlenecks - of aggressive panhandlers.
Do you know what Rudy Giuliani was saying back in 1993 when he said he was going to get rid of squeegeemen?  “He was telling every white person in NYC that he was going to close the sluice gates at 125th St.  Rudy was saying that he was going to make sure that they stay where they belong - up in Harlem and the Bronx.
      Race, Andrews concluded “isn’t just part of politics, it is politics.”  And to prove his point Mandery spends much of the book expressing his admiration, despite some doubts, for the Reverend Al Sharpton who nearly forced Messinger into a run-off for the Democratic nomination.  The basis of the doubts are clear enough. Sharpton is a racial demagogue who polarized the city over false accusation of rape in the Tawana Brawley hoax.  Later Sharpton and his aide Morris Powell an escaped mental patient, helped incite the murder of eight people on 125th Street in the name of driving “white interlopers” out of Harlem.  But like Messinger who reached out to Sharpton, Mandery is able to swallow his doubts about the Reverend, who, after he was defeated for the nomination tried to shake down the Messinger campaign for cash as the price of his endorsement. 
      What makes Sharpton so appealing and a central figure in New York politics, though most of the new books on New York fail to mention him, is that the Reverend carries on the tradition of militant protest. He “fights the power” however ill-defined and as such he is sacrosanct, independent of his deeds. 
      New York is today a city without a civic ideal except those occasionally imposed by the brute force of  Mayor Giuliani’s personality.   New York’s activists who like to talk, as does Freeman,  of the city’s “exceptionality”  were enraged when Giuliani spoke of the need to make New York  “more like the rest of America.”  For Giuliani this was a recognition of the city’s failed political tradition, for others  it was a betrayal of what Mario Cuomo called “the New York idea.” 
       In his darkest moments Mandery wonders if Giuliani hasn’t “changed the very nature of New York politics.”  He needn’t worry.   Some problems resolve themselves , containerization, for instance, reduced corruption on the docks.  Giuliani, first as D.A. and then as Mayor, Jacobs notes,  reduced the mob tax on the city economy.  But there is no solution in sight for the city’s long lived love affair with the idea of  struggle, be it class or racial.   In this post-modern version of the permanent revolution, Samuel Delany is on to something; achievements are secondary to periodic moments of political excitement ending in explosive catharsis.   Gotham’s dysfunctional political culture, the bastard heir of a once great tradition, shows no sign of resolving itself.   Or as Ruth Messinger put it quoting the Grateful Dead “what a long strange trip it has been.”

Fred Siegel is a Senior Fellow at The Progressive Policy Institute 
and the author of  The Future Once Happened Here: New 
York, D.C. L.A. and the Fate of America’s Big City, an Encounter 
Books paperback.
 
 
 
 

Joel – this was written for a Newman Inst Conference:  key point social spending crowded out infrastructure spending …this produced great hostility from some of the people  who will be in your audience

                                                   -  FS
 

THE HABOR ECONOMY

Rebuilding:
The Idea of the City: The Present Crisis in Perspective

Fred Siegel

The fate of Lower Manhattan has always been intimately intertwined with the well-being of Brooklyn and the New Jersey waterfront. Greater New York, “the Empire City,” created by the merger of Manhattan and Brooklyn in 1898, was a product of the harbor economy. Before there was a Times Square or a Grand Central Station, Lower Manhattan, then ringed with docks, was oriented to the railroads and factories of the Jersey coast to its west and the merchants and manufacturers of Brooklyn across the East River. The story of Lower Manhattan in the years since is, in large measure, a reflection of the fall of that harbor economy as first Manhattan and then its partners in Brooklyn and Jersey City deindustrialized. 

Still, there’s cause for optimism. In the last two decades, the old harbor economy of trade and industry, severed by the collapse of manufacturing, has been reknit on the basis of the service economy. By the middle of the 1970s, even as New York was at its nadir, the growth in service sector jobs began to exceed the decline in manufacturing jobs. In recent years, service sectors in which the city is strong have been growing and are likely to continue growing even faster than business activity is dispersing. And despite the impact of 9/11, New York continues to attract the key element of the modern economy, talented people; college applications are up for next year.

We forget that in the late 1990s there was a vigorous competition to be declared the sixth Borough of New York: Drawn by the dynamism of the New York City economy, Fairfield County, Connecticut, just to the northeast of the Big Apple, has now surpassed the Hartford area as the state’s largest county. And Fairfield’s fast growing city of Stamford, home to numerous Wall Street hedge funds, is now functioning as “the sixth borough of New York,” according to New Haven Mayor John DeStefano. To the west, across the Hudson, Fairfield has a competitor for sixth borough status in Jersey City, which grew by 12,000 to 240,000 in the 1990s. Even before 9/11, Jersey City’s waterfront was booming with Wall Street firms, including Chase Manhattan. And even seemingly far away Philly is in the hunt, according to the University of Pennsylvania’s Mark Hughes, who explains that the “connection is so good that the area around the 30th Street train station becomes a virtual Sixth Borough of New York.” 

In the midst of or current woes, it’s important to remember that for all the worries about office vacancies and the decentralization of economic activity since 9/11, other cities including Orlando and Las Vegas have been hit even harder. The entire country, notes the Wall Street Journal in early 2002, “experienced the sharpest jump in vacancies ever” in the last quarter of 2001. 

The dispersion of economic activity was well under way even as the five boroughs became part of “Greater New York” in 1898. Writing in 1902 H.G.Wells only slightly overstated that “`town’ and `city’ will be, in truth, terms as obsolete as ‘mail coach.’” “Cities,” he explained, “would of necessity become part of extended urban regions.” “The city,” Wells went on, “will diffuse itself until it has taken up considerable areas and many of the characteristics, the greenness, the fresh air of what is now country, leads us to suppose also that the country will take to itself many of the qualities of the city.” After noting how the electric grid, the telephone and an extensive rail network has dispersed economic activity, H.G. Wells saw that “Already for a great number of businesses it is no longer necessary that the office should be in London, and only habit, tradition and minor consideration keep them there... Still, he thought that “a new sort of downtown would be born. Though the center will probably still remain the center,” he wrote, “it will be essentially a bazaar, a great gallery of shops and places of concourse and rendezvous, a pedestrian place... and altogether a very spacious, brilliant and entertaining agglomeration.”1 

While I think the tides are running with New York, my optimism is tempered by two questions and a frightening possibility:
First: Will the attempt to accommodate all of the interest groups involved in the rebuilding of Lower Manhattan produce stasis? Between go-very-slow aesthetes, the grieving families of WTC victims and authority for reconstruction divided between the city, state and Port Authority, and the political terrain of an election year, will the economic vitality of Lower Manhattan be allowed to leach away?

Second: The Bloomberg administration has said that its top priorities are both the rebuilding of Lower Manhattan and developing the far west side of Manhattan. Can the city do both? Will money for the 7 line reduce money for, say, extending the LIRR from Atlantic Avenue into Manhattan? And what about the timing? How will the possibility of new office space on the far west side affect real estate prospects in Lower Manhattan? 

The Frightening Possibility: The chance of future terrorist attacks. The very idea of New York has long made it a tempting target for people who find its culture and values repellent. New Yorkers should never underestimate the capacity of their city to inspire murderous hatreds. Visitors––from H.G. Wells, who was repelled by polyglot places like New York where British stock was being diluted by what he saw as the barbarian yawp of America’s crude, materialist culture, to Sayyid  Qutb, the intellectual inspiration for the Al Queda network––have visited New York only to leave with hostility in their hearts. And in between there was Hermann Goering, the Nazi minister of Aviation (among other things). Goering responded to LaGuardia’s description of Hitler as a “perverted maniac” by having special maps of Lower Manhattan drawn up as part of plans to “shut up the arrogant people over there” with five-ton bombs.2

The question of terrorism aside, the harbor economy was first envisioned by ironmaster and former Manhattan mayor Abraham Hewitt, the son-in law of Peter Cooper, and the corporate lawyer and anti-Tammany reformer Andrew Haslett Green. Green feared that unless the harbor municipalities consolidated, Manhattan would fall behind rival Chicago in the race for urban leadership. To Green and Hewitt the logic of consolidation was compelling. By joining the largest and the fourth largest city in America the combined metropolis would have the ability to bypass Tammany, upgrade the harbor and finance the bridges and tunnels necessary for the island economies to grow. But for Hewitt, who had been elected in the famed election of 1886 when he defeated both the radical reformer Henry George and future president Theodore Roosevelt while the city was in the midst of a deep recession, there was an additional motivation. In the 1886 campaign he faced those he described as “anarchists, nihilists, communists, socialists,” who were “enemies of civilization and order.” The way to fend off these challenges, he argued, was to increase opportunity by building new bridges across the East River while rebuilding the city’s crumbling docks, streets and transit facilities. For Hewitt, infrastructure and opportunity were inextricably intertwined.

For rural Brooklyn, which as recently as the 1880s had been an agricultural powerhouse, undeveloped Queens, Bronx and Staten Island, consolidation was a good deal at a time when only the downtowns were wired for electricity and had the financial wherewithal to extend the electric grid outward. Brooklyn was an industrial dynamo. Two thousand ships a year docked in Brooklyn, bringing in raw materials and carrying away half the refined sugar in America as well as hats, clocks, shoes, cigars, beer and books. Two thousand ships a year docked there. But the downtowners were divided between those who feared Manhattan dominance and those who feared Brooklyn’s mounting debt even more. In the end the consolidationists prevailed in Brooklyn by a mere 277 votes. 

Protestant opponents of consolidation, led by the Brooklyn Eagle’s editorial page, warned that merger was really a takeover in which the “Manhattan Pattern,” meaning a corrupt Catholic Tammany (the three words were synonymous) would impose higher taxes and inferior services on the “borough of homes and churches.”3

Greater New York, explains historian David Hammack, became, in effect, a regional government “so that suburban development could, in effect, take place under the aegis of city.” Greater New York covered 322 square miles, making it far and away the largest city east of the Mississippi.  The upshot was extraordinary. New York became “the engineers’ city.” The harbor unified politically, New York City Bonds were issued to build bridges across the Harlem and East Rivers, and tunnels under the Hudson connecting New York to New Jersey as well as the subway system that became the city’s circulatory system for labor, weaving Brooklyn and Lower Manhattan into a single economic unit. With this New York became not only the largest city in the U.S. but its busiest port, a paradise for small manufacturers and a headquarters city for national corporations. It was, as George Francis Train had boasted, the “locomotive of these United States,” a city whose bank deposits were as great as all the rest of the country combined. But just as important is what Selma Berrol has described as the “symbiosis” between the immigrants flooding into the city and the city’s infrastructure projects. The subways linking Brooklyn and Manhattan were built by Italian immigrants who improved their social position as they upgraded the city’s infrastructure.4

New York’s City Hall faces south because when it was completed in 1896 it overlooked most of the city’s commercial and manufacturing activity as well as most of its retail and entertainment. At the time, the Lower East Side abutting the business district was the most densely settled piece of land in the world, with nearly a thousand people to an acre while (in 1906) more than half of all the city’s manufacturing was carried out in the fraction of the city located below 14th Street. This was also a moment when, with New York’s percentage of the national population rising due to immigration, the city had seven congressional districts south of 14th Street. 5

But even with consolidation, a time when centralization seemed to be in the saddle, the wildly crowded and extraordinarily expensive downtown began to shed some of its functions. First, housing began to move out of Lower Manhattan. Then, cultural institutions––the Metropolitan Museum of Art, the New York Historical Society, the Museum of Natural History––left before 1900. They were followed by manufacturing, looking to flee from a “hotbed of trade unionism,” smoke and noise regulation as well as endless complaints from neighboring property owners. These first two functions are today returning to Lower Manhattan. For their part, lawyers and traders welcomed the exit of manufacturers, who could now stay in touch with their downtown bankers via the telephone. Given the extraordinary cost of land, those who stayed increasingly worked in skyscrapers like the Woolworth Building, which opened in 1913. 

In the 1920s, even as New York surpassed London as the world’s financial center, the functions of the downtown were narrowing. Trucks and telephones dispersed economic activity and Lower Manhattan was increasingly an office district, albeit offices surrounded by a very active waterfront. In 1930 an Atlanta editor saw the future: “When Mr. Henry Ford...put some kind of automobile within easy reach of almost everybody, they inadvertently created a monster that has caused more trouble in the larger cities than bootleggers, speakeasies, and alley bandits.”6 

The opening of Penn Station in 1910 gave Long Island and New Jersey easy access to midtown. It helped set off a real estate boom in Times Square, which was intensified three years later when Grand Central Station opened. The Holland Tunnel followed in 1927. Not surprisingly in the 1920s most new construction was in midtown, a trend that continued even into the depression years when Rockefeller Center was built, with midtown beginning to eclipse Lower Manhattan.

While midtown grew, the port thrived; in the 1920s half of U.S. export and import traffic moved through the harbor. Eighty-five percent of the traffic landed on the New York side and then had to be moved across the Hudson on “lighters.” This was the so-called “Manhattan Transfer.”The problems of cross-harbor traffic were magnified by the control exerted on both sides of the harbor by the local political machines. Extraordinary harbor congestion during World War I––at one point trains were literally backed up to Pittsburgh––provided an opportunity to break out of the grip of Tammany and led to the creation of the bi-state Port of New York Authority. It was from the start given the task of building a rail tunnel between Brooklyn and the mainland.  But frustrated by its inability to get the overbuilt and highly competitive railroads to cooperate, the Port Authority turned very effectively to constructing the Lincoln Tunnel and the Outerbridge, Goethals, George Washington and Verrazano bridges linking New York to New Jersey by car and truck. That left the freight tunnel across the harbor unbuilt and, over the long run, dealt a severe blow to Brooklyn. 

In 1948, twenty-seven years after the creation of the Port Authority, the fifty-year anniversary of consolidation was an occasion for celebration.

When Allan Nevins and John Krout put together a volume of essays, “The Greater City: New York, 1898-1948,” to commemorate the occasion, there was nary a negative word. New York, unscathed by a war that had ravaged London, Paris and Berlin, was at the top of its form. For half a century, the move to unification played out brilliantly as the city successfully absorbed generations of immigrants into an ever expanding and highly diversified economy. The complaints from Brooklyn Protestants about the “great mistake” and the warnings from the Brooklyn Eagle about the dangers of a “Manhattan pattern” imposed on the outer boroughs were largely forgotten. The expanded tax base had been used to build the Manhattan and Williamsburg Bridges, as well as the subways, sewage and water systems necessary for a rapidly growing city. At that moment the Port Authority, which was about to begin a long period of decline, was still at the height of its powers. A Thomas Cochoran essay, “The City’s Business,” in The Greater City noted with satisfaction that “regardless of the trend toward the suburbs and the countryside, the pattern of New York industries has remained remarkably constant over the last fifty years….the same industries: clothing, printing and publishing, machine and foundry products, food products, chemicals and allied products––remained the leading five.” Tobacco manufacturing, formerly the sixth most important, was the only industry that had largely left New York. As late as 1961 Jane Jacobs, writing in The Death and Life of Great American Cities, spoke of Brooklyn as a great incubator of industry. She noted that each year more manufacturing were created in Brooklyn than left for other locations. A decade after Jacobs wrote so optimistically about Brooklyn, and after the economic boom of the 1960s,  Brooklyn and the harbor economy had come on very hard times.

What Went Wrong
In the early 1970s the harbor economy fell apart. But the seeds of the bitter fruit were planted earlier in the long-term shift from infrastructure to social service spending. The shift began in the 1940s, accelerated under Mayor Wagner and metastasized with the administration of John Lindsay.

In the 1960s economic boom, the real property base of Manhattan grew by about a third, local employment grew by a net of 279,000 jobs, even as the city lost 140,000 manufacturing jobs. It was hard to notice during the economic boom of the 1960s, but the single fastest growing sector of employment was in government workers engaged not in basic city services but rather in social services and make-work health care jobs.

An enormous shift was under way that made it financially and politically difficult to maintain the city’s infrastructure let alone build a Second Avenue subway or a cross-harbor tunnel to replace the outdated “lighters.”   Between 1960 and 1975 spending tripled in constant dollars, at the same time the city population was declining slightly. The money went to public assistance, health social services and housing. Redistribution rose from 26 percent of NYC expenditures in 1961 to 36  percent in 1969 and has stayed at about one-third. 

New York, like many other cities, was in the midst of a difficult dual transition. On the one hand, a manufacturing economy was being replaced by a service economy and, on the other, a vast new population of African-Americans from the South, who had be to incorporated into the economy, were transforming the city’s politics. 

During the 1957-58 and 1960-61 recessions New York suffered fewer job losses than the rest of the U.S. In the 1969 recession, Gotham lost jobs at three times the national average. In the severe recession that lasted from Nov. ‘73 to Sept. ‘75, NYC’s job loss, many in manufacturing, was six times the national average. In 1968 the city unemployment rate had been a question of a percentage point below the national average, placing it at the second lowest unemployment rate of the fourteen largest cities, according to the Bureau of Labor Statistics. In September 1975 New York’s unemployment had reached 11.1 percent, 2.3 percent above the national average, the second highest of the fourteen largest cities. The city’s secular slide in manufacturing jobs turned into an avalanche. That’s, in part, because between 1960 and 1975 the city, already a high tax locale, added a vast array of new taxes, including a personal income tax, the commercial rent tax, a business income tax, and a sales tax while state government under Nelson Rockefeller was similarly boosting taxes.7

In the midst of this crisis the World Trade Center was opened. It had been built, in part, to hasten the shift from a freight/manufacturing economy in Lower Manhattan to a service economy. But by late 1973 the vacancy rate in Manhattan office buildings was 12 percent. When the 110-story World Trade Center opened in 1975, initially adding 9 million square feet, it pushed the vacancy rate to 21 percent, the worst since the Great Depression. 

But as bad as taxes were, the rise of crime was worse and the decline in subway service almost as bad. When a giant chemical manufacturer left the city for Danbury, Connecticut, it cited first of all the deterioration in New York’s quality of life. They weren’t alone. When the New York Times surveyed ninety-five top executives and asked what would be most helpful to your company, the most frequent answer was “develop new and better ways to reduce crime.” Crime was out of control on the subways where first the shift to social service spending and then the fiscal crisis produced delayed maintenance. The Port Authority, which generated huge surpluses, might have come to the rescue of the subways but, immune from accountability, it refused. The upshot was a system whose breakdowns were so frequent––I remember being stranded for three hours in the dark at rush hour under in an East River tunnel––that the economic ties between Brooklyn and Lower Manhattan, already strained by the rise of crime and an underclass population in Brooklyn, were dramatically attenuated.

For more than thirty years the city had looked to Robert Moses to cut through the welter of interest groups and competing jurisdictions to build the infrastructure. But by the 1960s, Moses––who at one point held twelve city and state jobs controlling parks, sewers, highways and public housing––had more than worn out his welcome.  A man as arrogant as he was accomplished, he was more than willing to displace ordinary people who got in the way of his public-works projects. He proudly told an interviewer that “if you want to build public works in a metropolis, you have to swing the meat ax.” When questioned, he responded: “If the ends don’t justify the means, what does?” And when Moses was challenged by Jane Jacobs and her allies on his plans to build a Lower Manhattan expressway across her beloved west Greenwich Village, he responded commissar-like, asserting that one critic “doesn’t know what is in his own best interest, he’s not smart enough to visualize what you’re going to do.”

In the 1920s, when Moses began his rise to power with the aid of Governor Al Smith, he was a product of the progressive era faith in planning and expertise. That faith was shaken in the 1960s, which produced a vast social-service industry to compete for city, state and federal dollars. But by the 1960s there was a small cottage industry that ignored the city’s infrastructure problems by making Moses’ excesses the only issue.  Further, in the 1970s new construction was hemmed in by the generally salutary rise of the historical preservation and environmental movement that produced a drawn out Uniform Land Review Process. 

With Moses out of the way and with vastly increased social service, make-work spending, as well as rapidly expanding municipal labor costs taking a huge bite out of the budget, the city’s roads and bridges were subject to what was euphemistically called “deferred maintenance.” For four years during the 1970s fiscal crisis, the city had no capital budget for four years. Train service between Brooklyn was dramatically slowed or even halted at times because the Manhattan and Williamsburg Bridges were literally falling apart. The condition of the city’s infrastructure in the 1970s can be symbolized by two photos. One was of a repair truck that had fallen through the elevated West Side Highway, the other of a basketball hoop surrounded by debris that had been set up on the deserted highway. The West Side Highway south of 59th Street was eventually torn down, but the city was unable to build anything in its place. Three and a half billion dollars in federal funds for a Westway, a replacement road and waterfront parks went unused; eventually, Boston used the money to build the Big Dig, which is reshaping that city’s waterfront. 

Brooklyn, saddled by the high-energy costs, clogged roads and lack of rail access imposed by “the Manhattan arrangement,” was particularly hard hit by the changes which included the bankruptcies of the major freight carrying railroads. Manufacturing employment, which reached a peak of 235,000 in 1954 and was at 220,000 as late as 1967, dropped precipitously to 112,000 by 1976. The  breweries of Bushwick closed up while the Brooklyn Navy Yard shut down. Overall, between 1961 and 1976, 170 major manufacturers moved out of Brooklyn, with very few new companies created. Brooklyn, considered as a separate entity, had been hit by the quadruple whammy of Lindsay’s attempt to recruit the working poor onto the welfare rolls and the decline of manufacturing, accelerated by both the collapse of the rail freight lines and Lindsay’s tax and crime increases. By 1973 this once proud city of industry had, considered as a separate entity, the second lowest labor participation rate of the country’s large cities. Even as Manhattan began to recover jobs after 1977, Brooklyn’s job loss continued albeit at a slower pace. With Downtown Brooklyn handicapped by single-room occupancy hotels, prostitution and refuse-filed lots, it was “all but shut out of remarkable growth” in FIRE employment.

Brooklyn, once an enormous asset for Lower Manhattan, had turned into a liability. In the meantime, midtown, with its commuter rail links, was drawing in high-end workers from Westchester, Long Island and the North Jersey suburbs. Brooklyn had fallen victim to the paradox of a regional city. For all the talk of how the city and the region competed as a whole, a government dominated by Manhattan was willing to allow important assets like the Brooklyn waterfront to collapse. As the experience of Jersey City suggests, an independent Brooklyn dependent on the waterfront for its tax base would have looked at things differently. 

Across the Hudson on the other side of the harbor, the economy was falling apart as well
Alexander Hamilton, speaking of the site of what would become Jersey City, predicted that “Someday the great American city will rise on the west bank of the Hudson.” The Jersey City of the second quarter of the 20th century was dominated by a local version of Peronism. Frank “I am the Law” Hague rose in politics by attacking the railroads and championing the little guy.  He did indeed build a hospital for the poor but then he staffed it with so many no-show workers that the patient to staff ratio was one-to-one. These policies, applied citywide, produced the highest taxes in the country in return for relatively little in the way of services. No matter that business was fleeing, Hague and his machine prospered from the so-called “Horse Bourse,” a network of telephone and telegraph systems centered in Jersey City that were part of the largest illegal gambling operation in the country. Hague, who liked to speak of “justice at the end of a night stick,” assigned a cop from each precinct to collect from the local bookies.

Jersey City, with the slogan “Everything for Industry,” was a city dominated by local politics. In the intensely parochial and provincially Catholic Jersey City, Manhattan and Wall Street seemed very far away. As with Tammany the ties between the longshoremen, the local politicians and the mob defined the city’s economy and politics.

In Jersey City, explains political reporter Peter Weiss only half-jokingly, “it is considered a sin to be off the payroll.” “Politics, here, is a year-round contact sport played like half-court basketball where the winners get to keep playing and the losers get shut out.” In the postwar years many of Hague’s successors were hauled off to jail, while the city didn’t even try to cope with abandoned factories, contaminated land and property levies so high that owners stopped paying tax on land worth less than its assessed value. There were even academic predictions that Jersey City would become “the first totally slum city in the United States.” 

In the early 1980s the first bumbershoots of waterfront development and gentrification began under Mayor Gerald McCann, who would later be hauled off to jail.  When McCann’s opponent in the 1989 mayoral election Glen Cunningham suggested that the former mayor was up to no good, the audience at the mayoral debate applauded McCann and shouted “good for him.” Bret Schundler, Jersey City’s  reform mayor during its 1990s boom was one of the legions of Wall Street yuppies who arrived during the mid-1980s. When he pulled up in a cab in front of the apartment he had rented, the driver noticed the address and gestured to the front door, “My brother was shot to death right on your stoop.” 8

What went right: Recreation of 
the harbor economy on a new basis
After years of the city spending like a drunken sailor, Koch, with the help of the Financial Control Board, emerged as the mayor who could say no (at least temporarily) to the city’s interest groups. Even so, the city continued to totter on the edge of insolvency until the economic recovery rode to his rescue. From a high of 20 percent in late 1973, the midtown Manhattan office vacancy rate dropped to only 4 percent by the close of 1978. One of the city’s biggest developers crowed, “We’re at the beginning of one of the largest booms in real estate history. We’ve been in the starting gate for five years, now we’re off and running.” From 1981 through 1986 Manhattan, spurred by the President’s deregulation of financial markets, acquired approximately 45 million square feet of new commercial space, an area equal to the total of office space in Boston and San Francisco combined. Business Week reported that employment in business services like law and accounting grew 41 percent  between 1977 and 1983; at the same time financial sector employment was up 64 percent and real estate employment up 25 percent.

In part, the decline of manufacturing finally began to pay off for New York. Deindustrialization, a disaster for some sections of the city, had been an opportunity for others to upgrade their quality of life by turning manufacturing lofts into living spaces. Old manufacturing districts like SoHo became “funky.” First, they attracted artists in search of large spaces who pioneered the transformation, the artists were soon followed by Wall Street yuppies. New York became a magnet for twenty-somethings, a dating bar for young college graduates. 

Meanwhile, Jersey City was coming back to life. When the New York Times touted the consolidation in 1898 it mocked the “peril” Brooklyn faced. It depicted a future for consolidated Brooklyn with “well-paved and clean” streets bustling with business and shopping districts. Brooklyn, it promised, would soon be so “rich and noisy” it would rival Manhattan. But notes Times columnist John Tierney, “It was independent New Jersey that has ended up with the benefits that the Times promised Brooklyn a century ago.”

As part of the deal to build the World Trade Center, the site was moved from the East River side of Manhattan to the Hudson, and the Port Authority agreed to refurbish the decrepit, cob-webbed toonerville trolley of a rail line known as the Hudson and Manhattan Railroad. The upgrading of what was renamed the PATH opened the way for a new postindustrial waterfront for Jersey City while providing a quick commute and sub-Manhattan rents for young professionals.

Jersey City also benefited from the way New York made it difficult to build almost anything. Samuel Lefrak, a major builder with long-standing ties in both Brooklyn and Manhattan, moved most of his operation to the decayed piers of the Jersey waterfront. Lefrak threw up his hands with New York back in 1983, when Salvatore “Sammy the Bull” Gravano draped his arm over Lefrak’s shoulders and informed him, “We’re going to be partners” in constructing Lefrak’s portion of Battery Park City. “I told Mayor Beame, ‘If this doesn’t stop, I’m moving across the river,’ “says Lefrak, sitting in his modest office trailer beneath Newport’s latest office-construction project. “Sammy told me he was going to take one-third interest. That’s what it would cost me to pour concrete. “But the mayor was too busy and didn’t pay any attention. So I moved on.” New York City’s concrete business, of course, has long been the province of organized crime, costing builders two to three times as much to pour as anywhere else in the country. 

“In Jersey City, we mix our own concrete,”says Lefrak. “That’s just one of the things that makes it so cheap to build over here.” Forsaking Manhattan, Lefrak bought 600 acres of abandoned railroad yards from Amtrak and Conrail on the Jersey City waterfront. “Absolutely nobody wanted the property,” he says. “There were packs of wild dogs living on it.” Eighteen years later, that same 600 acres houses the World Business Center: 5 million square feet of office space, 4,000 apartments, a shopping mall, parks, playgrounds, and a marina.9

Bret Schundler, a white Protestant in a Catholic, black Hispanic and immigrant city, won the Jersey City mayoralty in a 1991 special election held after McCann was forced to resign. Schundler, a financial analyst brought order to both the city’s streets and its finances. He positioned the city to take advantage of the great boom of the 1990s with a package of city and state tax incentives and a willingness developers’ prize to actively cooperate on new projects. Jersey City would have made some gains in the 1990s even with its traditionally criminal mayors. But thanks to Schundler, Jersey City accounted for nearly 90 percent of the jobs created in the 1990s by New Jersey’s six largest cities.

From the point of view of Jersey City’s tax base, any mayor, whether he be McCann or Schundler, has to make waterfront development a priority. But Brooklyn, only a lesser cog in the Greater City, lacked the leadership and independence to make the most of its assets.  Nonetheless, Brooklyn, largely shorn of its manufacturing, began to revive as an adjunct to the Manhattan office economy. 
 
 

In the late 1970s, a wave of gentrification began in brownstone neighborhoods of Park Slope, Carroll Gardens and Fort Greene. In 1983 some of the seeds of the downtown revival were planted when Borough President Howard Golden invited the Regional Plan Association to come in and explain how to revive nearly moribund Downtown Brooklyn. In the 1970s, as the private sector fled, government projects became the default choice for starting a revival. Golden and others returned to the old idea first floated by Robert Moses in 1944 of turning Downtown Brooklyn into a civic center for the courts and different government agencies. In the 1950s this approach had displaced struggling manufacturers. Revived by Golden, government offices took up the land that might have attracted private sector companies. The problem of attracting business to Brooklyn is not a matter of cost per se. New York incentive programs, the difficulties of the paperwork aside, make Brooklyn competitive with Jersey City on a per square foot basis. The difficulties are 1) with much of the best land taken up by government buildings, public housing and class B office space, it’s hard to assemble the land packages the financial companies are looking for, and 2) Downtown Brooklyn is stuck with the same zoning codes and building costs as midtown Manhattan. 

Still, there was progress. Golden and the city helped assemble the package of tax incentives and UDAG grants that led to the construction of the massive Metrotech complex as back office, middle management and computer processing space for Wall Street. Metrotech, built by Forest City Ratner––probably the final example of a tower in the park design––and opened in 1988, gave nearby Brooklyn Polytechnic University a shot in the arm and helped spark a new interest in Downtown Brooklyn. 

One important example of the revival was the creation of a whole new neighborhood, Dumbo (Down Under the Brooklyn and Manhattan Bridge Overpass), that signaled new possibilities for the once moribund borough. Dumbo was largely the creation of one man, David Walentas, who bought up much of the property and developed it with the self-interest local mayors have in their limited assets. When Walentas began acquiring property in the 1970s the area was filled with abandoned buildings, but in the 1990s it became one of the prime sites along the Brooklyn littoral for  Silicon Valley companies that had crossed the river. Next to Dumbo the Brooklyn Navy Yard, led by Giuliani appointee Marc Rosenbaum, brought a variety of new companies, including movie production facilities, into the once all-but-mothballed Navy Yard.

In the 1980s it looked as if Fort Greene, which is adjacent to downtown, would become a thriving, integrated brownstone neighborhood. But its rebirth was short circuited by a high crime rate and a series of grisly murders. In the 1990s as crime receded, it blossomed as an integrated district defined, in part, by a number of independently opened African-themed boutiques, stores and restaurants. The adjacent BAM (Brooklyn Academy of Music) cultural district benefited from over-heated Manhattan rents that sent a stream of nonprofits, including the Mark Morris Dance Company, into the “outer” borough. Brooklyn has become hip. The trendsetting magazine Time Out, adverting to the tendency of the chic to dress all in black, recently declared the borough “the new Black.” Brooklyn, said urbanist Joel Kotkin, has “become the exciting urban experience people once went to Manhattan for before it became too expensive and too filled with chain-store retailers.” 

“The restoration of the brownstone belt,” explained Carl Weisbrod of the Downtown Alliance,”was a crucial  element in the revival of Lower Manhattan. Just as at the turn of the century Brooklyn’s toney neighborhoods were once again the neighborhood of choice for many “location decision-makers, senior managers in investment banks, partners in law firms, and bank executives.” 

The old ideal of independence still haunts some Brooklyn decision-makers. But once the Board of Estimate was eliminated in 1989 and the borough presidents were stripped of their power, it was time to give up the ghost. Jersey City markets itself as a part of the Lower Manhattan central business district, it is time for Brooklyn to do the same. And it is in that vein that private sector leaders, such as Keyspan’s Bob Catell, rather than elected officials, have taken the lead in promoting the borough.

With Brooklyn and Lower Manhattan intertwined by the best mass transit connections anywhere in the county, Brooklyn’s new waterfront park, its promenade, college and cultural institutions add an important dimension to a Lower Manhattan likely to continue on its pre-9/11 path and become more residential. “It’s not either or regarding residential and financial uses for Lower Manhattan,” explains Carl Weisbrod, “the two are linked, making it more residential is one of the key elements in preserving its importance as a financial center.”

For the last thirty years New York has largely turned its back on the harbor that created and sustained the city for centuries. The future of Lower Manhattan now lies, in part, in turning the waterfront into an asset. It’s beauty and recreational possibilities can make downtown into an attractive live-work location. And then there are the extraordinary possibilities presented by Governors Island. The island’s 172 acres are often forgotten when rebuilding is discussed. A five-minute ferry ride from either Lower Manhattan or Brooklyn’s Red Hook, Governors Island, with its golf course, playing fields and historic buildings can be a key part in the remaking of the harbor economy. With the reintroduction of a relatively inexpensive ferry service Governors Island revitalization promises to remake the Red Hook and Sunset Park waterfronts. 

Governor Island promises to provide not only recreation but also a site for the city’s many academic institutions to both gather cooperatively and perhaps even set up high-tech incubators. The Wall Street boom is over but the tech revolution continues. Despite the crash in dot.com stocks, only 10 to 20 percent of the software and graphic arts tech firms below 14th Street disappeared. Local tech companies like Brainstorm, which does 4-D imaging, have played a key role in speeding up the WTC cleanup. And tech companies will play a major role in a more diversified harbor economy. 

Jane Jacobs was relentlessly hostile to Los Angeles, a city with numerous downtowns spread over a region.  But Los Angeles, despite its traffic jams, has a dynamic, flexible, multidimensional economy. New York’s future will––gasp––probably become more similar to L.A.’s in the economic sphere. Decentralization to “six” boroughs and elsewhere will continue. Lower Manhattan will be far less central than it once was, but it will nonetheless retain the vitality and vibrance of its past. 

1  (H.G.Wells Anticipations of the Mechanical & Scientific Progress Upon Human Life and Thought Harper Bros 1902 pps 62,65,67)

2   The anti-Semitic Wells, who at times called for the extermination of the unfit, took pleasure in describing the destruction of New York by a surprise attack of German zeppelins; “Lower Manhattan was soon a furnace of crimson flames, from which there was no escape. Cars, railways, ferries, all had ceased, and never a light lit the way of the distracted fugitives in that dusky confusion but the light of burning . . . Dust and black smoke came pouring into the street, and were presently shot with red flame.”  And then in the vein of those European leftists who think New York deserved 9/11, he went on: As the airships sailed along they smashed up the city, as a child will shatter its cities of brick and card. Below they left ruins and blazing conflagrations and heaped and scattered dead: men, women and children mixed together as though they had been no more than Moors, or Zulus, or Chinese. H.G Well War in the Air , 1907, pps 181-2, 211-212
 Sayyid Qutb inspired the enactment of what Wells has had anticipated.  He came to New York from Egypt in the late 1940s a moderate and left a radical Muslim who would inspire a Jihad against New York. Disgusted by a culture which embraced Marx, Freud and the Kinsey Report, angered by even mild displays of female sexuality, and what he described as “evil and fanatic racial discrimination” he came to insist that  “no one is more distant than the Americans from spirituality and piety.” When he returned to Egypt radicalized, he joined the Muslim Brotherhood and developed a doctrine to explain why both the jahiliya, that is paganism of both America and the Moslem governments aligned with America have to be extirpated and replaced with a “just dictatorship.” Tortured by the tension between the certainty of the faith he acquired in an Egyptian village and the scientific skepticism and sensual temptation of America, he successfully courted martyrdom.  He was first imprisoned and later executed by the Egyptian strongman Gamal Abdel Nasser in 1966.  His heirs, hostile to democracy and modernity were further inspired by German terrorist organization of the 1970s, the Baader-Meinhof gang.

3  From 1850-1910 suburban voters generally seemed to favor union with the central city.  In fact the rate of territorial expansion increased in most cities after the state legislatures gave local electorates a greater say in annexation. Large cities like Chicago, LA, Detroit, Cleveland and Boston with their impressive public improvements had something valuable to offer the suburbanite.   So long as consolidation was a bargain rather than a burden for the suburban resident, the city would have little difficulty in winning further conquests.. . . Suburban units could not yet compete as purveyors of water, sewage disposal, or fire and police protection; the central city provided superior services at a lower cost. Jon Teaford Post-Suburbia: Government and Politics in the Edge Cities, Johns Hopkins 1997

4   In 1900 NY was the most important copper and sugar refining area in the US; and no.1 in apparel, electrical and electronic goods, fabricated metal products(hardware), toys, jewelry and motion pictures.
 It is a matter of no small irony that the Silicon Valley was made possible because the San Francisco Bay Area did not follow New York’s course.  In the wake of Gotham’s consolidation there was an attempt to unite the Bay area in one great city led by San Francisco. But the effort failed and San Francisco was unable to impose its politics and costs on to the San Jose which nurtured the new economy.

5    Doug Haskell  “The modern city emerged in the 1880s . . . . with the electrified, steel-framed, high, bridged and tunneled architecturally urbane, civically conscious city.  The airbrake (Westinghouse 1868),the telephone 1876, the electric light 1879, the fountain pen 1884, the adding machine 1885, the linotype 1885 helped create the modern office – these offices could concentrate in central business districts thanks to the telephone, the trolley car and the electric elevator all dev in the 1880s. From Peter Hall Cities in Civilization, Pantheon, 1997

6     This is a matter of New York exceptionalism - after the 1920s mass transit ridership leveled off most everywhere but in Gotham 

7   1967 was a fateful year.  Within a ten-day period in February 1967 both American Can and Pepsi-Cola announced plans to leave for the suburbs; Olin Mathieson announced it was shifting its HQ for chemical operations to Connecticut and Bohn Office Machines announced it was looking to leave.  That same February, 14 other corporations with 11,500 employees in Manhattan began to plan their exit.

 In 1967 a leading expert on corporate relocation explained: “the commutation problem, the rising crime rate, swollen welfare rolls and subway strike.” Corporate executives were coming to the same conclusion as the middle class. It’s a matter of some irony that in  1967 NYC also created a municipally financed industrial renewal program that assembled land and made it available for developers. During its first 4/12 yrs it claimed to help create 10,000 new manufacturing jobs. But in those same years the city lost 130,000 mfg jobs. Jon Teaford The Rough Road to Renaissance, Johns Hopkins 1990

8   Helen Stapinski Five-Finger Discount, Random House, 2001

9  from Bill Tuckers interview with Samuel Lefrak, 11,15,01 New York Post
 
 
 
 

Prince of the City 
Rudy Giuliani explains how he did it. 
by Fred Siegel 
02/10/2003, Volume 008, Issue 21  Weekly Standard

Leadership 
by Rudolph W. Giuliani 
Miramax Books, 407 pp., $25.95 

SIR RUDY GIULIANI has become such a commanding figure that the reviewers of his book "Leadership" have spent far more space on his persona than his policies. The reviews almost invariably buy into the line about 9/11 bringing forth "a new Rudy." The "new Rudy" idea was originally a creation of his critics, who were having a hard time reconciling their distaste for both the style and substance of his mayoralty with Giuliani's heroic leadership in the face of an enemy attack. 
The "new Rudy" talk takes two, somewhat unrelated, forms. One, drawing on his marital and medical troubles, insists, with some small justice, that he had become kinder and gentler. The other claims that 9/11 rescued his mayoralty from obscurity. In the words of BusinessWeek, "If not for his actions in the days after the attacks, the former New York mayor might have been remembered as much for his extramarital behavior and battle with cancer as for his performance in office." Here, as the latest murder statistics testify, there's barely a grain of truth. While murder is on the rise again around big-city America, it continues to decline in New York. 
The Giuliani mayoralty was defined by continuity of vision and managerial style. It was framed by the two attacks on the World Trade Center. "Leadership" doesn't mention it, but in Giuliani's first inaugural speech given in January 1994, pride of place went to the February 1993 attack on the World Trade Center. The newly installed mayor praised the police, fire, and nursing rescuers, and described the city's response to the terror attack as a model for the city's self-reliant future. It was a moment, he said, when "50,000 New Yorkers took charge of themselves and each other, showing on their own even before any city worker could help them . . . the New York spirit that brought us through the World Trade Center crisis." The response was "a demonstration of the courage and ingenuity we must apply to: restoring public safety, saving our schools, creating jobs, controlling our budget deficit and improving the quality of our lives." Only after these comments did he turn to another emergency, crime. 
If the city's response to crises was on his mind from the very start, so were his methods in tackling emergencies. The reviews have largely overlooked what is both the most obvious and most striking thing about "Leadership." How is it that a mayor--cities have long been synonymous with mismanagement--was presuming to give management advice to America's world-leading business magnates? 
The easy answer, noted by Newsweek, is that "Leadership" was written as "a calling card" for his consulting business "Giuliani Partners." True enough, but it misses the open secret of his book. Giuliani has been a keen student of management. The ex-mayor is not an intellectual, but he is, like former President Clinton, a formidable intellect, a natural student of whatever subject he tackles who is capable of quickly absorbing and organizing a vast array of material. 
STUDY IS THE LEITMOTIF of both "Leadership" and Giuliani's career. He went to Washington as an associate deputy attorney general in 1975, and has described it as "a terrific opportunity. I thought it would be a seminar on how government works." When his mentor Judge Lloyd MacMahon handed him the receivership of a bituminous coal mine in Kentucky, he used his quickly acquired knowledge of mining to win over hostile miners who had begun by asking, "Are you a Jew?" 
After his narrow defeat in the 1989 mayoral election, he spent two years studying city government in preparation for taking office. He had begun "Leadership" months before the 9/11 attack. He writes that "it had become almost a seminar for me, a self-imposed program on how to run an organization. It was as if God had provided an opportunity to design a course in leadership just when I needed it most." 
"A leader," insists Giuliani, "should have independently acquired understanding of the areas he oversees. Anybody who's going to take on a large organization must put time aside for deep study." He also contends that leaders have to know enough to fit all the specialized advice they receive into a coherent whole. This is true, but hardly earthshaking, even if its wisdom seems to have eluded Giuliani's successor Michael Bloomberg. 
The book doesn't begin to capture the fiery intensity of Giuliani's leadership that served as a beacon for the people who worked for him. Nor, aside from the numerous references to the morally ambiguous management techniques illustrated by "The Godfather" movies, does the reader get a sense of Giuliani's intuitive grasp of the underside of urban life. 
LIKE ALL MANAGEMENT BOOKS, "Leadership" has a good deal of hindsight and common sense dressed up as foresight. Public officials and business executives all over the country have turned the book into a bestseller because, the padding and self-flattery aside, it gives the reader a good sense of how Giuliani operated. He writes, "I've begun every single morning since 1981," when he was appointed the youngest associate attorney general ever, "with a meeting of my top staff." The importance of the "morning meeting cannot be overstated." With the chief executive and his top staff all gathered, "everyone is entitled to air concerns, that meant my staff knew they could get a yes or no from the boss . . . the access worked both ways." And with the different department heads gathered together around the table, it was hard, if not impossible, to engage in blame-shifting. 
"The entire 9/11 response and recovery," says Giuliani, who was expecting a second attack, "was planned at the morning meetings expanded to include Governor Pataki's staff, representatives from utilities and the Federal Emergency Management Agency." Baltimore's innovative mayor, Democrat Martin O'Malley, has taken this lesson to heart. He has been similarly drawing together his top staff, so that, guided by timely statistics, he can impose accountability on his commissioners. 
The book does little to account for the mix of instinct and intelligence that makes for a natural leader. Whether the subject has been corporate corruption, as when he zealously prosecuted Wall Street malfeasance in the 1980s, his decision to shun Arafat at a time when the Palestinian leader had been accorded a measure of respectability, or his crucial decision in the mid-1990s to emphasize emergency management when most of the country was on "a vacation from history," Giuliani has been ahead of the curve. 
But his Office of Emergency Management, which pioneered urban crisis management and made possible the extraordinary success in evacuating 25,000 people on 9/11, is not even mentioned in the two books written on Giuliani to date. The mayor's decision to establish an emergency command center was roundly mocked at the time as overkill. The New York Times derided it as Rudy's "bunker," former mayor Koch called the idea "nuts," and the Rudyphobes (and even some admirers) were derisive. The city council tried to eliminate it. 
The location of the emergency operations command post in the World Trade Center was a mistake, but the Office of Emergency Management that built the center proved an enormous success. Designed to prepare for "hybrid emergencies" (such as the possibility of biological or chemical attack), the Emergency Office's sole purpose, since copied by other cities, is to coordinate the city's numerous agencies in responding to a crisis. It got in its practice runs reacting to the West Nile virus, Y2K, and the Millennium Celebration. "For months," Giuliani says, "we had in place an exercise in which we'd drilled on our response to a biochemical attack, specifically practicing for the distribution of medication--that planned date Wed. 9/12." The location was Pier 92 in the Hudson River, which was then turned into the emergency command post when the Towers went down. 
"LEADERSHIP" isn't always a good read. It's disjointed. The book jumps from one, often disconnected anecdote, to another organized under the loose rubric of topics like "Loyalty," "Prepare Relentlessly," or "Be Your Own Man." But for those interested in the thinking behind the success of the most effective mayor of the last half century, a mayor whose thinking remained remarkably constant through his eight years, "Leadership" is well worth the effort. 

Fred Siegel is a professor at the Cooper Union for Science and Art in New York. 

© Copyright 2002, News Corporation, Weekly Standard, All Rights Reserved.
 
 
 
 
 

ELECTION 2001    (Wall Street Journal)
Bloomberg's Next Challenge
Oh God, not another John Lindsay!

BY FRED SIEGEL
Thursday November 8, 2001 
 

"It's a darn shame only one of these guys will lose." 
-- David Letterman

I should be smiling. Michael Bloomberg, a pro-business candidate who's promised not to raise taxes while continuing Rudolph Giuliani's crime-fighting legacy, and who seems to owe no debts to the public-sector unions, has defeated Mark Green, a longtime left-liberal who fought each and every Giuliani reform. 
But I'm more worried than happy, because the silent partners in Mr. Bloomberg's victory were the anti-Giuliani coalition of Bronx Democratic Party boss Roberto Ramirez; the city's leading racial demagogue, Al Sharpton; the city's most powerful union leader, Dennis Rivera; and Fernando Ferrer, the man who had been their candidate for the Democratic nomination. These are the four men who nearly won the Democratic Party primary for Mr. Ferrer on an identity-politics platform of rolling back the Giuliani reforms. 
During the campaign, Rep. Charles Rangel, a skilled politician, compared Mr. Bloomberg to John Lindsay, the Upper East Side Republican who was first elected mayor in 1965 on a law-and-order, low-tax platform, but who governed to the left of the Democrats. Mr. Bloomberg, who describes himself as a "liberal," was a Democrat until a year ago. Some of Mr. Bloomberg's advisers, like Alan Gartner--a former Lindsay supporter who was one of the architects of welfare expansion in the 1970s--are well to the left of the people alongside Mr. Green. So before I begin to smile, I want to see just how much John Lindsay there is in Mike Bloomberg. 
It is no accident, as the Marxists say, that on Election Day, the offices of the Bronx Democratic Party headquarters were closed, the phones turned off. And on the morning after his victory, the first man Mayor-elect Bloomberg met with was not Rudy Giuliani, but Freddy Ferrer. 
In America's war against terrorism, the partners President Bush chooses will have a considerable impact on how we pursue the conflict. In New York politics, Mr. Bloomberg's choice of partners will affect the kinds of policies he's able to pursue. 

How did Mr. Bloomberg win the election? The answer is that the unprecedented events of Sept. 11 made it possible for Mr. Bloomberg to put together an unprecedented coalition that broke all the "rules" of local politics. 
Rule One: If Rudy Giuliani supports something, minority voters will come out against it. So when Mr. Giuliani came out in support of school choice, it dropped 20 points among black voters. But this time when Mr. Giuliani, "America's mayor," endorsed Mr. Bloomberg, he galvanized white Catholic voters without producing a black and Hispanic backlash. That's because Mr. Bloomberg's silent partners worked effectively to demonize Mr. Green. 
Rule Two: In New York the power of the free media means you can't win an election with paid advertising; this isn't New Jersey. But the concatenation of Sept. 11, the war in Afghanistan, the anthrax scare, the World Series, Mr. Bloomberg's unprecedented spending, and Mark Green's rigid adherence to dysfunctional campaign-finance laws that limited his spending, combined to allow Mr. Bloomberg to win largely on the basis of paid advertising. 
Rule Three: Republicans in New York are only elected once every 30 years, and only after Democrats have bungled things badly. Mr. Giuliani changed that. Ever since he first ran in 1989, moderate white Catholic and Jewish voters have been deserting the Democratic Party primary in droves, preferring to wait and vote for Mr. Giuliani in the general election. 
This produced Democratic Party mayoral nominees who, chosen by the remaining rump of the Democratic Party, were well to the left of even New York's electorate. White liberal candidates for the Democratic nomination have been whipsawed by the Giuliani factor. If they fail to gain sufficient minority support they lose the primary, as Ed Koch lost to David Dinkins in 1989. But if they defeat a minority candidate, as Ruth Messinger did in 1997 and Mr. Green did this year, they generate resentments that come back to haunt them in the general election. 

Mr. Bloomberg has broken the rules to win. Can he break the rules to govern? He clearly knows less about the city and its government than any mayor of at least the last 100 years. When businessman Richard Riordan was elected mayor of Los Angeles in 1993, he had long been involved in the civic life of his city. Mr. Bloomberg is a stranger to much of New York. He has talked about how New York brought down crime with "community policing." It didn't; it used "broken windows" policing, which is quite different (and more aggressive). When asked about New York's ongoing deficit in what it pays to Washington and what it gets back, he said he would "serve as our third senator," as if that would help. The doubters, such as New York Post columnist John Podhoretz, describe Mr. Bloomberg as a man with an "elemental misunderstanding about how New York is governed." 
Mr. Bloomberg was almost as off target when talking about Sept. 11 as Freddy Ferrer. He spoke of our problems in terms of the national recession, but it's lower Manhattan, not the national economy, that lies devastated. His proposed solution to the city's problems changed little after the attacks. He wanted to refinance our enormous debt at reduced rates. This is a good idea, but of little immediate help for those businesses destroyed or displaced on Sept. 11. He insists that the city alone should handle the reconstruction, but the World Trade Center stood on state land, and Mr. Giuliani and Gov. George Pataki have gone ahead and named a state-city commission to oversee the rebuilding. 
Mr. Bloomberg will no doubt lean heavily on those Giuliani staffers who stay on to help organize his administration. But it's not clear how much help he will get from Mr. Giuliani himself, nor does it seem likely that two men of such gargantuan egos will be able to cooperate for very long. 
In the rough waters ahead Mr. Bloomberg, who has never had to deal with unionized workers at his company, will have to negotiate labor contracts with policemen, firemen, teachers and sanitation workers, among others. In the words of one veteran journalist with conservative leanings, Mr. Bloomberg, "who thinks he can hire and fire as he pleases, doesn't have a clue as to what these negotiations are like." Mr. Bloomberg wants to bargain for "shared savings" plans, in which the unions get more money in return for greater efficiencies. A good idea, but will he have the skill to pull it off? This is where Lindsay failed famously. He didn't know how to negotiate with the unions--they resented him as a representative of the rich and powerful--and the city paid dearly as a result. 

There were two winners on Tuesday: a nominal Republican with no experience in government, and identity politics. Mr. Bloomberg is going to have to cut back the size of government to meet the city's looming budget deficits. Those cutbacks will no doubt disproportionately affect the minority workers who depend on city jobs. It's at that point that Mayor Bloomberg, who won by telling black and Latino New Yorkers that Mark Green had run a racist campaign for criticizing Freddy Ferrer's nonresponse to Sept. 11, will be haunted by what candidate Bloomberg said. In New York, no matter who wins, the city seems unable to overcome the toxic mix of racial and class resentments that define our dysfunctional politics. 
Mr. Siegel is a professor at The Cooper Union in New York and a senior fellow at the Progressive Policy Institute in Washington.
Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. 
 
 
 
 
 
 

Bloomberg's Bedfellows 
As the mayoral election shows, racial politics are alive and well in New York. 
by Fred Siegel 

NEW YORK 
Call it the New York Paradox: Politically, it's always 1968. Racial tensions, thoug