Invoking Fiscal Crisis: Moral Discourse and Politics in New York City

The crisis was a crisis only because its political nature was essentially covered over.

—Reinhardt Kosselleck

In a 2001 article, Mike Davis turns his apocalyptic gaze onto the post-September 11 state of New York City: "All this adds up to a fiscal crisis of a magnitude that may dwarf the notorious municipal meltdown of the mid-1970s. Certainly this is the case in New York City where Felix Rohatyn, the city's bank-appointed financial overlord from 1973 to 1993, has warned of approaching bankruptcy as City Hall grapples with a projected $6 billion deficit in a $40 billion budget" (Davis 2001, 46). While Davis draws perverse solace from Rohatyn's words, which confirm his pessimistic outlook, others less likely than Davis to take delight in disaster have used this warning toward their own ends. In a November 2001 piece in the New York Times, Stephen Rattner, until 2000 the vice chairman of the investment firm Lazard Frères (perhaps not coincidentally Rohatyn's longtime home), gives his opinion of "What New York Will Have to Give Up": school construction and repair, among other improvements to New York's decaying infrastructure (Rattner 2001). Another period of pain, austerity, and sacrifice has come upon New Yorkers, Rattner reluctantly proclaims.

A 3 October 2001 New York Times editorial agrees, calling for "major sacrifice by New Yorkers":

It would be heartbreaking for City Hall to have to ask the city's heroic work force, especially its uniformed services, for pay freezes and givebacks. It would be almost suicidal to try to deny the teachers a significant wage hike at a time when higher-paying suburban schools are competing for staff and city students are being required to pass increasingly difficult achievement tests. But some very tough choices are in the offing. (New York Times 2001c)

Notably, tax increases and a reduction in city subsidies to business are absent from this list of "tough choices." One might ask: tough for whom? As Davis notes, the implications of this diagnosis are hardly the same for all New Yorkers:

[Rohatyn's] forecast is especially grim for the new immigrant working class already buried under the rubble of the city's fallen tourist and service industries. As failed Democratic mayoral candidate, the robotic Mark Green, liked to warn, the reconstruction of Lower Manhattan "may require sacrifice from others." Since Giuliani-era crime control is sacrosanct, as is the goodwill of big business, budget-cutters will hack away at lifeline public services—housing, libraries, sanitation recreation, job programs, and the like—in New York's neglected Black and Latino neighborhoods. Whatever twin-tower replica or monumental novelty eventually fills the void in Lower Manhattan, it will likely be financed by savage retrenchment in Washington Heights, Mott Haven and Brownsville. So much for the famous "solidarity" of New Yorkers. (Davis 2001, 46)

Actually, the FY 2003 budget was balanced using a variety of means including borrowing, spending cuts, and a property tax increase. Despite these measures, the 2004 deficit still remained roughly $3.5 billion. Mayor Bloomberg's plan to deal with this shortfall included revenue from the property tax increase, additional spending cuts, concessions from municipal unions, a possible commuter tax, and increased intergovernmental aid.

So things did not turn out quite so badly at first glance. The dire predictions made by Davis, Rattner, and the Times have been borne out only in part. Bloomberg's actions to close the 2003 deficit seem to have a progressive patina. Service cuts, though substantial and falling heavily in the area of social services, education, and welfare, were not initially as deep as might have been expected, primarily because of Bloomberg's recognition that disorder, crime, and urban decay negatively affect New York's business climate more than do taxes alone.

Perhaps the pain will be shared equally, perhaps not. Looking closely, we can see that New York's working classes and poor may not fare...