Why Did Austerity Win?

Let me begin with an appreciation of literary quality: this is a beautifully crafted piece of work. Fear City is the most vividly written book about the modern political history of New York City I have read since The Power Broker, Robert Caro's masterful study of Robert Moses, published way back in 1974.¹ There are other excellent works about the New York fiscal crisis of the 1970s, of course; Martin Shefter's 1985 study, Political Crisis, Fiscal Crisis, is notable for the way it places the same events in the context of the history of earlier battles between Democratic politicians and elite reformers.² But as a writer, Shefter is no Phillips-Fein.

She manages to turn what, at first glance, seem complex, arcane negotiations about bond issues and budget cuts into a series of thrilling dramas pitting progressive interest groups and constituents against austerity-minded bankers and politicians seeking compromise. She also captures the emotional toll the fiscal crisis took on ordinary New Yorkers and how some of them fought back. I will never forget the story she tells about Adam Veneski and his fellow Brooklynites who struggled to save their neighborhood firehouse—and succeeded, after sixteen months of imaginative tactics as well as sleeping on the firehouse floor.

Phillips-Fein is a gifted verbal portraitist too. She gives us splendid capsule biographies of John Lindsay, Victor Gotbaum, Hugh Carey, Ed Koch, Felix Rohatyn, and William Simon—among others—which highlight the intersecting aspects of their personalities and political positions. Most remarkably, she gives us a portrait of Mayor Abe Beame as a modern-day Job, a decent man struggling to understand why the city he loved was about to go bankrupt and why more powerful figures and forces seemed unable or unwilling to help him rescue it. I love the anecdote she tells about Beame stuffing budget notes in his bathing suit while he was comptroller of the city. Anyone who can make Abe Beame into an everyman hero is a fine writer indeed.

But I don't want to devote my entire response to saying nice things about the book. That would be boring.

There are two lines of argument I think Phillips-Fein could have pursued that would have placed the fiscal crisis and its resolution in a larger political context—and made Fear City even more impressive than it already is.

First, she might have placed the downfall of the social-democratic order in New York City within the larger crisis of the New Deal order in the nation more generally. This was, in part, the subject of her first book on the rise and influence of the corporate right. After all, there was a fiscal crisis in the United States as a whole in the mid-1970s that did a great deal to encourage those politicians in both major parties who favored a more austere state. The victories of liberals and leftists in the 1960s had been possible only because of a growing economy—and the expectations that it would continue to grow. But the 1970s was a decade of progressive retrenchment, and the growth of the right—and the perceived failure of Keynesian remedies for the downturn that began in 1973 had a good deal to do with that. It's hard to imagine how, in this depressing context, Mayor John Lindsay and Beame, who succeeded him, could have continued to raise enough revenue and pay higher wages for city employees and keep social services humming at the same levels, as well as keep colleges tuition-free. Social democracy in one city is inherently an unstable, vulnerable phenomenon.

The second topic Phillips-Fein might have examined in more detail is connected to the first one: the reasons why the opponents of austerity lost. One can thrill at the resistance of people like Veneski and be glad that she pays tribute to others like him. As Phillips-Fein writes, "When they were faced with the withdrawal of services that had become tantamount to rights, many people asserted their demands all the more forcefully, as long as they were able to do...