The Streets Were Paved with Gold - Ken Auletta [165]
The public chose three candidates—Koch, Cuomo and Goodman—who in prior years might incorrectly have been labeled “conservatives” because of their emphasis on “fiscal responsibility” and “mismanagement.” In this campaign, they were perceived as the anti–status quo candidates when they challenged, for example, union “ripoffs,” suggesting how much the public’s view of who was the enemy had changed. Voters rejected Beame’s everything-is-all-right theme and Abzug’s line that the federal government offered salvation. They elected Ed Koch not because he was “fresh and everyone else is tired,” like John Lindsay in 1965, or because he was against the “bosses,” as Bob Wagner was in 1961, or because he was “a mediator,” as Abe Beame promised to be in 1973. Koch beat Cuomo and the rest of the field because he came across as the most outspoken, the most specific about how he would do more with less. He convinced people he would represent the public against the special interests. Every time a union leader attacked him, or he harshly called Beame “incompetent,” he won points. Koch helped prove that to win a primary or an election it is often better to have the political, business and labor establishment on the other side.
But, as Koch would learn, getting elected is not synonymous with governing. In the first three years of the crisis, two questions—bankruptcy and how to avoid it—dominated City Hall’s attention. The people who would help answer those questions were not average voters, or the poor, or blacks, or neighborhood groups. Their influence and power was diminished. Three businessmen were appointed to the Emergency Financial Control Board that would oversee city finances. Labor, too, had its representatives attend Control Board meetings. Yet not one representative of the poor or the city’s diverse neighborhoods was represented. Minorities, in particular, lost power. For the first time in twenty-five years, they were not represented on the Board of Estimate. By 1978, blacks, who account for 25 percent of the city’s population, held only two of eighteen Congressional seats, three of twenty-five state senate seats, twelve of sixty-five state assembly seats and five of forty-three City Council seats. In place of a far-flung securities market composed of thousands of individuals, a handful of bankers and union leaders decided whether or not to invest in city or MAC securities. A “partnership,” as they came to call it, was formed between City Hall, the banks, the municipal unions, the business community, the state and the federal government. All shared a common interest in averting bankruptcy.
Former adversaries—in 1975, the unions blamed the banks and the banks blamed the unions for the fiscal crisis—locked arms. In 1977, Jack Bigel, representing the unions, and Walter Wriston, president of Citicorp, began to meet regularly on an informal basis—leading to the creation of an ongoing committee (called MUFLE) designed to determine areas of mutual interest. To avoid bankruptcy, Mayor Beame, a man fiercely proud of his reputation for fiscal wizardry, silently suffered humiliation and a reduction of his mayoral powers. Governor Carey braved a too-close identification with the city—traditionally unpopular upstate—and risked alienating powerful interest groups while appearing to be the Scrooge-like Chairman of the Control Board. Members of the business and banking community, abandoning the comforts of lecturing politicians, lent their time and financial and managerial expertise to the city. At one point, the New York banks consented to reduce the interest rate on almost $2 billion worth of city bonds. The federal