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By Root 1115 0

$8 billion in 1975. That we did. No one knew how we could come up with $983 million to pay moratorium noteholders in 1976. Yet we did. Ibsen can write and bring a play to a close in three acts. For us, it’s just another four weary years of continuing the formula we started in 1975. Call it a loose coalition, a process of exchange among partners. If you ask me how, I don’t know. I have to fall back on history.” The partners were, again, emboldened when the Congress passed additional loan legislation in the summer of 1978. Each congratulated the other for the truly brilliant lobbying effort. One of the few sour notes was sounded by The Wall Street Journal, which over the three years had earned the right to say I-told-you-so. “The doctors are concocting a patent cure for anemia, but the patient has a severed artery,” they editorialized. The city’s budget, they reminded readers, still wasn’t balanced. Nor was it soon likely to be. In 1978, as in 1975, the city was granted loans for essentially political, not economic reasons. In both years, the big change was that the loans came not from the public credit market but from the federal government, the pension funds and a handful of banks.

Over the first three years of the fiscal crisis New York’s witch doctors were often asking the wrong question—how do we avoid bankruptcy? The questions they should have constantly asked were: How do we make New York whole? Restore its economy? Improve its services? Truly balance its budget?

ONE PART OF ME is beginning to believe that perhaps bankruptcy is the answer. Since 1975, I have accepted the prevailing wisdom that bankruptcy would be a calamity for New York—an official declaration of death, an admission that democratic government had failed. I recoil at the thought of a nonelected judge ordering around elected officials. And at the ugly prospect of a fractious struggle among the city’s creditors—welfare recipients, bondholders, city workers, printers, landlords, bus drivers—for their slice of the city’s tangible assets. I worry about the psychological impact of bankruptcy: businesses or middle-income people who feel they have a bright future will not long remain in a city that has declared it may not have any future at all. I fear that Felix Rohatyn is right when he warns that the bankruptcy of America’s premier city could further undermine the dollar and convulse the international economy.

Yet, increasingly, I wonder whether to save New York we don’t have to destroy the stranglehold of our very own local military/ industrial complex. Maybe New York’s system of consent can’t work and only a judicial command will compel solutions. Maybe bankruptcy is inevitable and by postponing it through witchcraft New York is simply digging itself deeper into debt. If forced to choose between immediate or inevitable bankruptcy, I would choose the former because it is cheaper. Maybe the Wizard of Oz had a point when he told Dorothy, “I’m really a very good man, but I’m a very bad wizard.” Maybe horses can’t fly.

That’s the pessimist in me talking. I still believe bankruptcy would be calamitous. Part of me truly believes that New York is governable—that people, not just events, shape history, and that courageous and skillful leaders can make a difference. New York can capture additional federal aid without becoming a permanent ward of the federal government; need not remain a hostage of powerful special interests. The city can cut its budget, make its economy and business climate more competitive; reform its management and civil service system; inspire citizen volunteers, neighborhood improvement efforts, hope. “I have always held,” wrote Albert Camus after long and dangerous service as a member of the French Resistance, “that if he who bases his hopes on human nature is a fool, he who gives up in the face of circumstances is a coward.”

I am haunted by Prince Prospero. The Prince was a fool because he insisted on gaiety in the face of death, insisted on walling himself and his minions off from the truth, thinking they had “saved” themselves. While