The Streets Were Paved with Gold - Ken Auletta [47]
Federal matching and maintenance requirements were designed to assure expansion of total outlays for specific programs. When applied to the City at this time, the requirements often have a counterproductive effect. In many cases, the lack of necessary local matching funds means that federal funds and the projects that they support must be forsaken. In other instances, the City is often forced to make painful cuts in other worthy locally supported programs to satisfy matching and maintenance of effort requirements for federally-aided programs. In these cases, the allocation of our dwindling resources is seriously skewed by federal policies contrary to local needs.
Obviously, it’s not just Nixon’s fault. The mood of the country shifted—Nixon did, after all, carry every state but one in 1972. Much of the federal spending was wasteful, and the public wised up. And, one suspects, federal spending could have soared and New York would still be in trouble because local spending would have tried to keep pace. Parkinson’s law—work expands to fill available space—has its home in New York. In this sense, New York, not just Nixon, is to blame. New York refused to adjust to the new nogrowth federal reality. And, as we will see, it did not adjust to the reality of its own declining economy.
Ignoring the City’s Economy
“How would you like to be remembered?” I once asked Alfred Eisenpreis, Mayor Beame’s first Economic Development Administrator.
“I don’t know,” he said. “I’d probably want to be remembered as something ‘In Progress.’ That’s very corny, maybe. But, in many ways, that’s not untrue.”
“But how could you have ‘In Progress’ on your tombstone?”
“And why not?”
“Because you’re dead!”
“How do you know?” he said, a satisfied look settling over his otherwise impassive face.
For years, the city government acted as if it did not know it was bleeding to death. Beginning with John Lindsay, the city government ignored the hemorrhaging of its economy. The nation’s economy rebounded from a recession in 1969, but the city’s did not. For the first time in history, its economic performance did not mirror the nation’s. As the country gained jobs, the city lost them—more in the next five years than it had gained in the previous fifteen. As America’s population grew, for the first time the city’s total population declined, with 300,000 mostly middle-income residents fleeing between 1970 and 1975. As the nation’s median family income went up, the real median income of city families went down by 6.1 percent between 1970 to 1973—among blacks it fell 17.4 percent. Yet as Nixon put his foot on the federal spending brake, the city pressed down on the accelerator.
It’s not as if there were no warnings. As early as 1962, the Bureau of Labor Statistics was reporting job losses in four of the city’s major industrial sectors. By 1970, their reports showed an absolute decline in employment. On July 20, 1969, the Citizens Budget Commission issued a study—The Financial Outlook for New York City—describing “a picture of gloom” and warning that the city faced “choices between what is wanted and what can be afforded.” Bureau of Labor Statistics chief Herb Bienstock summed up those years: “No one paid any attention.”
One thing John Lindsay paid attention to was dedication ceremonies, like the one to christen the new McGraw-Hill building in March 1973. Before the clicking cameras, the Mayor took to his side a Columbia University professor, Eli Ginzberg, who had just published a book with the silly title New York Is Very Much Alive. Holding the book aloft, Lindsay boomed that it put the lie to those who claimed New York was declining. No, the Big Apple was alive and well and this book proved it. The press feasted on the good news.
While Lindsay played Candide, that same day a brief Times story