The Streets Were Paved with Gold - Ken Auletta [48]
The city’s spending did not reflect what was happening to its revenue base. Lindsay’s expense budget rose 16.6 percent from 1970 to 1971. Overall, the city’s budget expanded by 10.2 percent from 1971 to 1975, exceeding the growth rate from 1961 to 1966, when the economy was on the rise. During Lindsay’s second term and Beame’s first two years, the number of city employees increased by 30,000. Their wages also jumped between 1970 and 1976, when Lindsay and Beame presided. The Temporary Commission disclosed that the pay of policemen went up at the same rate in those years as it did between 1965 and 1970. Lavish pension agreements were conferred, including twenty-year retirement plans for city clerks. (The state legislature embarrassed Lindsay by turning down this agreement in the early 1970’s).
Of all John Lindsay’s bad and good decisions, perhaps history will judge that this non-decision to recognize economic reality was his most important. His thoughts were elsewhere—on running for President in 1972. But the Mayor was hardly alone. His Budget Bureau, for instance, also chose to ignore reality. The budget grew even though Budget Director Edward K. Hamilton told the Times on April 15, 1971, “there’s no natural growth of revenues.” It grew because, as a former Lindsay budget aide explains, “Our budgets were calculated based on what we expected to spend, not the revenues we expected to receive.”
This ostrich-like behavior was sometimes innocent. Many public officials didn’t follow the “numbers,” might not have understood them, and probably wouldn’t believe them if they did. New York, after all, was the Big Apple. There was a genuinely optimistic belief that the turnaround in the national economy would reach New York—it had always been thus. Besides, for years it had been more or less assumed that New York’s economy was a reflection of government, not private, spending.
Abe Beame promised to change that. His 1973 mayoral campaign vowed to beef up the city’s Economic Development Administration, to appoint a council of economic advisers, to devise a plan. By 1975, the city had a plan—a twenty-four-page document labeled Agenda for Economic Development. The centerpiece of the strategy was the development of twelve industrial parks, eight wholesale markets, and the “revitalization” of 575 miles of city waterfront. If the strategy worked, city officials said, 25,000 jobs would be created—the same number the city was losing every sixteen weeks. That year the Council of Economic Advisors stopped meeting. The “beefed-up” agency relied on one staff member and a secretary to attract and retain businesses. A considerable task, since there were then 172,090 businesses in the city. Unlike its counterparts in other localities and states, this agency was given only $1 million of flexible capital funds to buy and lease land for faltering firms. In 1975, 80 percent of this budget was used to assist just one firm, the Elmhurst Dairy—saving 300 jobs. Without flexible tax incentives or training funds, the head of the agency, Alfred Eisenpreis, was really like a waiter in a restaurant without a kitchen. Not that he could have been anything more. The former marketing executive, who never forgot that he had the opportunity to immigrate here from his native Europe, was so grateful for his new job that he was afraid of losing it. In the spring of 1975, this keeper of the city’s economy—who wondered whether you would know when you were dead—peered at me through his Coca-Cola thick eyeglasses and declared, “We are not losing our economic base. Our economic base is shifting.”
“New York City has had a total, planless economic development,”