The Streets Were Paved with Gold - Ken Auletta [51]
It was not until recently—from June 30, 1973 to March, 1975—that the really sharp increase in short-term borrowing occurred and the market began to ask what was going on. In those two years, short-term debt went up by an astounding 138%…. During the same two years, the expense budget went up 19% while the state and federal aid component rose by only 7%. Small wonder, then, that the city ran into a crisis of confidence in March, 1975 and ceased to be able to sell its short-term debt. What accounts for the very rapid growth in short-term borrowing in only two years? It would appear that the answer lies mostly in the way in which the last two City budgets were constructed—built on hoped-for revenues that never arrived, on budgetary techniques that anticipated future revenues by borrowing cash in the present, and on a continuing rollover of past deficits from year to year.… The current cash crisis is, in budgetary terms, the end result of a political process that saw the city adopt two successive budgets in which the hard issue of budget balance were avoided.
Abe Beame Sinks to the Occasion
Hair still wet from a morning shower, Mayor Abraham Beame rushed to Manhattan’s garment district in July 1975 to proclaim a new traffic control program. The Mayor couldn’t stand to be late; he was as proud to be punctual as he was to be called a fiscal wizard. And yet this morning Beame was both late and humiliated. To restore investor confidence and avoid bankruptcy, just days before a state agency had been created to police the city’s fiscal affairs.
The five-foot two-inch, sixty-nine-year-old patriot swallowed hard and took it, all to save his city from bankruptcy. But it hurt, and today he had his mind set on proving that neither he nor his government had been crippled by the fiscal crisis. Standing on a street corner, all but hidden by a forest of microphones, he read a prepared statement. The blare of truck horns drowned his voice, as did two local merchants who interrupted to scold their mayor, denouncing his program as “a publicity stunt.”
Determined to proceed, Beame sauntered across Seventh Avenue to inspect a new low street curb which would permit the easy movement of clothing carts. Suddenly, he halted. Befuddled, he gestured toward a large automobile blocking the city’s new low curb. “Yes, Mr. Mayor,” sighed the guide, Transportation Administrator Michael Lazar. “It’s an illegal park taking place right before your eyes.”
The fiscal crisis of 1975 also took place right before Abe Beame’s eyes. The new mayor was as blind to the gathering fiscal storm as Lindsay had been to the city’s economic decline. It was supposed to be different. “This time let’s elect a mayor who can do the job!” chimed Beame’s campaign commercials. “Let this day, the first day of our administration, mark the rebirth of faith in our city and confidence in our city government,” concluded the new mayor’s January 1, 1974 inaugural address. The torch had been passed from the promiscuous Lindsay to the frugal Beame, the man who “knows the buck”—or so voters thought.
What Beame (and the voters) didn’t know was that times had changed. And Abe Beame didn’t know how to change with them. He was the victim of cautious instincts nurtured by years of inching up the civil service ladder—from accountant to budget examiner to assistant deputy budget director to budget director (ten years) to comptroller (eight years), finally, to cap a dream, becoming New York’s 104th mayor. Beame followed the same route within his beloved Democratic party, rising from doorbell ringer to district captain to esteemed party leader. When others were turning their back on the Democratic organization, Beame remained a party man, rewarding the faithful as he had once been rewarded himself. Proudly, he described himself as a “conciliator,” a “negotiator,” a man searching for the middle ground. Abe Beame was a survivor,