The Streets Were Paved with Gold - Ken Auletta [63]
In New York, budget balancing was seen as a game—an annual rite of spring. And the best and the brightest people played the game. City Hall has probably never had a desk occupied by a more brilliant man than Edward Hamilton. Governor Rockefeller was so taken by his brilliance that after one Albany negotiation he enthusiastically offered him the post of state budget director. Hamilton said no. After serving fourteen months as city budget director, he was elevated in late 1971 to the position of first deputy mayor. Hamilton, however, had one glaring defect. “He was very sensitive to the charge that he wasn’t known as a ‘political animal,’ ” says a former colleague, “so he tried to swing more.”
The first deputy’s office had recently been occupied by skilled politicians, and Hamilton was determined to prove to Lindsay that he was not just a numbers man, that he was flexible, sensitive, could help his boss out of a political jam. So he became a pol, though he wasn’t treated like one. Because of an instinctive bias against people who work in political campaigns—and because of Hamilton’s brains and glittering academic background—the press and good government groups paraded this thirty-one-year-old “expert” as if he were an astronaut. Naturally, it went unnoticed that when it came to budget tricks, Hamilton was no boy scout. Like just about everyone else, he conformed—proved he was one of the boys.
The game went on because there was little opposition. But also because there were no rules. If New York followed standard accounting procedures and retained an outside auditor, as most corporations do, perhaps the game would have been played with an umpire. “The city’s accounting ‘principles’ were virtually incomprehensible,” said the SEC. Yet there was a method to this madness. In May 1976, Comptroller Goldin explained it before the Annual Conference of Municipal Finance Officers: “There was a broad feeling, I believe, that even though the City’s accounting and budgeting had been revealed as a kind of Rube Goldberg conception—a system which defied understanding or control—it was better to leave it alone as long as it churned out enough money to meet the bills and pay the debts.”
While the game was divorced from rules, it was not divorced from the political ethos of the time. The public was demanding, expecting, more. In truth, it would have been difficult, even if New York had enjoyed strong leadership, to have cut the city’s budget. The sixties saw Mayor Wagner pledge a local war on poverty. President Kennedy promised Camelot. President Johnson promised both guns and butter. Mayor Lindsay promised Fun City. Martin Luther King had a dream. The Great Society was going to transform slums into Scarsdales, Vietnam into Ohio. Public expectations rose. Cities seethed with rage when the inflated promises of the Great Society and New Frontier were not met, and City Hall tried to step into the breach. The sixties were a decade of optimism. People recognized few limits to what could be done. It naturally followed that the limits of a budget or bond market went largely unrecognized. Beame and Goldin’s SEC brief inadvertently makes this point: “If blame for the resulting fiscal effects is to be cast at all, then it is clear that the lion’s share must go to the Governors, to the State