The Streets Were Paved with Gold - Ken Auletta [83]
It is simpler to make a speech than to change policy. New Yorkers have to get used to the idea that the country and its problems are just as interdependent as progressives used to say the world is. There is a consequence for everything. Amending federal aid formulas to give the North more means giving the South less. Permitting European flights to originate from Southern cities, as President Carter has done, is more convenient for citizens and fair to the South, but it lessens the nation’s dependence on cities like New York. Allowing the two-martini lunch to be tax-deductible is a ripoff for business executives—yet New York’s restaurateurs and their unions plead that their business depends on it. In addition, some things government can’t change, particularly in a democratic society. Part of the Northeast’s decline had nothing to do with government policies and a lot to do with people’s preferences. Many citizens simply want to live in a warmer climate, seeking space, grass, new schools, lower taxes, a two-car garage—all plentiful in the Sunbelt. In a free society, how do we order people not to vote with their feet?
Instead of platitudes and shrieks about the need for a new national urban policy, says Professor Moynihan (now conveniently ignoring Senator Moynihan’s shrieks for “economic justice”), “The whole point of an urban policy should be that New York does not go bankrupt.” Sipping coffee, Moynihan leaned back and recalled returning from Hubert Humphrey’s funeral with President Carter on Air Force One: “I almost said to him, ‘Herbert Hoover wasn’t responsible for the great Depression. Yet it’s called Hooverism.’ ”
In early 1978, Moynihan and most other New York officials were warning that without new federal loan guarantees the city would be forced to declare bankruptcy. The consequences, they said, would be swift. Under this domino theory, the market would close to New York State; then local school boards who depend on state financing would default; then other states and municipalities would follow; then a massive crisis of confidence would likely engulf the nation and the world. The city would become a ward of the federal government. And how would the world react to the spectacle of the United States government callously standing by as the world’s premier city declared bankruptcy? That would be murder. Right?
Yes, and no. There would be no evidence to charge the federal government with discrimination had the Congress rejected loan guarantees, since no other city receives them. New York also rightly suffered a credibility problem. City and state officials sold the $2.3 billion annual seasonal loan program in 1975 on the basis that it was a one-time-only request. That was untrue, and officials knew it. Or, as Moynihan candidly told the White House Conference on Balanced Growth and Economic Development in January 1978, “The persons who put the emergency arrangements together assumed that in three years’ time—in 1978—there