The Streets Were Paved with Gold (57 page)

Democracy becomes a kind of Tolstoyan drama in which interests and events and institutions, not individuals, often hold sway. Ed Koch came to City Hall determined to shake up the system. He captured a public mandate to do so. He had the opportunity created
by the fiscal crisis. The sign on his City Hall desk, the same desk that Fiorello LaGuardia once used, reads:

“I have persevered,” Koch told me in March 1978. “I never give up. Don’t tell me it can’t be done. That’s the sign I have on my desk.… The bastards are not going to beat me down. They’ll have to carry me out of here.” So every morning New York’s ebullient Mayor rises, anxious to get to City Hall, to unleash a new reform proposal, to condemn some ancient wrong as “an outrage.” Like most people in government, Ed Koch is an optimist by choice as well as by chemistry. It would be difficult to get out of bed in the morning and face the day’s problems if he were as cynical as most journalists. Koch honestly believes he can make a difference.

But, imperceptibly, a change comes over most officeholders. It’s not just the crush of responsibility that accompanies public office, a greater appreciation of complexity. It’s also something basic, like ego. After a while, you come to label defeats as victories, not because you’re a liar but because you can’t tell the difference between the two. You also come to believe your own press releases. Knowing that you’re judged not always by what you do but by what you appear to do, a good press becomes all-important. Soon you’re spending part of each day laboring over your image. Success comes not from resolving problems but from skirting or appearing to solve them. From holding press conferences, giving speeches, issuing press releases, creating photo opportunities. The daily press’s preoccupation with a steady diet of news feeds the politicians’ preoccupation with making news.

Soon much of what you do becomes gloss. New York City’s economy looks better to Mayor Koch since
he
assumed office. Why? Because “I feel it,” Koch says. Like his partners, Koch claimed the labor settlement was an “extraordinary achievement,” as was “the progress” made by the city generally. To claim otherwise is to disparage your own work; all the backbreaking hours of toil and sweat. Besides, your staff and the local military/industrial complex agree. Together, you’re making progress.

Soon you lower your sights. You aim not for the moon but for
the top of the trees. “The chains of habit,” Samuel Johnson once said, “are too weak to be felt until they are too strong to be broken.” For the first three years of its fiscal crisis, New York could not break with past habits. In his first ten months in office, Mayor Koch could not break the chain, either. He achieved a labor contract, won the continued investment of the banks and pension funds, helped persuade the Congress to pass new loan legislation. He survived some difficult crises. He got by the year.

But as long as the city’s debt and budget grow faster than its revenue base, bankruptcy lurks just over the horizon. As long as no dramatic moves are made to make the city economically more competitive or to improve services, it is unlikely New York will maintain a tax base to support its budget. As long as the city spends more money than it collects, investors will be wary of making loans. As long as the rhetoric of the fiscal crisis is not matched by the actions, the Sturm und Drang of the fiscal crisis will become a permanent fixture, like the Brooklyn Bridge. Someday, the public will no longer believe the rhetoric.

Yet an almost eerie sense of optimism prevails among the partners. “We avoided bankruptcy,” Jack Bigel almost cheerfully told me in September 1977. “No one knew how we were going to refinance $8 billion in 1975. That we did. No one knew how we could come up with $983 million to pay moratorium noteholders in 1976. Yet we did. Ibsen can write and bring a play to a close in three acts. For us, it’s just another four weary years of continuing the formula we started in 1975. Call it a loose coalition, a process of exchange among partners. If you ask me how, I don’t know. I have to fall back on history.” The partners were, again, emboldened when the Congress passed additional loan legislation in the summer of 1978. Each congratulated the other for the truly brilliant lobbying effort. One of the few sour notes was sounded by
The Wall Street Journal
, which over the three years had earned the right to say I-told-you-so. “The doctors are concocting a patent cure for anemia, but the patient has a severed artery,” they editorialized. The city’s budget, they reminded readers, still wasn’t balanced. Nor was it soon likely to be. In 1978, as in 1975, the city was granted loans for essentially political, not economic reasons. In both years, the big change was that the loans came not from the public credit market but from the federal government, the pension funds and a handful of banks.

Over the first three years of the fiscal crisis New York’s witch
doctors were often asking the wrong question—how do we avoid bankruptcy? The questions they should have constantly asked were: How do we make New York whole? Restore its economy? Improve its services? Truly balance its budget?

O
NE PART OF ME
is beginning to believe that perhaps bankruptcy is the answer. Since 1975, I have accepted the prevailing wisdom that bankruptcy would be a calamity for New York—an official declaration of death, an admission that democratic government had failed. I recoil at the thought of a nonelected judge ordering around elected officials. And at the ugly prospect of a fractious struggle among the city’s creditors—welfare recipients, bondholders, city workers, printers, landlords, bus drivers—for their slice of the city’s tangible assets. I worry about the psychological impact of bankruptcy: businesses or middle-income people who feel they have a bright future will not long remain in a city that has declared it may not have any future at all. I fear that Felix Rohatyn is right when he warns that the bankruptcy of America’s premier city could further undermine the dollar and convulse the international economy.

Yet, increasingly, I wonder whether to save New York we don’t have to destroy the stranglehold of our very own local military/ industrial complex. Maybe New York’s system of consent can’t work and only a judicial command will compel solutions. Maybe bankruptcy is inevitable and by postponing it through witchcraft New York is simply digging itself deeper into debt. If forced to choose between immediate or inevitable bankruptcy, I would choose the former because it is cheaper. Maybe the Wizard of Oz had a point when he told Dorothy, “I’m really a very good man, but I’m a very bad wizard.” Maybe horses can’t fly.

That’s the pessimist in me talking. I still believe bankruptcy would be calamitous. Part of me truly believes that New York is governable—that people, not just events, shape history, and that courageous and skillful leaders can make a difference. New York can capture additional federal aid without becoming a permanent ward of the federal government; need not remain a hostage of powerful special interests. The city can cut its budget, make its economy and business climate more competitive; reform its management and civil service system; inspire citizen volunteers, neighborhood improvement efforts, hope. “I have always held,” wrote Albert Camus after long and dangerous service as a member of
the French Resistance, “that if he who bases his hopes on human nature is a fool, he who gives up in the face of circumstances is a coward.”

I am haunted by Prince Prospero. The Prince was a fool because he insisted on gaiety in the face of death, insisted on walling himself and his minions off from the truth, thinking they had “saved” themselves. While they partied and dreamed of a renaissance, the plague spread. The Prince wasn’t murdered. He committed suicide.

K
EN
A
ULETTA
was brought up in Coney Island, attended New York City public schools and the State University of New York at Oswego, and received an M.A. from the Maxwell School of Citizenship and Public Affairs at Syracuse University. He worked for the federal and city governments and participated in national and state political campaigns. A former contributing editor of
New York
magazine and writer for the
Village Voice
, he is now a writer for
The New Yorker
, a columnist for the
New York Daily News
and a regular commentator and host on New York public television. He is also a contributing editor of
Esquire
magazine, and his work has appeared in the
New York Review of Books
and the
New York Times.