Balanced and Unbalanced Metropolitan Accounts

...we are told gloomily, "is suspended between what it wants to do and what it can do, between its divergent political and economic goals " In short, the author laments the tense conditions that have characterized American history for over two centuries, but have given the country its vitality as well as its frustrations This lack ot any historical dimension is the book's major weakness For New 'York's present crisis, severe as it seems to contemporaries, is essentially a single anecdote in one ot the most massive changes in 'American history Until very recently, our cities were not merely self-sufficient as centers ot economic development they were more prosper ous than the state or Federal governments and so could manage their own affairs Indeed, cities constructed the most technologically sophisticated and expensive infrastructures from their own resources New York, for example, built the world's largest mass transit system, threw bridges over rivers and tunnels beneath them, reached 200 miles into the Adirondacks for fresh water, and developed the nation's biggest school system—while sending money to Albany and Washington for state and national purposes In return, the cities asked only for "Home Rule," a strategy designed to rid themselves of needless and often mischievous interference by state legislatures The present generation has seen the erosion of that self-sufficiency, caused largely by the phenomenal postwar growth of the suburbs By 1970, m fact, the census reported that more people in metropolitan regions lived outside the municipal boundaries than within Every city, even the smaller ones, was surrounded by numberless jurisdictions that were self-governing, self-taxing, and rapidly gaining m strength The historic remedy for this problem—annexation of the surrounding areas—was no longer available In most states the process required a majority of voters in both city and suburb to support consolidation, and as early as the 1920s, except for some places in the West and South, the outlying areas increasingly refused incorporation Their boundaries now fixed, cities gradually lost population, while the outer metropolitan areas enjoyed all the new growth This demographic shift profoundly altered the social structure of the metropolis When city dwellers reached middle class status they rapidly evacuated to the suburbs They were replaced by migrants from the South and from Latin America The newcomers were mostly poor, racially different, with little education and few skills Tax consumers rather than tax producers, they needed help on a large scale Above all, they needed jobs But industry and commerce had followed the middle class, placing municipal governments in a bind Just as they faced additional responsibilities, they saw their revenue base contracting The suburban/city division shattered the historic unity of the metropolis and undermined its self-sufficiency Cities found it difficult to sustain vital services and almost impossible to maintain aging infrastructures, social programs that would cost money were quickly shelved Soon the state and Federal governments had to start bailing out the cities—and it has not been a matter of simply alleviating temporary hard times Rather, it is a permanent affair because the historic conditions of self-sufficiency no longer exist It is therefore pointless for Auletta to insist that "New York and other cities" must "become more self-reliant," for that is precisely what they cannot do Even if New York were to fulfill all his recommendations—balance the budget, harness the banks, restrain the unions, tame the politicians, and re-enter the market—it would still have a million poor people, a housing stock depleting at the rate of 40,000 a year, high unemployment, volatile race relations, a constricting economy, and rising welfare and medical costs New York City will never be self-sufficient again—nor will the majority of other cities, since the most prosperous are part of the process, too Anyone who walks 10 minutes away from Houston's spectacular downtown comes upon the early symptoms of urban decay Similarly, anyone who has followed Atlanta through its recent travail knows that its problems will be worse the next time, and that the next time is not far off Until the historical inevitability is understood, no analysis or public policy is likely to be very relevant to the struggle of American cities m this last quarter of the 20th century Auletta does not pay sufficient attention to race, either Although he notes the disparity between blacks and whites in employment, wages, education, health and welfare, he fails to see racial division as critical to the nation's urban malaise Yet those who have dealt in any way with the present urban crisis know that if you scratch deeply enough you hit the race issue Unless we are willing to grapple with this legacy, the '80s will be a decade of further urban decay, evident not only in unbalanced budgets and other fiscal problems but in social tension and racial disorder Should that happen, our generation will witness the realization of Wendell Phillips' grim prediction of 100 years ago "The tune will come when our cities will strain our institutions as slavery never did " Its flaws notwithstanding, I still think The Streets Were Paved With Gold is the best book written on New York's crisis Richard S Morns' Bum Rap on American Cities is probably the worst Besides the lack of an historical overview, Morris has trouble with geography His theme is that the "net outflow in funds is the most important element in the decline of the northeastern urban economy " This charge, of course, has been tirelessly repeated by scholars over the last decade, and is eloquently rephrased each month by Senator Daniel Patrick Moymhan It has always been debatable, but it is further confused in this volume by the author's promiscuous mingling of Middle Western states with others to make up what he calls the'' Northeast'' Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin are treated as part of the same region, rendering meaningless the numberless statistical tables designed to support his case One illustration will suffice A table entitled "Population Decreases in Northeastern Cities, 1970-3" begins with St Louis at 14 2 per cent and moves downward through Minneapolis, Cleveland, Detroit, Pittsburgh, and Chicago, finally reaching Philadelphia and New York, which have lost just above 4 per cent A corresponding rigor characterizes the lavish use of statistics throughout the book Morris heads a consulting firm in New York and has worked for a host of candidates throughout a "band of urban areas running from Boston, through New York and Philadelphia, and out through Cleveland to Chicago and Minneapolis " Despite the inclusion of Massachusetts' Governor Edward King, the reader is assured that his clients were "exclusively liberal Democrats " Their names are dropped throughout the text to assure us that this is no sterile, academic enterprise, but one that springs from practical experience and the urgency of our times Morns also lets the reader in on his vigorous research techniques This enables us to see how he discovered, for instance, what everyone has known for at least a decade—that welfare recipients pay more rent than do otherwise comparable tenants "With the Pratt printouts under my arms, I went out to examine the buildings listed to see their condition," he writes "The first building I looked at was a seedy rooming house on Empire Boulevard Its forty apartments were in terrible condition and the hallway reeked of urine The outside door was broken so I walked right in and began to look around I scanned the rents paid [by welfare and nonwelfare tenants] and was astounded " But he was not daunted " I sat down on the stairwell, disregarded the pungent odors, took out my calculator, and computed average rents " Sure enough, landlords were gouging welfare recipients Morris is continually surprised at such conventional facts He finds it "incredulous" that there were fewer gas lines in Texas than New York in 1973 He is "absolutely amazed" to learn that Agriculture Department regulations drive up the price of milk He considers it "startling and important" when he discloses that New York City actually has a net "outflow" of tax money Readers familiar with postwar housing literature, however, will be surprised to hear that the "FHA's influence on mortgage investment is silent, unpublicized, uncriticized and deadly " In sum, for all of its exclamation marks, no one need fasten a seat belt before picking up Bum Rap on American Cities Everything here has been said elsewhere—and better, for the style sustains the elegance of the title...

...Balanced and Unbalanced Metropolitan Accounts_ The Streets Were Paved With Gold: The Decline of New York By Ken Auletta Random House 330 pp $12 95 Bum Rap on American Cities: The Real Cause of Urban Decay By Richard S Morris Prentice Hall 187 pp $8 95 Reviewed by Richard C. Wade Distinguished professor of Urban History, City University of New York In the months after the attack on Pearl Harbor, an embarrassed State Department revealed that only a handful of its analysts could read Japanese When the financial crisis hit New York City four years ago, it rapidly became apparent that still fewer people could read the budget Washington's response was quick and simple, crash programs to train a new generation of language specialists Lacking any such easy response, the city sought help from the business community and from the academy Unfortunately, the most sophisticated corporate economists and accountants were baffled by the city's books And academics were particularly puzzled, for the study of municipal finance had been notoriously neglected m favor of national and international analysis and theory Worse, it was soon discovered that mastering budgetese was as difficult as learning Japanese, for the figures concerning the deficit and total debt varied by millions and billions of dollars Months passed before even the broadest agreement could be reached on key items, and that agreement kept on breaking down periodically Meanwhile, a bewildered public could only watch anxiously Nowadays the chaos is at least a little better organized, the solvency debate is more rational and the disputants use pretty much the same figures, despite their occasionally differing projections Indeed, the sense of crisis m City Hall has not only abated somewhat but a certain recidivism has set m A "senior spokesman'' for Mayor Edward Koch's Administration has gone so far as to predict a cash surplus for this fiscal year To be sure, the Mayor immediately donned sack cloth and ashes to keep his mendicant credibility m Washington, yet next year's budget has successfully passed the rounds of state and Federal officials who must certify its plausibility before New York can draw again on its Federally-guaranteed loan Moreover, the city now abounds in fiscal "experts" Journalists have taught themselves how to read a budget, university courses on municipal finance are suddenly trendy, and labor unions come to the bargaining table armed with professional analyses of the city's revenue Some financial figures have even become celebrities Suzy is gaga over Municipal Assistance Corporation Chairman Felix Rohatyn at Elaine's, the dour predictions of Stephen Berger, former executive director of the city's Emergency Financial Control Board, grace talk shows, and any comment on New York's financial condition by Treasury Secretary W Michael Blumenthal or Senator William Proxmire (D -Wis ) commands the front page More substantively, the blind growings of 1975 have yielded to the precision of highly sophisticated, computerized analytical tools Certainly, the state of the art is well beyond William Allen White's lament of 1913 that "reliable facts as to the cost of city government are just what people have not had Municipal bookkeeping has been miserably done The blunders and crimes of politicians have been hidden in ledgers and daybooks and the truth about the comparative cost of municipal administration has been as little understood as 'the canals on Mars "' Nevertheless, there is little cause for rejoicing Next year's budget will contain a substantial deficit (partly covered by continuing the use of capital funds for expenses), and the '81 and '82 budgets project even larger gaps without taking into account the cost of labor settlements They pleasantly assume, as well, the maintenance of strong employment, controlled inflation and no recession—assumptions already cast in doubt by the latest Bureau of Labor Statistics report And underneath all this there remains the decade-old decline in the city's economy, plus the severe social tensions that have cost New York a good portion of its middle class Small wonder, then, that Moody's Investor Service has refused to raise its ratings on the city's long-term bonds The best introduction to New York City's continuing crisis is Ken Aulet-ta's The Streets Were Paved With Gold Of the authors attracted to this field, he has the broadest credentials He grew up in Brooklyn, studied at the Maxwell School of Public Administration, was executive director of the Off-Track Betting Corporation, and ran Howard Samuels' campaign for governor For all of his experience, though, he is self-taught on the crisis, hence he asks the most essential questions and is unimpressed with "political" rationales or academic tentative-ness In addition, he writes in the clean, spare prose of an accomplished journalist Auletta sets himself no less a task than uncovering why the city nearly went bankrupt "No one Devil theory can explain what has happened to New York," he writes "Neither John Lindsay nor Abe Beame, alone, brought us to our collective knees Nor, by themselves, did the banks, the Federal government or historical inevitability " There is a place for nearly everyone, including democracy itself, in his indictment Thus the introduction of collective bargaining and the transit strike of 1966 are cited as "causes" of the problem, and the high cost of labor contracts is a constant theme Auletta is especially trenchant on the embarrassing pension provisions and work rules accepted by the city to obtain labor "peace," and the way this enabled the municipal unions to lock the budget in a half-nelson (Mayor Koch found out just how hard it is to escape the unions' grip when he announced in 1978 that he would retrieve 60 "unconscionable give aways" in his first negotiations, then came away from the table with a wage settlement higher than he had considered "tolerable" and without a single "giveback ") The financial community gets its share of the blame, too The banks fed off the city's chronic deficits, sweeping up high interest short-term notes and long-term bonds While the author asserts that underwriters were aware of both the growing budget gaps and the questionable accounting at City Hall, he is more tentative in assessing the charge that the banks quietly dumped their New York notes on an unsuspecting public in the months before the bond market collapsed Apart from its role in the immediate crisis, Auletta feels the financial community contributed substantially over the years to the decline of New York by not investing in older neighborhoods (redlining) and thereby hastening the shrinkage of the tax base The author minimizes—without ignoring—the adverse effects of Federal policies, because he is anxious to establish that the trouble and the solution lay mostly in the city itself He does want Washington to "further tilt" its spending toward the Northeast, since older cities are "afflicted with loo many poor people and too few resources " But at the same time, he warns thai there is not likely to be a Federal "Santa Claus " Quite the contrary He argues that reliance on Washington could become a "narcotic," paralyzing needed efforts at home Auletta saves his heaviest criticism for those who deserve it most elected officials For no matter how "understandable" their motives, or how culpable others might also be, these were the men who brought the great city to its tatterdemalion estate The continuous deficits, the high-cost labor contracts, the raiding of capital funds for operating expenses, the fancy bookkeeping, laminated borrowing, and, above all, the unwillingness to level with the public about New York's true financial condition are the heart of the problem This is Auletta's central argument and he sustains it relentlessly The information provided may not be new, but the author's skill in marshalling the evidence from disparate sources and neatly sifting the key facts from otherwise transparently polemical tracts lends his theme power and authenticity The three mayors between 1961-77 are particular targets "Abe Beame Sinks to the Occasion" is the title of one section and succinctly sums up Auletta's view of the previous New York chief executive—who is pictured as a bumbling, incompetent old pol unable to understand the depth or gravity of the crisis and unwilling to do anything that would upset his political sponsors or jeopardize his re-election John Lindsay is cast as a handsome and dashing leading man, confounded by the swirling drama around him, who leaves the stage just at the moment the Greek Chorus spells out the inevitable tragedy Robert Wagner isn't quite as bad, his transgressions being largely the introduction of collective bargaining (which was inevitable) and a modest shift of capital money into the operating budget Auletta, in fact, has to stretch a bit to include Wagner He writes with approval, for example, that "By the mid-seventies, New York could no longer say what Wallace S Savrc and Herbert kaulman said in the final sentence ot their 1959 classic, Governing New York City 'The City of New York can confidently ask 'What other large American city is so democratically and so well governed''" He does not note that the 1965 edition ot the book concluded with the same sentence That was Wagner's last year in office Auletta's prognosis is pessimistic Those who think Edward Koch's election represented a sharp break with the past ought to read the devastating final chapter of 77ie Streets Were Paved With Gold, which finds the new Mayor talking reform while acting in the old tradition The city avoided bankruptcy, got its guaranteed loan from the Federal government, cleaned up its bookkeeping, and nursed the first signs of an economic revival in Manhattan But the crucial issues have still to be addressed Consequently, the current administration's situation may be likened to that of the man who fell from the 100th story of a building and was seen smiling as he passed the 20th floor Asked why he was so cheery, he responded "Nothing's happened yet " It should be noted, however, that Auletta's grasp is better than his reach As long as he is dealing with the past 15 years, his book has an admirable clarity and precision, once he starts to expand upon his interpretation, it becomes a tangled philosophical web Modest intervention by Albany makes the city a "ward of the State" and signals a "failure of democracy " If that isn't enough, the system's paralysis is symptomatic of a general collapse of democratic institutions "Democracy in New York—America, the world...