When New York City Almost Failed

Public Seminar had the privilege of printing an excerpt of historian Kim Phillips-Fein’s recent book, Fear City: New York’s Fiscal Crisis and The Rise of Austerity Politics. Originally published in 2017 by Metropolitan Books, it is now available in paperback from Picador. The book tells a complex story of an iconic moment in the so-called “urban crisis” of the 1970s, in which cities no longer seemed economically sustainable. Phillips-Fein’s keen attention to the interrelation of finance and politics – a preoccupation which was also at the center of her first book, Invisible Hands: the Businessmen’s Crusade Against the New Deal(2009) – helps us understand some of the tensions of our current moment: the privatization of public services; wooing corporations with tax cuts that expand taxation among working citizens and home owners, subsidizing developers like Donald Trump, and financing of public higher education through tuition revenue, are but a few of the outcomes that can be traces back to the 1970s. In Fear City, in a sense a sequel to Invisible Hands, Phillips-Fein describes how liberals in both political parties had to re-orient themselves to a stark new reality in the 1960s and 1970s: that commitments made to unions and citizens could not be kept without accumulating a public debt that soon became unsustainable. New York’s months of teetering on the edge of bankruptcy became both a cautionary tale about financing a public sphere that supported the aspirations of all citizens, and it became a moment when the techniques associate with modern neoliberalism were invented and first implemented.

For today’s Purple Wednesday, I had the opportunity to interview Phillips-Fein about this complex and important  book.

Public Seminar [PS]: You point out that New York City was a kind of laboratory for a proto-socialist urban vision that was consistent with American democracy, and that city services – education, parks, and transportation – enacted a robust vision for public life between the 1930s and the 1960s. But by the late 1960s, that vision was failing. What were the elements of that failure?

Kim Phillips-Fein [KPF]: First of all, I’m not totally sure that it’s right to describe New York as a proto-socialist urban space, even in the postwar years! This is the home of Wall Street, after all. And even during the 1940s, 1950s and 1960s, New York remained a deeply unequal city, both racially and economically.

But what I was struck by in working on the book (and I’ve also been intrigued by the positive response to this among many readers today) is just how extensive and ambitious the city’s public sector was in the years after the New Deal until the 1970s. We often think of the “affluent society” of the postwar years in a very suburban framework – what Lizabeth Cohen calls the “consumers’ republic.” And we also think of New York as a city of private ambitions and entrepreneurial dreams. But in truth, the city’s public sector – its subways, its libraries, its museums, its parks – have always constituted a major part of its appeal. In a way, New York embodies an urban version of the vision of postwar liberalism, in which the “good life” includes upward mobility within an urban community that includes access to culture, art, and higher education.

By the late 1960s this vision is fracturing. The city’s public services are growing strained, as its finances are coming under increased pressure. A serious recession grips the city in the late 1960s, leading to the loss of hundreds of thousands of jobs. The new ones being created tend to be in the service sector, and don’t pay as much (or generate as much income for the city) as the old industrial ones did. New York’s population shrinks by about 10 percent over the 1970s – and most of those leaving are white and middle class. In 1940, the city’s population was overwhelmingly white (more than 90 percent); by 1980, it was only 60 percent white.

At the same time, this is also the moment when there are actually more people seeking access and equality in the city, as the civil rights and black freedom movements lead many people of color in New York to protest inferior services in their neighborhoods. The result is that there is increased demand for city services, at the very moment when the city is losing the ability to pay for them.

With different federal policies – ones that had not subsidized the outflow of people to suburbia, or trade policies that had not made it easy for the garment industry (and others) to relocate to other, low-wage countries – New York might have been in a very different position. As it was, the city was in a serious bind. And New York’s mayors – first John Lindsay, then Abraham Beame – turned to short-term debt instead of attempting to address the underlying inequities.

For the rest of this interview, published at Public Seminar on June 13, 2018, click here.

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