New York City
Life after Bloomberg
A city in need of fearless leadership
Apr 7th 2012 | from the print edition
NEW YORK CITY’S current health, from its strong economy and pulsating civic culture to its low crime rates (Wall Street aside) and resilience against disaster, should not be taken for granted. Broke and almost ungovernable in the 1970s, Gotham’s renaissance was led by three remarkable mayors, Ed Koch (1978-89), Rudy Giuliani (1994-2001) and the latest “hizzoner”, Michael Bloomberg, since 2002. Each has exercised a degree of executive power rare in most big cities, having managed the twin threats of a meddlesome state government in Albany and a sometimes truculent city council. Despite their differences, they have been united in their dogged promotion of economic prosperity though policies that often defy the instinctive wishes of what remains at heart a left-leaning union town.
Many expect a return to politics as usual when the third and final four-year term of the now not-very-popular Mr Bloomberg finishes in December 2013. The prospect either delights or depresses New Yorkers depending on where they are on the political spectrum.
This looming uncertainty is captured in “Modern New York”, Greg David’s fast-paced telling of the fall and rise of the Big Apple. Indicating both his politics and his concern, he ends his book warning that a return to old mayoral habits could result in an “economic and fiscal cataclysm”. Mr David, who has monitored the turnaround for three decades in various posts at Crain’s New York Business, a trade paper, is not an uncritical cheerleader for Messrs Koch, Giuliani and Bloomberg (who he says has set some financial booby-traps for his successors). Still, he makes the case that they are vastly better than John Lindsay and Abe Beame, mayors who presided over the city’s decline, as well as David Dinkins, who dithered at the helm for a term between Mr Koch and Mr Giuliani.
Key to the turnaround was the assiduous courting of business, especially industries that create local wealth, such as tourism, media, property and especially finance. New York employs fewer people than it did in 1969, but those in work generate much more wealth, and with it the tax revenues to pay for the city’s massive budget. The fortunes of Wall Street in particular have influenced the city’s fate as a whole, not least through the taxes it pays. This was true after the terrorist attacks of September 11th 2001, when Wall Street helped the city to bounce back stronger than ever. And it was the rapid revival of finance following the 2008 market meltdown and federal bail-out that softened New York’s most recent recession. Whereas across America 8.4m jobs—or 6% of all jobs—were lost in the 27-month “Great Recession”, New York City lost only 140,000 jobs, or 3.5% of its total, and its downturn lasted just 17 months. Yet Mr David worries that Wall Street’s initial strength may prove misleadingly optimistic, as it does not reflect new rules on higher capital requirements or the reforms introduced by Dodd-Frank, which threaten to curb risk-taking.
As Mr David points out, the three likeliest contenders to replace Mr Bloomberg—John Liu, Bill de Blasio and Christine Quinn, the current favourite—are all part of the city’s Democratic party establishment. If elected, they would each face pressure to address New York’s soaring inequality through more progressive taxation (which could drive wealth creators to the suburbs) and by getting firms to pay well more than the legal minimum wage. They might also bow to union pressure to block Walmart from entering the local market, flouting polls showing that two-thirds of the city want the retailer’s low prices.
As yet, no candidate has emerged to continue the Koch-Giuliani-Bloomberg tradition. Mr David has some nice things to say about Dan Doctoroff, a former deputy mayor to Mr Bloomberg, who now looks after his master’s business empire. But there is no sign as yet that he wants to run. There has been talk of Alec Baldwin throwing his hat into the ring, though it is not clear why an actor is the right man for the job. Is it really too late to grant Mr Bloomberg one more term?