New York City: How Many More?

By the time you read this, President Ford will probably have signed into law his approval of short-term federal loan relief for New York City, which has been teetering on the verge of total collapse for the past year. Combined with near confiscatory local and state tax increases, the probability of massive layoffs, and all manner of fiscal austerity on the part of the city's government, under orders from the banks, the hard-won federal aid may give New York enough to meet its most pressing cash needs for a while, and the papers will no doubt heave a tremendous sigh of relief, declare the crisis averted, and wish us all a merry Christmas.
Not that we want to be humbugs, but Ford's grudging Christmas present to the supplicant city won't insure New York against default for very long. And it certainly won't begin to provide any kind of breathing space for those hardest hit by the city's troubles-its citizens. In fact, until the federal government wakes up to the enormity of its negligence, revamps its priorities from top to bottom, and realizes that the cities are its number one problem, New Yorkers will increasingly get a taste of the intense suffering other cities, including Detroit, have to look forward to.
As always, the poor, the elderly, and the working poor will get the brunt of new taxes, cuts in city services, layoffs, etc. Ever since last summer, when New York State went with the Municipal Assistance Corporation ("Big MAC"), the financial community's answer to the urban crisis, it has been clear that the banks are running the city and that so-called democratically elected government is taking orders from them. With tremendous amounts of their assets tied up in municipal bonds, eagerly purchased in support of the insane budget manipulations of the city administration, the banks have made it legally incumbent on the city that they will be paid back, no matter what, with whatever revenues the city can raise.
In the event of full-scale default. which becomes more and more inevitable with each passing day of federal inaction, it is entirely conceivable that the city would not be able to meet its payrolls or send out welfare checks (of which it pays 25 per cent). The resultant chaos might well provide the "shadow government" that has quietly taken over New York with the excuse to call out the 82nd Airborne, thus demonstrating once and for all that the liberal democracy that was New York has been replaced by fascism. Although one would certainly not wish for this scenario, it would be hard to blame the unemployed or the newly laid off for taking to the streets when the banks get their money first.
Thus New York will have gone the full route from its own brand of welfare statism (attempting through whatever unconscionable borrowing and shady fiscal practice, to care for the needs of its poor population), to America's first banana republic-occupied by a foreign army and governed by its creditors. This could continue as long as the banks are owed money and the federal government continues its barbarie urban non-policics. If it "works" in New York, the same conditions could well be imposed in other ailing, aging urban centers with similar-if less exacerbated-problems.
What the advent of Big MAC signalled, essentially, was that New York was already broke and helpless-bankrupt, in default, if you will. When a city is placed in receivership, its expenditures monitored by the banks and the state, it is bankrupt. So it's quite pointless to couch the issue, as it invariably is done, in terms of default or no default.
But Big MAC and the Emergency Financial Control Board, both dominated by bankers, corporate executives, and sympathetic politicians, may only be a small indication of the future for New York and other cities. By the admission of the Governor himself, if New York City goes into full default, the state will follow in short order. So might other cities; certainly, none would be able to sell municipal bonds to raise money. Banks all over the country who have invested heavily in the 'city's bonds would suffer tremendous losses. Credit would contract severely, precipitating a major financial panic. Construction would stop in its tracks. Businesses would collapse, and new ones could not be started. Everyone who could get out of the city would do so, leaving only the hindmost to struggle in the sink of poverty, crime, and filth the central cities would become- even more so than they are now.
With this prospect looming before us, it is indeed infuriating to watch Ihe federal government continue to squander the taxes contributed by New York, Detroit, and other hard-pressed cities on military hardware and counter-revolutionary coups. The cost overruns on the C5A and F-III aircraft alone total twice the $3.3 billion deficit of New York City. What's almost as bad is having to listen to suburban state legislators and members of Congress from the less affected regions of the country snicker at the fate of the cities, insisting that they deserve to be punished and to feel pain so they behave in the future.
If the grim scenario we have sketched seenis far-fetched, consider that only a year ago, the Mayor of New York City insisted that his city would never default. And recall that the urban rebellions of the '60's carne as a total surprise to most of us who were not directly in touch with the desperate circumstances of black people in the cities.
As every major urban center in America strives mightily to cope with its worsening financial and social situation, and as suburbia continues to expand and prosper as if nothing were happening, it becomes increasingly apparent that the fate of the cities, as the Democratic Mayors' Caucus statement put it last week, is the fate of America. If poor people, especially black people, are left in shells of cities without the resources to restore them to vitality, how can we continue to pretend that we have anything to celebrate in the Bicentennial year? How can we talk with a straight face about the ideas upon which this country was supposedly founded? If we are to avert the dreadful urban future which our national "leadership" is preparing for us, we must at the very least make sure that we elect a president next year when has a dramatically innovative social and economic program addressing itself fully to the urban crisis, and hold that person to that commitment There may be hope for such a program within the Democratic Party, if it is pushed hard enough.
This kind of program would, for starters confiscate a large portion of the Defense Department's budget and make it available to the cities to rebuild themselves. It would create massive job programs, either in the form of public works or, even better, by creating the economic incentives for businesses and industries to locate in the cities. It would institute some kind of national income maintenance. It would make an effort to collect some of the $100 billion that eludes the federal government yearly through various tax subsidies to already thriving industries and loopholes available to the rich. It would force the banks to wait for their payments from cities until they regained their financial balance.
If we do not elect a President on such a platform, the alternative is that people will have to provide for their own needs, since their government will not do it for them. That may mean the formation of neighborhood groups, in areas with some remaining resources, to provide essential services on a co-op basis. Those without resources will have no recourse but to demand control of the institutions which are supposed to serve them, or the establishment of new ones altogether-ones which start from the premise of human needs first, rather than the premise of maximized profits and expansion.
While we certainly would wélcome any relief a second "New Deal" might provide for the cities we must, however, view with some skepticism the ability of even the most progressive Democratic Party platform to set things right under the present political and economic rules of the game. If one believes, as we do, that income must be redistributed, that monopoly corporations will have to be publicly owned and operated, and that the institutions of society must operate solely to satisfy the needs of its people, then sooner or later we will have to develop some form of socialism in the United States. It is our belief that only this kind of restructuring of society can restore to the cities of America their self-respect and provide the long-term satisfaction we crave, once and for all.

"The cost overruns on the CSA and F-111 aircraft alone total twice the $3.3 billion deficit of New York City."