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Fear City: New York's Fiscal Crisis and the Rise of Austerity Politics
PULITZER PRIZE FINALIST
An epic, riveting history of New York City on the edge of disaster―and an anatomy of the austerity politics that continue to shape the world today
When the news broke in 1975 that New York City was on the brink of fiscal collapse, few believed it was possible. How could the country’s largest metropolis fail? How could the capital of the financial world go bankrupt? Yet the city was indeed billions of dollars in the red, with no way to pay back its debts. Bankers and politicians alike seized upon the situation as evidence that social liberalism, which New York famously exemplified, was unworkable. The city had to slash services, freeze wages, and fire thousands of workers, they insisted, or financial apocalypse would ensue.
In this vivid account, historian Kim Phillips-Fein tells the remarkable story of the crisis that engulfed the city. With unions and ordinary citizens refusing to accept retrenchment, the budget crunch became a struggle over the soul of New York, pitting fundamentally opposing visions of the city against each other. Drawing on never-before-used archival sources and interviews with key players in the crisis, Fear City shows how the brush with bankruptcy permanently transformed New York―and reshaped ideas about government across America.
At once a sweeping history of some of the most tumultuous times in New York's past, a gripping narrative of last-minute machinations and backroom deals, and an origin story of the politics of austerity, Fear City is essential reading for anyone seeking to understand the resurgent fiscal conservatism of today.
An epic, riveting history of New York City on the edge of disaster―and an anatomy of the austerity politics that continue to shape the world today
When the news broke in 1975 that New York City was on the brink of fiscal collapse, few believed it was possible. How could the country’s largest metropolis fail? How could the capital of the financial world go bankrupt? Yet the city was indeed billions of dollars in the red, with no way to pay back its debts. Bankers and politicians alike seized upon the situation as evidence that social liberalism, which New York famously exemplified, was unworkable. The city had to slash services, freeze wages, and fire thousands of workers, they insisted, or financial apocalypse would ensue.
In this vivid account, historian Kim Phillips-Fein tells the remarkable story of the crisis that engulfed the city. With unions and ordinary citizens refusing to accept retrenchment, the budget crunch became a struggle over the soul of New York, pitting fundamentally opposing visions of the city against each other. Drawing on never-before-used archival sources and interviews with key players in the crisis, Fear City shows how the brush with bankruptcy permanently transformed New York―and reshaped ideas about government across America.
At once a sweeping history of some of the most tumultuous times in New York's past, a gripping narrative of last-minute machinations and backroom deals, and an origin story of the politics of austerity, Fear City is essential reading for anyone seeking to understand the resurgent fiscal conservatism of today.
416 pages, Hardcover
First published August 16, 2016
195 people are currently reading
3547 people want to read
About the author
Kim Phillips-Fein
9 books48 followersKimberly Phillips-Fein is a historian of twentieth-century American politics. She teaches courses in American political, business, and labor history. She has contributed to essay collections published by Harvard University Press, University of Pennsylvania Press and Routledge and to journals such as Reviews in American History and International Labor and Working-Class History. Professor Phillips-Fein has written widely for publications including the Nation , London Review of Books , New Labor Forum , to which she has contributed articles and reviews. She is currently working on a new project about New York City in the 1970s.
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April 24, 2017
For decades, New York City had run a generous municipal welfare system that marked the left-most edge of New Deal politics. In addition to fire and police departments, to public schools and public transportation, the city ran a network of child care centers, senior centers and municipal hospitals. The flagship of this system, for both supporters and detractors, was the tuition-free CUNY system, which offered higher education to any NYC high school graduate regardless of income level. Then, in 1975, the near default of the city put this liberal vision at risk.
The city welfare system faced two problems. The first was fiscal: the city's tax base was shrinking because of white flight and the loss of manufacturing jobs, and LBJ's federal anti-poverty grants were not matched by Nixon or Ford. Combine that with the economic malaise of the 1970s and challenges were inevitable. The second was political: as the city became less white, the white population that remained increasingly saw the welfare system as a tax on them to benefit black and Latino communities.
Successive mayors dealt with these problems by ignoring them: with the support of Wall Street and Albany, they relied heavily on borrowing and specifically short-term borrowing to fund the city budget year after year. Municipal budget practices were so opaque that it was scarcely clear, even to Gracie Mansion, how bad the problem was. But while this worked in the short term, this introduced a dangerous new leverage point in city politics: at any time, the banks could refuse to stop selling municipal bonds and grind the city to a halt.
The rickety set-up came crashing down when a new comptroller performed an audit on the city budget and discovered the extent of the shortfall. As it became evident how bad the city's position was, Wall Street began to quail (for the first time) at selling municipal bonds for them. A routine process ground to a halt, and suddenly the city needed money and quickly. This put the city's welfare system at the mercy of two skeptical forces: the bankers at Wall Street and the free-market ideologues in the Ford administration.
Then and in the future, the victorious side argued that there was no choice to be had: New York City had spent too much on 'luxuries' and now needed to pare back and be more realistic. But Kimberly Phillips-Fein argues convincingly that there was a choice. What made the city's fiscal shortfall so precarious was Ford's insistence that the federal government would not bail the city out. Hence "FORD TO CITY: DROP DEAD," the famous Daily News headline. To Ford aides like Dick Cheney, Donald Rumsfeld, and William Simon, there was no reason to save big government liberalism from itself. This left the city in a position where it had to enact severe austerity politics in order to "establish credibility" with its creditors. (Notably, this included an insistence that CUNY start charging tuition, despite the fact that the revenue would cover less than 1% of the short-term debts the city faced.)
But was this the only way? When local poor relief efforts were overwhelmed during the Great Depression, this was widely seen as a reason for the federal government to devote its resources to a problem that only it could solve. And the federal government (which could not have been affected by white flight and wasn't vulnerable to bankruptcy) certainly was in a position to take on municipal responsibilities for child-care and access to higher education. The only reason they did not is because elites decided that these weren't problems worth solving, and they disguised this choice with moralistic language about responsibility, tough choices, and belt-tightening.
FEAR CITY is, needless to say, an infuriating book to read. Phillips-Fein is a strong story-teller and her blow-by-blow account is gripping. One might imagine a book about municipal finance and the bond market to be dry, but she makes it interesting by establishing the stakes involved and conveying the different personalities as well. This is also the rare book to establish the appeal of New York in the 70s without trading on self-aggrandizing boomer nostalgia. However, the story that she is telling so effectively is a tragedy, the loss of a humane governing vision that only occasionally comes back into view.
This is an important book for people interested in liberal politics and one of the best books I've read about the rise of the right in the 1970s. Highly recommended.
The city welfare system faced two problems. The first was fiscal: the city's tax base was shrinking because of white flight and the loss of manufacturing jobs, and LBJ's federal anti-poverty grants were not matched by Nixon or Ford. Combine that with the economic malaise of the 1970s and challenges were inevitable. The second was political: as the city became less white, the white population that remained increasingly saw the welfare system as a tax on them to benefit black and Latino communities.
Successive mayors dealt with these problems by ignoring them: with the support of Wall Street and Albany, they relied heavily on borrowing and specifically short-term borrowing to fund the city budget year after year. Municipal budget practices were so opaque that it was scarcely clear, even to Gracie Mansion, how bad the problem was. But while this worked in the short term, this introduced a dangerous new leverage point in city politics: at any time, the banks could refuse to stop selling municipal bonds and grind the city to a halt.
The rickety set-up came crashing down when a new comptroller performed an audit on the city budget and discovered the extent of the shortfall. As it became evident how bad the city's position was, Wall Street began to quail (for the first time) at selling municipal bonds for them. A routine process ground to a halt, and suddenly the city needed money and quickly. This put the city's welfare system at the mercy of two skeptical forces: the bankers at Wall Street and the free-market ideologues in the Ford administration.
Then and in the future, the victorious side argued that there was no choice to be had: New York City had spent too much on 'luxuries' and now needed to pare back and be more realistic. But Kimberly Phillips-Fein argues convincingly that there was a choice. What made the city's fiscal shortfall so precarious was Ford's insistence that the federal government would not bail the city out. Hence "FORD TO CITY: DROP DEAD," the famous Daily News headline. To Ford aides like Dick Cheney, Donald Rumsfeld, and William Simon, there was no reason to save big government liberalism from itself. This left the city in a position where it had to enact severe austerity politics in order to "establish credibility" with its creditors. (Notably, this included an insistence that CUNY start charging tuition, despite the fact that the revenue would cover less than 1% of the short-term debts the city faced.)
But was this the only way? When local poor relief efforts were overwhelmed during the Great Depression, this was widely seen as a reason for the federal government to devote its resources to a problem that only it could solve. And the federal government (which could not have been affected by white flight and wasn't vulnerable to bankruptcy) certainly was in a position to take on municipal responsibilities for child-care and access to higher education. The only reason they did not is because elites decided that these weren't problems worth solving, and they disguised this choice with moralistic language about responsibility, tough choices, and belt-tightening.
FEAR CITY is, needless to say, an infuriating book to read. Phillips-Fein is a strong story-teller and her blow-by-blow account is gripping. One might imagine a book about municipal finance and the bond market to be dry, but she makes it interesting by establishing the stakes involved and conveying the different personalities as well. This is also the rare book to establish the appeal of New York in the 70s without trading on self-aggrandizing boomer nostalgia. However, the story that she is telling so effectively is a tragedy, the loss of a humane governing vision that only occasionally comes back into view.
This is an important book for people interested in liberal politics and one of the best books I've read about the rise of the right in the 1970s. Highly recommended.
August 30, 2024
As someone who’s not a finance girlie nor a history girlie either I probably wasn’t the best fit for this book. That said, I recognize that it’s an important and thoroughly researched account of New York City’s financial crisis of the 1970’s. I thought there were interesting (and harrowing) themes related to how people with power and money can have so much undue and undeserved influence. I liked that Kim Phillips-Fein included information about activism and resistance too, such as the protestors at CUNY. I did find the writing a bit dry though that might’ve been a clash between the genres I tend to read and what this book had to offer. I also thought the book would’ve been more interesting with more perspectives of everyday people who were affected by the financial crisis of the 1970’s, but perhaps that’s not realistic to want. If you’re into economics, politics, and/or history though you might like this book!
January 12, 2018
Between 1945 and 1975, New York City functioned like an island of social democracy in the United States: free universal higher education, accessible health care, free or affordable day care. Due to deindustrialization, suburbanization, and economic crisis, though, by the mid 70s the city faced declining tax revenue and increasing expenditures, and was forced to borrow extensively from banks. This effectively ended the city's social democracy, putting bankers in charge to write the most important rules that governed the city, which included gutting social services and shifting the city's priorities towards the rich. New York City in 1975 was therefore a test case for neoliberalism, a key precursor to the Reagan and Thatcher revolutions. This book is a superb look at the fiscal crisis that made the world as we know it today.
May 13, 2018
Naomi Klein has said that when her book “The Shock Doctrine” came out, that one place many have said she left out, was what happened in New York City during the 70s. She refers to this work in her latest book and insisting that this does a fine job of telling the story and she isn’t wrong.
Phillips-Fein traces the origins of the crisis back to the 60s. Between the late 60s and the mid-70s, half a million jobs disappeared from the city, meaning that more people were in need of the city services. Garment production, electrical manufacturing and printing and publishing all steeply declined. New federal policies encouraged the middle class to flee the cities, drawn by tax incentives that favoured home ownership and new highways promoted commuting. The fear of blacks and Latinos was also a concern for many.
“All across the country, cities had been hollowed out by white flight, suburbanisation, and the movement of manufacturing to the South and overseas in search of lower wages and more compliant local governments. These changes had been hidden at first through economic growth, but the recession that had started in 1974 left governments everywhere scrambling to fund their public services.”
New York was the envy of most of the country in terms of the priority and importance placed on social services. It had a long and proud history of progressive free tuition. At its peak, the city ran a network of twenty four municipal hospitals. It also had many fine parks, playgrounds, elementary and secondary schools, public housing, swimming pools, college campuses. In the 60s it opened day care facilities for the low income mothers, drug treatment centres. It possessed a world class library system. New York controlled its Board of Education, which was a separate entity in many other cities. It boasted inexpensive public transport as well as free access to top drawer museums. This was a city where you could earn a degree without having to pay tuition. No other city in the country could rival the free education system.
But after the crisis, came the start of a deeper crisis, in many ways the real crisis. There would be no more public hospitals, free tuition or cheap transit and a city that ran for the working class. “New Yorkers had to learn to help themselves, and they would do so by relying on favours from the rich.”
The statistics in the aftermath of the money running out are confronting. Street sweepers had gone from 2,700 in 1975 to a mere 500 in 1980. Recorded felonies grew by 70% between 1979 and 1980. The cut backs with the police were so extreme that people started forming their own vigilante groups, like the Guardian Angels. The city had reduced its workforce by 20%, lowering the welfare rolls by several hundred thousand, closed 19 fire companies, defunded 77 day care centres, raised transit fares by more than 40% and imposed tuition fees at CUNY. But even these drastic measures were still not enough.
Between 1974 and 1977, the city would lose more than 1500 fire fighters. Phillips-Fein focuses on the case of Engine Company 212, where desperate and frightened locals, having no idea what else to do, were forced to occupy the station. When the station eventually did get restored, it would then be expected to cover three times as much territory. The cuts hit all sectors of public services, even the prisons, a jailhouse riot broke out on Rikers Island, where owing to the on-going budget cuts, the number of prison guards had been reduced from 500 down to 340, while the jail population had increased by around 50% meaning that inmates were being held three to a cell.
The city was forced to embark on a policy of so called ‘Planned shrinkage’, decisions made primarily by white, wealthy men that would primarily impact on poor blacks, Latinos and women. Predatory real estate agents were quick to get into the poor areas, exploiting racial fears, encouraging white home owners to sell their houses cheap because black people were moving into the area. They left flyers and then sold the same houses back onto the Latinos and blacks at inflated prices.
In many ways Gerald Ford was quite an unremarkable and forgettable man, a man who was never democratically elected by the people. He literally fell into his presidency by default. After former Vice President Spiro Agnew was forced to resign, Nixon promoted Ford to fill the role, before he too had to resign through his own serious, criminal activity. Ford was a man who chose to give a presidential pardon to a professional, serial liar, who would have been in prison if he were not a president, but Ford was not so forgiving when it came to the people of NYC.
Ford was backed up with some familiar names, the likes of Donald Rumsfeld and Dick Cheney, (both would go on to inflict greater damage under Bush). These were people who were happy to bail out failing corporations, but stubbornly resisted helping millions of people provide basic and essential services like sufficient police protection and a substantial fire service, meanwhile Wall St would continue to receive huge bonuses. Ford would eventually back track, when he belatedly saw the damage of the political fallout, but by then the damage had already been done for him and more importantly for the people of New York.
One of the major beneficiaries of New York’s dire situation was Donald Trump, he managed to strike a property deal that allowed him to pay taxes far below the normal rate for four decades-a windfall worth hundreds of millions of dollars. So that meant that millions of dollars went to subsidising Trump’s building projects instead of into restoring essential public services or promoting recovery in the poor and working class areas of the US’s greatest city. As of 2016, President Trump’s tax breaks has cost NYC around $360 million in uncollected taxes.
The banks being banks, were utterly ruthless, taking no responsibility for the thousands they would put out of a job and consign to poverty and uncertainty. They had little interest beyond their vast profit margins. We see how this would become a template for future millionaire and billionaire elites to squeeze and punish the poor and disenfranchised further, as almost every elected US president since then would welcome and implement a series of changes that would lessen taxes and regulation for the super-rich, whilst continuing to punish the poorest of society, taking more and more away from their public services, lessen their rights and privatise and monetise as much as they possibly can so that the super-rich can squeeze even more profit from the state and blame the poor for being poor.
So this was a really well written account, Phillips-Fein has given us a clear and informed overview of what really went on in New York during the 70s and shows some deeply ugly truths which make a mockery of how the US likes to portray itself to the rest of the world. We see how their greatest city was reduced to bankrupt mess for years, with a damaging and painful legacy that continues to this day for millions living there. We see just how ruthless its own government treats its own people, and how powerful their banks are allowed to be. We see how the bitter seeds of neo-liberalism were planted and how they continue to flourish today at the expense of the vast amount of people in the US and the world.
Phillips-Fein traces the origins of the crisis back to the 60s. Between the late 60s and the mid-70s, half a million jobs disappeared from the city, meaning that more people were in need of the city services. Garment production, electrical manufacturing and printing and publishing all steeply declined. New federal policies encouraged the middle class to flee the cities, drawn by tax incentives that favoured home ownership and new highways promoted commuting. The fear of blacks and Latinos was also a concern for many.
“All across the country, cities had been hollowed out by white flight, suburbanisation, and the movement of manufacturing to the South and overseas in search of lower wages and more compliant local governments. These changes had been hidden at first through economic growth, but the recession that had started in 1974 left governments everywhere scrambling to fund their public services.”
New York was the envy of most of the country in terms of the priority and importance placed on social services. It had a long and proud history of progressive free tuition. At its peak, the city ran a network of twenty four municipal hospitals. It also had many fine parks, playgrounds, elementary and secondary schools, public housing, swimming pools, college campuses. In the 60s it opened day care facilities for the low income mothers, drug treatment centres. It possessed a world class library system. New York controlled its Board of Education, which was a separate entity in many other cities. It boasted inexpensive public transport as well as free access to top drawer museums. This was a city where you could earn a degree without having to pay tuition. No other city in the country could rival the free education system.
But after the crisis, came the start of a deeper crisis, in many ways the real crisis. There would be no more public hospitals, free tuition or cheap transit and a city that ran for the working class. “New Yorkers had to learn to help themselves, and they would do so by relying on favours from the rich.”
The statistics in the aftermath of the money running out are confronting. Street sweepers had gone from 2,700 in 1975 to a mere 500 in 1980. Recorded felonies grew by 70% between 1979 and 1980. The cut backs with the police were so extreme that people started forming their own vigilante groups, like the Guardian Angels. The city had reduced its workforce by 20%, lowering the welfare rolls by several hundred thousand, closed 19 fire companies, defunded 77 day care centres, raised transit fares by more than 40% and imposed tuition fees at CUNY. But even these drastic measures were still not enough.
Between 1974 and 1977, the city would lose more than 1500 fire fighters. Phillips-Fein focuses on the case of Engine Company 212, where desperate and frightened locals, having no idea what else to do, were forced to occupy the station. When the station eventually did get restored, it would then be expected to cover three times as much territory. The cuts hit all sectors of public services, even the prisons, a jailhouse riot broke out on Rikers Island, where owing to the on-going budget cuts, the number of prison guards had been reduced from 500 down to 340, while the jail population had increased by around 50% meaning that inmates were being held three to a cell.
The city was forced to embark on a policy of so called ‘Planned shrinkage’, decisions made primarily by white, wealthy men that would primarily impact on poor blacks, Latinos and women. Predatory real estate agents were quick to get into the poor areas, exploiting racial fears, encouraging white home owners to sell their houses cheap because black people were moving into the area. They left flyers and then sold the same houses back onto the Latinos and blacks at inflated prices.
In many ways Gerald Ford was quite an unremarkable and forgettable man, a man who was never democratically elected by the people. He literally fell into his presidency by default. After former Vice President Spiro Agnew was forced to resign, Nixon promoted Ford to fill the role, before he too had to resign through his own serious, criminal activity. Ford was a man who chose to give a presidential pardon to a professional, serial liar, who would have been in prison if he were not a president, but Ford was not so forgiving when it came to the people of NYC.
Ford was backed up with some familiar names, the likes of Donald Rumsfeld and Dick Cheney, (both would go on to inflict greater damage under Bush). These were people who were happy to bail out failing corporations, but stubbornly resisted helping millions of people provide basic and essential services like sufficient police protection and a substantial fire service, meanwhile Wall St would continue to receive huge bonuses. Ford would eventually back track, when he belatedly saw the damage of the political fallout, but by then the damage had already been done for him and more importantly for the people of New York.
One of the major beneficiaries of New York’s dire situation was Donald Trump, he managed to strike a property deal that allowed him to pay taxes far below the normal rate for four decades-a windfall worth hundreds of millions of dollars. So that meant that millions of dollars went to subsidising Trump’s building projects instead of into restoring essential public services or promoting recovery in the poor and working class areas of the US’s greatest city. As of 2016, President Trump’s tax breaks has cost NYC around $360 million in uncollected taxes.
The banks being banks, were utterly ruthless, taking no responsibility for the thousands they would put out of a job and consign to poverty and uncertainty. They had little interest beyond their vast profit margins. We see how this would become a template for future millionaire and billionaire elites to squeeze and punish the poor and disenfranchised further, as almost every elected US president since then would welcome and implement a series of changes that would lessen taxes and regulation for the super-rich, whilst continuing to punish the poorest of society, taking more and more away from their public services, lessen their rights and privatise and monetise as much as they possibly can so that the super-rich can squeeze even more profit from the state and blame the poor for being poor.
So this was a really well written account, Phillips-Fein has given us a clear and informed overview of what really went on in New York during the 70s and shows some deeply ugly truths which make a mockery of how the US likes to portray itself to the rest of the world. We see how their greatest city was reduced to bankrupt mess for years, with a damaging and painful legacy that continues to this day for millions living there. We see just how ruthless its own government treats its own people, and how powerful their banks are allowed to be. We see how the bitter seeds of neo-liberalism were planted and how they continue to flourish today at the expense of the vast amount of people in the US and the world.
January 24, 2019
Do you ever wonder why our pundits blather endlessly about deficits? Has it ever vexed you how Amazon can pay zero federal taxes while receiving offers from dozens of municipalities worth billions? Or perhaps you are curious why in New York, one of the wealthiest locales on earth, thousands of people live without homes?
This book is an ideal place to begin an education on these matters. It charts the development and agonizing consequences of New York's fiscal crisis of the 1970s. But more than this, it outlines the ways that debt became king in politics, the role "professionalization" of municipal governance has played in shifting power and priorities away from a robust social safety net, and the steady incorporation of anti democratic extra-political bureaucracies throughout our polities.
When you hear someone spouting off about being socially liberal but fiscally conservative, first, tell them to fuck off. Then send them to read this. Nothing you or your political leaders say or do that affects other people is apolitical. Austerity is a ghoulish logical system that is classist, racist, and ableist. Reject it wherever you find it.
Fear City is a masterclass in historical inquiry wedded to political and social analysis, with fantastic evocation of place and characters. Highly recommended for readers of all stripes.
This book is an ideal place to begin an education on these matters. It charts the development and agonizing consequences of New York's fiscal crisis of the 1970s. But more than this, it outlines the ways that debt became king in politics, the role "professionalization" of municipal governance has played in shifting power and priorities away from a robust social safety net, and the steady incorporation of anti democratic extra-political bureaucracies throughout our polities.
When you hear someone spouting off about being socially liberal but fiscally conservative, first, tell them to fuck off. Then send them to read this. Nothing you or your political leaders say or do that affects other people is apolitical. Austerity is a ghoulish logical system that is classist, racist, and ableist. Reject it wherever you find it.
Fear City is a masterclass in historical inquiry wedded to political and social analysis, with fantastic evocation of place and characters. Highly recommended for readers of all stripes.
Read
March 9, 2025this was so interesting and so relevant! explained so much of how the city and government in general function now, why we can’t have nice things anymore, and why the city continues to sell its soul to be a playground for the wealthy :( good context for how people who lived through the 70s often think about what a city’s goals show be. also a great follow-up to the power broker given the time period covered basically lines up w the end of robert moses’s career.
December 3, 2017
This book is so good she turned fiscal policy into a political thriller.
Read
March 12, 2021sad
February 11, 2023
Compelling and very readable. A thorough and well-paced account, with strong contextualization but also concision.
September 21, 2021
Well written, breezy book about an extremely interesting series of events that unfortunately succumbs to the idealistic left liberal mainstays about people making good/bad decisions because of good/bad ideas rather than material conditions: at least, usually.
Fein doesn't explore deindustrialization enough (she mentions it as a national thing), it's beyond the brief of the book, but it also literally caused the crisis (according to her): so I thought it would have been discussed more. I'm also not sure her narrative on the MTA is quite correct, I think she's missing some of the Lindsay changes in ownership and structure. Discussions of industrial and infrastructural policy are basically non-existent in general here, including the famous highway building of the Moses era.
There's also sort of a Schmittian public union worker/CUNY student good vs. national politician/banker bad theme which, again, isn't a materialist analysis and definitely lacks explanatory power. You could certainly read this book as a description of a battle between a public labor aristocracy and the debt markets, with private sector labor and the public at large suffering as each side fights for its piece. I'm not quite sure if this is right though, since Fein doesn't really investigate the bureaucracy: opting instead for a litany of (admittedly) sad stories about closed services.
She also never really explores who the political coalitions or patronage networks were: so when she's describing how each mayor prior to Beame couldn't reduce spending anywhere, it's hard to really understand how Lindsay (for instance) had literally zero enemies in city government he could cut funding from. It just feels like an incomplete story.
But yeah, it's a good beach read even though there's really no historical analysis worth engaging with. Fein's doesn't make the reader think very often.
Fein doesn't explore deindustrialization enough (she mentions it as a national thing), it's beyond the brief of the book, but it also literally caused the crisis (according to her): so I thought it would have been discussed more. I'm also not sure her narrative on the MTA is quite correct, I think she's missing some of the Lindsay changes in ownership and structure. Discussions of industrial and infrastructural policy are basically non-existent in general here, including the famous highway building of the Moses era.
There's also sort of a Schmittian public union worker/CUNY student good vs. national politician/banker bad theme which, again, isn't a materialist analysis and definitely lacks explanatory power. You could certainly read this book as a description of a battle between a public labor aristocracy and the debt markets, with private sector labor and the public at large suffering as each side fights for its piece. I'm not quite sure if this is right though, since Fein doesn't really investigate the bureaucracy: opting instead for a litany of (admittedly) sad stories about closed services.
She also never really explores who the political coalitions or patronage networks were: so when she's describing how each mayor prior to Beame couldn't reduce spending anywhere, it's hard to really understand how Lindsay (for instance) had literally zero enemies in city government he could cut funding from. It just feels like an incomplete story.
But yeah, it's a good beach read even though there's really no historical analysis worth engaging with. Fein's doesn't make the reader think very often.
October 10, 2025
Such a well-written nonfiction book. She makes budget politics both understandable and interesting!
I learned so much about city politics. The information was distilled down to intent and values of the people involved, which clarified the complex economic and political situation of NYC’s 1970’s fiscal crisis into a battle over who decides the purpose and goals of local (and larger scale) govt.
It also feels SO relevant to today’s situation—nyc was, and to a large extent still is, a liberal oasis of robust public services. The book highlights how so many public services were axed by unelected business professionals appointed to newly minted committees charged with balancing NYC’s budget. Although many services remain (public libraries, hospitals, cheap CUNY tuition, cheap public transportation), the city never went back to the level of public services it had in the boom of the 60’s (free CUNY, more hospitals, fire stations, day cares, social services, esp in areas with higher poverty rates).
Zohran’s campaign feels so radical without knowing the history of the city’s public services, but there is nothing new about Zohran’s agenda that wasn’t there (with great public support) in the 60s. The historical context reframes his campaign as a return to liberal values, that the success and power of private wealth (directly opposed to democracy) could be just a period in history instead of the default mode of government. It wasn’t always this way and cultural shifts in the expectations of government are possible!
The budget history also demystified for me the question of “but how can we afford [fill in public service here]?” both in showing the origin of this q and some answers. Re:zohran, It’s a question I usually ignore and assume someone has an answer to (when joes dad asks me, for example).
The origin comes from the spin of private interest and President Ford’s cold attacks on NYC’s values. Phillips-Fein lays out how the tremendous debt and subsequent fiscal crisis in the 70s stemmed from a variety of economic and societal factors, yet President Ford and self-interested private investors were eager to moralize NYC’s fiscal crisis: you provided too much in your socialist urban “utopia” and bankruptcy is your moral punishment. This attitude still stands today, and is why, especially for people who lived through that time in nyc (Joe’s dad, for example), there is an old, deep fear thats triggered at the thought that too much spending on govt services leads to bankruptcy, crime, joblessness, etc.
That fear remains even though the current situation is very different from the shitstorm of the 70s (e.g. We are not dealing with white flight and suburban growth, and instead wealth gentrifies the ever-expanding urban center).
Some takeaways:
- the relationship between the nyc mayor and the state/fed is really important to get real change done. The state does have some oversight power on city budget and the city also depends on money (programs and aid as well as loans when necessary) from the state and fed govt
- Democracy/the people’s power DIED in the 70s when business professionals appointed to spending oversight committees were tasked with deciding what city services should be cut, and there was no say from people of nyc and very little say from the people’s elected representatives
- Free cuny tuition barely made a dent in the city debt, but the budget oversight committees and pres. Ford demanded tuition be charged as a SIGNAL that nyc was committed to balancing the budget, to PUNISH nyc for wanting a “socialist utopia”!!!
- I learned a lot about union politics
Ok that’s all for now but such a thought-provoking book
I learned so much about city politics. The information was distilled down to intent and values of the people involved, which clarified the complex economic and political situation of NYC’s 1970’s fiscal crisis into a battle over who decides the purpose and goals of local (and larger scale) govt.
It also feels SO relevant to today’s situation—nyc was, and to a large extent still is, a liberal oasis of robust public services. The book highlights how so many public services were axed by unelected business professionals appointed to newly minted committees charged with balancing NYC’s budget. Although many services remain (public libraries, hospitals, cheap CUNY tuition, cheap public transportation), the city never went back to the level of public services it had in the boom of the 60’s (free CUNY, more hospitals, fire stations, day cares, social services, esp in areas with higher poverty rates).
Zohran’s campaign feels so radical without knowing the history of the city’s public services, but there is nothing new about Zohran’s agenda that wasn’t there (with great public support) in the 60s. The historical context reframes his campaign as a return to liberal values, that the success and power of private wealth (directly opposed to democracy) could be just a period in history instead of the default mode of government. It wasn’t always this way and cultural shifts in the expectations of government are possible!
The budget history also demystified for me the question of “but how can we afford [fill in public service here]?” both in showing the origin of this q and some answers. Re:zohran, It’s a question I usually ignore and assume someone has an answer to (when joes dad asks me, for example).
The origin comes from the spin of private interest and President Ford’s cold attacks on NYC’s values. Phillips-Fein lays out how the tremendous debt and subsequent fiscal crisis in the 70s stemmed from a variety of economic and societal factors, yet President Ford and self-interested private investors were eager to moralize NYC’s fiscal crisis: you provided too much in your socialist urban “utopia” and bankruptcy is your moral punishment. This attitude still stands today, and is why, especially for people who lived through that time in nyc (Joe’s dad, for example), there is an old, deep fear thats triggered at the thought that too much spending on govt services leads to bankruptcy, crime, joblessness, etc.
That fear remains even though the current situation is very different from the shitstorm of the 70s (e.g. We are not dealing with white flight and suburban growth, and instead wealth gentrifies the ever-expanding urban center).
Some takeaways:
- the relationship between the nyc mayor and the state/fed is really important to get real change done. The state does have some oversight power on city budget and the city also depends on money (programs and aid as well as loans when necessary) from the state and fed govt
- Democracy/the people’s power DIED in the 70s when business professionals appointed to spending oversight committees were tasked with deciding what city services should be cut, and there was no say from people of nyc and very little say from the people’s elected representatives
- Free cuny tuition barely made a dent in the city debt, but the budget oversight committees and pres. Ford demanded tuition be charged as a SIGNAL that nyc was committed to balancing the budget, to PUNISH nyc for wanting a “socialist utopia”!!!
- I learned a lot about union politics
Ok that’s all for now but such a thought-provoking book
October 14, 2023
Absolutely stunning. Phillips-Fein writes with breathtaking clarity and directness. This is historical writing of the highest order. This book has fundamentally shaped my understanding of New York City, as well as the politics of the 70s and 80s. The sheer amount of original research here is incredible. Every detail of the pieces of the city that were wrenched away during the bankruptcy crisis is heartbreaking. This is absolutely essential reading. Such a clear identification of power and who wields it in urban politics. At the same time an aching rumination on the kind of world that we might have been able to create. I cannot recommend this book highly enough, particularly for anyone who has only known the version of New York City defined by the politics of austerity.
October 11, 2020
Feckless, performatively woke mayor skips town chasing after long-shot presidential campaign; the most dire fiscal crisis the city has ever seen ensues. Is New York's history repeating itself?
This book deserves an adaptation in the style of The Big Short. Phillips-Fein's account is driven by both personality and policy, portraying the stories of those thrust into positions of great, unelected responsibility alongside with the consequences of their decisions.
You will find both an accessible breakdown of the municipal bond market alongside striking stories of community leaders who fought to save their neighborhood firehouses and hospitals.
The New York fiscal crisis was ground zero for the rise of austerity politics, reverberating as a model for cities, companies, and nations on the brink of default. Phillips-Fein argues it didn't have to be this way, and that even now it's incredible how much of the public sector and common urban life survives in New York.
As the city teeters on the edge of another fiscal crisis, albeit one caused by a sudden evaporation in revenue rather than decades of unrestrained postwar spending against a disappearing manufacturing economy, let's hope the public soul of the city will continue to persist long after.
This book deserves an adaptation in the style of The Big Short. Phillips-Fein's account is driven by both personality and policy, portraying the stories of those thrust into positions of great, unelected responsibility alongside with the consequences of their decisions.
You will find both an accessible breakdown of the municipal bond market alongside striking stories of community leaders who fought to save their neighborhood firehouses and hospitals.
The New York fiscal crisis was ground zero for the rise of austerity politics, reverberating as a model for cities, companies, and nations on the brink of default. Phillips-Fein argues it didn't have to be this way, and that even now it's incredible how much of the public sector and common urban life survives in New York.
As the city teeters on the edge of another fiscal crisis, albeit one caused by a sudden evaporation in revenue rather than decades of unrestrained postwar spending against a disappearing manufacturing economy, let's hope the public soul of the city will continue to persist long after.
September 25, 2023
Very good indeed but I would have appreciated a paragraph outlining that all the nice things pre-fiscal crisis New York had - which they had to be stripped of by a bankers' coup - were and are the norm in most other rich countries.
November 23, 2017
If balancing municipal budgets isn't your thing, then you can probably skip this one.
January 1, 2023
“The inequality that characterizes our society today seems to be accompanied by the constant sense that any hope for a better society, any notion of collective action, must be a pipe-dream—irresponsible, impossible to afford.”
This book brings together several intersecting histories of 20th century America and offers some clarity when looking at our current system’s irrationality. It was a must-read for me, covering the end of the New Deal state and the rise of austerity politics, through the lens of municipal finance and the city’s unrealized potential within grotesque Federalism.
The American City today—labeled by the federal and state governments as the helpless, idealistic child in need of discipline, even while being completely dependent upon profit-seeking actors through the municipal bond market as well as the businesses stationed there that supposedly must be retained through tax benefits—is not seen as having much of a role in making residents’ lives better. Being pro-business is supposedly the only reasonable policy objective; there is no room for local government to serve the community as a whole.
Postwar New York City is a great picture of what municipal government can alternatively look like—how public policy can ensure a whole community prospers. Without certain authorities granted to them by state government, though—without the ability to respond to an unstable economy or to the loss of tax revenues due to suburbanization—and in the absence of sufficient federal funding, no city could’ve maintained New York’s regime throughout this time period.
“When it made some attempt to address the economic and social problems that resulted, the city government faced profound and tragic structural limitations—its limited ability to tax incomes, its restricted role under the state constitution, its economic vulnerability.”
The fiscal crisis of New York in the 1970s did not ‘pull together’ New Yorkers for ‘the greater good of saving the city’ as Reagan suggested it did early in his presidency. The telling history that Phillips-Fein outlines in the book proves this is false—the closing of hospitals, the firing of public employees, and the monster budget cuts to schools were protested at every turn by those that would end up being hurt by austerity. Working people knew what was happening.
The author writes, “Ever since the 1980s, the embrace of private enterprise as the sole way to fuel social development has helped to justify and legitimate the economic inequality that seems to define our day…The idea of using the state to remedy poverty and improve social conditions has given way to the sense that doing so is simply too expensive—a social cost we cannot take on for fear of deficits and debt. Tax cuts have starved state and local governments, leaving them without the resources they need to provide education and other basic functions…Throughout the country, at every level of government, public budgets suffer even as private fortunes grow, and the high wages and labor unions of civil servants are blamed for bankrupting the public trust.”
This book brings together several intersecting histories of 20th century America and offers some clarity when looking at our current system’s irrationality. It was a must-read for me, covering the end of the New Deal state and the rise of austerity politics, through the lens of municipal finance and the city’s unrealized potential within grotesque Federalism.
The American City today—labeled by the federal and state governments as the helpless, idealistic child in need of discipline, even while being completely dependent upon profit-seeking actors through the municipal bond market as well as the businesses stationed there that supposedly must be retained through tax benefits—is not seen as having much of a role in making residents’ lives better. Being pro-business is supposedly the only reasonable policy objective; there is no room for local government to serve the community as a whole.
Postwar New York City is a great picture of what municipal government can alternatively look like—how public policy can ensure a whole community prospers. Without certain authorities granted to them by state government, though—without the ability to respond to an unstable economy or to the loss of tax revenues due to suburbanization—and in the absence of sufficient federal funding, no city could’ve maintained New York’s regime throughout this time period.
“When it made some attempt to address the economic and social problems that resulted, the city government faced profound and tragic structural limitations—its limited ability to tax incomes, its restricted role under the state constitution, its economic vulnerability.”
The fiscal crisis of New York in the 1970s did not ‘pull together’ New Yorkers for ‘the greater good of saving the city’ as Reagan suggested it did early in his presidency. The telling history that Phillips-Fein outlines in the book proves this is false—the closing of hospitals, the firing of public employees, and the monster budget cuts to schools were protested at every turn by those that would end up being hurt by austerity. Working people knew what was happening.
The author writes, “Ever since the 1980s, the embrace of private enterprise as the sole way to fuel social development has helped to justify and legitimate the economic inequality that seems to define our day…The idea of using the state to remedy poverty and improve social conditions has given way to the sense that doing so is simply too expensive—a social cost we cannot take on for fear of deficits and debt. Tax cuts have starved state and local governments, leaving them without the resources they need to provide education and other basic functions…Throughout the country, at every level of government, public budgets suffer even as private fortunes grow, and the high wages and labor unions of civil servants are blamed for bankrupting the public trust.”
February 14, 2025
Excellent history of NYC’s debt crisis.
The notion of governments having a any moral or social responsibility to citizens or residents now seems quaint, but, as Phillips-Fein lays out, that was very much the ethos of NYC since well before the Civil War, but this changed in the mid-1970s.
The book details the shabby accounting procedures of the Lindsay and Wagner administrations and how growing debt engulfed NYC. Taking its lead from the bankers, the Beame administration closed fire station, hospital and school closures, and sacked physicians, nurses, teachers, police officers and firefighters. The City University of New York’s policy of accepting every NYC HS grad and offering free tuition ended. Subway fares were jacked up. In the aftermath of these cuts to services, poverty rates skyrocketed, crime increased, disease spread, a city was transformed.
It’s a gnarly tale that anticipates much of what later played out across the US and, indeed, across much of the world. Recommended.
The notion of governments having a any moral or social responsibility to citizens or residents now seems quaint, but, as Phillips-Fein lays out, that was very much the ethos of NYC since well before the Civil War, but this changed in the mid-1970s.
The book details the shabby accounting procedures of the Lindsay and Wagner administrations and how growing debt engulfed NYC. Taking its lead from the bankers, the Beame administration closed fire station, hospital and school closures, and sacked physicians, nurses, teachers, police officers and firefighters. The City University of New York’s policy of accepting every NYC HS grad and offering free tuition ended. Subway fares were jacked up. In the aftermath of these cuts to services, poverty rates skyrocketed, crime increased, disease spread, a city was transformed.
It’s a gnarly tale that anticipates much of what later played out across the US and, indeed, across much of the world. Recommended.
January 9, 2024
As a description of NY's municipal austerity that would prove to be a precursor to Reagan and Thatcher, Fear City is a splendid story, passionately told. Phillips-Fein has a knack for finding the personal lives illuminating political and economic developments. This book contains all the lived experiences of struggle and defeat necessary to bring the past to life.
On a theoretical level, however, I'm less enamored. The fiscal crisis is amalgamated to neoliberalism generally, private business and the free market being held as the new idols taking the place of the ideals of social justice and equality. But fiscal questions, especially on a subnational level, are a orthagonal to the goals of the budget, neither restricted to capitalist free markets, municipal welfare engines nor even to state socialism. The culprits of the crisis, the rich urban fugitives, blue collar decline and globalization, barely remain in purview. Deepening the analysis of how moribund great society liberalism had become would reveal the true significance of partial victories and defeats of tax payers and tenants. As it stands, their barricades are propped up only by the righteousness of their grievances, not their real power vis a vis capital and the federal level.
On a theoretical level, however, I'm less enamored. The fiscal crisis is amalgamated to neoliberalism generally, private business and the free market being held as the new idols taking the place of the ideals of social justice and equality. But fiscal questions, especially on a subnational level, are a orthagonal to the goals of the budget, neither restricted to capitalist free markets, municipal welfare engines nor even to state socialism. The culprits of the crisis, the rich urban fugitives, blue collar decline and globalization, barely remain in purview. Deepening the analysis of how moribund great society liberalism had become would reveal the true significance of partial victories and defeats of tax payers and tenants. As it stands, their barricades are propped up only by the righteousness of their grievances, not their real power vis a vis capital and the federal level.
January 13, 2025
Soo good shocking amazing
May 9, 2022
I would've handled New York's fiscal crisis pretty differently
February 25, 2025
I really appreciated this (audio)book! It picked up where The Power Broker left off, showing how the aftermath of Robert Moses’ public works dictatorship was, amongst other things, the 1970s fiscal crisis. In Fear City, Kim Phillips-Fein neatly lays out the origins of this crisis. By 1975, New York City was losing money due to decreased federal and state spending, predatory lending terms for municipal debt, and a shrinking tax base. The tax base was shrinking due to white flight from the city, and landlord abandonment/arson of properties in the Bronx. The first tax issue can be connected to Moses’ construction of the highways that led out to Long Island, facilitating unprecedented (though crowded) vehicular access to suburbia. On the other hand, the in-town portions of Moses’ expressways decimated neighborhoods like East Tremont. As families fled from the demolished buildings in their neighborhoods, this made landlords’ abnegation of the remaining properties all the more likely. Unfortunately, even the solution to this equation became difficult, as New York State often blocked the City from raising taxes to resolve the budget shortfalls. The only solution that the powers that be were willing to entertain was shrinking the actual expenses (AKA public services provided to New York.)
What this period did to our future
Early on in Fear City, Phillips-Fein takes up the concept of budgets as moral documents. From 1975-1978, New York City’s budgets decimated social services and public works spending, leading to a huge curtailing of what all future generations could expect from the city. In Empire of Pain: The Secret History of the Sackler Dynasty, Patrick Radden Keefe explains how the Sackler brothers’ success wouldn’t have been possible without the high-quality public education provided to them at Erasmus Hall High School. These earlier generations of immigrant children were able to benefit from a New York that would not exist by the time their own children and grandchildren came of age. For the millions of people who did not become as wealthy as the Sacklers, this must’ve been a huge loss.
Always, Phillips-Fein is reminding us of the larger picture: this dismantling of New York’s social safety net contributed to the rightward shift of liberalism throughout our country. Over the course of this book, you see more and more politicians ceding common ground by betraying labor unions, destroying welfare programs, and deprioritizing public education. You see the labor unions themselves become proponents of austerity, because they were now major creditors of the City after investing worker pensions in municipal bonds. By the time Ed Koch became mayor, his support of striking workers was no longer a Democratic litmus test—the new era of “business-friendly” liberalism had replaced much of what came before. Again, what a loss!!!
The hypocrisy of the Great Society
Just as Hammer and Hoe deconstructed The New Deal, Fear City pulls no punches when examining New York’s conditional commitment to the Great Society. Phillips-Fein notes that the “give me your tired, your poor” lines engraved on the Statue of Liberty must have only applied to the earlier, whiter generations of immigrants. It’s no coincidence that the clawing back of public spending happened just at the time that Puerto Rican and Black Southern families became New York’s main migrants. It made me think about the Scandinavian countries who are great at providing government services for white people, but do everything in their power to deter migrants from accessing the same “great” society.
To me, it seems curious that at no other time in New York’s history was it this conceivable to drastically curtail public spending. While many powers that be still despised the earlier European immigrants, they were at least perceived as people who could be “reformed” into American-ness. This huge decline in New York’s social safety net only took place once the people served by that public spending were themselves seen as irrevocably devious and disposable, Throughout Fear City, New York’s growing Black and Puerto Rican communities were blamed for everything from swelling the welfare roles to “ruining” the city during the 1977 blackout. Even more sadly, this punitive nature of some of New York’s people actually mirrored how the federal government was treating New York City. The Ford administration and many business leaders sought to punish New York for its profligate spending on the poor, and equated the City’s resistance to austerity with immaturity. I’m reminded of Alicent Hightower’s one good point in HOTD Season 1: reluctance to murder is not a weakness!!!!
The grave costs of austerity
And murder it truly was. Not only were people beginning to get way too comfortable with sentencing humans to death, claiming that the 1977 blackout looters should’ve been “shot on sight”, but they were also okay with budgeting for death. This “solution” to the fiscal crisis was in no way a solution for the people of New York: they lost daycares, health clinics, libraries, and many other city services. CUNY lost its status as a tuition-free institution for the first time in history, subway fares were raised higher than the cost of meals, and classroom sizes swelled to as large as 60 students.
Perhaps most terribly, some of New York’s poorest neighborhoods lost fire stations that provided lifesaving services in a time of unprecedented arson. After one budget cut, Abraham Beame literally SAID OUT OF HIS MOUTH that people would likely lose their lives because of the cuts to fire service. The fact that this wouldn’t be considered a gross betrayal of his duty as a mayor says everything about the system of governance we live under. At the end of the day, financial interests come before even human life.
As you would imagine, these crises beget more crises. Responding to the fiscal crisis with a rejection of public spending and public caring created problems for years to come, ones that New York’s leaders must have chosen to ignore the possibilities of. In the 1980s, the decision to close many public hospitals exacerbated the AIDS epidemic, as an influx of patients found far fewer places to seek treatment than they would have a decade earlier. The decimation of municipal government positions resulted in a general weakening of public sector unions, an issue that remains a major factor to this day. Even as the City’s coffers ostensibly recovered from this crisis, many New Yorkers never bounced back.
The real citizens of New York: the creditors and bondholders
But who, Fear City asks, were the true people of New York? If you look at the leaders of the externally-imposed readjustment boards, or even the budget itself (debt service was the city’s third largest line item), it was clear that the true citizens of New York were the financial interests guiding its descent into austerity.
Phillips-Fein shows that many residents came to view the City’s looming bankruptcy as something bad for everyone, while the avoidance of default would be something bad for everyone BUT the bankers. Indeed, New York’s narrow aversion of default sacrificed all other parties so the creditors and bondholders could be repaid. While it should have been unfathomable that the City could default on salaries owed to its employees or services its residents depended on, the only impossibility was that the City might default on its payments to investors. This showed that the bondholding class was the only constituency that truly mattered, something that remains true today.
Final Thoughts
Overall, I’d really recommend this book to anyone interested in learning more about the crises that informed modern municipal finance. Kim Phillips-Fein shows that austerity is indeed a CHOICE, but one that many politicians will choose time and time again. While it’s hard to follow up The Power Broker with another book on New York, I think Fear City could be a great option. Phillips-Fein takes care to celebrate several acts of resistance to the austerity regime, whether that was the People’s Firehouse in Northside/Williamsburg, or the defense of Eugenio María de Hostos Community College in the South Bronx.
This book could also be great for anyone else who didn’t know WTF was going on during Netflix’s The Get Down. Even if you’re not as interested in the past, it could even take on a comforting role as a reminder that our times do, in fact, have some precedents. In some ways, we’ve been here before: with “the era of big government” being pronounced as over by a sitting president, with Donald J. Trump himself receiving very curious access to public-sanctioned power, and with people fighting all sorts of these things. It’s a bleak story, and one that made many lives much harder. But, it’s also a story that (some, not enough) people lived to tell—we can only hope for the same this time around.
What this period did to our future
Early on in Fear City, Phillips-Fein takes up the concept of budgets as moral documents. From 1975-1978, New York City’s budgets decimated social services and public works spending, leading to a huge curtailing of what all future generations could expect from the city. In Empire of Pain: The Secret History of the Sackler Dynasty, Patrick Radden Keefe explains how the Sackler brothers’ success wouldn’t have been possible without the high-quality public education provided to them at Erasmus Hall High School. These earlier generations of immigrant children were able to benefit from a New York that would not exist by the time their own children and grandchildren came of age. For the millions of people who did not become as wealthy as the Sacklers, this must’ve been a huge loss.
Always, Phillips-Fein is reminding us of the larger picture: this dismantling of New York’s social safety net contributed to the rightward shift of liberalism throughout our country. Over the course of this book, you see more and more politicians ceding common ground by betraying labor unions, destroying welfare programs, and deprioritizing public education. You see the labor unions themselves become proponents of austerity, because they were now major creditors of the City after investing worker pensions in municipal bonds. By the time Ed Koch became mayor, his support of striking workers was no longer a Democratic litmus test—the new era of “business-friendly” liberalism had replaced much of what came before. Again, what a loss!!!
The hypocrisy of the Great Society
Just as Hammer and Hoe deconstructed The New Deal, Fear City pulls no punches when examining New York’s conditional commitment to the Great Society. Phillips-Fein notes that the “give me your tired, your poor” lines engraved on the Statue of Liberty must have only applied to the earlier, whiter generations of immigrants. It’s no coincidence that the clawing back of public spending happened just at the time that Puerto Rican and Black Southern families became New York’s main migrants. It made me think about the Scandinavian countries who are great at providing government services for white people, but do everything in their power to deter migrants from accessing the same “great” society.
To me, it seems curious that at no other time in New York’s history was it this conceivable to drastically curtail public spending. While many powers that be still despised the earlier European immigrants, they were at least perceived as people who could be “reformed” into American-ness. This huge decline in New York’s social safety net only took place once the people served by that public spending were themselves seen as irrevocably devious and disposable, Throughout Fear City, New York’s growing Black and Puerto Rican communities were blamed for everything from swelling the welfare roles to “ruining” the city during the 1977 blackout. Even more sadly, this punitive nature of some of New York’s people actually mirrored how the federal government was treating New York City. The Ford administration and many business leaders sought to punish New York for its profligate spending on the poor, and equated the City’s resistance to austerity with immaturity. I’m reminded of Alicent Hightower’s one good point in HOTD Season 1: reluctance to murder is not a weakness!!!!
The grave costs of austerity
And murder it truly was. Not only were people beginning to get way too comfortable with sentencing humans to death, claiming that the 1977 blackout looters should’ve been “shot on sight”, but they were also okay with budgeting for death. This “solution” to the fiscal crisis was in no way a solution for the people of New York: they lost daycares, health clinics, libraries, and many other city services. CUNY lost its status as a tuition-free institution for the first time in history, subway fares were raised higher than the cost of meals, and classroom sizes swelled to as large as 60 students.
Perhaps most terribly, some of New York’s poorest neighborhoods lost fire stations that provided lifesaving services in a time of unprecedented arson. After one budget cut, Abraham Beame literally SAID OUT OF HIS MOUTH that people would likely lose their lives because of the cuts to fire service. The fact that this wouldn’t be considered a gross betrayal of his duty as a mayor says everything about the system of governance we live under. At the end of the day, financial interests come before even human life.
As you would imagine, these crises beget more crises. Responding to the fiscal crisis with a rejection of public spending and public caring created problems for years to come, ones that New York’s leaders must have chosen to ignore the possibilities of. In the 1980s, the decision to close many public hospitals exacerbated the AIDS epidemic, as an influx of patients found far fewer places to seek treatment than they would have a decade earlier. The decimation of municipal government positions resulted in a general weakening of public sector unions, an issue that remains a major factor to this day. Even as the City’s coffers ostensibly recovered from this crisis, many New Yorkers never bounced back.
The real citizens of New York: the creditors and bondholders
But who, Fear City asks, were the true people of New York? If you look at the leaders of the externally-imposed readjustment boards, or even the budget itself (debt service was the city’s third largest line item), it was clear that the true citizens of New York were the financial interests guiding its descent into austerity.
Phillips-Fein shows that many residents came to view the City’s looming bankruptcy as something bad for everyone, while the avoidance of default would be something bad for everyone BUT the bankers. Indeed, New York’s narrow aversion of default sacrificed all other parties so the creditors and bondholders could be repaid. While it should have been unfathomable that the City could default on salaries owed to its employees or services its residents depended on, the only impossibility was that the City might default on its payments to investors. This showed that the bondholding class was the only constituency that truly mattered, something that remains true today.
Final Thoughts
Overall, I’d really recommend this book to anyone interested in learning more about the crises that informed modern municipal finance. Kim Phillips-Fein shows that austerity is indeed a CHOICE, but one that many politicians will choose time and time again. While it’s hard to follow up The Power Broker with another book on New York, I think Fear City could be a great option. Phillips-Fein takes care to celebrate several acts of resistance to the austerity regime, whether that was the People’s Firehouse in Northside/Williamsburg, or the defense of Eugenio María de Hostos Community College in the South Bronx.
This book could also be great for anyone else who didn’t know WTF was going on during Netflix’s The Get Down. Even if you’re not as interested in the past, it could even take on a comforting role as a reminder that our times do, in fact, have some precedents. In some ways, we’ve been here before: with “the era of big government” being pronounced as over by a sitting president, with Donald J. Trump himself receiving very curious access to public-sanctioned power, and with people fighting all sorts of these things. It’s a bleak story, and one that made many lives much harder. But, it’s also a story that (some, not enough) people lived to tell—we can only hope for the same this time around.
February 12, 2021
This book blew me away. I vaguely remember New York City’s 1975 fiscal crisis, mostly from the classic headline ‘Ford to NYC: Drop Dead’. I didn’t realise it was one of the first testing grounds of neoliberalism and austerity, featuring many of the ghouls who would go on to even more powerful and destructive behaviour. Donald Rumsfeld plays a role in this excellent history, as does a racist grifter named Donald Trump. Phillips-Fein does a fantastic job of putting faces and stories to the poor people who were punished for bad accounting practices by the Mayor and former Comptroller Abe Beame. I had to put the book down a few times, because I was so upset by the closure of childcare centres and teaching hospitals- just the utter wanton destruction of decades of progressive gains by unelected business people. ‘Know your junta’, the Village Voice said when it wrote about the new managers charged with destroying social services. If you want a great case history of bad politics, read this book.
Read
March 16, 2022Really glad I didn't live in New York when this happened
January 11, 2024
This book provides an engaging history of New York City’s fiscal crisis in the 1970s which was precipitated by white flight and suburban investment, the decline of manufacturing, and the movement of companies to poorer countries. This retelling details how the politics of the city, and those of the country at large, shifted from Great Society-era high spending on the public sector and social services to a program of austerity and promotion of private business.
The real impetus to avoid bankruptcy complicates the simple story of democrat/liberalism/unions/public services versus conservative/union-busting/corporations/financial sector. I appreciated how the author highlighted how this shift was not necessarily premeditated or driven by some preformed neoliberal ideology but was instead created on the fly in each decision those in power made and the sacrifices they deemed were necessary for the public to make such as free tuition at CUNY or affordable childcare. I learned a lot about the interplay between local, state, and federal government and how influential even the appearance of federal support can be in keeping a local government viable. I also really liked the personal stories of New Yorkers who fought to protect the services that their communities relied on. One thing that I wish was discussed in more depth is alternatives to the massive cuts made and why the solutions enacted seemed like they were the only ones possible. Overall I recommend if you like history and are interested in local government politics (ㆀ˘･з･˘)
The real impetus to avoid bankruptcy complicates the simple story of democrat/liberalism/unions/public services versus conservative/union-busting/corporations/financial sector. I appreciated how the author highlighted how this shift was not necessarily premeditated or driven by some preformed neoliberal ideology but was instead created on the fly in each decision those in power made and the sacrifices they deemed were necessary for the public to make such as free tuition at CUNY or affordable childcare. I learned a lot about the interplay between local, state, and federal government and how influential even the appearance of federal support can be in keeping a local government viable. I also really liked the personal stories of New Yorkers who fought to protect the services that their communities relied on. One thing that I wish was discussed in more depth is alternatives to the massive cuts made and why the solutions enacted seemed like they were the only ones possible. Overall I recommend if you like history and are interested in local government politics (ㆀ˘･з･˘)
October 19, 2021
Phillips-Fein does a great job of portraying the fiscal crisis of NYC of the 70s, detailing how the city got to that point through mass exodus to the suburbs post WWII, replacing the population with people of color constantly discriminated against, a long history of social programs, and a lack of revenue to pay for all of it.
NYC borrowed extensively, and used some fuzzy math to balance the budget. Eventually, the banks that were buying the NYC bonds decided they simply couldn't do so any longer, and the city suddenly was on the brink of bankruptcy. Of course, Mayor Beam went to the White House looking for assistance, which led to the classic Daily News headline of "Ford to City: Drop Dead."
Eventually, the feds and the state did help, through financial control boards and the instituting of layoffs, elimination of the free tuition at the city colleges, etc. While these austerity measures eventually helped NYC get out of its fiscal crisis, it also paved the way for the new era of the mega real estate developer, building tall shiny complexes for the ultra rich that permeate the city even to this day.
NYC borrowed extensively, and used some fuzzy math to balance the budget. Eventually, the banks that were buying the NYC bonds decided they simply couldn't do so any longer, and the city suddenly was on the brink of bankruptcy. Of course, Mayor Beam went to the White House looking for assistance, which led to the classic Daily News headline of "Ford to City: Drop Dead."
Eventually, the feds and the state did help, through financial control boards and the instituting of layoffs, elimination of the free tuition at the city colleges, etc. While these austerity measures eventually helped NYC get out of its fiscal crisis, it also paved the way for the new era of the mega real estate developer, building tall shiny complexes for the ultra rich that permeate the city even to this day.
November 10, 2020
This book is a blow-by-blow account of New York's mid-1970s fiscal crisis. Although the author's perspective is very left-wing and pro-spending, she accumulates a set of facts showing that the city's finances were out of control before the crisis. For example, she admits that in John Lindsay's first term (1965-69) "the city's spending on social services and welfare had doubled" and "Health and hospital spending had risen by more than 50 percent." (p. 36).
In the last few chapters, the author suggests that the city's budget cuts were responsible for the rioting of 1977 and the growth of poverty and crime in the following years. This part of the book is less persuasive, because other cities with less extreme fiscal problems were also declining in roughly similar ways.
In the last few chapters, the author suggests that the city's budget cuts were responsible for the rioting of 1977 and the growth of poverty and crime in the following years. This part of the book is less persuasive, because other cities with less extreme fiscal problems were also declining in roughly similar ways.
January 4, 2023
I didn't expect much, and then Phillips-Fein does the impossible and makes the fiscal crisis of New York City in the 1970s read like a mystery novel. It's got compelling characters, dramatic exposition of blackouts and anti-austerity protests, and still manages to adequately explain how the bond market collapsed and bankers and the business class seized all manner of powers for themselves behind closed doors. Along the way, we encounter the rise of thin blue line ideology and how buttering up the richest of the rich was justified as the only way to save a city in an era of depriving the working class of what it'd won in past generations.
February 7, 2024
A good book to drive you completely insane!
Just wild that an unelected President with an unelected cabinet worked to impose an unelected economic board and force cuts on New York City—pretending that debt had some moral weight and wasn't just a reflection of financial choices by the state and federal government, the beginning of a new era of austerity that used its own devastation to justify further existence.
Just wild that an unelected President with an unelected cabinet worked to impose an unelected economic board and force cuts on New York City—pretending that debt had some moral weight and wasn't just a reflection of financial choices by the state and federal government, the beginning of a new era of austerity that used its own devastation to justify further existence.
April 2, 2024
Turns fiscal policy into a beach read … maybe this is an historical accuracy but it was curious how the swift changes in policy which are a proving ground for the neoliberal revolution feel much more like historical contingencies in her book than in other histories. That’s probably a question of method more than anything - I don’t mind it but you have to think backwards if you believe history is determined by ideas
January 28, 2023
Donald Trump and the developers who exploited the city’s desperation to build their towers had little interest in the rest of New York. The fact that millions of dollars went to subsidize their building projects instead of restoring public services or promoting recovery for poor and working-class neighborhoods of the city never registered as a moral concern. Quite the contrary.
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