“How am I doing?” This is the immortal and some may say rhetorical question repeatedly
asked by former New York City Mayor, Edward (Ed) Irving Koch throughout his 12 year tenure
as elected leader of the city. Mayor Koch is considered by many New Yorkers one of the most
charismatic, popular as well as its savior during its most challenging period in the late 1970’s
and mid 1980’s. Upon reviewing Ed’s 1984 State of the City Address readers get a glimpse of
New York City’s socioeconomic environment. However, to fully appreciate Mayor Koch’s
speech we must first take a look at the city not one, two or even three years, but as far back as a
decade.
During the 1970’s New York City, suffered from high crime rates, graffiti riddled mass
transit system (subways and buses), an electrical blackout and most devastating was on the brink
of fiscal bankruptcy. How did New York City almost self-destruct? According to Donna E.
Shalala, Associate Professor of Politics at Teachers College, Columbia University and Carol
Bellamy former New York State Senator there were four major reasons behind New York City’s
potential bankruptcy and potential demise during the 1970’s. These included the city’s changing
population and economic make up, the national economic recession, state and federal
government intervention and weaknesses of the local politicians as well as the political landscape
at the time.
Similar to any large metropolitan city, New York City was in a period of realignment. A
population shift had been on-going for the last three decades. Middle-income families were
moving to the suburbs and took their buyer powers with them. They moved out in search of
better school systems, bigger homes and land to spread out (backyard barbeques and swimming
pools). When they moved out the retailers followed s they needed the middle-classes’ dollar to
remain in business. Heavy manufacturing moved out of the city also in search of land to spread
out and obtain lower labor and real estate costs. Although the middle-class relocated, the poor
with limited resources remained which contributed to a high level of poverty. The result of this
great migration was a reduction in private sector jobs and high unemployment rates which added
to the lower socioeconomic plight.
The second factor for this state of New York during the 70’s was the national economy.
The United States was facing its own economic crisis caused by a recession. Like most large
cities, New York was more susceptible to economic downturns because of its reliance on sale
and income tax revenue which tend to be more at risk during cyclical conversions.
In addition to the national recession, the high cost of services New York City provided to
its residents was also a factor contributing to its troubles. It proved very expensive to maintain a
large police, fire and sanitation force. This coupled with a large public elementary school system
and a mass transit system, the only in the nation that runs 24 hours and 7 days a week, all were
contributing factors to the city’s potential bankruptcy. Along with New York City’s high
operating costs, the lack of state action to expand the boundaries of the City was considered a
failure of management. Not only did the State play a role but the federal government had a
significant effect in New York City’s burdens. Federal program regulations originating from the
1960’s into the 1970’s on taxation fell most substantially on those local jurisdictions whose
education, health and welfare programs received the most in federal aid. In addition, the federal
government made it easier via FHA and GI loans for the middle-class to move out of the city and
into the suburbs.
One of the last contributing factors causing New York City’s decline was the political
climate and lack of leadership. Leaders from the mayor’s office and governor’s office were
considered “yes men” and these “yeses” didn’t come with any obligation from the benefactors.
The City’s leaders seemed to respond yes to all interest groups without requiring any
compromises or partnership in revenue sharing. It seemed that they wanted to please everyone
instead of providing true leadership by saying “no” when a proposal was fiscally unsound.
These decisions lead to the City taking big leaps into programs when only small steps were
necessary or should have never been enacted. The lack of compromise was due to the climate of
local politicians who desired to win reelection bids at any and all costs.
We have reviewed the history of what led to New York City’s fiscal crisis during the
early to mid-1970. Now we move to the end of the 70’s and the City ushers in a new Mayor,
Edward Irving Koch who inherits this mess. Ed Koch was considered a true New Yorker, loud,
bold, straightforward and from Greenwich Village. This was in sharp contrast to the former
mayor, Abraham Beame who was older and more reserved. Ed Koch was considered the leader
who rejected the idea of filing bankruptcy for the City which had a 6 billion debt that was
supposed to be paid immediately. When elected and taking office he along with his
administration declared that bankruptcy was not an option. Mayor Koch decided that bankruptcy
would further contribute to New York City’s economic hardships. Once filed, New York City
could not issue bonds for 10 years per regulations, thus damaging the City’s borrowing capacity
and credit ranking for 10 or more years. Through his leadership and fiscal policies the City was
able to balance its budget in 3 years, one year prior to the mandated 4 year law. Mayor Koch
accomplished this by reducing expenditures and increasing revenues (taxes). This was done with
the assistance of the Municipal Assistance Corporation for the City of New York (MAC). MAC
is a public benefit corporation that acted as an interim borrowing agency for the City. Its major
responsibility was to transform the City’s short-term debt into long-term obligations. During this
time period MAC was given permission to borrow 3 billion by issuing long-term obligation to
refund the City’s maturing short-term debt and to pay some of New York City’s operating
expenses. Since the City’s securities were considered unmarketable, it was also hoped that MAC
bonds would be viewed as stronger and different. This difference would hopefully attract buyers
to purchase them. There were at least two factors contributing to the faith in MAC. These
included the hope that buyers would see that MAC bonds were being issued by a state agency
and brought with it an obligation of the state to meet any shortfall in debt service. Also that the
City was beginning to reform itself and MAC was specifically charged with monitoring efforts to
change what was previously viewed as New York City’s weak accounting system.
We examined New York City prior to Ed Koch and after his election. Fast forward to
1984 and six years have passed since New Yorkers first elected him. “How was he doing?”
Reviewing his 1984 State of the City address reveals some of the answers. Mayor Koch’s
address also bears witness to his ideology, tells the story of New York City and the nation’s
political climate as well as divulges how the use of rhetoric is important in shaping policy and
delivering a message.
The mayor begins his State of the City address by first reminding the audience that it has
been six years since he was first elected. This opening set the stage to the mayor’s expounding
on how under his administration and leadership he accomplished bringing New York City back
from the depths of the abyss and brink of despair. This is shown by invoking President
Roosevelt’s New Deal policies that helped stabilized the United States economy during the Great
Depression and comparing it to the recent recession and New York’s almost declaring
bankruptcy in mid-1970. By invoking President Roosevelt’s New Deal, Koch is attempting to
show the high degree of economic crises New York City was in and how his policies, like
Roosevelt’s, helped to uplift the City. The first four paragraphs also reveal Mayor Koch’s fiscal
conserve agenda by stating “We set about to right the sins of the past and put the City back on its
feet again. We had been profligate in our spending so we learned to say no.” This is his way of
informing the audience that the old policies of the former two mayors which involved saying
“yes” to proposal without fiscal responsibility and management did not work. Mayor Koch goes
on to outline how the City is now thriving because of his policies. This growth included job
creation, a lower unemployment rate compared to the national average during the same time
period, retail growth and a surge in real estate activity.
Along with outlining his accomplishments, Koch’s State of the City address also
discloses his ideology and how he governs the City. After he presents his bullet points of
achievements he outlines once again the City’s growth but specifically tells the audience that it is
not limited to one borough (Manhattan) but is spread throughout the five boroughs. This
included economic development in the Bronx (Fordham Plaza), Queens (College Point Industrial
Park), Brooklyn (Albee Square Mall) and in Staten Island (The Teleport). This tells the audience
that he believes in spreading and sharing the wealth and opportunity to all New Yorkers. Koch’s
ideology is further revealed throughout his speech when he outlines his future initiatives. This
includes providing affordable housing, education reform, public services enterprises and
subsidies in the MTA fares for the elderly along with homecare programs for them. Once again
Mayor Koch showcases his view point on spreading opportunity for every New Yorker by telling
the audience that his affordable housing programs are intended for residents in all five boroughs.
Specifically, for the Bronx, he was promoting housing partnerships in Charlotte Gardens and for
Brooklyn he was supporting partnerships in the Nehemiah project. For the elderly he requested
an extension of the life of the transit pass allowing these citizens to travel within the system all
day (24 hours) when necessary. Also for the elderly, supporting Meals-on-Wheels and other
nutrition programs was at the top of his list. Another passion for the mayor was promoting
quality education for New York City children so that the programs would be equal to that of the
suburban schools. He put the City’s money where its mouth is by increasing education spending
and increasing pedagogical staff by 4,000. Additionally, the mayor’s commitment to public
service and extending that commitment to New York City’s youth is highlighted. Mayor Koch’s
promotion for developing a Nation Service Corporation for the City of New York as a three pilot
test program was detailed in his speech. His belief in allowing the City’s youth to discover their
potentially hidden talents through service to others showed his commitment to the philosophy of
giving back to communities.
Throughout the State of the City address, words such as dignity and equality are found.
These words are specifically designed to showcase the mayor’s Democratic Party’s values as
sharp contrast to the Republican Party’s values under the Reagan Administration. Specifically,
Mayor Koch denounces the Reagan Administration’s policies by telling the audience that they
have hurt the poor of New York City and most vulnerable such as Blacks and Hispanics. He
further denounces federal cutback to help the homeless and other disenfranchise not just in New
York City but across the nation.
Although Mayor Koch’s speech showcased his social consciousness and ideology for
equality, it was extremely important for him to inform the audience that his policies were being
delivered on a solid foundation for fiscal responsibility. This is repeatedly expounded
throughout the address. This was designed to once again showcase the Democratic Party’s
values system of social reform with strong adherence to monetary bottom line.
Mayor Ed Koch’s State of the City speech holds up very well over time. Reading it
transported me to my youth when New York City was gritty-sometimes I miss it. Ironically, it
also holds up now a tribute to a Mayor’s dedication to the service of others and moral
commitment for the disenfranchised. This is especially enlightening while listening to
Republican Senator Ted Cruz’s denouncement of New York City as a place with no morals
during the recent Republican debate. Throughout New York City’s struggles since the 1960’s
from race relations, stock market crashes, Wall Street abuses, real estate collapses and the World
Trade Center bombings, New York City always seems to bounce back. So to paraphrase former
Mayor Edward Irving Koch, “How is New York City doing?” – Just fine.
References
Burstein, J. The fiscal crisis after 30 years. Gotham Gazette, 2005
McMahon, E.J & Siegel, F. (2005). Gotham’s fiscal crisis: lessons unlearned. The Public
Interest
Roberts, S. When new York teetered on the brink of bankruptcy. The New York Times, 2013
Shalala, D. E & Bellamy, C. (1977). A state saves a city: the new York case. Duke Law Journal