New Geography

Author: Fred Siegel

  • Manhattan Moment: Two distinct groups make up ‘Occupy’ protesters

    Strange to say, but there may be something valuable going on among some of the Occupy Wall Street protesters.

    Until now, two narratives have defined both the press coverage and public discussion of the Occupy Wall Street demonstrators camped out in lower Manhattan’s Zuccotti Park.

    The first depicts a collection of buffoonish, semiliterate juveniles engaged in a seeming left-wing version of a college prank. There is, to be sure, something to this story.

    In last week’s Zombie Parade the protesters, giddy with their cleverness, portrayed themselves as the living dead whose lives had been sucked from them by unnamed corporations.

    One of the pre-Halloween costumers was asked why she had chosen to dress up like a zombie who looked like Marie Antoinette, the French queen guillotined by the revolutionaries of 1793. She replied that she had no idea of who Marie Antoinette was but just liked the look of the costume.

    The second narrative sees the protesters as ripe to be harnessed by the labor leaders who hope to tap into their energy on behalf of the Obama 2012 campaign.

    Watching New York Federation of Teachers President Mike Mulgrew prance about, speaking in the name of the protest, you might think Occupy Wall Street had signed on to a campaign to raise teachers’ salaries in a city whose budget shortfalls are already producing layoffs.

    But both of these explanations presume that there is a single, largely unified group of people in Zuccotti Park. There isn’t. The exhibitionists, lost souls and zanies acting out tend to congregate in the Western stretch of the block-long park.

    To their east, where anti-Obama placards outnumber those supporting the president, a more cerebral group of protesters is gathered. Their organizational skills have kept the encampment running in reasonably good order for these past three weeks.

    Some of them, carrying anti-Obama placards, are standard issue leftists who, like the New York Times editorial board, think that the president’s problem is that he has been too moderate and thoughtful.

    But others are caught up in the practical details of self-government on a small scale. They are doing their best not to be co-opted, which is why, despite the hoopla from labor leaders, they haven’t signed on to the union campaign. Like Students for a Democratic Society in the early 1960s, they are grappling with a paradox.

    On the one hand, they insist that corporations ineffectively run the government; on the other, they want more government regulation to control the corporations.

    By contrast, the Tea Party has a ready and plausible answer as to how to restore self-government and break the grip of the crony capitalism that ties the Obama administration to Wall Street. They want to drastically reduce the size of government.

    The protesters have no such view. Like their 1960s predecessors, they’re chasing their tails trying to imagine procedural reforms that will allow the demonstrators to govern themselves, while also curbing the power of those greedy capitalists.

    It’s too easy to dismiss the protesters, with their "Eat The Rich" signs, as just spoiled "trustafarian" misfits. They see themselves as the American equivalents of Egypt’s Tahrir Square protesters who brought down President Hosni Mubarak, but they haven’t noticed that it’s the Islamists who are inheriting the Arab Spring.

    Mocking them is easy; but here at home, the problem of crony capitalism is in fact eating away at our civic entrails. Leftists willing to grapple with this malignancy should be welcomed, if only for the potential seriousness of their efforts.

    As the more thoughtful 68ers eventually discovered, the idea of reforming government by expanding it is a circular dead end.

    This piece originally appeared at The Washington Examiner.

    Fred Siegel is a senior fellow at the Manhattan Institute and scholar in residence at St Francis College in Brooklyn.

  • Who Lost the Middle Class?

    Forty years from now, politicians, writers, and historians may struggle to understand how America, once the quintessential middle-class society, became as socially stratified as Europe or even Brazil. Should that dark scenario come to pass, they would do well to turn their attention first to New York City and New York State, which have been in the vanguard of middle-class decline.

    It was in mid-1960s New York—under the leadership of a Barack Obama precursor, Hollywood-handsome John Lindsay—that the country’s first top-bottom political coalition emerged. In 1965, Gotham had more manufacturing jobs than any other city in the country.programs failed. New York City responded by inflating its unionized public-sector workforce to incorporate minority workers.

    Higher taxes to pay for bigger government joined higher crime to produce a massive exodus of manufacturing and middle-class jobs. Over the last 45 years, New York has led the country in outmigration. A recent study by E. J. McMahon and Robert Scardamalia of the Empire Center for New York State Policy notes that since 1960, New York has lost 7.3 million residents to the rest of the country. For the last 20 years, “New York’s net population loss due to domestic migration has been the highest of any state as a percentage of population.”

    New York City, meanwhile, solidified its standing as the most unequal city in America. Twenty-five percent of New York was middle-class in 1970, according to a Brookings Institution study. By 2008, that figure had dropped to 16 percent, and the numbers have only plunged further since the financial crisis, with virtually all the new jobs in the city’s hourglass economy coming at either the high end or the low. Only high-end businesses can succeed in a local economy that has the nation’s highest taxes and highest cost of living—and even those businesses, in many cases, weathered the downturn only by living off the Fed’s policy of subsidizing banks. Despite the federal largesse, more of the city’s new jobs are in the low-wage hospitality and food-services industries than in the financial sector. The middle has lost its political voice in a city dominated by the politically wired wealthy and the public-sector unions that service the poor.

    New York is the picture of what the Tea Party fears for the country at large. In the 1970s, liberal mandarins seized the high ground of American institutions in the name of managing social, racial, gender, and environmental justice on behalf of the disadvantaged. Their job, as they saw it, was to protect minorities from the depredations of middle-class mores. In the wake of the Aquarian age, the U.S. developed the first mass upper-middle class in the history of the world. These well-to-do, often politically connected professionals—including the increasingly intertwined wealthy of Wall Street, Hollywood, and Silicon Valley—espoused what might be called gentry liberalism, a creed according to which the middle classes had to be punished for their racism, sexism, and excess consumption.

    And they have been punished—with job losses. These losses are the inevitable result of the costs of an ever-expanding, European-style public sector; environmental restrictions on manufacturing, mining, and forestry, which push high-paying jobs offshore; and illegal immigration, which reduces overall wage levels. At the same time, the decline in the quality of K–12 schools has undermined what was once a ladder of economic ascent. After completing high school today, students are likely to require a raft of remedial courses in college. Then, after college, many middle-class students graduate not with an education but with a credential—and a bag of enormous college loans that paid for the intermittent attention of a highly paid, tenured faculty.

    The private-sector middle class’s plight has been exacerbated by international competition and technological innovation, which have undermined job security, including for unionized manufacturing workers, who had enjoyed an unprecedented prosperity for about a quarter-century. Median household incomes have grown only marginally since the early 1970s, despite the mass movement of women into the workplace. Many dual-earner families have been caught in the two-income tax trap: on the one hand, they pay for services once performed by the homemaker; on the other, notes economist Todd Zywicki, they’re pushed into a higher tax bracket when the wife’s salary is added to the husband’s.

    Adding to the woes of the middle and lower classes is that their families are far less stable than they were a generation ago. The decline of marriage has been driven not only by changing mores but also by a decline in male employment. In 1970, only one of 14 working-age men was out of the workforce. Today, notes Nina Easton, one in five is either “collecting unemployment, in prison, on disability, operating in the underground economy, or getting by on the paychecks of wives or girlfriends or parents.” Whites who don’t attend college have out-of-wedlock birthrates approaching those that triggered Daniel Patrick Moynihan’s concerns about the black family in 1965. Today, four in ten American babies are born out of wedlock.

    During the current downturn, the black and Hispanic middle class has been particularly hard hit. From 2005 to 2009, according to a recent Pew survey, inflation-adjusted wealth fell by 66 percent among Hispanic households and by 53 percent among black households, compared with 16 percent among white households. These families worry with good reason that in the face of continuing high unemployment, they may fall out of the middle class. For the Obama administration and the public-sector unions, the solution to this slide is to force the nearly one in four employers that have contracts with the federal government to pay above-market wages. Here again, New York has been a pacesetter. Recently, public-sector unions and their allies tried to force a developer rebuilding a decayed Bronx armory to follow their wage and hiring guidelines; the deal collapsed, leaving one of the poorest sections of Gotham in the lurch.

    There’s a major difference, though, between New York and the country as a whole. The New York option—move somewhere else—doesn’t apply to private-sector middle-class workers fighting adverse conditions that exist throughout America. So they’ve exercised the classic democratic right of political action, organizing themselves to compete in elections. The Tea Party is the national voice of the private-sector middle class—despite the demonizations heaped upon it by public-policy elites whose own judgment and competence leave much to be desired.

    Middle-class decline should be front and center in 2012, which is shaping up as a firestorm of an election. It’s likely to be a bitter contest, in which the polarized class interests of those who identify with the growth of government and those who are being undermined by its expansion face off without the buffer of mutual goodwill. Liberals, unless they change their tune, will blame Tea Party “terrorists” for the tragedy of a fading middle class. They will continue to delude themselves into thinking, as Al Gore said in 2000, that their rivals represent “the powerful” and that they themselves act on behalf of “the people,” even though President Obama’s policies have poured money into Wall Street and the politically connected “green” businesses that form the upper half of his top-bottom electoral coalition. The question is whether the country will buy this line and, more broadly, whether it will follow the New York model. Should it do so, those future historians will no doubt look at the election of 2012 as the contest in which the middle class staggered past the point of no return.

    This piece originally appeared in The City Journal.

    Fred Siegel is a contributing editor of City Journal, a senior fellow at the Manhattan Institute, and a scholar in residence at St. Francis College in Brooklyn.

    Photo by SEIU International.

  • Goodbye, New York State Residents are Rushing for the Exits

    For more than 15 years, New York State has led the country in domestic outmigration: for every American who comes to New York, roughly two depart for other states. This outmigration slowed briefly following the onset of the Great Recession. But a new Marist poll released last week suggests that the rate is likely to increase: 36 percent of New Yorkers under 30 are planning to leave over the next five years. Why are all these people fleeing?

    For one thing, according to a recent survey in Chief Executive, New York State has the second-worst business climate in the country. (Only California ranks lower.) People go where the jobs are, so when a state repels businesses, it repels residents, too. It’s also telling that in the Marist poll, 62 percent of New Yorkers planning to leave cited economic factors—including cost of living (30 percent), taxes (19 percent), and the job environment (10 percent)—as the primary reason.

    In upstate New York, a big part of the problem is extraordinarily high property taxes. New York has the 15 highest-taxed counties in the country, including Nassau and Westchester, which rank first and second nationwide. Most of the property tax goes toward paying the state’s Medicaid bill—which is unlikely to diminish, since the state’s most powerful lobby, the political cartel created by the alliance of the hospital workers’ union and hospital management, has gone unchallenged by new governor Andrew Cuomo.

    New York City doesn’t suffer from outmigration to the extent that the state does; in fact, the city grew slightly over the past decade, thanks to immigration. And there’s more work in Gotham than in the state as a whole. The problem is that the kind of work available shows that the city accommodates new immigrants much better than it supports middle-class aspirations. A recent report from the Drum Major Institute helps make sense of the Marist numbers: “The two fastest-growing industries in New York are also the lowest paid. More than half of the city’s employment growth over the past year has been in retail, hospitality, and food services, all of which pay their workers less than half of the city’s average wage.” Worse yet, more than 80 percent of the new jobs are in the city’s five lowest-paying sectors. Parts of the country are seeing a revival of manufacturing—traditionally a source of upward mobility for immigrants—but not New York City, whose manufacturing continues to decline. The culprits here include the city’s zoning policies, business taxes, and declining physical infrastructure.

    Then there’s the cost of living in New York City. A 2009 report by the Center for an Urban Future found that “a New Yorker would have to make $123,322 a year to have the same standard of living as someone making $50,000 in Houston. In Manhattan, a $60,000 salary is equivalent to someone making $26,092 in Atlanta.” Even Queens, the report found, was the fifth most expensive urban area in the country.

    The implications of Gotham’s hourglass economy—with all the action on the top and bottom, and not much in the middle—are daunting. The Drum Major report, which noted that 31 percent of the adults employed in New York work at low-wage labor, came with a political agenda. The institute wants the city to subsidize new categories of work by expanding the scope of “living-wage” laws, which require higher pay than minimum-wage laws do, to all businesses that receive city funds or contracts. But that would mean higher taxes for the middle class and a further narrowing of the hourglass’s midsection.

    Governor Cuomo is calling for a property-tax cap, but without “mandate relief” for localities—for example, relaxing state laws that require localities to pay out exorbitant pension benefits. Mayor Michael Bloomberg has pledged not to increase local taxes, but even at their current level, city taxes and regulations will keep serving as an exit sign for aspiring twentysomething workers. In short, we can expect New York to lead the country in outmigration for the near future.

    This piece first appeared in the City Journal.

    Fred Siegel is a contributing editor of City Journal, a senior fellow at the Manhattan Institute, and a scholar in residence at St. Francis College in Brooklyn.

    Photo by Christopher Schoenbohm

  • Progressives Against Progress

    For the first two-thirds of the twentieth century, American liberals distinguished themselves from conservatives by what Lionel Trilling called “a spiritual orthodoxy of belief in progress.” Liberalism placed its hopes in human perfectibility. Regarding human nature as essentially both beneficent and malleable, liberals, like their socialist cousins, argued that with the aid of science and given the proper social and economic conditions, humanity could free itself from its cramped carapace of greed and distrust and enter a realm of true freedom and happiness. Conservatives, by contrast, clung to a tragic sense of man’s inherent limitations. While acknowledging the benefits of science, they argued that it could never fundamentally reform, let alone transcend, the human condition. Most problems don’t have a solution, the conservatives maintained; rather than attempting Promethean feats, man would do best to find a balanced place in the world.

    In the late 1960s, liberals appeared to have the better of the argument. Something approaching the realm of freedom seemed to have arrived. American workers, white and black, achieved hitherto unimagined levels of prosperity. In the nineteenth century, only utopian socialists had imagined that ordinary workers could achieve a degree of leisure; in the 1930s, radicals had insisted that prosperity was unattainable under American capitalism; yet these seemingly unreachable goals were achieved in the two decades after World War II.

    Why, then, did American liberalism, starting in the early 1970s, undergo a historic metanoia, dismissing the idea of progress just as progress was being won? Multiple political and economic forces paved liberalism’s path away from its mid-century optimism and toward an aristocratic outlook reminiscent of the Tory Radicalism of nineteenth-century Britain; but one of the most powerful was the rise of the modern environmental movement and its recurrent hysterias.

    If one were to pick a point at which liberalism’s extraordinary reversal began, it might be the celebration of the first Earth Day, in April 1970. Some 20 million Americans at 2,000 college campuses and 10,000 elementary and secondary schools took part in what was the largest nationwide demonstration ever held in the United States. The event brought together disparate conservationist, antinuclear, and back-to-the-land groups into what became the church of environmentalism, complete with warnings of hellfire and damnation. Senator Gaylord Nelson of Wisconsin, the founder of Earth Day, invoked “responsible scientists” to warn that “accelerating rates of air pollution could become so serious by the 1980s that many people may be forced on the worst days to wear breathing helmets to survive outdoors. It has also been predicted that in 20 years man will live in domed cities.”

    Thanks in part to Earth Day’s minions, progress, as liberals had once understood the term, started to be reviled as reactionary. In its place, Nature was totemized as the basis of the authenticity that technology and affluence had bleached out of existence. It was only by rolling in the mud of primitive practices that modern man could remove the stain of sinful science and materialism. In the words of Joni Mitchell’s celebrated song “Woodstock”: “We are stardust / We are golden / And we got to get ourselves back to the garden.”

    In his 1973 book The Death of Progress, Bernard James laid out an argument already popularized in such bestsellers as Charles Reich’s The Greening of America and William Irwin Thompson’s At the Edge of History. “Progress seems to have become a lethal idée fixe, irreversibly destroying the very planet it depends upon to survive,” wrote James. Like Reich, James criticized both the “George Babbitt” and “John Dewey” versions of “progress culture”—that is, visions of progress based on rising material attainment or on educational opportunities and upward mobility. “Progress ideology,” he insisted, “whether preached by New Deal Liberals, conservative Western industrialists or Soviet Zealots,” always led in the same direction: environmental apocalypse. Liberalism, which had once viewed men and women as capable of shaping their own destinies, now saw humanity in the grip of vast ecological forces that could be tamed only by extreme measures to reverse the damages that industrial capitalism had inflicted on Mother Earth. It had become progressive to reject progress.

    Rejected as well was the science that led to progress. In 1970, the Franco-American environmentalist René Dubos described what was quickly becoming a liberal consensus: “Most would agree that science and technology are responsible for some of our worst nightmares and have made our societies so complex as to be almost unmanageable.” The same distrust of science was one reason that British author Francis Wheen can describe the 1970s as “the golden age of paranoia.” Where American consumers had once felt confidence in food and drug laws that protected them from dirt and germs, a series of food scares involving additives made many view science, not nature, as the real threat to public health. Similarly, the sensational impact of the feminist book Our Bodies, Ourselves—which depicted doctors as a danger to women’s well-being, while arguing, without qualifications, for natural childbirth—obscured the extraordinary safety gains that had made death during childbirth a rarity in developed nations.

    Crankery, in short, became respectable. In 1972, Sir John Maddox, editor of the British journal Nature, noted that though it had once been usual to see maniacs wearing sandwich boards that proclaimed the imminent end of the Earth, they had been replaced by a growing number of frenzied activists and politicized scientists making precisely the same claim. In the years since then, liberalism has seen recurring waves of such end-of-days hysteria. These waves have shared not only a common pattern but often the same cast of characters. Strangely, the promised despoliations are most likely to be presented as imminent when Republicans are in the White House. In each case, liberals have argued that the threat of catastrophe can be averted only through drastic actions in which the ordinary political mechanisms of democracy are suspended and power is turned over to a body of experts and supermen.

    Back in the early 1970s, it was overpopulation that was about to destroy the Earth. In his 1968 book The Population Bomb, Paul Ehrlich, who has been involved in all three waves, warned that “the battle to feed all of humanity is over” on our crowded planet. He predicted mass starvation and called for compulsory sterilization to curb population growth, even comparing unplanned births with cancer: “A cancer is an uncontrolled multiplication of cells; the population explosion is an uncontrolled multiplication of people.” An advocate of abortion on demand, Ehrlich wanted to ban photos of large, happy families from newspapers and magazines, and he called for new, heavy taxes on baby carriages and the like. He proposed a federal Department of Population and Environment that would regulate both procreation and the economy. But the population bomb, fear of which peaked during Richard Nixon’s presidency, never detonated. Population in much of the world actually declined in the 1970s, and the green revolution, based on biologically modified foods, produced a sharp increase in crop productivity.

    In the 1980s, the prophets of doom found another theme: the imminent danger of nuclear winter, the potential end of life on Earth resulting from a Soviet-American nuclear war. Even a limited nuclear exchange, argued politicized scientists like Ehrlich and Carl Sagan, would release enough soot and dust into the atmosphere to block the sun’s warming rays, producing drastic drops in temperature. Skeptics, such as Russell Seitz, acknowledged that even with the new, smaller warheads, a nuclear exchange would have fearsome consequences, but argued effectively that the dangers were dramatically exaggerated. The nuke scare nevertheless received major backing from the liberal press. Nuclear-winter doomsayers placed their hopes, variously, in an unverifiable nuclear-weapons “freeze,” American unilateral disarmament, or assigning control of nuclear weapons to international bodies. Back in the real world, nuclear fears eventually faded with Ronald Reagan’s Cold War successes.

    The third wave, which has been building for decades, is the campaign against global warming. The global-warming argument relied on the claim, effectively promoted by former vice president Al Gore, that the rapid growth of carbon dioxide in the atmosphere was producing an unprecedented rise in temperatures. This rise was summarized in the now-notorious “hockey stick” graph, which supposedly showed that temperatures had been steady from roughly ad 1000 to 1900 but had sharply increased from 1900 on, thanks to industrialization. Brandishing the graph, the UN’s Intergovernmental Panel on Climate Change predicted that the first decade of the twenty-first century would be even warmer. As it turned out, temperatures were essentially flat, and the entire global-warming argument came under increasing scrutiny. Skeptics pointed out that temperatures had repeatedly risen and fallen since ad 1000, describing, for instance, a “little ice age” between 1500 and 1850. The global-warming panic cooled further after a series of e-mails from East Anglia University’s Climatic Research Unit, showing apparent collusion among scientists to exaggerate warming data and repress contradictory information, was leaked.

    As with the previous waves, politicized science played on liberal fears of progress: for Gore and his allies at the UN, only a global command-and-control economy that kept growth in check could stave off imminent catastrophe. The anti-progress mind-set was by then familiar ground for liberals. Back in the 1970s, environmentalist E. J. Mishan had proposed dramatic solutions to the growth dilemma. He suggested banning all international air travel so that only those with the time and money could get to the choice spots—thus reintroducing, in effect, the class system. Should this prove too radical, Mishan proposed banning air travel “to a wide variety of mountain, lake and coastal resorts, and to a selection of some islands from the many scattered about the globe; and within such areas also to abolish all motorised traffic.” Echoing John Stuart Mill’s mid-nineteenth-century call for a “stationary state” without economic growth, Mishan argued that “regions may be set aside for the true nature lover who is willing to make his pilgrimage by boat and willing leisurely to explore islands, valleys, bays, woodlands, on foot or on horseback.”

    As such proposals indicate, American liberalism has remarkably come to resemble nineteenth-century British Tory Radicalism, an aristocratic sensibility that combined strong support for centralized monarchical power with a paternalistic concern for the poor. Its enemies were the middle classes and the aesthetic ugliness it associated with an industrial economy powered by bourgeois energies. For instance, John Ruskin, a leading nineteenth-century Tory Radical and a proponent of handicrafts, declaimed against “ilth,” a negative version of wealth produced by manufacturing.

    Like the Tory Radicals, today’s liberal gentry see the untamed middle classes as the true enemy. “Environmentalism offered the extraordinary opportunity to combine the qualities of virtue and selfishness,” wrote William Tucker in a groundbreaking 1977 Harper’s article on the opposition to construction of the Storm King power plant along New York’s Hudson River. Tucker described the extraordinary sight of a fleet of yachts—including one piloted by the old Stalinist singer Pete Seeger—sailing up and down the Hudson in protest. What Tucker tellingly described as the environmentalists’ “aristocratic” vision called for a stratified, terraced society in which the knowing ones would order society for the rest of us. Touring American campuses in the mid-1970s, Norman Macrae of The Economist was shocked “to hear so many supposedly left-wing young Americans who still thought they were expressing an entirely new and progressive philosophy as they mouthed the same prejudices as Trollope’s 19th century Tory squires: attacking any further expansion of industry and commerce as impossibly vulgar, because ecologically unfair to their pheasants and wild ducks.”

    Neither the failure of the environmental apocalypse to arrive nor the steady improvement in environmental conditions over the last 40 years has dampened the ardor of those eager to make hair shirts for others to wear. The call for political coercion as a path back to Ruskin’s and Mishan’s small-is-beautiful world is still with us. Radical environmentalists’ Tory disdain for democracy and for the habits of their inferiors remains undiminished. True to its late-1960s origins, political environmentalism in America gravitates toward both bureaucrats and hippies: toward a global, big-brother government that will keep the middle classes in line and toward a back-to-the-earth, peasantlike localism, imposed on others but presenting no threat to the elites’ comfortable lives. How ironic that these gentry liberals—progressives against progress—turn out to resemble nothing so much as nineteenth-century conservatives.

    This essay originally appeared in City Journal.

    Fred Siegel is a contributing editor of City Journal, a senior fellow at the Manhattan Institute, and a scholar in residence at St. Francis College in Brooklyn.

    Photo: CarbonNYC

  • King Bloomberg: New York City Mayor Run Amok

    When Mayor Bloomberg deployed his vast personal and political power to overturn the term limits law, he began to demystify the public relations image he had purchased at considerable expense.

    It was only then that New Yorkers began to recognize the danger of making Gotham’s wealthiest man its chief executive. That recognition is the reason his approval rating slipped by nine points in the latest Marist poll. The public chose a mayor; they didn’t expect an elected monarch.

    The latest furor over his unaccountable power is his unlawful refusal to send out property tax rebate checks that have been due since Oct. 1. “We have no money . .. . this is not a legal issue, it’s a fiscal issue,” he says, an argument that boils down to “I know better.”

    But the cupboards are bare because Bloomberg has emptied them for his own political ambitions. While the stock market was heading south, Bloomberg, one eye on a potential presidential run, raised his approval numbers by expanding the city payroll. Since 2004, he has hired at least 40,000 new city employees, while bringing his own mayoral staff to record levels.

    Similarly, to help clear the way for a third term, Bloomberg has been shoveling out considerable money in the form of newly negotiated union contracts with the Policeman’s Benevolent Association, DC37 and the Corrections Officers that run above the rate of inflation. If it wasn’t above an elegant gentleman such as the mayor to stoop to such measures, you might call this what Tammany Hall did: vote buying. Bloomberg is only too happy to raise property taxes on the unorganized middle class if that’s what it takes to keep the power of the city’s politically well-organized unions in his corner or on the sidelines come election time.

    *

    People assume that because of his successful career in business, Bloomberg is a manager and not a politician. That gets things exactly backwards.

    As mayor, he’s been little interested in management. When the Staten Island Ferry crashed, killing 11 people, the politically well-connected Transportation Commissioner was spared a reprimand, let alone fired. When the mayor was informed that a set of subway switches had burned out and couldn’t be replaced for months or even years, guaranteeing massive delays, Bloomberg nonchalantly said fine, that’s the way it will have to be. He reversed himself only after howls of public protest. When a blackout produced by Con Ed incompetence left more than 100,000 Queens residents without electricity for a week, Manager Mike declined even to visit the affected areas until the press began to hound him. Even then he declared, “I think [Con Ed CEO] Kevin Burke deserves a thank you from this city. He’s worked as hard as he can.” It took 13 construction-related deaths before the mayor was moved to replace the City Building Commissioner.

    Bloomberg touts himself as a CEO who can negotiate the best deal for the city. But part of running the city includes bargaining with people he can neither give orders to, nor buy like the City Council. That’s made Bloomberg a singular failure in Albany, where the mayor tried to steamroll his ill-conceived congestion pricing plan through the Assembly. The plan, which seemed designed as much to provide Bloomberg with a green issue for his presidential campaign as to decongest Manhattan, met with a skeptical response. Bloomberg’s reaction was to blame his defeat on “gutless” opponents. While arguing over whether to reauthorize Off Track Betting, the Mayor clashed with the normally mild-mannered Governor Paterson, whose support is essential for the city; Paterson came away describing the mayor to the Post’s Fred Dicker as “a nasty, untrustworthy, tantrum-prone liar who has little use for average New Yorkers.”

    While Bloomberg has been little interested in management, he has been superbly self-promoting. Early on he sold credulous journalists on the idea that he was a post-partisan mayor, a man who rose above conventional party politics. This is in a sense true. He has been only too willing to buy support from either of the major parties to achieve his own ends. A self-described “liberal Democrat,” he shipped out with the Republicans under a flag of convenience in order to run for mayor in 2001. He then abandoned the GOP to become an independent, and his staff is now exploring the chances of his running as a Democrat for re-election in 2009.

    But talk of party labels misses the point. Bloomberg runs his own personalized political party. He is not so much bi- or non-partisan as his own political pole, one that offers Michael Bloomberg as the sole program.

    *

    The traditional danger with party candidates is that they can be bought up by special interest groups. Bloomberg reverses the old game; he’s won office by buying up the interest groups.

    When in office, Bloomberg – like most mayors – used public funds to keep the organized interests happy while putting the city at fiscal risk. But Bloomberg adds a twist, by dipping into his own vast treasury to buy support through “anonymous” gifts to non-profit institutions.

    For years, our so-called “business savvy” mayor has only one strategy: Spend. In 2007, the city took in 41% more in taxes than it did in 2000. And yet that wasn’t enough to cover Bloomberg’s gargantuan vote-buying spree. During Bloomberg’s first six years as mayor, notes The Manhattan Institute’s Nicole Gelinas, city spending shot up about 50% – from $41 to $62 billion. That meant that even in the midst of an unprecedented boom, Bloomberg’s genius required the city to incur record levels of debt.

    One method of buying support has come in the form of lavish subsidies to his wealthy developer friends. Early in his administration, when Bloomberg was still presenting himself as a reformer, he promised to end the practice of “bribing companies” to stay in New York. Yet that is exactly what he did in the case of developer Jerry Speyer, part owner of Yankees, who is building the New Yankee Stadium, and Fred Wilpon, owner of the Mets. Between direct and indirect subsidies the city is committed to spend nearly a billion dollars on the two very profitable teams in what amounts to a transfer of money from working stiffs into the pockets of the wealthiest New Yorkers.

    The Industrial Commercial Incentive Program, meanwhile, designed to retain business that might flee the city’s onerous taxes, has doubled under Bloomberg. Today roughly 6,000 business received a half a billion dollars in the kind of rebate relief that the mayor now wants to deny to middle class homeowners.

    For those who object to his tax strategy, Bloomberg always has the same response: “we’re just not going to return to the dark old days of the ’70s, when service cuts all but destroyed our quality of life.”

    It’s not clear if this argument is willfully ill-informed or merely self-serving evasion. But it was John Lindsay’s tax hikes in the years leading up to the fiscal crisis that sent the city spiraling down into effective bankruptcy. The upshot was that in the 1970s, the city work force faced major layoffs, which only deepened the downturn. We’re again headed down that path. Even as Bloomberg hikes the wages of senior workers who are crucial to the leadership of their respective unions, and hence Bloomberg’s royal re-election bid, he’s threatening sizeable layoffs for the newest hires.

    The city was only rescued from the Lindsay/Beame policies when the stock market revived in the early 1980s. That was the beginning of the long boom built on highly leveraged financial firms that has now come to a definitive end.

    Bloomberg is so committed to his ideal of the “luxury city” run by and for the wealthy and organized interest groups that the Wall Street collapse took him completely by surprise. Like Lindsay’s successor, the hapless Abe Beame, Bloomberg seems not to understand what’s happening around him. His budget projections are based on the notion that the future economic path will be shaped like a U, but it’s more likely to look like an L.

    New York, which became ever more dependent on Wall Street’s high rollers to create each new job a thousand-dollar meal at a time, is going to have to rethink its economic future. Wall Street as we knew it is never coming back. The high taxes and over-regulation Bloomberg prefers pushes out the small- to medium-size businesses that will have to drive much of our economic growth in the future.

    *

    We’re likely to look back on the Bloomberg years as a time of lost opportunities to build on the gains of the Giuliani years. Between 2003 and 2007, the vast flow of revenues produced a boom that gave the city a chance to dig out from under its massive debt and restructure its labor contracts. Instead, Bloomberg’s agenda added costs that will plague the city long into the future.

    There is no better monument to Bloomberg failures as a CEO – of his arrogant inability to negotiate, of his purchased reputation – than with New York’s education system.

    Bloomberg, who has had whole subway cards plastered with ads and full-page spreads in the newspapers touting his educational “achievements,” has done a far better job of promoting himself than improving the schools. He has nearly doubled the education budget. Yet his “reforms” have created considerable chaos in the schools, which have now been re-organized three times to little educational effect. What the changes haven’t produced, Bloomberg’s vast PR operation notwithstanding, is improvement on the national education tests. His education legacy to date: the debts that will have to borne by a work force ill-prepared for the economy to come.

    Bloomberg says he’s beyond politics. He’s right. We’re living in his monarchy, subjects to his unwavering faith in himself.

    This article appeared originally in the NY Post.

    Fred Siegel, senior fellow of the Manhattan Institute’s Center for Civic Innovation, is writing a book on the making of modern liberalism.

  • Rebuilding the Idea of the City: The Present Crisis in Perspective

    New York long was a product of the harbor economy. Before there was a Times Square or a Grand Central Station, Lower Manhattan, then ringed with docks, was oriented to the railroads and factories of the Jersey coast to its west and the merchants and manufacturers of Brooklyn across the East River. The decline of Lower Manhattan as an economic engine is in large measure a reflection of the fall of that harbor economy as first Manhattan and then its partners in Brooklyn and Jersey City de-industrialized.

    Still, there’s cause for optimism. In the last two decades, the old harbor economy of trade and industry, severed by the collapse of manufacturing, has been re-knit on the basis of the service economy. By the middle of the 1970s, even as New York was at its nadir, the growth in service sector jobs began to exceed the decline in manufacturing jobs. And despite the impact of 9/11, New York continues to attract the key element of the modern economy, talented people; college applications are up for next year.

    One sign of New York’s vitality is that so many places want to be considered the city’s ‘sixth borough’ — Fairfield County, Conn., Jersey City and even Philadelphia. This dispersion has brought both opportunities and challenges to New York itself.

    My optimism has been tempered by two questions and a frightening possibility. First, attempts to accommodate all the interest groups has slowed the entire rebuilding of Lower Manhattan. Second, the Bloomberg administration — for all its posturing about rebuilding downtown — continues to focus as well on expanding the far west side of Manhattan and downtown Brooklyn as well as various new stadia. With a recession already underway, one that is centered in part on the critical financial industry, it would seem more prudent for the city to narrow its priorities.

    Perhaps a better focus would be to seek how to revive the harbor economy first envisioned by ironmaster and former Manhattan mayor Abraham Hewitt, the son-in law of Peter Cooper, and the corporate lawyer and anti-Tammany reformer Andrew Haslett Green. Their vision was one of a vast united city united by new bridges across the East River as well as a rebuilding program for the city’s crumbling docks, streets and transit facilities. In the late 19th Century, basic infrastructure and opportunity were inextricably intertwined.

    The upshot was extraordinary. New York became “the engineers’ city.” New York City bonds were issued to build bridges across the Harlem and East Rivers, and tunnels under the Hudson connecting New York to New Jersey as well as the subway system that became the city’s circulatory system for labor. These tied Brooklyn and Lower Manhattan together into a single economic unit. With this New York became not only the largest city in the U.S. but its busiest port, a paradise for small manufacturers and a headquarters city for national corporations.

    New York’s consolidation also promoted a rapid expansion of the urban area. Even at a time when centralization seemed to be in the saddle, the wildly crowded and extraordinarily expensive downtown began to shed some of its functions. Given the extraordinary cost of land, those who stayed increasingly worked in skyscrapers like the Woolworth Building, which opened in 1913.

    In the 1920s, even as New York surpassed London as the world’s financial center — a designation that may not be reversing again — the functions of the downtown were narrowing. The opening of Penn Station in 1910 gave Long Island and New Jersey easy access to midtown. It helped set off a real estate boom in Times Square, which was intensified three years later when Grand Central Station opened. The Holland Tunnel followed in 1927. Not surprisingly in the 1920s most new construction was in midtown, a trend that continued even into the depression years when Rockefeller Center was built, with midtown beginning to eclipse Lower Manhattan.

    While midtown grew, the port thrived; in the 1920s half of U.S. export and import traffic moved through the harbor. Eighty-five percent of the traffic landed on the New York side and then had to be moved across the Hudson on “lighters.” This was the so-called “Manhattan Transfer.” The problems of cross-harbor traffic were magnified by the control exerted on both sides of the harbor by the local political machines.

    As a response harbor congestion during World War I — at one point trains were literally backed up to Pittsburgh — the new bi-state Port of New York Authority turned very effectively to constructing the Lincoln Tunnel and the Outerbridge, Goethals, George Washington and Verrazano bridges linking New York to New Jersey by car and truck. By 1950 New York had it all, including a vast and varied manufacturing sector, the largest port and undisputed dominion over the financial, cultural and media life of the nation.

    What Went Wrong and Right
    In the early 1970s the harbor economy fell apart. Even though the financial sector grew, the fastest growth was in government workers engaged not in basic city services but rather in social services and make-work health care jobs. Between 1960 and 1975 spending tripled in constant dollars, while the city population was declining slightly. The money went to public assistance, health social services and housing. Redistribution rose from 26 percent of NYC expenditures in 1961 to 36 percent in 1969 and has stayed at about one-third.

    This change in economic character transformed New York from a city that fared well in recessions to one more susceptible to wide swings in employment and growth. Taxes rose, city services deteriorated and businesses fled.

    The city, of course, is in much better shape today, largely due to the reforms of mayors Koch and Giuliani and some favorable trends in the global economy. New York is clearly a better place to live and work than it was just two decades ago.

    In part, the decline of manufacturing finally began to pay off for New York. De-industrialization, a disaster for some sections of the city, had been an opportunity for others to upgrade their quality of life by turning manufacturing lofts into living spaces. Old manufacturing districts like SoHo became “funky.” First, they attracted artists who were soon followed by Wall Street yuppies. New York became a magnet for twenty-somethings, a dating bar for young college graduates. Brooklyn also is bustling with business and shopping districts, with a wave of gentrification beginning in the brownstone neighborhoods of Park Slope, Carroll Gardens and Fort Greene.

    “The restoration of the brownstone belt,” explained Carl Weisbrod of the Downtown Alliance, “was a crucial element in the revival of Lower Manhattan. Just as at the turn of the century, Brooklyn’s tony neighborhoods were once again the neighborhood of choice for many location decision-makers, senior managers in investment banks, partners in law firms, and bank executives.”

    With the nexus between Manhattan and Brooklyn restored — intertwined by the best mass transit connections anywhere in the county — the chance to reinvent the great harbor economy is better now than any time in fifty years. Instead of turning its back on the harbor that created and sustained the city or centuries, the future depends, in large part on n turning the waterfront into an asset.

    It’s beauty and recreational possibilities can make downtown into an attractive live-work location. And then there are the extraordinary possibilities presented by 172 acre Governors Island, a five-minute ferry ride from either Lower Manhattan or Brooklyn’s Red Hook, Governors Island, with its golf course, playing fields and historic buildings.

    The future of the city once again will depend on capitalizing on the waterfront. Born a harbor city, New York can be reborn once again as a city the lives and thrives on its waterways — if the city can decide that this again represents its priority for the future. We will probably have to wait for a Mayor with a name other than Bloomberg for that process to start.

    Fred Siegel is a Professor of History at Cooper Union in New York.