NYC that jumped in to help NYC by

   NYC still resisted changes and
MAC was unable to fully market its bonds designed to allow City to finance day
to day operations and long-term needs. To balance budget, MAC demanded  partial wage freeze and deferral to be
imposed.

              In simpler terms, Ford meant that
the New York City’s leadership should be responsible. Nevertheless, concerning
administration, the President changed his mind. This is because, within six
months, the New York City had “began to help themselves.” (Loverd, 257). For
instance, it was New York State that jumped in to help NYC by establishing the
MAC (Municipal Assistance Corporation) in June that acted as an interim
borrowing agency for the city. The agency succeeded in restructuring the city’s
short-term role into longer-term MAC bonds via borrowing up to $3 billion.
Together with other efforts, the New York City was able to soften the heart of
Ford who argued that he would “veto any bill which had as its central purpose a
Federal bailout of New York City to present a default.” (Loverd, 260) Ford
commended the efforts done by the New York City calling it a “realistic
program.” Additionally, the president was pressed by political pressure, which
came from state-local participants. There were precise causes of the positive
response given by the president. This is because “times” were changing. The
coming election made the president change his mind since his inclination to
veto any bailout law would “represent the “big mistake’ that could cost him the
election in his right.” (Loverd, 262)

                     President Gerald Ford also cultivated the New
York City’s Fiscal Crisis. In, Presidential Decision Making during the 1975 New York City
Financial Crisis: A Conceptual Analysis by Richard A. Loverd we learn as to why
he flips flops and issues two contradicting statements in merely six months’
time regarding the crisis from Nay to Yay in 1975. In May 1975, he aggressively admitted that no
federal aid would be dispensed to the New York City to mitigate its fiscal
woes. Concerning ethics, the president disapproved the need to fund the New
York City since it was against his philosophy (as to how New York City was run).
It can be related that the President was aware of how poorly the New York City’s
books were managed. Therefore, giving the loan meant rewarding irresponsible
practices with the federal money. In fact, he said that, “it was not right and
unfair” (Loverd, 256) to other cities in the nation.  It can be found in his presidential files him
saying that New York City” Must do what’s right. Bite bullet” (Loverd, 256) as it was unfair to burden the
taxpayers with huge loans due to irresponsible leaders. As the time he also
feared that if the federal government got involved in bailing out a city
financially it would set a bad precedent. As It was unethical to engage in such
funding because “the extent to which the federal government can redistribute
revenues among the states is limited by standards of equity.” (Lovered 256)

                       While NYC was able to
sell debt before at higher interest rate than other similar cities and states
until February of 1975 when sale of tax anticipation notes failed. In the
online article, Lessons From the Great
Default Crisis of 1975, by Kim Phillips-Fein we learn how the “The city
tried to borrow to cover a widening budget gap, but by 1975 the major banks
refused to market its debt.” By march the underwriters grew more resistant to
selling NYC debt for various reasons such as ,NYC had not responded adequately
to a worsening situation and banks were worried that they would be liable for
losses on securities sold to public. Fein further sates that the “trustees for the teachers’ union
pension fund had voted against using the pension money of their members to
purchase the city’s bonds, even though the city needed this money to pay notes
coming due.” Causing the city lawyers
to draw up a bankruptcy petition overnight, which caused the following morning
the Dow Jones to fall, gold price shot up and the city note holders lined up in
front of the Municipal Building in hopes of redeeming their bonds.

           According to Bill Keller, the following
social and political causes were the under lying factors that in part had
caused budget deficits to accumulate under Mayor Robert F. Wagner between 1962
– 1965. During this period, the mayor had increased the municipal expenditures
to maintain political support. Municipal union’s power was increasing, and they
resorted to strikes to gain wage increases. One of the first major riots in
Harlem in 1964, mentioned above led to increased social spending.  Rent control had further slowed growth in property
tax collections.  Keller also points out
that problem of poor budget control continued with Mayor John Lindsay
(1966-74). During his time in office, money was borrowed to pay for the
expanded city service. He had “granted very generous contracts to public
employee unions to avoid labor unrest. Wanted union support in run for
President.” (Keller) Furthermore, issues that contributed were the new highways
that helped lead to the development of new suburbs on LI and New Jersey were
among factors that led mass migration of middle class out of the city, putting
a significant dent on the tax base. Some of the fiscal or Budgetary causes that
brought the situation is that the New York City embraced an optimistic forecast
of revenues. Moreover, it underfunded pension on top of applying funds in
raised for capital costs in operating costs. Also, the fact that the “Heavy use
of revenue anticipation notes, including notes for revenues that did not
materialize (e.g. revenues were anticipated from property taxes to be paid on
City-owned land which is not taxable)” (Keller)

          In, Bedford-Stuyvesant: Giving a Damn
About Hell, from Robert Kennedy: A Memoir, by Jack Newfield, he talks about
various problems the blacks faced economically. One being, the blacks who
wanted to move out of the ghettos into the white neighborhoods, as Baldwin
tries to explain in his writing, experienced the effects of white flight and
blockbusting. Bedford-Stuyvesant neighborhood in
Brooklyn once pre-dominantly white, was beginning to see the change in the
neighborhood. White flight was basically which meant whites leaving the
neighborhood such as Bedford-Stuyvesant due to real estate agents blockbusting
and speculation. Blockbusting was the real estate agents that go to the white
home owners and tell that that a black family will be moving in the neighborhood.
And that they should sell their property now as they can still get decent
money, where once the black moves in they will lose money which caused the
whites to flee. Speculators made a lot of money from each property they had
purchased and later sold. For example, in the 1960’s speculators who would’ve
acquired “brownstones”10 (Newfield, 800) for $12,000 was sold to
many negro families who paid as much as $20,000. The real estate agents played
on the white home owners fears of losing their savings or home investment and
thus promoted false economic crisis. “At the turn of the century
Bedford-Stuyvesant was an elite, white, middle-class community.” (Newfield, 800) All this changed a lot after the community was hit with
the second wave during World War II. The whites had mostly held the Brooklyn
Navy Yard jobs and neighborhood pretty much hit rock bottom as the yard closed
down. “The history of race relations in America changed on July 16, 1964.”
(Newfield, 801) James Powell, a fifteen-year-old black boy was shot on that day
by an off duty, white police officer on the streets of Manhattan. This death
“signaled the end of the civil rights movement and the beginning of the long, hot
summers.” (Newfield, 800) As stated in the text, rioting had broken out on the
streets of Harlem which led to looting, vandalism, and violence. This response
was the result of all the years of economic oppression and frustration of the
black community. 

             In Fifth Avenue, Uptown by James Baldwin
we read about an African American writer’s opinion regarding the projects in
Harlem, New York during the 1960s. He talks as to how the community was so well
connected, and the grocery store gave “credit”4 (Baldwin, 742) to those that
lived on paycheck to paycheck. In other words, one can feed their family due to
the grocer’s courtesy and paying for the food once their check came in. It also
states that the projects were hated in Harlem”, almost as much as the police,
and this is saying a great deal.” (Baldwin, 745) The reasons being, as they
both revealed”, unbearably the real attitude of the white world.” (Baldwin,
745) He says that the blacks don’t escape the Jim Crow”, they do not move to
New York, they move to Harlem.” (Baldwin, 748) These ghettos, a part of a city
where a minority or group lives in, particularly because of social and or
economic pressure is the proof of that. Baldwin is trying to say that the
blacks are placed in these ghettos were victimized economically in variety of
ways from the rent to the prices of Harlem goods compared with, to the “quality
with those downtown.” (Baldwin, 745) He also says that those who managed to
“get off this block have only got as far as a more respectable ghetto.”
(Baldwin, 745) Meaning they encounter the same restrictions but now in the form
of a home owner, that might have paid extra for their property due to block
busting. Another example that they faced with hardship is in part to the
Administration of the projects, where the renter must inform salary raises to
the management, so they can increase your rent. It didn’t stop there, as the
management can ask you who is
staying in your apartment and even ask you to leave at their discretion. This
further makes him feel being managed by white people, and he sees it as a
blanket of discrimination into the segregated, where one paying rent shouldn’t
have to deal with such drama but then yet again where can they go?

        
    To better understand why the New York City
Fiscal Crisis came about in 1975, we will have to go back in to the under lying
causes or factors back to the late 1950’s. Hilary Ballon writes about the Title I of the U.S. Housing Act of 1949
which provided the great federal subsidies for slum areas to be cleared, in Robert Moses and Urban Renewal, and
order the reconstruction by private developers. The Title I was such a big hit
that initial funding helped “set 838 projects in motion. Moses was the
pacesetter and experimenter-in-chief.” (Ballon, 94) While others were struck by
such legislation Moses was swinging left and right and scoring the funding for
his slum clearance projects. During the span of twelve years under Title I,”
the city had received $65.8 million…obtained planning grants for thirty-two
urban renewal projects.”(Ballon, 94) Moses three-part plan strategy consisting
of building housing for the middle class, expanding higher education, and
promote the city’s cultural superiority. This strategy did not go so well with
less fortunate as “the losers were those displaced from tenement districts: the
poor, Puerto Ricans and blacks, and small-business owners.” (Ballon, 96) I
believe Moses’s rapid slum clearing are in some way shape or form had impacted
the New York City’s growth and the readings to follow are crucial examples of
that.

Urban
Crisis of post-WWII in New York City can be described as number of
interconnected factors which I believe led to the fiscal Crisis of 1975 . Those
problems being but not limited to race, gender, class, history, and the
economy.  In this case the public housing
being built to replace the old overcrowded tenements and even at times over the
slum cleared land. In other words, I would say that the relocation of the
middle working class often referred as white flight, from the city into the
suburbs put a dent on the city’s tax base which effected the services offered
by the city. Also, the isolation of black minority and white majority. We will
read of such factors that played a role in the urban crisis in New York City
through various readings that will help us understand how these urban crisis
factors contributed to the New York City Fiscal Crisis of 1975. The crisis
which was Fiscal an Budgetary, caused and propagated by the lack of support
from the Federal Government. Therefore, the following discussion will indulge
in reviewing the causes of the crisis taking into consideration how such cities
such as the New York City could be susceptible to such crisis.