Is it me or is New York undergoing a slow but deepening economic crisis, one defined by stagnation rather than depression? More troubling, is this being mirrored around the country?
Sure, at first glance – and what’s promoted by the fawning media — everything seems cool, on track. The New York Times comes out every day; Wall Street financial indicators keep going up; those in the know and with money flock to the latest “in” restaurant; people shop, kids go to school and the subway works – more-or-less. It’s the city of Wall Street, big spenders and an endless stream of tourists. It’s Trump town even though the Donald fled the city to the White House and his country-club estates.
I regularly ride the subways throughout Manhatten, often visiting family, friends and events in non-hip parts of Brooklyn and Queens, occasionally to the Bronx and (via the ferry) to Statin Island. It’s a big city, bigger than any time in its 400-year history and the 8.5 million people who call it home.
Henry Hudson first came upon the New World harbor in 1609 and celebrated his arrival with the local indigenous people, the Lenape, on an island named Manahachtanienk, meaning “the island where we all got drunk.” From the Dutch to the British to, finally, generations of Americans, the city has been repeatedly colonized and renewed. Now, four centuries later, it is the center of global, 21stcentury postmodern life, yet faces a mounting homeless crisis.
Riding the city’s subways and walking the streets, I’m often struck by what seems to be a significant increase in the number of hustlers panhandling for dimes, dollars and even food. The police occasionally bust some, but most hustle on. Some are creative, singing ethnic tunes, strumming guitars, pounding drums, dancing and juggling their way from car to car. Many others appear as bottom-feeders, lost souls poorly trained at a 21st-century version of a Dickens beggar’s academy. Sadly, the next person’s tale of woe is an all-too-often repeated version of the story told by the person who preceded him (and occasionally her) – they just lost their job, their kids are hungry, they can’t pay the rent, they are veterans suffering PTSD.
The city has a growing number of homeless and destitute people, those who’ve truly fallen through the cracks. Most troubling, the city’s – and nation’s – well-intentioned safety net is fraying big time. While huge swaths of Manhatten are swept clean of street urchins (e.g., Financial District, Midtown, Upper Eastside and Upper Westside), the outer-boroughs, especially Brooklyn and the Bronx, have become their last refuge of the wayward.
The Coalition for the Homeless finds that in March 2017 there were 61,936 homeless people in the city, reaching the highest number since the Great Depression of the 1930s. The total includes 15,525 homeless families with 23,445 children who sleep each night in the city’s municipal shelter system. In simplest numerical terms, 61,936 homeless people in a city of 8.5 million inhabitants is a minuscule segment, small potatoes. But in terms of income inequality, they are the proverbial canaries in the coalmine.
The increase of homeless people reflects the deepening income crisis that is squeezing the poor and middleclass from the city. The lack of affordable housing is leading to mounting evictions; in turn, it drives overcrowded housing, the doubling-up among family and friends. The housing crisis fosters increased domestic violence, job loss, mental illness, addiction disorders and other problems.
And who are the principle victims of the city’s deepening crisis? “African-American and Latino New Yorkers are disproportionately affected by homelessness,” reports the Coalition for the Homeless. It notes that “approximately 58 percent of New York City homeless shelter residents are African-American, 31 percent are Latino, 7 percent are white, less than 1 percent are Asian-American ….”
Does the apparent increasing number of homeless, hustlers and sad souls wandering the subways, city streets and shelters foretell, foreshadow, a social crisis like that which occurred during the mid-1970s? Or possibly worse?
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“Ford to City: Drop Dead”; this was the New York Daily News famous headline of October 30, 1975. Abe Beame was mayor and was seriously considered declaring the bankrupt; Pres. Gerald Ford refused to come to the city’s aid.
America’s postwar recovery plateaued out during the ‘70s and 
the social challenges it fostered came to a head in Gotham. The city’s two mayors of the postwar recovery period — Robert Wagner (1954-1965) and John Lindsay (1966-1973) –employed a “kick-the-can-down-the-road” political philosophy, one that denied the city’s deepening fiscal crisis. And the metaphoric “can”? – public debt.
Both mayors understood that city revenues did not cover its costs, both daily operating and long-term infrastructural expenses. They both chose to hide this reality through increased city borrowing. In 1974, when Beame took office, the city’s debt was, as Kim Phillips-Fein reports in her carefully researched and pointedly critical study, Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics, “in the ballpark of $10 billion” whereas it was about $4 billion in 1965.
New York was hit hard by the postwar recovery. Suburbanization, the mass “white flight” from cities, was propelled by the GI Bill, the creation of the national highway system and Robert Moses’s mad reconfiguration of the city’s transport infrastructure, parks and public housing. Numerous city-based corporations relocated, taking their workforces with them; the city’s tax-base withered.
Paris, during its postwar reconstruction, pushed the poor to the city’s periphery; postwar America lured white, middle-class city dwellers to the Levittown suburbs sprawling across the country. Social life was re-centered, shifting from the city to the ‘burbs. Private homes, cars, TVs and malls became the America’s new reality. This shift profoundly altered life in the nation’s cities, especially Gotham.
In New York, it was a period that saw a spike in rapes, assaults, robberies, burglaries, car thefts and the murder rate double from 681 in 1965 to 1,690 in 1975. The city appeared in free-fall, a sentiment captured in movies like The French Connection (1971), Death Wish (1974), Taxi Driver (1976) and The Warriors (1979). Popular resistance mounted, reflecting in the innumerable demonstrations, marches, strikes and sit-ins that took place; it culminated in the wide-spread looting and fires in the Bronx that accompanied the blackout of July 13, 1977.
Compounding this situation, the U.S. faced a severe recession in the early-70s. Pres. Richard Nixon took steps to address it: he ended the dollar’s equivalence to the gold standard and imposed a nationwide freeze on all prices and wages. Adding salt to the wound, the major oil-producing countries orchestrated a global energy crisis that sent the U.S. economy into a tailspin. In the ‘70s, U.S. and global capitalism began to restructure and, as New York’s financial crisis mounted, an insider admitted, “the city is fucked.”
Sadly for New York, banks were no longer interested in municipal bonds; there were better ways to make money. The past finally caught up with the present and Beame was holding the proverbial debt bag. Once an old-fashioned New Deal Progressive, he succumbed to the new fiscal-policy reality of austerity, of increased inequality, imposed by the bankers and their enforcers.
Beame ordered cuts to the police, fire-fighters and sanitation workforce; laid off teachers and imposed wage freezes on other city workers; approved ever-increasing subway fare increases; shut down municipals hospitals; and – for the first time since it was founded in 1847 – instituted tuition at the City University. Ed – “How’m I doin’?” – Koch followed as mayor (1977–1989) and normalized liberal retrenchment. “The city would adopt strategies of development that focused on tax breaks,” Phillips-Fein notes, “and run campaigns designed to market the city who weren’t there: tourists, executives, companies that might come and do business in New York.”
As Phillips-Fein reflects, “the financial collapse of New York would be the ultimate symbol of American economic decline, a demonstration to the whole world that the United States was no longer the preeminent nation it has been over the postwar years.” The city did not declare bankruptcy, but what did occur was more telling. It set the stage of a new phase in the city’s historical development and the rise of global financial capital rationalized by corporatist neoliberalism.
In the decades since the crisis, the city — and city life — fundamentally changed. It’s no accident that for all the hipster hype about the “sharing” or “gig” economy, New York is more divided between the super-haves and the rest of us than any time since the Robber Barons of the late-19th century.
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New York’s mayor, Bill de Blasio, is a Democratic Party “progressive,” a strong but qualified supporter of Hillary Clinton.
In the wake of the rising homeless rate, the mayor opined:
I’ve gotta produce for the people of this city. I’ve gotta find a way to keep preventing homelessness, to get people off the streets for good and to provide the shelter capacity we need. It’s not a fun and easy equation. … So my job is to get it right, and I’m certainly not satisfied that I or my team got it right to date, but I do see the beginning of some real progress.
de Blasio made this statement on December 29, 2016 – well after Trump was elected, but before he was inauguration. The mayor is the best, well-intentioned liberal the establishment party system can produce, far more humane than his most recent predecessors, Rudi Giuliani (1994-2001) and Mike Bloomberg 2002-2013); he recalls John Lindsey. Only someone knowingly prevaricating can say, “I do see the beginning of some real progress.” In the age of Trump, who is he kidding? — the worst is yet to come.
New York and other cities across the country are facing a very different federal government – and the allocation of tax monies — than they confronted during the post-Reagan, post-Cold-War, era. Bush-I, Clinton, Bush-II and Obama reflect a common, if fiercely contested, acceptance of the role of metropolitan areas as the anchor of economic and social development.
Trump signifies a very different orientation toward cities, one based not on a notion of “progress,” but on political vengeance and opportunism. Under the Republican Congress, federal largesse is likely to shift from cities to more rural, more “white” and conservative strongholds. And this comes at a time of mounting global economic instability and U.S.’s continuing wage stagnation.
The next four years of Trump’s presidency will likely make life worse for an increasing number of Americans, especially urban dwellers. The Department of Housing and Urban Development (HUD) estimated that in January 2015, 564,708 people were experiencing homelessness. The long-term consequences will likely only get worse.
There will likely be a marked increase in the displacement of economically-marginal people. The growing legion of the homeless and destitute will likely overwhelm New York and other city administrations’ ability to redress the systemic problem of deepening income inequality. The worst is yet to come; it will be a long four years.
