Politics & Policy

Rotting Apple

The future of New York City.

Is New York City dying? Events of the past month suggest the seemingly implausible conclusion implied by the question. What it suggests is not that New York will disappear, but that its role as showcase of the world’s best and brightest could diminish over time.

Consider the grim reality of Mayor Bloomberg’s 18.5 percent real-estate-tax hike now manifest in all its ugliness as city residents begin to pay their monthly real-estate assessments. For many families, it means hundreds, if not thousands, of dollars of additional expense. For a business, it results in the confiscation of thousands, if not millions, of dollars of annual profit. The Manhattan Institute projects that 62,000 jobs will leave the city as a result. Poof. This, on top of the 150,000 jobs lost since the end of 2001.

New York City’s pickpocket politics will get more extreme as Mayor Bloomberg and the city council devise additional tax hikes to close the city’s $5 billion deficit. The city income tax, already the nation’s highest, almost certainly will be raised. Fines and user fees will be aggressively pursued. The policy of borrowing to fund current operations will continue, and the mayor pledges not to layoff any of the city’s 300,000 employees.

Of course, this mess is symptomatic of a political debate characterized by platitudes bereft of ideas (We must invest in New York’s future!), inspirational mantras (Do it for the children!) and emotional manipulations (9/11 button pushing). A fresh specimen of such political uplift was recently deposited on the stoop by Randi Weingarten, president of the powerful United Federation of Teachers: “If there are cuts to school aid, it’s a broken promise to the kids. And if you hurt kids, we’re going to be railing against it, fighting as much as we can on behalf of kids.” It’s amazing what the love of children can inspire. Take, for instance, the $275 million pay raise Weingarten recently extracted for her union’s members from the ailing city. Love conquers all.

Its not surprising that new extortionate tax regime will be imposed contemporaneous with Mayor Bloomberg’s successful effort to ban smoking in all public (and many private) areas of the city. The curtailment of economic and social liberties goes hand in hand. Want a Marlboro with that beer? Take it outside. Want an after-dinner cigar at your private club? Tough. In this new, grim era, Bloomberg’s New York does not tolerate the most traditional of vices. New York shall be the poorer for it.

The larger issue implied by New York’s current crisis is whether cities are as important as they once were. Our cities descend from medieval ancestors that incubated primitive forms of local self-government and economic activity one-step removed from the strictures of feudalism. Cities exist not only to provide economic and social freedoms, but to create a fertile zone of human productivity that allows the best and brightest to be proximate to one another; the resulting clash and mixing of their efforts and ideas result in something greater than had they pursued their activities independent of one another.

But the economic and social benefits of proximity are offset by the higher cost attendant to city life. On the margin, when these costs outstrip the benefits, people move away from the city and rely on the virtual proximity created by today’s technology and cheap transportation.

How has this affected New York? Consider that in the 1960s, New York was home to 140 of the Fortune 500. Today, it is home to 40 of such companies. Over a 40-year period, one hundred of the country’s top companies decided that New York is too expensive a location for their activities. Or consider that potential federal regulations would have required Wall Street to create backup operations outside of a 300-mile radius of New York as a contingency for potential market-disrupting terrorist activity. Even the government is telling the world that the city model — New York in particular — is not as imperative as it once was.

E. B. White anticipated this almost 60 years ago when he wrote in, Here is New York:

The subtlest change in New York is something people don’t speak much about but that is in everyone’s mind. The city, for the first time in its long history, is destructible. A single flight of planes no bigger than a wedge of geese can quickly end this island fantasy, burn the towers, crumble the bridges, turn the underground passages into lethal chambers, cremate the millions.

Despite the prophetic quality of White’s insight, the threat to New York City (and others) comes not just from the terrorist, but also from the compound stupidities of soaring taxes and profligate spending that bleed of the city of its animal spirits. Like the practitioners of medieval medicine whose leaches sapped life out of the weakening patient, tax hikes and curtailment of social freedoms will achieve the exact opposite of their intended results. We should be mindful that it could all end, as Eliot put it, not with a bang but a whimper.

— Christopher E. Baldwin writes from Manhattan. He can be reached at christopherebaldwin@hotmail.com.


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