THE WAY IT IS
New York City is in trouble.
Covid-19 which had turned the city into a medical and healthcare nightmare, collapsing under the burden of a disease which literally flew into the city from Europe, has survived but in a seriously damaged state.
Business office skyscrapers are essentially empty; stores are closed, the streets are empty of people and cars have replaced mass transportation as commuters ignore it …commuter trains, subways and buses are essentially empty as the Municipal Transportation Authority rockets towards bankruptcy.
The loss of jobs is as stunning as the rows of boarded up storefronts. The pandemic has stopped tourism, now New York’s biggest income-producer. It is literally killing all forms of entertainment from Broadway to the Symphony, the clubs and the Metropolitan Opera…restaurants are closed or are seating people right next to moving traffic on city streets. Limited indoor seating becomes an outright loss as they need 70% occupancy not 25% to sustain their operation
The entire tax income structure has collapsed. Real Estate reports that people are fleeing the city for nearby suburbs; apartment availability is at an all-time high.
And worst of all Mayor Bill de Blasio remains alarmingly, unbearingly incompetent; what was bad has become horrific. He seems totally lost and his decisions which have always been questionable are now so off-base that they have become a genuine danger to the city’s recovery.
The Mayor needs to borrow money. The State Legislature must approve such borrowing as it has already done for the State and Gov. Andrew Cuomo.
No one…absolutely no one truly believes De Blasio will handle any money he receives in a productive way.
There seems no way out. But there is:
Another Municipal Assistance Corporation.
MAC
The Municipal Assistance Corporation of the City of New York was established by the State Legislature in June 1975 in order to deal with New York City’s severe fiscal crisis. At that time the City was unable to pay its bills, a default on outstanding debt was likely and the possibility of bankruptcy was very real.
While there was no real way for a Democratic Governor to remove a Democratic Mayor, politics never worked that way and still doesn’t, Carey called for help.
And he got it from Jurist Simon Rifkin, investment banker Felix Rohatyn, CEO of the Metropolitan Life Insurance Co., Richard Shinn and CEO of Macy’s, Donald Smiley.
MAC would have a Board of Directors of nine private citizens and was given the authority to borrow billions backed by State revenue and the freedom and authority to oversee all City fiscal practices.
What the State did to help control City finances was to convert the City’s sales and stock transfer taxes into State taxes. While MAC ceded control of the city’s fiscal activities back to the elected officials in years following the crisis, it remained in existence until 2008 when having sold $10 billion in bonds to keep the City solvent during its worst fiscal crisis, it settled all accounts and voted itself out of existence.
We see the need again for this kind of civic and public partnership. The essential shutdown of all retail business but for those considered essential has brought with it unemployment and a financial shortfall which certainly rivals if not exceeds those fiscal troubles 45 years ago.
While Andrew Cuomo makes continued negative comments about the Mayor’s handling of the city in a variety of instances, he has done nothing to provide leadership other than to threaten that he will.
It’s time now to provide direct assistance and we see a new MAC as just the way to do that.
As a watchdog he is a man with no bite at all. When he produces audits which negatively portray the current Administration’s shortcomings, he beats a hasty retreat…silent for months and months at a time.
He completely buys into New York’s “pay to play” culture or he wouldn’t be where he is today.
The idea that that De Blasio will stagger through the next year with New York in such a precarious place is all but impossible to imagine.
A MAC would work and there are several individuals in the city who can reach Cuomo’s ear and energize his power accordingly.
There are any number of business and civic leaders who could become part of a new Municipal Assistance Corporation.
People like: Jonathon Lippman, formerly Chief Judge of New York; Robert Rubin, investment banker and the Secretary of Treasury in the last Clinton years who led the nation to a budget surplus; Richard Ravitch, a man who has been there before, are but examples of those who can be recruited.
Major retail and banking leaders could certainly be part of a new working partnership with only the city’s financial and business health of primary importance.
The city needs not only leadership, it needs talent, wisdom and the support of power to drive New York out of its plague-fueled present.
We have a working model that has succeeded. There is nothing to reinvent. We need it now.
Perhaps one solution is to repeal all restrictions (compulsory masks, social distancing, etc) and let the covid chips fall where they may as they did in 1918-1919. Would that be worse than the status quo?