A Union Man Saves the City

A couple of weeks ago, a friend suggested that I call Jack Bigel, a forgotten hero of the city’s torturous crawl from the abyss of bankruptcy in the mid-1970′s. I hadn’t spoken with Mr. Bigel in over a decade-in other words, since the city’s last fiscal crisis-so I wrote a note to myself to renew my acquaintance. Before I could, however, Mr. Bigel died on Thanksgiving Day at age 89.

The headline of Mr. Bigel’s obituary in The New York Times called him a “labor advisor and negotiator,” which he most certainly was, in the same way that Felix Rohatyn is an investment banker. Neither description, however, tells us much about the roles they played in rescuing the city from insolvency a generation ago.

Mr. Rohatyn is widely hailed, all these years later, as the man who saved New York. At a time when banks refused to lend the city any more money, Mr. Rohatyn helped create the Municipal Assistance Corporation, which borrowed money on the city’s behalf. For this bit of ingenuity, Mr. Rohatyn became a civic hero, famous the world over for almost single-handedly rescuing the world’s greatest city from the humiliation of bankruptcy.

Jack Bigel never became as famous as Felix Rohatyn, and, regrettably, only students of the fiscal crisis remember his vital contributions during that dark time. But without him, the city could well have stumbled into the bottomless canyon of financial ruin. In the literature of the fiscal crisis, the creation of the Municipal Assistance Corporation is considered the saving act of financial genius. Mr. Bigel’s own bit of ingenuity often is treated, undeservedly, as a footnote. He persuaded New York’s public-employee unions to invest their pension funds in city bonds. As the Times obituary noted, the unions invested nearly $2 billion in city notes-this at a time when the banks considered those notes less than worthless (and at a time when $2 billion was real money). That infusion of cash was as responsible as anything else for inspiring renewed confidence in the city’s finances.

“The city would not have recovered without the unions’ willingness to invest money back into the city,” said Richard Schrader, a political consultant and friend of Mr. Bigel. “You have to remember that it was a huge gamble for the unions-they were putting their pensions at risk, and they went along with a series of new constraints on what they could do.”

Mr. Bigel, along with union leader Victor Gotbaum, persuaded the unions to take the risk. “Jack embodied a certain type of political figure that we’re losing,” Mr. Schrader said. “He combined intellectual gifts, an understanding of complex financial issues and a dedication to labor in a way that’s rare now.”

As important as the pension funds were, Mr. Bigel’s plan contained a larger idea that ought to resonate with City Hall and the union halls today. Through Mr. Bigel, the city’s public-employee unions became a full and engaged partner in the city’s revival. They could no longer be derided as mere obstacles to fiscal reform, nor could they be smeared (at least not among those of good conscience) as a collection of witless hacks willing to let the city sink in the name of ideology. “Jack would often tell me that you have to get past short-term goals sometimes and think of larger issues,” Mr. Schrader said. “That’s the kind of leadership we need now, but I don’t see leaders from, say, the banking community and the unions trying to pool their resources and their creativity to make sure the city survives.”

Early in his career, Mr. Bigel helped organize workers in several city departments during the Great Depression, and he continued to advise municipal unions through the 1950′s and 60′s. He was accused of being a communist, but his reply to the rumormongers was simple: He was, he said, a pragmatist. He had that virtue in common with the mainstream politicians and civic-minded business leaders of the 1970′s whose creativity and, yes, pragmatism were tested during New York’s financial emergency.

Jack Bigel saw that in a time of severe financial stress, unions could be-and ought to be-an asset, not a liability. It’s a lesson that surely resonates today, with City Hall facing a monumental $6 billion deficit and talk of layoffs in the air.

But if the unions are to reprise their role as part of the solution, their leaders have to rise to the occasion, too. Thus far, there’s little evidence that they realize this is no run-of-the-mill bust, that fire-breathing speeches are not only inappropriate, but counterproductive. In mid-October, leaders of some of the city’s uniformed services rallied their troops in rainy Central Park; the rhetoric from the platform was punctuated with language unfit for the nightly news broadcasts.

Labor and management are in this mess together. Jack Bigel understood that a quarter-century ago.