The Future of New York

As the city observes the second anniversary of Sept. 11, New Yorkers can take pride in the remarkable courage and optimism which have helped the city heal and rebound from the worst terrorist attack in history. As attention focuses on the rebuilding of downtown Manhattan, equal attention must be paid to the city’s long-term economic health, which may depend more on the success of small businesses rather than the large companies which have stamped New York with their imprint in the past. A new study by the Rockefeller Foundation and the Center for an Urban Future warns the city of continuing its “doomed strategy” of coddling large industries like finance, real estate and media, and recommends that the city restore its “entrepreneurial vitality and create a better environment for smaller firms to grow and prosper.” Failure to do so would leave the city particularly vulnerable to unpredictable economic shifts.

The Bloomberg administration has taken steps in this direction. Unlike Mayors of the recent past, Michael Bloomberg has shown himself less eager to offer multimillion-dollar tax breaks and real-estate subsidies to large firms threatening to move out of the city. As Deputy Mayor Daniel Doctoroff recently told The New York Times , “We have basically ended the era of corporate welfare, basically paying people to stay.” The energy which City Hall previously expended on large companies is slowly being redirected toward small start-ups, with small-business advisory offices being opened in each borough.

The issue comes down to affordability: What would the city, state and federal governments have to do to make small businesses succeed? For starters, tax and rental subsidies could be structured so that a small business would pay a landlord the market rent but then be reimbursed for some of that rent. For example, a start-up company which can’t afford $50 per square foot might be able to make a go of it at $30 per square foot. City Hall could also offer small businesses preference when it comes to zoning and land-use issues.

Equally crucial is maintaining the city’s quality of life: If the Bloomberg administration stops holding the line on low crime and clean streets, the city will have a hard time being a magnet for firms of any size.

Bush’s America: Poverty and Joblessness

George Bush’s 2004 re-election team has their work cut out for them: Since taking office, President Bush has presided over the loss of 2.7 million private-sector jobs. And last year, the Census Bureau reports, the number of Americans below the poverty line increased by more than 1.3 million, with 600,000 more children living in poverty in 2002 than 2001. These are not the sort of numbers that a re-election campaign thrives upon.

George Bush’s policies of big spending, big deficits and big tax cuts constitute a new recipe for joblessness. And a study by the Federal Reserve Bank of New York indicates that the current job losses are likely to be more permanent than in the past. Will it be long before the social pathology that comes with joblessness-higher crime, homelessness, drug abuse, disintegrating families-makes itself felt in the nation’s cities? But even though much of the country is suffering, the President doesn’t seem overly concerned. “There are better days ahead,” he announced on Labor Day.

But as The New York Times ‘ Bob Herbert and others have documented, the President has no coherent plan to address this mess. Prominent economists are alarmed. Nobel laureate Robert Solow put things in perspective when he recently declared, “There has been a dissipation of the huge budget surplus and all we have to show for that is the city of Baghdad.” (And, of course, with American soldiers and U.N. diplomats being slaughtered on a weekly basis, Islamist terrorists pouring over Iraq’s borders and a still-skyrocketing price tag of $166 billion, Baghdad isn’t turning out to be much of a prize.) The Bush administration would have Americans believe that the rising stock market indicates that happy days are here again. But as the joblessness and poverty numbers indicate, it’s a bit early to be breaking out the champagne. The Economic Policy Institute reports that the recovery is “the weakest recovery in terms of employment since the Bureau of Labor Statistics began tracking monthly data in 1939.” And those who are finding work often have to take low-wage jobs, or temporary jobs without benefits-hardly indicators of a robust rebound.

What is the President’s prescription? He doesn’t have one. He doesn’t see anything distressing in the fact that 34.8 million Americans are now living in poverty (defined as a family of four with an income under $17,960.) Or with the fact that a million Californians are out of work. Perhaps President Bush should be grateful that his bungling of foreign policy in Iraq is getting so much press; it’s covering up the abysmal job he’s doing at home.

Is George Pataki in a Fog?

Governor George Pataki recently announced the formation of a special commission to address the pressing issue of school reform in New York City. On its face, a fine idea. But Mr. Pataki is not serious about school reform: A serious Governor would have consulted the Mayor before forming such a commission. Mr. Pataki did not do that. Amazingly, the Governor did not involve Mayor Michael Bloomberg-the man in charge of the city’s schools-and none of the Mayor’s people were named to the 16-member commission. Mr. Pataki also didn’t bother to pick up the telephone to talk with Schools Chancellor Joel Klein, who along with Mr. Bloomberg has been intimately occupied with the city’s education issues. Rightly, Mayor Bloomberg denounced the panel, saying it will do nothing to help the state comply with a court mandate to improve the city’s schools.

The commission is the Governor’s first response to the historic court decision earlier this year which ruled that the state’s complex funding formula has been shortchanging the city’s schoolchildren for years. The decision grew out of a lawsuit filed by a group of parents. The court decision would seem to suggest that the state can no longer play games with education funding. Mr. Pataki’s response, however, is a joke.

Compare Mr. Pataki’s outrageous move with the way Mr. Bloomberg has acted on behalf of the city’s schoolchildren. He demanded the abolition of the incompetent and patronage-ridden Board of Education. He lobbied to be given control over the public schools. He has invited voters to judge him on his promises to make the city’s public schools safer and better.

The Governor, on the other hand, forms a commission and fills it with his friends and political allies, cronies and has-beens and would-have-beens. George Pataki is looking more and more like a disaster for anyone who doesn’t live upstate or in the suburbs. New York City has 42 percent of the state’s population, pays $3 billion more in taxes to Albany than it receives, and is the state’s economic and cultural capital. And yet Mr. Pataki’s third term has been full of measures that are intrinsically hostile to the citizens of this city.