In Another Great Recession, Immortalizing Hugh Carey

62088 cov In Another Great Recession, Immortalizing Hugh Carey With the nation’s largest city teetering on the brink of bankruptcy in September of 1975, New York Governor Hugh Carey traveled to the exclusive Burning Tree Golf Course outside Washington, D.C., where he made a show of losing a round to his old friend, Wisconsin Republican Melvin Laird, in exchange for information. Why, asked Mr. Carey when the two were safely out of sight, were his pleas for a rescue of New York City falling on deaf ears in the House?

A former seven-term Brooklyn representative with allies on both sides of the aisle, Mr. Carey had hoped his former colleagues would come to his aid after he threw the state government into the battle to save the city, but the only noise from Washington had been rousing denunciations of New York as a modern Gomorrah from fiscal conservatives.

Mr. Laird cut to the chase: Dick Daley was keeping the Illinois delegation away from the issue because someone was spreading rumors that if New York City went bust, Chicago stood to inherit the title of world financial capital. Despite the patent ridiculousness of the notion (Chicago was hardly better off than NYC in 1976, and whether or not world financial markets would survive to be relocated was itself a matter for debate), the Chicago boss, in his sixth term as mayor and the last year of his life, was interested enough to let the Big Apple twist in the wind.

Who, wondered Mr. Carey, had planted such a notion in Mr. Daley’s ear? Mr. Laird answered that President Ford’s chief of staff was the problem. “Well, Rummy comes from Illinois.”

It is insider accounts like the one above that make The Man Who Saved New York: Hugh Carey and the Great Fiscal Crisis of 1975 worth reading, and not merely because they capture a young Donald Rumsfeld honing his unique ability to be spectacularly wrong. This slim volume by Seymour P. Lachman, a former Board of Education president and current director of the Hugh L. Carey Institute for Government Reform at Wagner College, and Robert Polner, a former Newsday reporter and a public affairs officer at N.Y.U., is neither a complete biography of Hugh Carey nor a comprehensive examination of historical forces that brought New York City within hours of collapse. Rather, it is a profile in courage, a detailed portrait of a man in his moment.

Based on extensive interviews with Mr. Carey and the talented, admiring young people who served under him during the crisis, the book makes a compelling case that without the governor’s savvy, unswerving leadership, New York City would have gone under, and might well have taken the state and the nation down with it.

 

HOW DID MR. CAREY do it? How did the Albany newcomer who had bucked the Democratic machine and still won the governorship build a series of creative, tenuous coalitions and institutions to keep New York City afloat while simultaneously reining in city spending? Messrs. Lachman and Polner argue that he did so with a combination of conviction, charm, and commitment to his diverse, independent, and hardworking staff. Having warned that “the days of wine and roses are over” in his first State of the State address, Mr. Carey, as the incoming governor, could easily have blamed the rapidly-growing crisis on the profligate policies of his predecessor, Nelson Rockefeller, and Mayors Lindsay and Beame. He could have kept the state’s finances, themselves tightening with the onset of recession, out of the city and allowed it to default, a prospect popular with upstate conservatives and the Wall Street Journal alike, who saw bankruptcy as the only way to adequately punish the spenders and restructure the city’s budget.

Instead, one spring day in 1975, Mr. Carey “jammed his hands deep into his pants pockets” and announced, in no uncertain terms, that he would no sooner see New York City go bankrupt than one of his own children. “We’re stopping this right now,” the governor informed his staff, adding that they could resign if they disagreed, and once committed, he never wavered.

The decision made, Mr. Carey began seeking the solution, and in so doing, he relied heavily on his own well-respected record as an independent Democrat, one that union leaders and bank presidents alike could trust. It was his aides who crafted the debt-packaging corporations to keep the city afloat and sought buy-ins from a wide-range of public and private interests; but it was Carey’s kind words, willingness to bargain, cashed-in favors, and sheer force of personality that glued the whole enterprise together.

Who else could have talked UFT warrior-king Albert Shankar (immortalized in Woody Allen’s Sleeper as the origin of a nuclear winter) into shelving a raise and stowing his pension funds in a bond offering on the same day, and then convinced him to fly out to Chicago to cajole the boss of bosses to release his Illinois votes for New York?

As for his staff, Mr. Carey was the rare politician who knew when to ask for help. He managed egos deftly, working with established political players from Republican operative Felix “The Fixer” Rohatyn to DC 37 head Victor Gotbaum, but more often he turned to young talent, giving thirty-somethings such as Richard Ravitch and Peter Goldmark responsibility and support in exchange for their hard work. In return, they delivered innovative solutions to the mounting financial crisis.

It all added up to a remarkable rescue of New York City, one in which Carey’s mastery of the minutia of politics made all the difference. Messrs. Lachman and Polner’s account is at its best recreating these moments, the wee-hours phone calls and last-minute meetings in which deals, careers and legacies were made.

The rest of the book lacks this second-by-second urgency, offering a biographical sketch of Mr. Carey that is charming if sometimes maddeningly brief (Mr. Carey’s “striking” surge from underdog Democrat to the governor’s mansion is covered in 10 short pages). Nor does this account delve into the troubling questions posed by the crisis for the promise of social welfare that Great Society Democrats like Carey held so dear, questions of whether those services deemed essential in times of plenty were to be extended to the poorest citizens when budgets needed balancing.

But these concerns are beyond the scope of a book that seeks, above all, to enshrine Hugh Carey in the pantheon of New York’s greatest leaders. The authors make their case well, not least by citing Mr. Carey’s brain trust. That these career politicians and public servants continue to revere him speaks volumes about Carey’s abilities. The Man Who Saved New York makes a strong case for the man of whom Peter Goldmark once said, “the greater the pressure, the bigger he got.”

 

Nick Juravich holds degrees in history from the universities of Chicago and Oxford, and blogs about neighborhood change in New York at I Love Franklin Ave. The last book he reviewed for The Observer was, The Flatiron: The New York Landmark and the Incomparable City That Arose. With It.