Editorials

Bloomberg Keeps Heat On Schools

Schools Chancellor Joel Klein summed up the Bloomberg administration’s newest package of education reforms in a pithy and telling phrase: “How can we be anything but bold, when 140,000 of our children between the ages of 16 and 20 years old have either dropped out or are on the verge of dropping out?”

Good question. For all the gains our schools have made in recent years, too many students still drop out, dooming themselves—and by extension, the city—to an unpromising future.

Fortunately, Mayor Michael Bloomberg continues to embrace bold and controversial innovation, even as the end of his time in City Hall comes into view. (He cannot run for re-election in 2009.) Mr. Bloomberg’s latest changes, announced in his State of the City message, will accomplish several crucial reforms. He will adjust the school system’s finances so that middle-class schools don’t monopolize good teachers; make it harder for teachers to get tenure; build on the system’s new relationships with private educational groups; and empower teachers to rate their principals.

These are welcome changes—a sign that the Mayor continues to focus on his promise to do for public schools what Rudy Giuliani did for crime rates.

Especially welcome is the Mayor’s proposal to allow private groups to work in closer harmony with local public schools. New York has emerged as a national leader in this sort of partnership, which has permitted the public schools to draw on the expertise and good will of people outside the educational bureaucracy.

The Mayor’s plan to redistribute funds on a school-by-school basis means that stable, middle-class schools may not be able to monopolize the talents of higher-paid, experienced teachers. Mr. Bloomberg will thus have to confront schools that are used to getting all the best teachers.

Cracking down on automatic tenure is good for the system, too. The Education Department should not give tenure to teachers after three years as a matter of course. Tenure must be earned, not handed out just for showing up—no matter how strenuously the teachers’ union objects.

Looming ahead for Mr. Bloomberg is a possible battle with the State Legislature over an extension of Mayoral control of the schools. Mr. Bloomberg won that historic battle early in his tenure, but the Legislature reserved the right to take it away. That would be a disaster, so Mr. Bloomberg must continue to show improvement and creativity—not for the greater glory of his administration, but for the future of New York.

Can Hillary Hold Hometown Crowd?

“I’m in. And I’m in to win.”

With those seven words last Saturday, Hillary Rodham Clinton announced her candidacy for the highest office in the land. And as she begins the hugely time-consuming and expensive process of trying to be all things to all Americans, New Yorkers find themselves with a vested interest that goes deeper than the casual political voyeurism and appetite for drama of the American public.

This is a critical opportunity for Senator Clinton to demonstrate to New Yorkers that she truly cares about the state, and to prove wrong those who have asserted, ever since she first ran for Senate in 2000, that her interest in New York was largely fabricated, a convenient stepping stone to higher office.

Indeed, it will be easy for Mrs. Clinton—as she flies from Iowa to New Hampshire, and as she pursues her goal of raising at least $100 million this year—to forget that New Yorkers gave her her first and only elective office, that she has served only one full term, and that now, with some seniority in a Senate controlled by Democrats, she must deliver for New York.

At the moment, New Yorkers are certainly giving Mrs. Clinton the benefit of the doubt: In a poll taken when she was running for re-election last year, 67 percent of New Yorkers said they would not hold it against her if, once re-elected to the Senate, she announced a run for the White House.

But that support could drop swiftly—New Yorkers are a famously self-interested bunch—if she’s perceived as forgetting the folks back home. For example, in her capacity as Senator, her to-do list should include helping change the formula for homeland-security funding, so that small towns don’t get money which should go to high-risk targets such as New York City; working to relocate major federal facilities to upstate New York as a way to boost the economy; and pressuring the Bush administration to allocate money for modernizing mass transit in the city. Particularly with a fellow Democrat in Governor Eliot Spitzer, Mrs. Clinton and Senator Charles Schumer have a golden opportunity to help New York emerge from the sloth of the Pataki era.

One cannot blame Mrs. Clinton, of course, for being magnetized by dreams of returning to the White House. Indeed, New York was once the epicenter of national politics, home of Presidential candidates like Al Smith, Thomas E. Dewey and the Roosevelts. But over the last 40 years, the state’s clout has shrunk as the South and the West have dominated. Mrs. Clinton is the first serious Presidential candidate from New York since Bobby Kennedy—who was a carpetbagger as well (and whose seat she holds). And with Rudolph Giuliani in the Republican primary herd, for the first time in a generation, New York is helping to set the country’s agenda and producing politicians with national profiles.

But it will be a shame if New Yorkers pay for Mrs. Clinton’s Presidential race by losing her attention and capacity to deliver what New York needs right now, while she is a Senator.

A Frigid Forecast

While the city’s economy may be in good shape these days, New York’s leadership position as a world financial center is coming under increasing pressure from abroad. A troubling and illuminating study by McKinsey & Company reports that unless several steps are taken, the city will continue to lose ground to London, Tokyo, Dubai and Hong Kong.

The signs are not promising. Fewer international corporations are listing on the U.S. stock exchanges, and foreign exchanges are seeing more robust growth in over-the-counter derivatives trading. The McKinsey study, which was commissioned by Mayor Michael Bloomberg and Senator Charles Schumer and paid for by the New York City Economic Development Corporation, measured various countries’ “financial stock”—the figure you get if you add up a country’s public equities, bank deposits and debt—and found compound annual growth rates between 2001 and 2005 of 8.4 percent in the U.K., 7.5 percent in Japan, 15.5 percent in Asian countries outside Japan—but just 6.5 percent in the U.S. The effects of such a national lag are felt most pointedly in New York: Between 2002 and 2005, the city’s financial-services workforce saw a decline of 0.7 percent, while London’s rose by 4.3 percent.

The study suggested several wise moves the U.S. can take to stem the slide, such as relaxing restrictions on foreign companies imposed by the anti-fraud 2002 Sarbanes-Oxley Act, limiting punitive damages in class-action lawsuits and easing immigration laws to allow skilled foreign workers to make their careers on our shores. The report also recommended setting up an “international financial services zone” in New York City, which would feature tax breaks and other perks to lure foreign businesses and investors.

As Mr. Bloomberg said about the report’s results, “Unless we take corrective steps, and soon, we’re going to see America’s leadership in global financial transactions dwindle, putting a chill on the nation’s economy and the city’s.”

Editorials