ROMAN MARS: This is 99% Invisible. I’m Roman Mars.
We spent a good chunk of last year on a special series breaking down The Power Broker by Robert Caro, the incredible biography of New York City planner Robert Moses. The Power Broker is such a complete work, but the end of the book is not the end of the story. When The Power Broker was published in 1974, New York City was crumbling. And its subtitle, Robert Moses and the Fall of New York, was widely accepted as truth. What Robert Caro didn’t get to cover was just one year later, the city went through a terrible financial crisis. That crisis is the subject of a new documentary called Drop Dead City, directed by Michael Rohatyn and Peter Yost. The title is a reference to the infamous New York Daily News front page headline published after then-president Gerald Ford made a speech saying that the federal government would not bail out New York. That headline, “Ford to City: Drop Dead,” is what most people remember about this whole saga–if they know anything at all. But there’s a whole lot more to the story.
Drop Dead City is excellent and compelling and does a great job explaining the situation, with interviews from nearly all the key players still around and some fantastic archival footage of 1970s New York streets and 1970s New York accents. It sort of feels like a coda/next chapter to The Power Broker, so I thought it’d be fun to break the movie down like we did with each chapter of The Power Broker and turn this into a special episode of The 99% Invisible Breakdown of The Power Broker. Which means, of course, I had to call up my co-host, Elliott Kalan.
So, Elliott.
ELLIOTT KALAN: Yes, Roman.
ROMAN MARS: When we last talked about The Power Broker, where did we leave our characters and where did we leave New York City?
ELLIOTT KALAN: We left New York City doing great. [CHUCKLES] It was just doing fantastically well. Our old friend, Robert Moses–the titular Power Broker, the master planner–he had been finally pushed out of office. He was, as the final chapter of the book says, “old” and “no longer in power.” He was frustrated by the lack of thankfulness and gratefulness that people were showing for all the work he had done to shape this city. “Why weren’t they grateful?” as the book ends. One of the reasons maybe they were not grateful and why Robert Caro is so not grateful in the book is because he leaves a New York behind that is doing financially very poorly. And this is the New York that, I think, any of us–like myself and like you, too, Roman–who love the New-York movies of the 1970s knows pretty well, which is what I would call “grimy New York.” The New York of… There’s garbage all over the streets. There’s drug addicts everywhere. The subways don’t work. This was a New York that was desperately struggling to provide the level of service to its citizens that it had taken for granted that it would be able to provide. And you can’t blame all of this for Robert Moses, but it’s so tempting just because we spent so much time talking about him.
ROMAN MARS: That’s right. And this brings us to what we’re discussing today–at least the piece of pop culture that is centering our discussion–which is this movie called Drop Dead City, which is a documentary about the 1970s New York financial crisis and the sort of austerity that followed. And it really sets a scene of the “Fall of New York” in the subtitle of The Power Broker. Like, it really shows you what Robert Caro was getting at and why he was so mad. And anytime we’ve ever talked to him, where we go, “Maybe, you know, like, in retrospect, you think back, maybe you were a little harsh on Robert Moses,” he’s like, “No. If nothing, I went easy on him.”
ELLIOTT KALAN: “I was too nice. I was too nice to him.” One of the things that strikes me so much about this movie–there’s so much great footage in it of just street scenes of New York and what New York looked like at the time. And you look at it, and you’re like, “Oh, this New York looks like it is crumbling–that it’s physically falling apart.” And even the nice parts of the city that you see–because there’s lots of scenes of union leaders and bank executives showing up in their cars at meetings–even the nice parts look sickly. There’s this kind of, like, horrible, sickly, ’70s feel to it.
ROMAN MARS: Fluorescent lighting, yeah.
ELLIOTT KALAN: Yeah, exactly. It’s like everything’s orange and brown. I kind of like it. But all these guys who are in suits have very long hair.
ROMAN MARS: You’re just like, “I need Sidney Lumet to get the fuck out of here and stop lighting this place because everyone looks horrible.”
ELLIOTT KALAN: But you understand while you’re watching it, “Oh, if this is the New York that Robert Caro is living in while he’s finishing The Power Broker–because he started it eight years earlier–no wonder he’s mad.” No wonder it’s the fall of New York in the subtitle because New York looks like it is in decay. You know, it looks just terrible.
ROMAN MARS: Yeah. And so that’s the first striking thing in this movie–the sort of visuals of that. The other striking thing that I love about this movie is the New York accents are just out of control. We have flattened culture by, I think, social media and stuff. Regional accents have really fallen away. Especially the sort of quintessential New York accent has really diminished because kids are interviewed on the street talking about Mayor Abe Beame.
KID: I think that’s not fair. Why should people get laid off?
REPORTER: Well, the mayor says there isn’t enough money to pay him.
KID: Well, I don’t care what he says. He’s just a dumb, old bum…
ROMAN MARS: It’s so fantastic. I love it. And the movie immediately delights with the visuals and the sound of New York City in 1975. It’s spectacular.
ELLIOTT KALAN: I feel the same way because, as much as I was saying, “Oh, it’s crumbling, the city is falling apart,” there’s still something so enticing about it. And maybe it’s just the young punk in me that refuses to die all the way, knowing that there’s going to be all these amazing things that come out of this decay, you know? But perhaps it’s like you’re talking about–it is that the accents are so strong and the personality of the people in the city and the personality of the city is so strong. Whereas New York, as much I love it–it still is the greatest city in the world and always will be–it’s a city that does not feel as distinctly New York as it once was. And the saddest aspect of the movie is that New York at the time is having trouble taking care of its citizens. It’s having trouble living day-to-day because it’s running out of money and it’s living on debt. But the second saddest part of it is this undercurrent of, yeah, things were bad, but there was still something New York about this place. And the process of the austerity that was brought in–the money that was bought in to get New York back on its feet financially–inevitably has that flattening effect that you’re talking about, where New York stops being itself and becomes instead the global capital of finance, which is not as fun a place to be.
ROMAN MARS: Well, right. And that’s a big theme of this movie and any sort of history of this time period. You know, this was the last vestige of New York City being a working-class city, where most people were part of a union. There was a large infrastructure of workers in the city. They could afford maybe not to live in Manhattan, but they could buy a house in Brooklyn or Queens. And this is hitting at this moment where this is breaking because there’s all these city services that are being offered. And the unions are quite powerful, and they’ve made a good life for the people who are underneath the unions. But many forces are making it so the economic centers of the city are leaving. So, like, factories are leaving the city; they’re no longer in place. White people are leaving the city; they’re no longer there as a tax base. And city services are keeping up. And this is further complicating the financial problems of the city. But it turns out that the financial problems have been a long time coming, but nobody knew about him because the city kept horrible books.
DROP DEAD CITY: They didn’t have an accounting system that made any sense. It was chaotic… / Everybody had stuff in drawers. Everybody had buried stuff. And… There’s gotta be a good “and” to some of this. There were no [BLEEP] books!”
ELLIOTT KALAN: I’ve mentioned before on The Power Broker podcast, my favorite movie is The Taking of Pelham 123–the 1974 edition–and I love it. But the whole time I’m watching it–loving it–I’m like, “I’m so glad I don’t have to live in this city and deal with these people who are in it because all of these very kind of quaint, fun, abrasive New York types are probably not the easiest people to work with or deal with on a day-to-day basis.”
CAZ DOLOWICZ: Oh, come on! If I gotta watch my language just because they let a few broads in, I’m gonna quit! How the hell can you run a goddamn railroad without swearing?
ELLIOTT KALAN: And an example of that is that the bookkeeping of the city–this is a city that’s been around for hundreds of years by this point–is not existent. It’s basically run the way that, like, a guy just out of college does his taxes, where he just has a bunch of crumpled receipts and maybe he printed out the form to pay his taxes. And it’s just astonishing the way that the city has done such a good– I guess it’s a real tribute to the New York spirit. It’s done such a good job of surviving when nobody knows how much money is being spent on anything or how much the city money has at any given point. And you can’t look at a ledger and say, “Here’s what the budget is. Here’s what our debt is. Here’s what the deficit is. Here’s how much we’re paying each of these departments.” Instead, it’s just various rogue numbers floating around in different people’s heads and on different scraps of paper. And one of the amazing things about this is that the mayor who this is going to fall on the hardest–Abe Beame–he was the comptroller beforehand. So, he’s partly responsible for how disorganized the system is because he was the guy who was keeping the city afloat using scraps of paper, you know?
ROMAN MARS: Well, what he’s a victim of here–why he’s sort of caught holding the bag at the end–is there was a way of doing things for a couple hundred years. And it was fine because the city was so massive that the cash flow was so great that it could mask what side of the ledger any sort of transaction was on. Like, if there’s money flowing through, it doesn’t really matter. You’re kind of constantly borrowing. You’re constantly in debt. But you’re always giving money out and everyone kind of gets paid somehow and it kind of works.
ELLIOTT KALAN: Especially at the end of World War II, when New York is a major manufacturing center, it’s the place people from all over the world are coming to to do work, and it’s just flush with money. Yeah, there’s just money flowing through it. So, it’s like, “Oh the bill on the sanitation came through. Well, here’s ten bucks I found in a desk drawer. You can use that. Oh, great. Great. We gotta pay these teachers. Hold on a second. Yeah, here some money over here. It’s all very slushy. It’s all very slushy.”
ROMAN MARS: Slushy is very much the way it is. And so this habit of borrowing money–this has been a long time coming. In fact, it’s possible that they were kind of taught this by Robert Moses, in terms of, like, making bonds available, funding things, and then paying them back. So, from the Power Broker book, where do you place the beginning of the borrowing money for services that seems to be the sort of thing that starts the downfall here?
ELLIOTT KALAN: So, I think you’re right that Robert Moses’ big policy is you issue a bond to pay for a big infrastructure improvement–for a bridge, for a tunnel… The tolls pay you back and you pay the bondholders and it becomes a constant eternal perpetual money machine. And when Mayor Wagner is mayor of New York, there’s a funding shortfall and, for really the first major time, the city itself is now issuing a bond. It’s now borrowing money in order to pay not just a big capital improvement bill–not a new thing, like a bridge or a tunnel or a stadium or an aquarium or something like that, that’s a one-time fee that will pay itself off. But they’re borrowing money for the first time to cover the day-to-day expenses of the city. And this is seen as an out of the ordinary thing. “We are not going to make a habit out of this. The tax revenues are going to come in. We’re going to pay it off. We are going balance these books on the sheets of paper in Abe Beame’s pocket.”
And then when Mayor John Lindsay comes in after Wagner, it becomes much more of a problem for New York to meet those bills and becomes a regular thing to borrow money. Now, suddenly, New York is living on its credit card, the way that so many average, everyday Americans do, where it is living on borrowed money and can never fully pay off that money. And so by the time Abe Beame is mayor, that has caught up with New York. It can no longer continue to borrow money without paying off the money it owes. And it’s paying so much to service the debt that a larger and larger portion of its budget is being used just to pay off previous debt that it borrowed. And they keep saying, “Well, the tax revenues will come in. We’re gonna have a flush time. And then we’ll pay everything off.” It’s like classic Vegas gambler addiction talk. It was like Heat with Robert De Niro, basically, where it’s like, “Just one last big score.” That’s Val Kilmer. “Then we’ll be done. Just one last score.” But everything goes terribly. Spoiler for the movie Heat–the big heist doesn’t go off the way they want it to.
ROMAN MARS: [CHUCKLES] And this is also reflected in the state budget as well. Nelson Rockefeller–the sort of northeast, liberal Republican, which doesn’t really exist anymore–was also quite a spender and liked to provide services. He was, I think, a man with a good moral compass. I have no objections to him greatly. [LAUGHS] But he also was a spender and took a lot of pride in the services that were provided to New Yorkers through the state government. So, all of this–this was just the habit of the time and the habit of New York.
ELLIOTT KALAN: Not just in New York, this was city, state, and federal. This is the era of the 1960s. It’s the time of the Great Society. We are post-World War II, and America is saying, “How can we–the most powerful country in the world–have poor people? How can we have hungry people? We have to take care of everybody.” And it is the best of intentions. And their ambitions become larger and larger about how to do this. And unfortunately, economic forces change–time changes–and suddenly they’re not as flush with money. And it’s very hard to put ourselves back in that mindset since, for the past 40 years, we’ve lived in an America where the overriding ideology has been: “We’ve got to not spend money on services. This is the thing that we cannot spend much money on.” Whereas, in the 1960s, it was the exact opposite. And the prices in New York was one of those big tipping points in turning one from the other.
ROMAN MARS: That’s right. I mean, there was a sense up until this point–or maybe just especially during this time–that there was a social contract with the big manufacturers and bankers and rich people that, to make a society, we all pitched in to create a better world for everybody.
ELLIOTT KALAN: I think I would call it the “we all live in the same country” compact, which no longer exists.
ROMAN MARS: But at a certain point–and this sort of starts in this little bit in the ’60s and the ’70s–there’s off-ramps afforded the rich and the powerful to not put in their part. And all of a sudden, the economic underpinnings of the great society–the wheels come off because rich people just kind of go, “No, I’m not paying for that. I’m gonna move out of the city or I’m going to move my factory to Delaware or Texas or something.” And all of a sudden, when you don’t have that anymore, this system that’s all built on a virtuous cycle of money coming through and the rich people not extracting as much as they can and now they extract almost exclusively–this is the very beginning of that. And so this whole system is like– It’s not just that there’s overspending liberals. It’s like we had a social contract with everybody that we were all making the world a better place. And the taxes reflected that, and people not moving their factories out away from where people lived reflected that. It was all built on this system, and it all comes apart. And this is a big tension of this movie, Drop Dead City.
One of the breaking points in the sort of fiscal crisis of New York is this idea of selling the municipal bonds that the banks would then bid on and then sell to their customers. And there’s this sense of the overspending–the bankruptcy–is on the horizon. And the banks decide, “We’re not gonna buy your bonds.” And it used to be competitive and they’d bid on it and then they would parcel them out. And all of a sudden, this gear in the system of how the city pays for itself and pays for the services just starts to break down because the banks decided they do not want to take the risk of supporting these bonds because they do not know if the tax money is going to come in. They are right to be skeptical of it because the tax money is not coming in. It’s not that they’re wrong. It’s just that, up until this point, there was a shared fiction among everyone. It must have been just completely weird for Abe Beame, who was the comptroller and becomes the mayor. And the new comptroller is named Harrison Goldin. He does this independent audit, and he’s just like, “The books don’t exist. Nobody knows what anyone’s making.” The banks begin to ask questions that are harder questions about whether or not the income coming in from these bonds is actually going to be paid. And in a way, Beame felt attacked.
ELLIOTT KALAN: It’s the kind of thing where, if this was Enron, Goldin would be a hero. He’d be a whistleblower. But it’s not Enron, it’s New York City. And a lot of people live there. So, there’s much more at stake that’s fraught. And there’s so much to the story that is a story of changing generations in a way. Beame is a fascinating character to me partly because he is a very unfascinating person in a lot of ways. He’s a very–
ROMAN MARS: Short king. 5′ 2″.
ELLIOTT KALAN: He’s this short, little guy. He’s an old-school politician. He came up through the machine. He came up in the days when you were a ward leader and you made sure that the people in your area had food on Christmas. “This guy needs a job. Okay, I’ll pull some strings to get you a job.” And now he has become mayor in a new world where that kind of extremely hyper local politics has been minimized or maybe vaporized by the interconnectedness of everything and by new ways of doing things and more professional ways of doing things and banks that expect a more professional, more corporate level of governance than what he’s used to–what he came up through. And I couldn’t help compare him in my mind with the mayors that came after him, specifically when I was living in New York. And he’s very much the opposite of Mayor Michael Bloomberg, who was mayor for three terms and was very much the “I’m a billionaire, I ran a corporation, and I’m now going to run New York the way that a billionaire who runs a corporation would like New York to be run.” Whereas Abe Beame was very much a guy who came up from the bottom and said, “I’m going to try to run this city the way that a guy from the bottom might want it to be run, which is one where we try to give everybody the things that they need or want. And we don’t worry as much about paying off bankers.” And it just wasn’t the right time in history for him to be doing that.
ROMAN MARS: So the city is dependent on the bankers thinking that the city is financially sound enough to do business with again. And the bankers wanted all sorts of city services cut for them to feel okay about investing in the city. And one of the main friction points between the banks and the city, in terms of services, was the City University of New York or CUNY. CUNY is the city’s public university system, and it had been tuition-free since its founding in 1846.
ELLIOTT KALAN: And Abe Beame is a graduate of CUNY. And he says all the time, “I wouldn’t be here. I wouldn’t be mayor if it wasn’t for free tuition.” And it becomes such a symbol, to the bankers, of what New York is doing wrong. “They think they can give free college to everybody in the city? This is insane! Charge them tuition!” And what the… I was going to say “normal citizens.” What the–let’s say–lower wage citizens of New York believe is that the city is this shared place that owes services to them and which is there to help them to rise up in their status or their children to rise in their station. And it is two competing views of what it means to live in a city and what it needs to be American. And the city university just becomes this locus point of the fight, and it becomes something that the banks and the federal government become very offended by almost. Like, they’re angry and they keep saying, “Don’t you see? You have to charge tuition because that will show the world that you’re serious about being austere.” And it becomes such a fracture point for just two different views of what it means to govern a city, which are coming into crisis at this moment.
ROMAN MARS: Absolutely. And one of the things that’s striking when you hear that, as a main point of argument, is how much the Overton window has shifted towards the banker’s point of view.
ELLIOTT KALAN: Now the argument is whether the government should help people to pay the hundreds of thousands of dollars that they owe in college, rather than that the government should allow them to go to college for free. It’s really an astonishing thing watching it and reading a little bit of supplementary materials afterwards. It was just such an astonishing vision of a different time when various services were just taken for granted as things that New York City will provide–it wasn’t like everybody in America was getting this–but that New York City took for granted. This is part of living in the city–you get these things. And it makes you wonder– The trade-off is that then the city is running out of money and there’s garbage all over the streets. But it’s a trade-off that often runs through my mind as someone who lived in New York during that different time post-Giuliani, when Bloomberg was mayor, when the city contract seemed to be: “You are going to come here. You’re gonna spend way more money than you think you should for your apartment. You’re gonna work as hard as possible. The city is gonna chew you up and spit you out. But the city is also safe. And it’s relatively clean.” It still stinks. Like, the city still smells really bad, which my children always comment on every time we visit. But the idea that you can take it for granted that you’re probably not gonna get mugged–your building’s probably not going to burn down. Whereas in the ’70s, it was almost like the opposite. It was almost like New York was entering this place– You can go to college. You’ll have all these services. But it’s also possible that you may get mugged. You may get stabbed. You might get caught in a fire. The city is gonna be filthy all over the place. I mean, it’s still kind of filthy, but it just shows a… The way to look at it is, I guess, as different priorities, you know?
ROMAN MARS: And so this is a real inflection point in how the city is run financially–the sort of mindset of what services are just standard and which are far reaching and what we would consider to be kind of pipe dreams today in terms of what is being offered. And what’s funny is Nelson Rockefeller resigned and is no longer governor. It feels like Beame is the last of the old guard, kind of, like, holding on. And everyone’s leaving him responsible to a certain extent.
ELLIOTT KALAN: Rockfeller’s like, “I think I will be vice president of the United States. I’ll let you deal with this.”
ROMAN MARS: And so Hugh Carey is the new governor. And he’s also just, like… He’s been part of this the whole time. And he probably again was kind of blindsided by, like, “What do you mean? We used to do this this way. And why is it a problem now?” You know what I mean? And he really does not wanna be the last one without a chair in musical chairs. But it all comes down–the independent audit by Goldin and this realization that… There’s a sense of like, “Maybe we’re one or two billion dollars in debt.” And it turns out they’re more like six billion dollars in debt.
ELLIOTT KALAN: It feels like every time they do an audit, they find out that they are $2 billion more in debt than they were before. I don’t know how expensive these audits were, but they keep thinking, “It’ll be a little bit of a shortfall, but we’ll be able to patch it up.” And then they keep realizing how much bigger and bigger the bill is than they think it is, how much the city has been borrowing to cover its debt, how much it spends on things, and how much it’s not taking in in terms of taxes. It’s really… I have to admit, I started getting very stressed just hearing about it in the movie. And this happened 50 years ago, and I wasn’t involved. So, I was just like, “Oh, how are they going to get out of this one? They never will.”
ROMAN MARS: And the sort of shaky confidence is sort of, like, the idea of people are not very confident about the city and its debt and its finances. It’s getting to the bankers that they’re not buying the bonds anymore. That money coming in from buying the bond was what was paying off the old bonds, which had been set up decades before. And there’s these series of crises in sort of 1975, which is like, “Oh, we’re gonna have a bunch of bonds due where we have to pay them off to the people who own them. And if we don’t have the money, we’re going to default.” And at first, it’s sort of like, “$10 million is due in seven days, and we have to do something about it.”
ELLIOTT KALAN: The bills always seem to be coming up in just a few days, as if no one was keeping a calendar of this at any point. There’s always a bunch of bills that are coming up almost instantly, and they continually have to find ways to deal with it. And their only way is to raise more money or to make cuts.
ROMAN MARS: And so there’s a quick reaction to all this at first. There’s these construction projects, and Beame just stops construction projects. It’s like, “If we can’t afford stuff, we can’t do it. We can’t pay the construction workers.” And so the first construction workers, which are a nicely paid contingent of the electorate, all of a sudden don’t have projects to work on. And so they get angry first, you know what I mean? And the things that are deteriorating begin deteriorating even more. And then there’s a round of, like, laying off workers. And there’s even a layoff of cops, which had never happened before in the city of New York. Apparently, there have only been more and more cops over time, up until that point.
ELLIOTT KALAN: It was a real growth industry–policing in New York. And the cops have this big protest action where they’re shutting down a bridge. You have police officers off-duty protesting, who are getting into fights with police officers that are there to try to keep the peace on-duty. And, I mean, the term “powder keg” gets thrown around a lot. But I think the fear at the time was, if New York defaults, you’re going to get even more of this. “And it’s such a powder keg that we’re going to have to fire cops and they’re going to be, you know, rioting. We’re going to have to fire sanitation workers, and the garbage is going to pile up. We’re going to have to fire firefighters at a time when there’s fires constantly in the city because there are abandoned buildings going up in flames. There are landlords who are getting buildings off of their hands by lighting them on fire.” And all these very basic services– And the people who are being cut are not like, “Oh, well, I guess it’s time for me to go pick up the skills for another job.” No, they react very angrily, you know? And there’s a feeling of: “But we’re supposed to have the power in this relationship because we’re these powerful unions.” And it becomes, to a certain extent, if I can use the term “pissing match” on this podcast… It becomes a little bit of one of those. But just these things that the city has not seen in a long, long time– And the fear is: “If we cut all these services, then the city is gonna turn into bedlam. People are just gonna riot and rise up. But also, if we don’t make these cuts, the city is gonna default, in which case everyone’s gonna lose their job. And the city’s gonna rise up. And it’ll be riots and become violent if these things happen.”
ROMAN MARS: The police union really pushes this narrative. And they even launch a propaganda campaign where off-duty cops go to bus terminals and they pass out pamphlets to tourists that say in big letters, “WELCOME TO FEAR CITY,” with a grim reaper in the middle. And underneath it, it said, “A Survival Guide for Visitors to the City of New York.”
ELLIOTT KALAN: All these tips where it’s like, “Don’t leave your hotel room after dark. Do not ride the subways.” They’re really raising the level of paranoia among travelers, especially because what they’re trying to do is they’re trying to say, “If we’re not on-duty, we are going to cut off the tourism to New York City that amazingly, even at this time when New York City was crumbling, was still pretty big business.” That’s the thing that’s astounding to me. And New York is an enormous city. What’s happening in one side of the city is so different from what’s happening on the other side of city. What’s happening in the South Bronx is so different from what’s happening in Greenwich Village, which is so different from what is happening in Flushing, Queens. It’s an enormous city. But you see this footage of garbage in the streets, old buildings, just crumbling, and just empty lots of rubble that children are playing in and getting hurt in. And at the same time, people still want to go to New York and visit it. Like, they still want to see the Empire State Building and Times Square. And even though Times Square is full of, at that point, just kind of, like, porn theaters and shooting galleries and things like that, they still want to go see these things. And the police want to present the idea that, if you don’t rehire these police–without this police presence–this city will just be the most dangerous, frightening place in the world.
ROMAN MARS: Meanwhile, the city is trying to figure out where it’s gonna get all this money. So, they approach the federal government. So, Nixon had resigned a year earlier and Gerald Ford is now the president. And like we mentioned, former New York governor, Nelson Rockefeller, had gotten himself appointed as vice president. And the secretary of treasury was William Simon, who had been a New York City bond salesman. So, like, they knew exactly what had been going on in the city.
ELLIOTT KALAN: You would think, “The vice president used to be our governor. The secretary of treasury used to work here. This will be super easy.” But instead it’s the exact opposite. It’s such a stonewall. And Simon’s part of the problem. But another part of the problem is who is running things in the Ford administration? And, like, my stomach hurt when these guys showed up in the movie. It’s Donald Rumsfeld and Dick Cheney. What is going on? Like, how many times are they gonna pop up in the government and wreck things and just do bad stuff? Like, they’re just such bad guys, you know? I don’t know if you had the same reaction I did, Roman, but it was literally like, as soon as they showed up on screen looking young and smiling because they’re doing bad and they’re hurting people and they love it, I was like, “Ugh, these guys. How do these bad pennies keep turning up?”
ROMAN MARS: It’s totally right. It’s like watching the Star Wars prequels and you see Senator Palpatine walking across and you’re like, “I know what’s going to happen now!”
More on Drop Dead City after the break…
[AD BREAK]
ROMAN MARS: We’re back with Elliott Kalan, talking about the documentary Drop Dead City. So, when we left New York, it was 1975, and the city was trying to claw its way out of a catastrophic financial crisis. The federal government did not want to help, and so the city is stuck sort of negotiating between the bankers who want deep cuts to services and the city workers who want their jobs.
ELLIOTT KALAN: And so you end up in this cycle of the city constantly firing people, cutting services, strikes happening because the unions are mad because of the services, talks between the bankers and the city, talks between the unions and the city, and the formation of different schemes to try to reorganize the city’s finances. And the big one is MAC, the Municipal Assistance Corporation, under the oversight of Chairman Felix Rohatyn. His name is spelled R-O-H-A-T-Y-N, and I always have trouble pronouncing it in my head.
ROMAN MARS: You know, in the movie they say it a couple of different ways. But I sort of make it rhyme with Manhattan–Felix Rohatyn.
ELLIOTT KALAN: Oh, that’s really nice. That’s a good way to do it. And at this point, if you wanted to put it into political cartoon terms, it becomes, in some ways, the bankers versus the unions, where the bank is just saying, “You need to make cuts. You need to make cuts.” And the union is just saying, “No, no, no. Don’t make cuts. We’re going to go on strike if you do this.” And the city is kind of paralyzed in the middle. But it’s really more complicated than that because so much of the solution to the problem involves also the unions investing in these bonds as well, which is something that I was not as familiar with and seems very strange to me because it’s like, “Well, now the union pension fund is going to invest in the city that then pays the union workers.” And if it works, what a beautiful cycle of money that can just go in and out of the union pockets and out of the city pockets. But it really shows you, I guess, that the narrative that I was always taught growing up was the city ran out of money because it was too poorly managed and it didn’t know what it was doing and it needed help and it had to cut everything in order to get bankers to come back and businesses to come back. And it had to become the technotopian capitalist world that it is right now. But in reality, it’s a much more complicated story and one that didn’t come to as clean a conclusion as it’s sometimes told. It also still relied on a lot of different power brokers and power sources having to come together to work together in some way.
ROMAN MARS: This whole idea of this municipal assistance corporation is basically there to find wonky ways to create new kinds of bonds so that maybe, if the MAC is sponsoring the bonds of the city, it has a little bit more confidence in terms of the bankers. And they kind of get a few people–
ELLIOTT KALAN: This will show the banks that somebody is overseeing the city in a way that’s going to keep it honest. And I love also that they need a great acronym for it and they start calling it “big MAC,” which is such a… It’s just that branding is so important, even in something like this. And the way people perceive things is so important, even something as seemingly boring and cut and dry as municipal bond confidence.
ROMAN MARS: Right. So, big MAC comes in and it begins to diminish Mayor Beame, who’s just sort of there for ceremonial things and is not making the fiscal decisions of the city, which you could argue is, like, the key decisions of a mayor.
ELLIOTT KALAN: I would say so. Yeah, I would think so.
ROMAN MARS: And then they can’t get a break from… Like, he goes and testifies in front of subcommittees where these Alabama senators are chastising them for their spending habits and stuff like this. The whole place is really, really shaky.
SENATOR WILLIAM PROXMIRE: Now, what we all have to consider is how the people back in our respective states respond to this. If we’re going to help you out, we’ve got to justify it to them. And right now we’re having great difficulty doing it. Now, you noted yourself that New York has the strongest municipal unions in the nation. I suggest that they’re too strong and the salaries are inordinately high in New York…
ELLIOTT KALAN: That feeling that New York needs to be disciplined, that it needs to punished, that it is a place that can barely hold together, and that it’s full of just the most violent, uncontrollable, liberal scum of the country, which has its incredible layers of racism built into that–
ROMAN MARS: Absolutely.
ELLIOTT KALAN: So much of this is Black migrants from the South coming up to New York. This is Puerto Ricans coming to New York City. People who are not middle-class, white homeowners–that is all built into this. But this idea that someone’s got to teach New York a lesson…
ROMAN MARS: No, it’s the worst. And there’s this rise of conservatism. Gerald Ford–I don’t have much of an impression of him. That whole administration was an unelected administration.
ELLIOTT KALAN: I’ll give you the reader’s digest version of Gerald Ford. Gerald Ford–well-meaning guy, not particularly ideological, but very kind of like, “Well, everyone’s got to follow a budget”–he loves budgets and he doesn’t like the idea of spending. Very athletic–incredibly athletic—probably the most athletic president we’ve ever had. He could have played professional ball–football, that is. But yeah, unelected to where he is– And the feeling I always get from him is someone who is not really equipped to handle the job that he is doing. He’s not an idiot. But he is struggling more because he does not have a real strong ideological bearing. And so, when this is all happening with New York City, what’s really in the back of his mind–other than New York needs to be taught a lesson because everyone needs to live within a budget–is: “I know, in 1976, I’m going to face Ronald Reagan in a presidential primary. And Ronald Reagan is going to say, ‘We need to cut taxes and we need to cut services.’ So, I got to outflank him on the right.” And it just shows you how any decision made by someone in an elected federal office is partly about the decision and partly about “how is this going to affect me in the next election?” And I think it can’t be understated how much Gerald Ford was taking a cue from the people who worked for him, who were much more conservative than he was, and also attempting to set himself up not as “I’m the Republican presidential candidate who saved New York by giving it an unlimited lifeline of money–this city that all of us conservatives hate,” but instead how he’s trying to kind out-Reagan Reagan in that moment. And he doesn’t do it in the most tactful way.
ROMAN MARS: In the documentary, Ford’s communications director, David Gergen says he got a call to write a speech for Ford explaining why he would not support any help to New York City.
DAVID GERGEN: I had the impression that Ford wanted a hardline speech. So, I wrote a very hardheaded speech and sent it over–with the understanding it was going to be staffed out. And what happens in the staffing out is it gets watered down. I was shocked when he gave the speech…
GERALD FORD: Responsibility for New York City’s financial problems is being left on the front doorstep of the federal government, unwanted and abandoned by its real parents. I can tell you and tell you now that I am prepared to veto any bill that has as its purpose a federal bailout of New York City to prevent a default. I am fundamentally opposed to this so-called solution…
ROMAN MARS: Ford gives this speech on October 29th, 1975. And the next day, the New York Daily News runs a front page story with the headline, “Ford to City: Drop Dead.” Of course, Ford never said those exact words or really anything like those words. But it did not matter.
ELLIOTT KALAN: When it was run through the New York Daily News translation machine, we end up with the headline, “Ford to City: Drop Dead,” which is such… I mean, when you think about the greatest headlines in American history in newspaper, it’s like, “Man Walks on Moon,” “Dewey Defeats Truman”–and Dewey Defeats Truman just gets in because it’s that great picture because they were wrong–and “Ford to City: Drop Dead.” And then I think the Post had “Headless Body Found in Topless Bar,” which was one of the all-time great New York newspaper headlines. But the fact that this headline felt to New Yorkers like it so captured the feeling they were getting from the federal government–and it so tainted the idea of Ford’s response in the minds of New Yorker’s, in a way that… You can argue whether it was fair or not. But I will say, it’s a great headline. So, I’m okay with it.
ROMAN MARS: [LAUGHS] It’s really a moment where you see the power of journalism because one of the things that’s so fascinating about the Ford, like, tough speech and the New York Daily News’ Ford to City: Drop Dead headline is that, in a way, I think it creates this, like… The city reacts to this gut punch and kind of pulls together because of it. Like, it really has a powerful impact because, all of a sudden, New York is like, “Uh… [BLEEP] you.”
ELLIOTT KALAN: Yeah, basically. “Drop dead me? No, no, no, no, President Ford. Drop dead you.” It just goes to show– I feel like this is the kind of thing that bad guys say in action movies all the time, where they’re like, “If you want to bring people together, give them a villain to hate.” And it feels like these New Yorkers are all at each other’s throats, as the movie presents in a way. Labor is mad at capital. And different people are mad at other different people. And the people who aren’t getting their garbage picked up are mad at the strikers and things like that. And then once Ford comes in and says, “No, the whole city… I’m not gonna help you, you stink,” everyone gets mad at him. And it does draw them together a little bit. It’s like the end of–I think we all remember–Spiderman, the Sam Raimi film, where people may not like the wall crawler, but as soon as they see the Green Goblin attacking a tram full of kids, they know they have to throw pipes and garbage and things at him. I think it does help them to realize, at the very least, “Oh, we can’t fight among ourselves if we’re going to get through this, at least not the same way before. And the government is not going to help us unless we show them, in a way, why they need to help.”
This to me is the craziest thing about the whole process. Eventually, the federal government does provide help to the city. It provides kind of loans to back up New York’s initial funding problems so that they can dig their way out of this problem eventually over time. And there’s still austerity cuts. It’s still not pleasant. And the city still transforms in this way that is probably safer but less fun in the long run. But you start to think about, “Well, if the federal government had just done this months earlier, then things probably wouldn’t have gotten as bad.” Instead, everyone was in this kind of, like… They had to show that they were right. It feels like any movie where two guys get into an argument and then, at the end, their wives–or maybe it’s a sitcom–have to tell them, “You were both so focused on being right that you couldn’t see that you needed to help each other. You really need each other.” And that’s what it seems like because another underlying argument of it is: Does America really need New York City? Is New York City as important as it thinks it is? And can the United States teach New York a lesson without its own regional banks that have already invested in these New York bonds over the years, without them falling apart, without international business falling apart, and without the other countries seeing America as crumbling? This is during the Cold War. And the idea that the United States would allow its largest city to just default and go bankrupt and that Russia would not have a field day with that is also an amazing thing.
ROMAN MARS: I mean, that’s a huge part of, you know– Like, after Ford gives his speech, all of a sudden, people start doing the books and go, “Oh, you know what? It’s not just individual bondholders inside of New York that are going to have these defaulted bonds and just, like, have kind of worthless paper.” Hundreds of banks around the country are going to have these things, and they’re gonna default. And then hundreds of banks in other countries are going to have these defaults. Everyone owns a piece of New York City’s prosperity.
ELLIOTT KALAN: Literally, the head of state of Germany is saying to Ford, “You’re not really gonna let this happen, right?”
ROMAN MARS: And everything changes. And all of a sudden, all these sort of systems that are put into place, which were kind of having a hard time gaining traction, were finally… People realized that this needs to be solved. So, Albany decides, on a bipartisan basis, to raise taxes. And the city cuts services. And Felix Rohatyn helps to oversee this; he’s talking to all sides because he kind of can see all sides of this stuff. He brings people together. Ford promises a bunch of loans. The last little bit is the labor unions buy the MAC bonds. They take their pension money, and they invest in the city. And this last little bit of convincing, especially the teachers union who, you know, kind of got the… I don’t know. They sort of set up the head of the teachers’ union as particularly kind of truculent when it comes to this stuff, particularly because the teachers are pretty underpaid. And the one thing they have is security. And when they were laid off in great number, they took great offense to what the city was doing. And also, like, packing the schools with more and more students– Classrooms that are supposed to have 30 students would have 60 students in them. And so they really had to be convinced to invest in these bonds. But in the end, they did. And that set of things finally sort of averted bankruptcy in its worst moments and kind of set them up on the path to a reset of what city services could be offered–but sort of a fiscal solvency that sort of continues, I think, probably tenuously to this day.
ELLIOTT KALAN: It’s this amazing kind of hinge point. And Drop Dead City presents it so viscerally–this hinge point from the city as it was to the city as it became. And to someone who grew up outside of New York in the ’80s and then the early 90s–I was in New York in the late ’90s and the 2000s–it’s just so fascinating to see it and to see this kind of other version of the city. The city that really doesn’t exist the same way anymore–there’s remnants of it–the city that my parents would tell me stories about or that you can watch movies about. But when you walk around New York now, it just doesn’t have that same feeling. It doesn’t have that same visceral feeling. And so much of the strength of the documentary comes to how it seems to capture that feeling–that feeling of being in a different city than the one that exists now that I wish I could visit. But I’m never quite sure I actually want to live there because it does seem like a real dismal place, you know?
ROMAN MARS: It would be a lot, for sure. Okay, so to bring us back to the Power Broker discussion, Robert Moses is not mentioned in the movie Drop Dead City. This other book that we read sort of in conjunction with this to get a full picture was this book called Fear City by Kim Phillips-Fein. Moses is mentioned maybe once. I don’t even remember it being a very big deal.
ELLIOTT KALAN: Maybe. That feels like a deliberate decentering of Moses to me–maybe in both projects. Through The Power Broker–not even Moses himself–but through The Power Broker, that shadow falls so heavily on New York studies that it almost feels like a deliberate setting him aside to focus on other things. But maybe it’s also a sign of just how fast history was changing and how fast New York and the world was changing. I wouldn’t be surprised if the people at the time were not thinking about him too much. You know, New York is a fast-moving city. It’s always changing and transforming itself. And things that were incredibly important and vital to it at one point become the thing that your grandma’s telling you about that you’re like, “Yeah, yeah, whatever, whatever, we don’t deal with that anymore.” And I wonder if that was the way that the city felt at the time in the ’70s–that Robert Mooses. “Mooses.” Robert Mooses–the cartoon animal version of him as a moose. Or Robert Mouses–that would be the other one. Robert Moses–maybe he felt like old news at that time. And I don’t know, maybe it took another generation of reading The Power Broker to reassert his dominance. I know it’s a strange thing. It’s the way that public figures and their memories kind of go in and out of fashion, as well, just as everything else does.
ROMAN MARS: But just because Robert Moses is the center of our lives and our thinking about New York–
ELLIOTT KALAN: All the time. It’s rare I spend a day where I don’t think about it.
ROMAN MARS: If you were to put this– And just from the experience–we’re not experts. We’re just fans. And we’re invested fans in this. Would you place any of this crisis at the feet of Robert Moses? Like, is there any part of this that you think he is responsible for or is a part of, even if it’s not presented in this movie or this book?
ELLIOTT KALAN: I’m curious to get your take on it, Roman. But first I’ll give my take because you so kindly asked me. I appreciate it. I think, certainly. There’s so much in the city that was going on that was not related to Robert Moses when he was around. The Power Broker makes him seem so central. But at the same time, garbage pickup doesn’t really get mentioned in The Power Broker. And that is one of the three vital services of New York City. It’s police, fire, garbage pickup–water is on there, too. Maybe that’s the four vital services. And one of the curious things about the austerity measures was the argument over whether education is a vital public service or not–whether it’s necessary or not. But certainly garbage pickup is because, if the garbage doesn’t get picked up for a couple days, the city is disgusting. It’s like a pit; it’s just horrible. But it doesn’t mention The Power Broker because it wasn’t a thing he was involved with at all. But keeping in mind that–that there’s more to the city than just massive construction projects–you have to imagine that the things he did in terms of moving the city’s priorities away from internal services and travel for residents and towards the construction of ways to get out of the city or through the city and ways that he starved public transit of funding for private transit and the ways that he refused to pay off the bonds for the city bridges so that those tolls could never go to other city needs and they would just always go back to the Triborough Authority… He at the very least was setting up or contributing to the conditions that were leading to what was making it harder to live in New York City, which is what this really comes down to. The services would not be necessary if the city was easier to live in and was also contributing to the city’s just lack of spending cash on a daily basis. You know, you can’t run a city on the tolls on the Triborough Bridge. But you could probably, like, keep it afloat for a couple days if you needed to.
ROMAN MARS: I think that’s right. I think his sort of ability to sequester and isolate this little business of the Triborough Authority and keep it away from the general operating expenses of New York– And there’s there’s really no reason why–if you just weren’t so obsessed with roads and, to a lesser extent, parks–you wouldn’t think that this money coming in could not support public transit or other services and just realize this is an income stream that is part of New York and New York should use it as it best sees fit. Whereas Robert Moses wrote all the laws and controlled everything so that he got to see where that money went to and how to create these shovel-ready projects to get from the feds. And you can say that maybe that wouldn’t have worked as well had people been able to get to that money and use it for other things. But yeah, that would be great if he didn’t get his way. And, you know, maybe a few different highways wouldn’t have been built and some money wouldn’t have flowed through the system. But again, if fractions of that had been devoted to the subway system, we wouldn’t have the breakdown of the subway system later on, which is a huge part of this crisis in the ’70s. I think, you know, he’s not responsible for $6 billion of deficit. But had he thought in the totality about the health and welfare of New York and New Yorkers and really had that at the center of his heart and soul, this place really could have avoided this. I mean, it would require a different structure of system. But I feel like he was smart enough that he could figure that out, if he just cared about these things. And so I would put a lot– I mean it’s hard to run the tape back and see how history would have played out had he been a true New Yorker team player and cared about–
ELLIOTT KALAN: As Robert Caro says, “You can’t say if New York would be a better city without Robert Moses, but it’d be a different city.”
ROMAN MARS: But I do think that there’s a good chance it could have been actually better. If he had all those powers and all that faculty to build and create and make things and also thought about the city as a whole and cared about all the different aspects of who was in the city, I think that there was a tool at the disposal of the city to make this better and maybe not have this crisis happen at all–and Robert Moses could have that tool.
ELLIOTT KALAN: You put your finger on something, Roman, too, that I had forgotten about because I’m so focused on the physical, the tangible, roads, tunnels, bridges, and parks. You’re right. You mentioned he wrote the laws. And one of New York’s problems was that it could not raise certain taxes unless the state gave it approval. There were institutional reasons that New York was kind of stuck in doing things the way it was. And he was responsible for at least some of those laws. He wrote the state constitution for New York, right? So, he is somewhat responsible for it directly, even just from that. And I think you’re right. If he had been writing those laws less to an eye of “how do I create little loopholes for myself in the future for doing powerful things?” and more from a point of view of that earlier Moses that we want to believe in from the beginning of the book–who is more idealistic, even if we don’t agree with all of his ideals–then perhaps the city would have still found itself in a tight spot, but it would have had the tools to wriggle out of that tight spot without things coming to a head so dramatically and so explosively. On the other hand, think about it this way, Roman, if there hadn’t been that crisis, what would we be talking about on this episode today? You’re not going to do a whole episode on how New York sailed through the ’70s’ fiscal bumpiness, you know?
ROMAN MARS: And 50 years later, we would have never met.
ELLIOTT KALAN: That’s true. So, really, in a way, everything worked out for the best. Yeah, that’s true.
ROMAN MARS: Hey, it was fun revisiting the Power Broker and watching this movie, Drop Dead City. If you haven’t watched it already, I really recommend you check it out. If nothing else, just to hear the New Yorkers talking in the 1970s is the greatest thing in the world. And yeah, this is great. Thank you so much, Elliott, for rejoining us.
ELLIOTT KALAN: Thank you so much. Anytime you want to talk about New York and how grimy it can get, please have me on. I really appreciate it.
ROMAN MARS: Drop Dead City comes out on VOD on November 14th. And if you live in New York, there are a bunch of screenings coming up. You can find out more at dropdeadcitythemovie.com.
And if you’re interested in 1970s New York but never got around to listening to our Power Broker Breakdown series, then do yourself a favor. Scroll back up in the 99PI feed to December 2023, and hit play every time you see the words “The Power Brokers.” You can enjoy it whether you’re reading along or not. And Elliott and I talk with a bunch of great guests, including Conan O’Brien, AOC, Pete Buttigieg, and the man himself, Robert Caro.
This episode was produced by me and Isabel Angell. Music by Swan Real. Mix by Martín Gonzales.
99% Invisible’s executive producer is Kathy Tu. Our senior editor is Delaney Hall. Kurt Kohlstedt is the digital director. The rest of the team includes Chris Berube, Jayson De Leon, Emmett FitzGerald, Christopher Johnson, Vivian Le, Lasha Madan, Jeyca Maldonado Medina, Kelly Prime, Joe Rosenberg, and me, Roman Mars. The 99% Invisible logo was created by Stefan Lawrence.
We are part of the SiriusXM podcast family, now headquartered six blocks north in the Pandora building… in beautiful… uptown… Oakland, California. You can find the show on all the usual social media sites, as well as our own Discord server, where we have fun discussions about constitutional law, again. We have conversations about architecture, movies, music, and all kinds of good stuff. It’s where I’m hanging out most these days. You can find a link to the Discord server, as well as every past episode of 99PI and The Power Broker Breakdown, at 99pi.org.
We can have you talk about Philadelphia, too. [LAUGHS]
ELLIOTT KALAN: I can’t believe we got through a whole episode without me insulting Philadelphia. You’ve got a world-class art museum–world-class–and you stick a statue of Sylvester Stallone on the steps? What are you doing? Philly, what are you doing? What are you doing, Philly?
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