As he takes office as mayor of New York, Rudy Giuliani must contend with a variety of daunting urban problems. To help the new mayor set an agenda for his first year in office, the City Journal asked a group of prominent New Yorkers to tell Giuliani what priorities, policies, and tactics they think he should pursue.
Delta Airlines announcement that it was moving its reservation center, together with hundreds of jobs, out of New York City is just one of the latest of such events to make the papers. Modern telecommunications make it almost immaterial where such functions are located, since all a customer cares about is a seat on a plane and the company knows that communication costs today are an insignificant component of total business expense.
The advent of the Information Age makes capital even more mobile than in the past; it will go where it is wanted and stay where it is well-treated. It will flee onerous regulations and high taxes. Since capital, both financial and intellectual, is what produces jobs, New York has to create a climate to attract capital. The high-tax, overregulated environment you inherited repels capital. It is no solution to cut a few special deals for favored big companies at the expense of the rest of the taxpayers.
For years, many Latin American countries motivated even their own citizens to employ their capital abroad, not at home. Today, our neighbors to the south have opened their borders, adopted free-market ideas, reduced unnecessary regulations, and caused the process to reverse—capital is now pouring into Latin America and economies are booming. New York should take a leaf out of their book and start disassembling the apparatus of what is becoming the last remaining center of socialist economics in the world. This is the only way to reverse the loss of jobs and give people hope.
These problems are being attacked in other, smaller cities. The mayors of Philadelphia, Jersey City, and Indianapolis are working to attract private capital and reduce the size of government. Yours is a great opportunity to lead New York out of its self-inflicted problems and make New Yorkers proud again.
The media tend to dwell on incidents of racial hatred. But far more often, people of different ethnic and religious backgrounds risk their safety to help one another. A black guy is attacked by white thugs on Staten Island, and Italian guys come out of a pizza place and help fight them off. A white woman is mugged on the subway and a young black and Hispanic guy catch the mugger, bring the woman back her purse, and hold the mugger for the police. A Jewish guys van catches fire in Brooklyn, and a couple of young black guys go into the van and save the drivers children.
As mayor, you should publicly celebrate these humanitarian acts. They are far more representative of whats really happening than the hysterical ideas about ingrained racial hostility that the media pump out.
Define what your job is. Write it on a piece of paper. Say it out loud. Live your job description, not other peoples.
Appoint three deputy mayors: for operations and management (first deputy), criminal justice, and education. The first deputy is your change agent. With luck this person has run a business. With more luck he has seen an income statement. Remember—the difference between the public and private sectors is how they view time and cash.
Put one person in charge of job creation and economic development. Make it an important position, but not a deputy mayor. Three deputy mayors, a budget director, and four thousand kitchen cabinet advisors are all youll have time for.
Identify your three to five key objectives. You do these; someone else does most of everything else. Announce them up front and stick to them.
Hire commissioners as if youre hiring corporate CEOs with profit-and-loss responsibilities under a conglomerate. Treat them as if they work for you—not as if theyre the enemy.
Tell the truth—nobody is smart enough to keep track of enough stories to make everyone happy. If youre going to dump on people (or organizations), tell them privately first.
If you dont get it on the table in the first three months, the junk in the cupboards becomes yours.
Finally, you have no friends—the mayor is the action and everyone wants a piece. The next time you will have friends is in four or eight years, depending on how lucky you get.
Recovering streets and public spaces, now threatened by the violently mentally ill, must rank as a priority. Toward that end, you should convene a task force of legal experts to recommend revisions in civil commitment laws, with the goal of substantially broadening current criteria for commitment to state mental institutions and reversing the downturn in the institutional population. I believe the key criteria are legislatively, rather than constitutionally, defined. Assuming that some of them have come to be constitutionally defined, you should form a small task force of able lawyers to develop and pursue a litigation strategy aimed at reversing the worst of the relevant decisions.
You should also develop some form of triage for separating the “homeless” into the truly homeless (I believe there are a substantial number), the addicted, the mentally ill, and so forth, so that people will get the kind of help—including commitment, when appropriate—that suits their individual needs.
Select what you want to do for the next four years, and narrow the list down to what you think is doable and most needs to be done.
Improving the public schools would be first on my list. Organizational expert Peter Drucker says the future of the United States lies in the knowledge industry—the ability to generate knowledge and the ability to use it. New York Citys schools are not now up to the task of properly preparing future generations of knowledge producers and users.
My second priority would be to make government a facilitator, not a roadblock, to improving how things are done. Our industries, businesses, and social agencies should be encouraged to innovate—what the Japanese call Kaizen, a concept that is embodied in the daily life and work of Japanese organizations. New Yorks city and state governments often make it impossible to improve how things work—whether its getting contracts to build or renovate approved, introducing new services, or changing systemwide processes or procedures.
Third, even marginal but measurable progress in daily city life would be heralded: better traffic controls, definitive efforts to control begging by helping nonprofit agencies that work with street people, protecting our vast parkland, and putting more cops on the beat would all be steps in the right direction.
The greatest city in the world is sinking under the weight of a government that we can no longer afford and that is not working well. The most promising path to reform is the most direct: privatizing whatever city tasks can be handled better by commercial or not-for-profit organizations.
You should search systematically for tasks the city can shed without guilt, having demonstrated that they can be done better and more cheaply by others. There are promising possibilities in housing, hospitals, transit, and welfare, among scores of others.
Choose your battles for maximum impact on the citys budget and quality of life, and make a persuasive case so the public will rally behind you. In every battle, the aims must be clear, incontrovertible, and fair, and translate into tangible improvements. Here are some ideas:
Draw a bright line in negotiations with the unions representing employees in the uniformed services—the police, fire, and corrections departments. This will set a pattern that redounds to the citys good in negotiations with other unions. The uniformed unions supported you, but there should be no raises without significant productivity gains. Then, move on to revamping how the city delivers sanitation services, by inviting major companies to compete for segments of the work.
Shake up the Police Department. As the NYPD has grown ever larger (which is good), it has become increasingly inefficient. Because too many cops are manning telephones and desks, when those jobs could be done far less expensively by civilians, the department wastes a healthy chunk of its $1.75 billion yearly budget.
Give up the fight over the shape of the Board of Education, and focus instead on two critical goals: making the schools safer and more habitable. The Division of School Safety is larger than all but eight of the nations police departments, but is ineffective and mismanaged. And the Division of School Facilities has allowed hundreds of buildings to crumble under a backlog of fifty thousand repair orders.
The city needs a radical change in how it does business. The challenges you face are difficult, but the opportunities are stunning.
We tend to stereotype New Yorks poorer neighborhoods as war zones of crime and crack. But the truth is much more complicated. New York has many new “Zones of Emergence”—middle- and working-class communities inhabited by blacks, Hispanics, and immigrants. From Flushing, Queens, to Sunset Park, Brooklyn, and even Bedford-Stuyvesant and Bushwick, many New York City neighborhoods arc not the stereotypical inner-city danger zones.
These neighborhoods are fragile, but they are holding out. Shine a spotlight on these areas and see how we can help them.
Since this is the season when everyone gives advice about what the new mayor should do, let me suggest what a new mayor should not do:
Do not appoint out-of-towners to run city agencies; new commissioners should already know how to get around the five boroughs.
Do not travel abroad during your first term. Many groups will suggest that you can win votes by going overseas, but New York Citys population is too diverse for you to visit every homeland. Others will suggest that a foreign trip can generate jobs, but such travel is rarely productive. Its wiser to host receptions at Gracie Mansion and to participate in ethnic parades and street fairs. There will be plenty of time to travel overseas during your second term.
Do not treat the local press corps as the enemy. New York City has some of the best journalists in the nation—theyre smart, resourceful, and competitive. Many columnists and reporters have spent their careers watching mayors come and go; seasoned journalists know how the city works—often better than the people they write about—and are not easily fooled.
Do not let the members of New York Citys congressional delegation put their own concerns above the citys interests. The citys congressional delegation tends to be more concerned with national and international issues than with the future of our city. Make sure that this active but fractious group remembers to target money for projects and programs that will improve conditions within New York.
Review city funding of hundreds of not-for-profits, many of which exist just to fund themselves and deliver votes, without any measurement of performance.
Recognize that we small business people who provide rental housing are the backbone of housing—and of the stability of low-income neighborhoods—in New York City. Repudiate the view, expressed by the previous commissioner on human fights, that a landlord is “likely to get his money through lying, promises, intimidation, harassment, etc.” Thats bigotry under the flag of human fights.
Improve the policing of housing in impoverished neighborhoods, which is besieged by drugs and crime. The city has a Housing Police force, but it is only for government-owned housing. Housing police should be available to the small property owners who pay taxes, incur a great deal of property damage, and lose good tenants due to drug dealers.
H. Erich Heinemann
There is little evidence that the city government has identified, let alone confronted, its most basic issue—the long-term structural barriers to job creation in New York City. The number of payroll jobs in the city dropped to 3.26 million in September 1993, after having peaked at 3.61 million four years earlier, a decline of nearly 10 percent. There are a variety of reasons for the citys economic stagnation. Among those that deserve your attention:
Rent control has destroyed construction jobs and reduced the supply of housing. Switching to means-tested, taxpayer-funded cash subsidies and allowing the market to determine the rate of return on investment in residential real estate would spark an explosion of building.
New Yorks efforts to micromanage small business through regulation have bred corruption and driven entrepreneurs to the suburbs.
Outlays per pupil by the Board of Education increased more than 25 percent (in current dollars, including capital expenditures) between 1989 and 1993, with little evidence of an increased return on the citys $8 billion annual investment in human capital. Basic reform in education is long overdue, and examples like the Mohegan School, a Core Knowledge elementary school in the Bronx, point the way.
Read the fine print in President Clintons health-care bill, then lobby to defeat it. The bill would deprive New Yorkers of access to the health care they need and drive employers from the city.
The presidents bill provides for a system of “community rating,” which means everyone in a “regional alliance” would pay the same rate for health coverage and the premiums collected would have to be stretched to cover everyones needs—including the AIDS patient, the assault victim, and the low-birth-weight baby. (It costs $63,000 to treat a baby born addicted to crack.) People would figure out that you pay the highest premiums and get the least health care in alliances with inner-city problems. Employers, mandated to pay 80 percent of their workers premiums, would have another reason to abandon cities.
To make matters worse, the bill would shift costs now paid partly by the Federal Government onto the local alliances. For example, the bill halts Medicaid payments for the chronically ill ($4.9 billion to New York City residents in 1991) and subsidies to urban hospitals that treat the poor ($800 million to New York City hospitals the same year). Costs taken off the federal budget are called “savings” by the Clinton administration, but the cost shift amounts to a new tax on New York residents and employers, hidden inside their “premiums.” Universal health coverage is an important goal, but making urban residents and businesses pick up most of the tab would devastate New Yorks economy.
Rethink the citys policy on the homeless. Elected officials and homeless “advocates” seem to think that every homeless person in New York is the helpless victim of the real estate economy, Republican urban policies, and an uncaring nation. The homeless themselves dispute this. When one talks to homeless people (as employees of my business improvement districts do all day long), one finds that most acknowledge having serious personal problems. It is more practical for the city to approach the problems of this limited number of people (far fewer than the 100,000 or more the advocates claim) than to change all of society.
Start with employment programs for the homeless, as we have at the Grand Central and 34th Street partnerships. A troubled person with a job to do every day gradually becomes less troubled. Providing employment, even before drug treatment and well before housing, is the best route to reentry into society. With work-readiness training, and some continued counseling while they are employed, even those with drug or alcohol problems or serious neuroses are often ready for entry-level jobs.
E. S. Savas
The bloated city government squanders taxpayers money in scores of activities that no other city in America undertakes-municipal hospitals and housing rehabilitation are two costly examples. Stick to your campaign promise to adopt a program of prudent privatization. Bus services, garbage collection and disposal, and recycling are good places to start: on just these three services taxpayers can save more than half a billion dollars a year after gradual implementation that relies on attrition, rather than layoffs, to cut the city workforce.
Sell OTB and the citys radio and TV stations—the city has no business being in bookmaking or broadcasting. Sell unneeded city-owned land, buildings, and other property to raise cash. Auction off housing that has been acquired for nonpayment of taxes. Airports are being privatized around the world: how about selling JFK and LaGuardia? Let the Port Authority continue to operate Newark Airport and lets see who does a better job. Cultural institutions, zoos, and museums should be left entirely to the private, nonprofit sector.
Reform the citys obsolete personnel system, which gives employees both civil-service and labor union protection. Reform work rules to increase productivity, as Mayor Edward Rendell did recently in Philadelphia. Put able-bodied men and women who arc on welfare in vacant, unskilled, entry-level jobs in city agencies. Pay them higher than minimum wage, but less than above-market municipal wages. Challenge the unions on this and challenge the Clinton administration to treat it as an experiment aimed at “ending welfare as we know it.”
The “swing” voters who elected you are looking for improvements in the quality of life: the basic decency of clean streets and freedom from panhandlers, graffiti, and the other constant annoyances of city life.
A more long-term, systematic issue is making the city more friendly to small business. Avoid the mistake that moderate Republicans so often make, which is to think that whats good for big business is necessarily good for New York. What the city really needs more than anything else is an entrepreneurial revival.
Make sure you get what you pay for in welfare-to-work programs. The city should pay only for results, not for the process or for the program itself.
Determine exactly how much its worth to get a person off welfare and into a job. Then say to any organization that would like to participate: “Come to me with your plan for moving people off welfare, and if the plan sounds OK, Ill tell you to do it. But Im not going pay you until you place them in a job and they hold it for some period of time.”
Companies like mine, along with any of the existing employment and training programs, could come forward with plans. Perhaps even the Human Resources Administration and the Department of Employment would want to try it. But they wouldnt get a nickel unless they produced results.
New York faces a great challenge from the globalization of markets and the revolution in communications technology. You and your advisors must determine what infrastructure changes and improvements, what taxation policies, what recreational and cultural amenities, and what governmental structure a twenty- first-century city must have to be competitive.
In the same way that the citys leaders early in the century understood the need for a massive rapid transit system, the citys leaders today must proceed with the steps necessary to make New York an efficient and productive place in a communications-driven world economy. The lack of conceptual economic thinking within city government for some three decades has caused many of New Yorks economic advantages to dissipate and left us behind in an increasingly competitive race.