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The bosses' takeover of New York

Review by Aaron Hess | June 1, 2007 | Page 9

Kim Moody, From Welfare State to Real Estate: Regime Change in New York City, 1974 to the Present. New Press, 2007, 352 pages, $26.95.

IN 2004, a new record was set on Wall Street. For the first time, a single Wall Street hedge fund manager, Edward Lampert, pocketed more than $1 billion in annual income. Since then, Lampert's annual "earnings" has been surpassed by others, such as Kenneth Griffin of the Citadel Investment Group and James Simons of Renaissance Technologies Corporations—who last year raked in $1.4 and $1.7 billion, respectively.

In 2006, the average Wall Street hedge-fund manager made roughly $1.5 million per day. That is, $1,000 per minute. In the same city last year, using the federal government's miserly index for measuring poverty, nearly one quarter of New Yorkers were living below the poverty line—twice the national average. For Blacks and Latinos, the rate is closer to 30 percent.

But numbers alone can't convey the rampant inequality. On the morning of November 3, 2006, the candy company Mars, Inc. sent out a call for job applications for a new store in Times Square. Two hundred positions were opening for "customer service ambassadors," to be paid $10.75 an hour. A flier advertising on-the–spot hiring promised that "The Rewards Are Sweet!"

According to the New York Times, "several thousand people—mostly young, Black and Hispanic" showed up to apply. The Times added that, "[m]any had arranged for baby sitters, traveled from other boroughs and New Jersey, and lined up as early as 1 a.m., only to be told eventually that there were no more jobs being offered that day." Eventually the NYPD arrived on horseback, dispersed the enormous crowd, and issued four summonses for disorderly conduct. Welcome to neo-liberal New York.

On the one side, an army of real-estate mavens, CEOs, financial managers, bankers, stock brokers and various hangers-on have sweetened their rewards year after year—with the full collaboration of City Hall. Meanwhile the city's massive and diverse working class has had to swallow the bitter pill of deteriorating health care, lowered income, skyrocketing housing costs, under-funded public schools and racist police violence.

Socialist scholar and activist Kim Moody's new book, From Welfare State to Real Estate: Regime Change in New York City, 1974 to the Present is an angry, accessible and scrupulously researched account of how the city's rich and politically connected have consolidated their power over ordinary New Yorkers in the last three decades.

Among the strengths of Moody's book is that it shows how the inequality and racism in the Big Apple today are not accidental features of "development" or the inevitable consequence of uncontrollable market forces. Beginning in the mid-1970s, the city's business and political elite consciously planned out its war on workers and the poor.

Faced with a massive economic downturn in 1974-75, the city's ruling class decided that the social gains won by ordinary people during the post-war boom had to be drastically reversed. Achieved through the mobilization of strong municipal unions and social movements, these gains included a growing City University system, substantial public housing programs, a large public hospital system, rent control and civil rights legislation.

The relative strength of New York's working class made it the prime target for the city and national business elite—ground zero for a neo-liberal "crisis regime" of cutting taxes for the rich, privatization, law-and-order policing, gentrification, budget-slashing and union-busting that Ronald Reagan would lead nationwide in the 1980s. Through a nexus of unelected corporate groups like the Citizens Union, the Real Estate Board of New York and the Citizens Budget Commission, New York's rich and powerful orchestrated what radical author David Harvey called the "re-imposition of ruling-class power."

Real estate was a key element of this "re-imposition" in New York. Moody quotes Roger Starr, housing commissioner in the late 1970s and early '80s, arguing for "planned shrinkage": removing money and social services from poor, disproportionately minority neighborhoods to drive these populations out of the city. "Stop Puerto Ricans and the rural Blacks from living in the city," Starr wrote, "Our urban system is based on the theory of taking the peasant and turning him into an industrial worker. Now there are no industrial jobs. Why not keep him a peasant. Better a thriving city of 5 million than a Calcutta of 7 million."

While gutting funding for affordable housing, the city and state have doled out hundreds of millions of dollars in tax exemptions and abatements to the upscale housing market and corporate welfare to "public-private" partnerships run by real-estate titans like Bruce Ratner and Larry Silverstein.

While Moody rightly lays the primary blame for the war on ordinary New Yorkers upon what he calls the city's "permanent government" of unelected corporate power brokers, he never lets the city's Democratic Party off the hook. Readers who despise Rudy Giuliani and the current billionaire mayor, Michael Bloomberg, won't finish Moody's book with nostalgia for the mayoralty of David Dinkins or, even less, the grotesque race-baiter Ed Koch. At every stage, the city's Democratic Party machine has submitted to financial and real-estate interest, and placed patronage over principle.

Moody also offers a sharp critique of the leadership of the city's major unions for their strategy of "partnership" with business and the city and state governments, a strategy that has only led to endless concessions and division. But Moody argues it's not enough to change the ranks of union leaders or draw up wish lists of reforms—what's necessary is "a greater and deeper upheaval" with "a strategy more focused on rank-and-file activation and involvement."

He identifies the sparks of hope today in the working-class challenge of a new immigrant rights movement, the activity of union dissidents and in a future "disruptive mass movement we haven't seen for some time." Moody's book provides not only a critical history of the corporate assault of the last 30 years, but points toward the kind of politics, struggle and organization needed to make another New York City possible.

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