Fear City: New York’s Fiscal Crisis and the Rise of Austerity Policis
Kim Phillips-Fein
(Metropolitan Books)
Books about financial crises shouldn’t be this exciting. Books about financial crises that happened 40 years shouldn’t be this exciting. But, somehow, Kim Phillips-Fein has achieved the impossible. One would think a book dealing with such a serious and complicated subject would read like dry homework, but Phillips-Fein has managed to tell the story in a riveting way. I don’t want to say that I couldn’t wait to put this book down, but it most definitely is a page turner.
The way Phillips-Fein pulls this off is to focus on only the essential players in the crisis and moving quickly. She puts things in context and how New York, with its many public institutions, basically kept borrowing to make ends meet for the longest time. Mayors and Governors knew this wasn’t a long-term solution, but they also seemed to believe in the indestructability of New York. It stood for so much and was so important to the United States that surely, when push came to shove, the government would be there to support it. That’s why its bonds kept getting A ratings. It’s almost like the insiders had an understanding never to doubt New York’s credibility. However, it seems like this house of cards needed just one rookie trader, who didn’t get the memo, to raise a red flag for it all to come tumbling down.
What followed was a snowballing of debt and a government scrambling to pay its bills and demanding that someone, anyone, bail out the city. Mayor Beame was raised on the system that was now failing and, for some reason, was naïve to think it wasn’t built on a rock solid foundation. Presidents, governors, congressmen, senators, citizens all started doubting whether it’s really anyone’s responsibility to bail out a city who did this to itself. The pace of Fear City is fast fast fast, as Phillips-Fein quickly sets the stage to keep telling the story of New York City exploring its options to avoid bankruptcy while cutting facility after facility from its citizens: hospitals, schools, policemen, firemen.
Surprisingly, telling the story of the crisis is much more exciting than telling the story of the aftermath, which is that New York City became a place that embraced business and investment to keep it running, shifting its loyalty from its citizens to its investors. Nevertheless, Fear City it highly recommended.
