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21 " In November, Random House had published The Art of the Deal by Donald Trump, whose disdain for tradition and good taste had by now convinced striving classes that he was one of them. The people who resented him were the meritocracy who followed the rules; those on top and those on the bottom both knew Balzac had it right: “Behind every great fortune,” he’d written, “there is a great crime.” For Liz Smith, the love of money could still excuse anything. “It is refreshing,” she wrote of “The Donald,” “to find a rich person who isn’t pretending to be broke or modest and unassuming, hopping and skipping on hot coals to avoid being called crass and vulgar when it comes to the most absorbing subject known to the average man and woman in 1988: money…” She finished, “Let’s not kill Donald. Don’t you want to see what happens when he grows up?” In the meantime, he borrowed $407.5 million to buy the Plaza, taking out full-page ads promising to make it “perhaps the greatest hotel in the world.” He mulled public office. “I’m not running for president,” he said, “But if I did… I’d win.” The Helmsleys, on the other hand, were sacrificed for the sins of their class; Giuliani indicted them for tax evasion. "
― Thomas Dyja , New York, New York, New York: Four Decades of Success, Excess, and Transformation
22 " Unfortunately, the Bull that gilded Renaissance New York did little for most Americans. Eighties Wall Street was about institutional money released by deregulation, mergers and acquisitions, and, most of all, the debt that made it all possible. As John Kenneth Galbraith points out, financial euphoria always starts with new ways to borrow money; this time it was triggered by the Savings & Loan crisis. Volcker’s rocketing interest rates had forced S&Ls to offer double digits to new depositors while only getting back single digits on the old thirty-year mortgages on their books. S&Ls were going under, and getting a mortgage was nearly impossible, so in March 1980, with the banking system and the housing market on the brink, Carter had signed a law to allow them to issue credit cards, invest in commercial real estate, and offer checking accounts in order to stay in business. Reagan then took it a step further with a change that encouraged S&Ls to sell their mortgages in search of higher returns, freeing up a $1 trillion that needed to be invested in something. Which takes us back to Salomon Brothers, where in 1978 one Lew Ranieri had repackaged an old investment product the government had clamped down on during the Depression: A group of home mortgages all backed by government insurance would be bundled together, then sliced into bonds, thus converting the debt some people owed on their homes into an asset for others. Ranieri had been a bit ahead of the curve then—the same high interest rates that killed the S&Ls also made his bonds unattractive—but now deregulation let Salomon buy up the S&Ls’ mortgages at a deep discount, bundle them into bonds, and sell them back to the S&Ls who believed they’d diversified into the bond market when in fact they’d just bought ground meat made out of their own steaks. In June 1983, Salomon Brothers and Freddie Mac together issued the first collateralized mortgage obligation bonds (CMOs), which bundled up debt and cut it into tranches based on the amount of risk: you could choose between ground chuck and ground sirloin. It would be years before technology would allow doing this on a huge scale, but the immediate impact was that all kinds of debt, not just mortgages, were bundled, cut into bonds, and sold: credit card debt, car loans, you name it. Between 1983 and 1988, some $60 billion of CMOs were sold; GM’s financing arm became more profitable than its cars. America began to make debt instead of things. The "
23 " The tide began to turn in Rudy’s favor when he endorsed Clinton’s crime bill and its funds for social programs he’d just gutted. “My city comes first,” said the mayor to congressional Republicans. “Political parties come second.” His approval rating broke 50%, something Mario Cuomo noticed as he ran for a fourth term, this time against D’Amato’s guy George Pataki. Despite giving signals that he’d sit this one out, Giuliani endorsed Cuomo on live television on October 25, a “Dirty Deal” Republicans packaged to represent everything they hated about New York City. Massive Upstate turnout gave Pataki an easy win, but Rudy had made himself look like the Fusion mayor he’d promised to be, transforming perceptions of his Reaganomic takeover into the rough but necessary medicine of Koch’s emergency budgets. "
24 " Everywhere a sudden light shone down. The all-type cover of New York’s Christmas issue harked and heralded the news that “NEW YORK IS BACK.” “The death of this city has been declared so often,” it read, “that almost no one realizes life here is actually getting better—safer, nicer, tastier, cheaper, snazzier, more sensible and exciting than it’s been in years. Who knew?” Inside, the “celebration of the new, improved metropolis” began “Admit it: You’ve been feeling better, but don’t know why,” though it certainly hinted by naming Rudy himself one of the thirty-eight “new, improved” things about New York: “Rudy Giuliani’s first year as mayor, though far from perfect, has been so eventful, so thrillingly New Paradigmatic that the Dinkins administration seems even less accomplished in memory than it was in fact.” Yet out of the thirty-seven other reasons cited, little was new or in any way related to Giuliani. From Times Square, Chelsea Piers, and Bryant Park to better subways, bustling flea markets, and a wave of coffeehouses, this sudden awakening was the result of policies, plans, and battles of prior administrations and the tireless efforts of individuals who’d fought and labored with their fellow New Yorkers for more than a decade. "
25 " Protest is good; involvement is better; doing both is the best. "
26 " This work ahead will require leaders who put the good of the city above all else. The greatest failures of Dinkins and de Blasio were their failures of leadership, not of policy. They let the city go adrift, but worse, they made everyone who lived in it feel adrift. "
27 " Grassroots leaders must weave a hundred voices and wills into a single, strong thread to wind with others into a cable that can, with more cables, hold up a bridge in partnership with bigger forces. Reverend Johnny Ray Youngblood and Yolanda Garcia, for example, weren’t afraid to hold power. They understood that for all the danger it presents, sometimes the righteous must wrap their hands around the live wire in order to achieve the greater good. In short, people have to step up and find the courage to lead, but no one can lead all the time. They must also let themselves be led by others. "
28 " Public administration must be as nonpartisan as possible. Though it’s never been a sexy platform for any politician to run on, maintaining infrastructure, budgeting funds, and using them well to keep it updated and in good working order matters more than splashy new capital projects. The failure of basic things like transit, sanitation, and water, streets, fire protection, and parks undermines confidence in the city more than any particular crisis, but rather than guaranteeing reliable, efficient, equitable services, the answer to problems has usually been more “catalytic bigness, "
29 " The movement from Industry to Information would prove to be the fundamental economic shift of the next four decades, and it was hardly some secret conspiracy even then. Going forward, as Daniel Bell had explained, knowledge would replace labor, services would replace goods, and a new knowledge-based power class would emerge that would increase the role of women in the economy. "