RUTHFULLY YOURS

Nicole Gelinas, E. J. McMahon New York City’s Drop Dead Year A new film vividly revisits Gotham’s 1975 nadir.

Posted By Ruth King on June 23rd, 2025

https://www.city-journal.org/article/drop-dead-city-documentary-new-york-city-fiscal-crisis

This year marks a half-century since the acute phase of New York City’s fiscal crisis. It began in February 1975, when a default by a state-backed housing authority alarmed the bankers who regularly lent to the city, prompting closer scrutiny of New York’s own finances. In April, the banks stopped extending credit to cover the city’s chronic deficits. That led to a state takeover of city finances in June and, finally, a federal guarantee of the state rescue plan in December.

The crisis still sparks both ideological and practical debate: Was it the banks’ fault—for lending too much, or for cutting off credit? Or was it the city’s fault, for borrowing beyond its means? Did the reforms that followed usher in an era of harmful austerity or broad-based prosperity? Was the outcome a bailout, a punishment, or both?

We’ve both recently attended a screening of a new documentary on the crisis, Drop Dead City. The title comes from the famous Daily News headline paraphrasing President Gerald Ford’s initial refusal to rescue New York in October 1975: “FORD TO CITY: DROP DEAD.” As with many famous quotes, Ford never used those exact words—though what he did say was close enough. Directed by Michael Rohatyn and Peter Yost, Drop Dead City blends newly unearthed archival footage with clips and fresh interviews featuring key figures from 1975, including union leaders and financiers.

Nicole Gelinas: E. J., I’ve always wondered—where were you when the events of 1975 unfolded? Were you following them closely at the time, or did you come to the topic later—and if so, how, when, and why? And what was your initial impression of Drop Dead City? Did it strike you as riveting or dull, accurate or off the mark, relevant to today or a relic of the past?

E. J. McMahon: I was completing my junior year and studying for final exams at Villanova (one year ahead of a future pope, as it turns out) when the crisis burst into the open in the spring of 1975. I had returned for my senior year by the time of the famous “Drop Dead” headline that fall. Of course, much else was happening in the spring of 1975—not least the fall of South Vietnam and its aftermath. And in September, just a month before giving the speech that inspired the Daily News headline, President Ford was the target of two assassination attempts within just over two weeks—events that Drop Dead City doesn’t mention.

If you grew up in the metropolitan area, as I did—in the suburbs of Westchester and Putnam counties—New York City felt like the center of the known universe. It was certainly the center of the local news media universe. From a very young age, just from the 15 minutes of local TV news I watched each morning before Captain Kangaroo, I got the impression that some guy named “Mayor Wagner” must be more important than the president.

As a viewing experience, Drop Dead City was first-rate, in my book—an entertaining and still-relevant portrayal of what now feels like ancient history. The directors made a smart choice in focusing on a single year, 1975, rather than getting bogged down in the sprawling backstory of the fiscal crisis, which stretched back to the 1960s and wasn’t fully resolved until around 1980. Of course, as a Boomer, I’ll admit to having a nostalgic bias toward anything centered on 1975.

Unlike a Ken Burns–style, multipart deep dive, Drop Dead City forgoes scripted narration and tells its story through the recollections of former officials, retired city workers, and journalists, as well as contemporaneous news coverage and real-time comments from key players—people like the late Felix Rohatyn, chair of the Municipal Assistance Corporation (MAC) and father of one of the documentary’s directors.

In the entertaining clips of 1975 interviews with everyday New Yorkers—men, women, and kids in the street, as opposed to union members facing layoffs—the dominant emotion seems less like anxiety over the fiscal crisis and more like excitement about being on TV. The crisis was real and deadly serious, but in an era of peak local television and peak newspaper circulation, much of the outrage portrayed in the documentary also feels performative. Amid the mounting alarm—verging on panic—in City Hall and the State Capitol, most New Yorkers were simply going about their lives, largely unconcerned about the city’s financial future.

The anger of union leaders—especially sanitation workers, firefighters, and cops—was real. But the worst scenes of garbage piling up on the streets were the result of a three-day wildcat strike by the sanitation union ahead of the July 4 weekend. They didn’t reflect daily life across the city, at least not in 1975. And as one Drop Dead City interview shows, not all tourists were even aware of the “Fear City” leaflets distributed by the police union. The most consistently outspoken union leaders, like Victor Gotbaum of DC 37, the city’s largest civilian union, and Ken McFeeley of the PBA, clearly knew where the cameras were. But protests and publicity stunts aside, the deepest strains on city services came later, during the period of fiscal retrenchment in the years following the 1975 crisis.

So, to sum up: as a production, Drop Dead City told an interesting story—entertaining, well-crafted, and creatively assembled from archival footage and interviews with surviving principals (most of whom, sadly, have since passed away). But to answer another part of your question—did Drop Dead City offer a fully accurate picture of what was happening and why? My take on that is more mixed.

Before getting to that, though, I’d be curious to hear the impression this film made on someone from a different city and a younger generation—though in your case, Nicole, someone who also came to this documentary fresh from researching and writing an award-winning history of transportation policy in New York City. That story overlaps with the fiscal crisis in key ways and features some of the same figures who play prominent roles in Drop Dead City.

Gelinas: Yes, E. J.—regarding those interviews, it was especially poignant to see the late Dick Ravitch, the real-estate developer who helped engineer the city’s rescue in the 1970s and, a few years later as MTA chairman, led the revival of the transit system, speaking in vivid color from his kitchen. I still catch myself feeling—as I did for so long—that you can just reach out to these people whenever you have a question. But the reality is, for some of them, you can’t anymore.

Though I came along a generation or so later and grew up much farther from New York City, my formative experience of it, and my impression of the movie, weren’t so different from yours. When I was a kid, I loved newspapers—all newspapers—and my dad, who worked for the Cambridge Fire Department, would bring home the New York tabloids from the now-defunct Out of Town News kiosk in Harvard Square. The New York news of the 1980s was so much more dramatic—and more dramatically presented—than the Boston news, and the personalities were so much larger. I, too, saw the mayor—Ed Koch, in my era—as this almost cartoonishly important national figure, which, in many ways, he was.

Thinking about it from a fiscal perspective today—which does, I promise, tie back to the movie!—Robert Wagner, your formative mayor in the late 1950s and early 1960s, derived much of his power from the city’s fiscal position within a specific postwar state and national context. His administration, including his multiple-office-holding appointee Robert Moses, expertly leveraged this environment. Wagner controlled what would today amount to tens of billions in federal funding for road infrastructure and public housing. He also benefited from the natural growth in property tax revenues that came with a still-expanding local economy, which allowed him to formalize public-sector collective bargaining and to begin increasing social spending, without the city experiencing immediate fiscal strain.

Nearly three decades later, Koch didn’t derive his powers from fiscal strength but despite its absence: for most of his mayoralty, which ran from 1978 until 1989, the city remained under the state receivership imposed in 1975. The mayor couldn’t approve an infrastructure project or sign a labor contract without the permission of MAC, the state-controlled financial control board. In retrospect, some of the stunts Koch pulled, like suggesting that wolves be placed in subway railyards to deter graffiti vandals, and his perceived coziness with real estate—supporting the Westway landfill highway development project, say, after initially running for office opposing it—were ingenious hacks, meant to wield influence without holding the purse strings. And they sometimes worked: his public pressure on subway graffiti helped push the state-run MTA to act.

What happened between Wagner and Koch was, in compressed form, the subject of Drop Dead City. The story of 1975, in few sentences: starting in the 1950s, New York City’s spending began to outpace its tax revenues. In the 1960s, rising social spending collided with middle-class flight to the suburbs. For a long time, the city’s banks covered the gap, lending money to maintain the illusion of a balanced budget. But in 1975, for various reasons, the banks shut off the spigot. New York had to turn first to the state, then to the federal government, for a bailout—one whose repercussions still echo today.

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