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?
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.