Austerity Politics further Explained: Kim Phillips-Fein on The Metropole’s Review of Fear City

[Editor’s note: As part of our Book Review Series, The Metropole provides authors a chance to respond to reviews by The Metropole of their work. This week, New York University Professor Kim Phillips-Fein responds to the review of her work Fear City: New York City’s Fiscal Crisis and the Rise of Austerity Politics. You can read the original review here.]

I’m honored by Michael Glass’s generous, thoughtful review of Fear City. I appreciate his engagement with the book overall, but I am most grateful for his assessment of its methodology. Narrative history is as deeply structured by theory as any other style of historical writing, but there’s always a danger that the arguments can get too submerged in the arc of the story. So it’s very gratifying to have the sense that what I wanted to do came through for this reviewer.

New York Stock Exchange, New York, New York, photograph byCarol M. Highsmith, between 1980 and 1990s, Prints and Photographs Division, Library of Congress

Glass raises an excellent question about the politics of debt throughout the postwar years, and the growing reliance of cities on bond markets all through this time. The immediate cause of New York’s fiscal crisis was the large quantity of short-term debt it took on in the early 1970s, which generated heavy interest payments and also demanded frequent refinancing (this gave creditors greater leverage, which is part of why it precipitated the crisis).

But more broadly, many cities and states across the country took on increased debt over the postwar years. This became a problem in the early 1970s, when the commercial banks that had held much municipal debt became less interested in doing so.[1]

For a fiscal crisis, debt is only part of the story—the question of what revenue will repay it is the other. In New York, the near-crisis of the mid-1960s under Mayor Wagner was averted through new taxes that the Lindsey administration was able to win in Albany, as well as War on Poverty spending. But the question remains: what level of government – state, federal or municipal – should bear the costs of social spending, given the different taxing powers possessed by each? One of the lessons I hope readers will take from Fear City is the importance of historical analysis in short-term “crisis” situations: when viewed narrowly, in terms of the pressures of a fiscal shortfall, the only answer becomes to cut—but taking a longer view enables us to see the underlying conditions and to think of solutions in those terms.

Finally, Glass points to another important issue raised by Fear City: what happened afterwards? Is this the story of the end of an old regime or the creation of a new one? The strategies used to cope with the fiscal crisis – in particular, the creation of a financial control board granted veto power over the city’s spending – would be replicated in many other fiscal crises in the years that followed. And the crisis gave rise to a whole range of new institutions and ways of thinking about city government –ones that endured even as the spending of the city government rose again, as it eventually did.

New York Stock Exchange, photograph by Carol M. Highsmith, between 1980 and 2006, Prints and Photographs Division, Library of Congress

The austerity politics of the 1970s, in other words, was not only about the end of an old world, but the creation of a new one, and the way that it was forged out of the conflicts associated with the collapse of the earlier order. It was not only about dismantling social services and cutting spending, but about the struggle to shift social priorities. The slow, steady and determined effort to construct this new regime even against the resistance of many New Yorkers is where Fear City ends – but it’s really a much larger story in its own right, and one that I hope future scholars will pick up.

[1] Different takes on this story can be found in Eric Fure-Slocum’s Contesting the Postwar City: Working-Class and Growth Politics in 1940s Milwaukee, and in the work of Destin Jenkins on San Francisco. (Michael Reagan’s 2017 University of Washington dissertation on New York’s fiscal crisis also has important material on the bond market and the fiscal crisis.)

Featured image (at top): Wall Street bull, New York, New York, photograph by Carol M. Highsmith, between 1980 and 2006, Prints and Photographs Division, Library of Congress

One thought on “Austerity Politics further Explained: Kim Phillips-Fein on The Metropole’s Review of Fear City

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.