Michael R. Bloomberg was until recently better known in the canyons of Wall Street and office towers of Corporate America than in the streets and neighborhoods of Brooklyn, Queens, the Bronx, Staten Island, and most of Manhattan. His ubiquitous Bloomberg computer screens provide much of the financial data that power global stock, bond, and commodity markets. Now the self-made billionaire entrepreneur, who built his business in New York City, is its 108th mayor.
A businessman-mayor is a most remarkable event in a liberal city often indifferent to economic development. Even outgoing Mayor Rudolph W. Giuliani, for all his brilliant successes, did little to change that tradition. Giuliani "normalized" New York and reintegrated it into America by restoring order and bringing common sense back to social policy. Bloomberg now has the opportunity to build on this foundation and bring his skills as a pragmatic manager and innovator to the economic sphere. September 11 and the recession have left New York with a budget deficit of $4 billion and 100,000 newly unemployed.
The most immediate problem is cutting the deficit. Giuliani had an economic boom to fill the city's coffers and avoided tough negotiations with unions. Bloomberg can't. Firefighters, police, and teachers have been working without contracts, and their salaries aren't competitive with most nearby suburbs. Given their heroic efforts and new role in securing the city against terrorism, the firefighters and police are in line to get decent increases. But with tax revenues falling, that money must come from wringing greater efficiencies from the rest of the city's workforce. The recession has forced employees in the private sector to accept pay freezes, givebacks, and layoffs. Municipal workers may well have to bear the same burden. At the very least, any raises should be justified by higher productivity. Bloomberg got off to a good start by announcing a 20% reduction in his own staff.
Bloomberg must also draw up a viable long-term economic plan for the city. Making New York economically competitive should be a significant goal. As a CEO, he knows that doing business in New York is a difficult, byzantine affair with endless red tape, archaic zoning laws, and, of course, among the highest taxes in the country. As a purveyor of electronic data, Bloomberg is in a good position to computerize paperwork and put government functions on the Web. A long-term plan to bring down in later years New York's personal and business taxes is crucial.
Bloomberg's toughest job will be rebuilding the public schools and the city's human capital. New York has some of the best private and parochial schools in America and many good public schools as well, but most of its inner-city schools are in terrible shape. Teachers complain that many of their students come from homes that are broken and lacking clocks or books, or from rural areas in foreign countries and can't read or write in any language. Critics counter that the school year is too short, that union rules--not performance--dominate teaching, and accountability is lacking. The truth is that everyone in the education debate is right. Bloomberg needs to find more money for schools but he also needs to make schools more accountable. To do that, the New York state legislature must give the mayor direct authority over the city's school system, as is the case in Chicago, where early results are promising. Giuliani couldn't get the necessary control. Bloomberg must. Bloomberg also should bring in Edison Schools Inc. and others to provide competitive benchmarking. Not least, he needs to help the City University in its traditional role of providing quality education to immigrants and the poor.
Rudy Giuliani will always be known as the mayor who turned New York City around and guided it through the trauma of September 11. Michael Bloomberg has the chance to be known as the mayor who steadied New York after the crisis and set her course into the new century. We wish him luck.
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