In her new book Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics (Metropolitan Books, 2017), historian Kim Phillips-Fein tells the story of the 1975 financial crisis that engulfed New York City. When the news broke that New York City was on the brink of fiscal collapse, few believed it was possible. How could the country’s largest metropolis fail? How could the capital of the financial world go bankrupt? Yet the city was indeed billions of dollars in the red, with no way to pay back its debts. Bankers and politicians alike seized upon the situation as evidence that social liberalism, which New York famously exemplified, was unworkable. The city had to slash services, freeze wages, and fire thousands of workers, they insisted, or financial apocalypse would ensue.
Phillips-Fein argues that with unions and ordinary citizens refusing to accept retrenchment, the budget crunch became a struggle over the soul of New York, pitting fundamentally opposing visions of the city against each other. Drawing on archival sources and interviews, Fear City shows how the brush with bankruptcy permanently changed New York — and reshaped ideas about government.
Kim Phillips-Fein is the author of Invisible Hands: The Businessmen’s Crusade Against the New Deal. She teaches history at New York University’s Gallatin School of Individualized Study, and has written for The Nation, Dissent, The Baffler, The Atlantic, and The New York Times, among other publications. She lives in New York City.
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