It must have been quite a sad sight to see observers at the White House that spring morning in 1975. Abraham Beame, Mayor of New York City, and Hugh Carey, Governor of the state of the same name, sat in front of President Gerald Ford. But they did not come as proud representatives of a world metropolis, but as supplicants: New York, according to Mayor Beame, is on the verge of bankruptcy, if Washington does not give any money, the city will sink into social unrest, violence and chaos. Ford asked for a day to think about it – and declined.
Four and a half decades later, history could repeat itself exactly like that. Because after a long upswing, New York is threatened with another financial collapse. This time it’s not industrial companies that emigrate, globalization and the urban exodus of the rich and famous, but the corona virus. Hardly any other place in the world has been hit as hard by the pandemic, both medically and financially, as the self-proclaimed world capital between the Hudson River and Long Island Sound – and few US politicians are as antagonistic as the incumbent Mayor Bill de Blasio, Governor Andrew Cuomo and President Donald Trump.
According to calculations by the Independent Budget Inspectorate of New York (IBO), the city treasury is threatened with a double-digit billion dollar hole by mid-2021, and tax revenues alone could be $ 9.7 billion lower than previously planned. The reasons include, among other things, the collapsing profits of companies and – even more – the massive loss of jobs. By March of next year alone, the IBO expects around 475,000 jobs to be cut. That would correspond to every tenth job in the city.
It is particularly critical that many jobs can be lost not only temporarily, but permanently. According to the IBO, this applies, among other things, to the retail trade, the hospitality industry and cultural sites, where a rapid return to the conditions of the pre-Corona period is not expected and many companies are threatened with extinction. But job cuts are also to be expected in almost all other industries, and those who suffer are mainly people who are not earning well anyway. Overall, looking at employment, one must reckon with “the worst recession since the early 1970s,” according to the agency.
Mayor de Blasio and Governor Cuomo, who are both members of the Democratic Party but have been making life difficult for each other for years, have already positioned themselves in the face of the poor numbers. “We will not be able to offer simple services and live normally as a society if we do not get help from the federal government,” said de Blasio. In contrast, in view of the crisis, spending cuts, as some are demanding of him, are hardly possible. “There are many things that cannot simply be cut. And that is why we will have to keep fighting for the support we deserve from Washington,” said the mayor.
Cuomo already went one step further and applied for an interest-free loan from the federal government of four billion dollars for the state of New York. The Ministry of Labor in the state capital Albany said the money will be used, among other things, to pay unemployment benefits to all those people who have lost their jobs in the past few weeks. According to calculations by the Wall Street Journal New York State used half of its unemployment benefit reserves in just six weeks.
Trump has not yet commented on the requests for financial aid. What he thinks of the mayor and the governor of his hometown, however, he has made clear in dozens of tweets in recent years: Both, the President’s conclusion, are “incompetent and stupid”.
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