The business of New York has always been business, the buying and selling of dreams. The currency–money, power, ideas, creativity–may vary, but not the chase. New York rattles and churns around the clock; even the criminals (a nearly endangered species these days) are jumpier than elsewhere. Adversity here is often just another form of competition. In 1835, a devastating fire swept lower Manhattan, destroying nearly 700 buildings and bankrupting almost all of the fire-insurance companies. New York barely blinked. Within 12 months, 500 new buildings were built and the area now known as Ground Zero soon teemed again with commerce, bigger and noisier than ever.
This year has been much worse than 1835 in terms of human loss, but the long-term outlook for the city may be just as rosy. The pattern of triumph is visible through the smoke and rubble: a risk associated with density–fire then, terrorism now–is assessed and eventually reduced. New York’s recovery will take longer this time, with a recession already rolling and lawsuits galore. But you can’t keep a great city down.
Or so New Yorkers tell themselves with all the Churchillian resolve they can muster. Chin up! Soldier on! But it can be hard to stay chipper, even under the inspired leadership of one Rudolph Giuliani, whose astonishing prestige carried Bloomberg over the finish line. The hole above lower Manhattan is like the void where an amputee’s limbs once were–not just depressing but disorienting in its emptiness. For more than a quarter century, you could get your bearings in Manhattan with a quick glance at the towers. Now we must set course by different stars.
And where might they be? The truth is, the city hasn’t a clue about its direction, and the colorful new mayor is mostly a hostage to fortune. All that’s clear is that with an estimated 100,000 jobs lost in the September 11 fallout and more office space destroyed than exists in the entire city of Cincinnati, the task is gargantuan. Some of the challenges are concrete–insurers may raise rates on Manhattan office towers 100 percent–and some more psychological. Will the young and ambitious still want to come? Will the capital markets revive? Much depends on Washington, where President Bush and Congress unambiguously promised at least $20 billion in aid, but budget gremlins are starting to play games. So far, the check is still very much in the mail.
While New York waits, memories fade. The good feeling about New York in the rest of the country, confirmed this fall by the huge outpouring of support for the families of the World Trade Center victims, may already be slipping into the past. “Everyone was a New Yorker for a while,” says William McDonough, chairman of the Federal Reserve Bank of New York. “But no more. This is not going to be a picnic for anyone.” Businesses are threatening to flee, and the city is facing a budget deficit next year of at least $3 billion. With a shrinking tax base and police and teacher contracts on the table, the new mayor has to be something of a masochist.
The last time New York was in such a pickle was 1975, when a fiscal crisis sent the city to the brink of bankruptcy and the New York Daily News ran the famous headline FORD TO CITY: DROP DEAD. Bloomberg and Giuliani, citing a more diverse local economy, say that the budget crunch is less worrisome today, but Mitchell Moss, a professor at New York University and a Bloomberg adviser, argues that the challenge is actually more serious now: “This is not a problem of accounting. It is not a problem that can be resolved by better budget techniques and financial controls. This is going to require genuine leadership.”
We’ve already had a lesson in it. Giuliani, knighted by the Queen of England in honor of his pitch-perfect performance (as an American, he has to skip the “Sir”), has ascended to an exalted place for any politician, but especially one in New York. Even Chelsea Clinton, writing in Talk magazine, calls him “my captain.” The mayor still attends two or three funerals every day, but he got his first full night’s sleep since September 11 last week. “I’m totally energized, so my staff is getting nervous,” he jokes. But he’s reluctant to take on the job of running the powerful new state and local authority that will plan the rebuilding of the World Trade Center site, a post that is his for the asking.
“It’s too complicated for the new mayor to have me around,” Giuliani says, stressing that he’s looking forward to a transition along the lines of the one from Ronald Reagan to George Bush in 1988. “I’m more than happy to be helpful from the sidelines, but I think I should step aside for a while and let him [Bloomberg] do his own thing.” So what will Giuliani do? He’ll write his memoirs, lecture and, according to a friend, entertain offers to run a big company for big money. If Bush has a job for him down the road (rumored to be director of the CIA), Giuliani says he will at least listen.
His replacement as mayor, a 59-year-old divorced billionaire and man about town, is essentially a blind date for the City of New York. Bloomberg comes to office Jan. 1 with no experience in politics, no ideological guideposts and, beyond a few pet ideas, no clear vision of exactly what he wants to do with the job. While “Mike” (as he likes to be called) tries to sell all this as an advantage, it can also be a large handicap. Rookies, even extraordinarily wealthy and capable ones, don’t usually fare well in politics, and his political instincts seemed slow during the long campaign season.
Even so, Bloomberg’s learning curve is steep and his “skill set,” as they say in the business world, is a good match for the moment. He’s a proven salesman, legendary motivator and disciplined manager. “If he focuses on this as a business, it’s going to work,” says Giuliani. “In the new era, you don’t need to be so political. He can sit down with business people and convince them not to leave. They understand him, and he’ll get the benefit of the doubt.”
By itself, that won’t be enough to rebuild New York. “Many big corporate CEOs don’t need anything from a mayor nowadays,” says Jay Kriegel, part of a team hoping to bring the Olympics to town in 2012 (page 54). “Power for them is in Albany or Washington.” That means Gov. George Pataki and Sens. Chuck Schumer and Hillary Clinton (not to mention Rep. Charles Rangel, who becomes chairman of the House Ways and Means Committee if the Democrats win control of the House next year) will need to use all of their legislative leverage to keep New York strong. These advocates need to convince the rest of the country that even in a time of dispersed technology, a weak financial capital means a weak economy nationwide. In other words, as goes New York, so goes America.
Bloomberg is in a paradoxical position on this question. The company he founded and that bears his name developed a real-time information system that’s practically indispensable for anyone in the investment business, which now reaches far beyond Wall Street. In fact, the very dispersal of knowledge that Bloomberg helped make possible–a “Bloomberg box” on nearly every desk in every financial institution around the world–is now an obstacle to his efforts to keep business in New York. Bloomberg himself, long proud of his Manhattan headquarters, challenges this logic: “This is where the labor force you need wants to live. This is where your customers, suppliers and competitors are, and you have to be close to them.” But the technological revolution of the last 20 years is making that argument harder to sustain.
Bloomberg’s personal contradictions are equally striking. He’s smart, but not engrossed in public-policy issues. Driven, but always up for a good party or ski vacation. Flippant, but deeply serious about the social responsibilities of wealth and privilege. Ferocious, but also compassionate toward employees who need help. Plain-spoken, but given to malapropisms and silly comments that will keep reporters smacking their lips. Pragmatic, but idealistic about his ability to make a difference.
While his ego is legendary, what’s most striking about him is his self-confidence. He made no secret of the fact that the only three jobs that interested him were president of the United States, secretary-general of the United Nations or mayor of New York.
Around the city, Bloomberg is best known for his penchant for putting his name on everything (one of his employees joked that a sign will now go up on the George Washington Bridge: WELCOME TO BLOOMBERG) and his philanthropy. Long before he considered running for public office, Bloomberg began giving away $100 million a year, sometimes more. The gifts, to a wide variety of cultural, scientific and youth-development causes, were made quietly until the campaign began, when his lavishly printed fliers boasted about them. As mayor, he plans to use his corporate philanthropy network to develop large education projects that join the city with the nonprofit sector.
The son of a Medford, Mass., bookkeeper who died when Bloomberg was at Johns Hopkins (his largest charitable beneficiary), he was an indifferent engineering student and BMOC. After Harvard Business School, he spent 15 years at Salomon Brothers, where he was fiery and foulmouthed, even by the wild-and-crazy standards of the trading floor. He wrote with a brutal honesty in his 1997 autobiography that he felt “ambivalent” when one of his rivals later died in a plane crash. Fired in 1981 after a merger, he walked out with $10 million and a brilliant plan for a financial-information service. A company that began in a one-room office with four employees now spreads around the world, with 7,700 employees and dozens of related businesses. “He’s very breezy. Laughs a lot and doesn’t take himself too seriously,” says Matthew Winkler, editor in chief of Bloomberg News, a respected news service.
To build esprit at his company, Bloomberg created a unique corporate culture, with an open floor plan (no offices), free snacks, hallway fish tanks, lots of parties and an insistence on nose-to-the-grindstone work. Until the mid-1990s, when three female ex-employees filed sexual- harassment lawsuits, that culture included plenty of degrading sexual humor from the boss. Bloomberg denied under oath that he ever told a pregnant employee to “kill it,” but he settled that suit and admitted to making other crude sexual comments to women employees, a practice he has since stopped.
Other traditions strike him as simply good business sense. Bloomberg never attends a farewell party for a departing employee, unless the person is retiring or going into government service. “I’m fiercely loyal to the people [still] in the company,” he says.
Bloomberg is not the first mayor to come straight out of business. In fact, there’s a bit of a trend underway. Richard Riordan, a liberal Republican businessman, was elected in Los Angeles in 1993. And centrist mayors like Richard M. Daley in Chicago and Edward Rendell in Philadelphia, while not business leaders, have championed public-private partnerships. With Americans owning stocks in record numbers and much more savvy about business, a new urban electoral base is surfacing to compete with the old ethnic politics. While the man Bloomberg narrowly beat, Democrat Mark Green, carried public employees overwhelmingly, Bloomberg scored heavily among those in the private sector. With more than 40 percent of New Yorkers now foreign-born, the immigrant shopkeeper is a potent political player, and no longer reliably Democratic.
Even so, last week’s election hardly constitutes a triumph for the GOP. Bloomberg describes himself as a “liberal,” and he became a Republican only to avoid a crowded Democratic primary. His role model in politics is not his political savior, Giuliani, but John McCain, whose accessibility and independence forged a hot new political style. Beyond rebuilding, Bloomberg says his big goals as mayor are to fix the schools and advance racial relations, especially with police and inside the nearly all-white fire department.
He’ll do that by moving away from the confrontational politics of the Giuliani era. Behind closed doors, Bloomberg is expected to be every bit as tough as his reputation. But in public, he’ll resume the role of salesman, “showing up with a smile on your face even after they slam the door.” In his first days as mayor-elect, Bloomberg met with political players in New York City whom Giuliani hasn’t seen in eight years (the leftwing a-list, sneered the New York Post). “Symbolism in government is a lot more important than it is in the commercial world. People want respect. People want to be acknowledged,” Bloomberg says. He plans to have city workers from all levels to dinner routinely at Gracie Mansion.
Not that Bloomberg will live there. For now, he hopes to remain in his sumptuous 79th Street town house (Giuliani doesn’t live in Gracie Mansion, either; his wife threw him out after they separated last year). Bloomberg’s ex-wife (a British subject), two teenage daughters (equestrian champions) and girlfriend (a power- company executive on Long Island) each worked on his campaign, along with 5,000 other volunteers.
The rest of the race was paid for out of his pocket–almost $100 a voter, nearly five times what Green spent. The record-setting $70 million exceeds spendthrifts like Michael Huffington in 1994 and Jon Corzine in 2000, both of whom spent less in statewide races in California and New Jersey than Bloomberg did in New York City. It marked a bitter irony for Green, who wrote a best seller in 1972, “Who Runs Congress?” about the power of money in politics. “I guess the book’s thesis was stronger than my candidacy,” Green says. “I hope God got a good laugh out of it.”
After running strong most of the year, Green made mistakes this fall, especially a last-minute ad trying to exploit the “kill it” sexual-harassment charge. Fernando Ferrer, who lost to Green in the Democratic runoff, and Al Sharpton didn’t help. They preferred to vent over perceived slights than to win back city hall for the Democrats. The result was erosion in black turnout and an actual Bloomberg majority among Hispanics, a shocker in New York politics.
But the decisive factor was Giuliani, who cut what will likely be remembered as the most powerful political-endorsement ad ever made. Down 10 points in the polls with 10 days to go, Bloomberg moved up with each airing. “Rudy was the thousand-pound gorilla. I’ve never seen that kind of impact,” says legendary New York media adviser David Garth, who worked for Bloomberg. The ad, made by Bill Knapp, showed Giuliani sounding a note of humility about his reign, then delivering a convincing 60-second explanation of why Bloomberg should carry the torch. Garth and Giuliani had sharp words over when the ad should air, with the media maven wanting it earlier. Giuliani, remembering that he endorsed Democratic Gov. Mario Cuomo too early in 1994 (Cuomo lost), wanted to wait, and Garth later admitted that the mayor had been right about the timing.
Until Giuliani saved his hide, Bloomberg was not a particularly convincing candidate. One day he chastised Green for being too liberal (an aide actually called him a Stalinist), then described himself as a liberal before walking out of a press conference and leaving Pataki standing there alone. Other gaffes (saying sanitation workers faced more dangers than police or firefighters) didn’t seem to hurt because no one was paying attention.
But campaigning is different from governing, and he may be better at the latter. “His entrepreneurial spirit will help. The classic line you always hear in government–‘That’s not the way we do it’–will not last a nanosecond with him,” says Joseph Lhota, the current deputy mayor.
At the same time, Bloomberg described himself in his book “Bloomberg by Bloomberg” as a “contrarian” and “pigheaded,” which could prove to be a problem in government. “I think everybody who’s a leader is to some extent pigheaded,” he says. “When you’re an innovator, you go against conventional wisdom by definition. There is nothing you do where somebody won’t find fault. No proposal you could possibly make.” All true. But “being a contrarian is not a particularly good recipe for running a city,” says Alan Ehrenhalt, editor of Governing magazine. It doesn’t help bring people together, which is the only way anything gets done.
Bloomberg himself is sensitive to the need to bring people along. “You can have the vision, but if the people that have to execute it haven’t signed on, it just doesn’t come out the other end.”
That’s where the people of New York come in. It is they, more than the bureaucrats and politicians, who must revive and restore their city. Most schoolchildren don’t learn it, but lower Manhattan is where the American Republic really began. George Washington was sworn in as the first president in 1789, only a few yards from Ground Zero. “America has been extremely ambivalent about New York,” says Ric Burns, who made a moving documentary about the city. “But it is a symbol of democracy and of capitalism and the undisputed center of global culture. We will build something here that is even more magnificent. We will reassert all of the values for which New York has stood. This is where the future came thrusting out of the ground.”
