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How Gerald Ford Saved NYC – From Itself

It would seem that Gerald Ford never told New York City to “drop dead.”

Still, in hindsight, he was right to refuse to give its city fathers an unconditional taxpayer financed bailout, which would have amounted to nationalizing New York City’s profligate ways.

All of which is perhaps a very timely lesson for today.

After former Mr. Ford’s death two years ago, the New York Times actually made the effort to correct the historical record somewhat:

Infamous ‘Drop Dead’ Was Never Said by Ford

Published: December 28, 2006

… Mr. Ford, on Oct. 29, 1975, gave a speech denying federal assistance to spare New York from bankruptcy. The front page of The Daily News the next day read: “FORD TO CITY: DROP DEAD.”

Mr. Ford never explicitly said “drop dead.” Yet those two words, arguably the essence of his remarks as encapsulated in the immortal headline, would, as he later acknowledged, cost him the presidency the following year, after Jimmy Carter, nominated by the Democrats in New York, narrowly carried the state.

“It more than annoyed me because it wasn’t accurate,” he recalled years later. “It was very unfair.”

That view is echoed in an evolving version of historical revisionism. Only two months after saying or meaning or merely implying “drop dead” — or, perhaps, resorting to tough love by holding the city’s feet to the fire — Mr. Ford signed legislation to provide federal loans to the city, which were repaid with interest

Moreover, the speech spurred New York’s civic, business and labor leaders to rally bankers in the United States and abroad, who feared their own investments would be harmed if New York defaulted on its debt.

Mr. Ford was also an unlikely whipping boy. His resolve against profligacy was stiffened by more inviting villains, especially his treasury secretary, William E. Simon, whom even the president referred to as “hard-nosed.”

Mr. Simon warned that bailing out the city would amount to nationalizing municipal debt and rewarding local officials who lacked the will to stanch the inevitable hemorrhaging inflicted by bankrupt liberalism. (The investment banker Felix G. Rohatyn, recruited by Mr. Carey to rescue the city, would liken default to “someone stepping into a tepid bath and slashing his wrists — you might not feel yourself dying, but that’s what would happen”).

The Ford administration’s politically suicidal demands to city officials — raise transit fares, abolish rent control, scrap free tuition at the City University — prompted Victor Gotbaum, the municipal labor leader, to complain that Mr. Simon barely believed in government at all, except for police and fire protection, “and he’s not sure about fire.”

David R. Gergen, an assistant to Mr. Simon at the time and later a presidential adviser, recalled that Mr. Ford himself “was one of those moderate Republicans who actually liked New York” — he chose Nelson A. Rockefeller as his vice president — but that “he was offended by the city’s profligate spending.”

“The president’s speechwriters whipped up one draft, and I was asked by the White House chief of staff to write an alternative version,” Mr. Gergen said. “I wrote a hard-hitting piece, assuming that if it ever saw the light of day, the White House would, in the normal course, invite me to smooth the rough edges. Instead, someone plopped a few of my rough, unedited paragraphs into the final text.”

In the speech, the president said: “The people of this country will not be stampeded. They will not panic when a few desperate New York officials and bankers try to scare New York’s mortgage payments out of them.”

The speech had a powerful impact, Mr. Gergen said. “It was a doozy of a speech, but events caught both sides by surprise,” Mr. Gergen remembered. “New Yorkers had not foreseen how tough the president would be, and Republicans in Washington had not anticipated how angry the response would be.”

Howard J. Rubenstein, the public relations executive who was an adviser to Mayor Abraham D. Beame, recalled that the speech “galvanized New York like I’ve never seen before.” Mr. Rubenstein still has a framed copy of the headline on his office wall.

With 30 years’ hindsight, some of the players say that if Mr. Ford had acquiesced to the city’s appeals months or even weeks earlier, New York might never have recovered.

“Ford was good for New York, because he made us clean up our act,” said Henry J. Stern, a former parks commissioner and city councilman.

On balance, Mr. Rohatyn said, “I think he was a plus,” he said. “Ford did change his mind, and you can’t say that about every president.”

Edward I. Koch, who succeeded Mr. Beame, said of Mr. Ford: “Obviously he was persuaded his original position was wrong, and that shows a great man open to change. I hold nothing against him. And there are very few people, even when they’re dead, that I hold nothing against.”

Not long ago, Mr. Ford was interviewed for a tribute to Lewis Rudin, the New York real estate magnate and civic booster who fought mightily for federal help from the Ford administration in 1975. Praising Mr. Rudin’s relentless lobbying, Mr. Ford once again returned to the famous headline that had haunted him for decades.

“It was totally untrue,” he said, adding with a weak smile, “We burned all those papers.”

But isn’t there a moral in this for our current political Solons?

Nationalizing cities — even industries — is not always necessary, no matter what the politicians and headlines scream.

Indeed, everyone now seems to agree that a bailout of New York City would have been a disaster.

Still, thanks to our media in the 1970s, being right probably cost Mr. Ford the election.

(Do note that the Ford speech was written by the ever-helpful David Rodham Gergen.)

This article was posted by Steve on Wednesday, December 3rd, 2008. Comments are currently closed.

5 Responses to “How Gerald Ford Saved NYC – From Itself”

  1. Phil Byler says:

    Gerald Ford was right in his position concerning the requested bailout by New York City; and the larger lesson is to stand on principle, whether it be to oppose bailouts or to support our troops in war to victory. When you do right, you may not win the next election, but you will have served the country and in time you will be recognized for having been right.

  2. Steve says:

    Good points, PB. But more important than even winning elections or being viewed as correct by history, Ford did actually save New York City from itself.

    Despite itself — and of course our media.

  3. Liberals Demise says:

    “Stocks Skid……..Dow Down 12”
    Ahhhh…..those were the heady days, were they not? Man… I miss President Ford. He wasn’t afraid to tell you where and how far to shove it!!!!

  4. Chinnubie says:

    I was still too young to remember anything substantial about President Ford but from the things I’ve heard he seemed like a stand-up guy. I’m wishing the RNC could take notes from those days and nominate a true conservative the next time around like a Ford or Reagan.

    I love the stick-it attitude from those guys back then and man, it’s hard to believe that Gergan wrote that speech, I always assumed he was a Commie Pinko!

  5. proreason says:

    The simple principal underlying Ford’s refusal to bail-out NYC is the same one that smart parents apply to their children.

    Children that get everything for free remain children forever.

    That pretty much explains liberalism in 9 words.

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