New York City can learn valuable lessons from Detroit’s bankruptcy, Mayor Michael Bloomberg said, despite the contrasts between the two cities.
Speaking Tuesday at the 630 Flushing Incubator, a Brooklyn center for manufacturing startups, Bloomberg warned about escalating pension and health care costs.
“The idea that our pension costs can be substantially reduced through increased market returns is a fantasy perpetuated to avoid the hard choices we must confront today,” said Bloomberg. “Avoiding the hard choices is how Detroit went bankrupt. And it’s the road to ruin for any city.”
Bloomberg is in the last of his 12 years in office. His successor will take charge of a city whose employees are working on expired union contracts.
Although New York endured a major financial crisis in the mid-1970s, its economy was not based on a single industry, as is the Motor City. New York emerged stronger and Bloomberg attributes this to New York’s diversification.
“Economic diversity and geographic diversity: those have been out two overarching goals, and we’ve pursued both using the same simple idea: If you can attract people to the neighborhoods across the city residents, visitors, immigrants by creating safe and clean streets, good schools and green parks, and cultural opportunities you can set off a virtuous cycle of growth,” said Bloomberg.
The importance of fiscal stewardship was also a major contributing factor to Detroit’s demise. Bloomberg stated that the harmful factors at work in Detroit in recent years were “short-sightedness, corruption, mismanagement and perhaps most dangerous of all special interest politics.”