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And i think that he felt a response ability because theres nobody, he felt a responsibility to say well, without a body, without dna evidence, can we really say for sure that this man is dead . To the phantom that escapes how many times managed to escape a month time as adolf eichmann. At the top of most wanted list have been ostracized presents at, but not a lewdly sure. That is through the case remains from his perspective to this day. The macquarie convinced he had yes. Everyone while u. S. Yourself, but its very clear from the evidence in the German Authorities they declared him dead as well. The book is called the eternal nazi. Nicholas kulish, souad mekhennet, thank you very much. [applause] please join us in the back force of wine and food and books to purchase and had nine. Thank you again for joining us. [inaudible conversations] [inaudible conversations] Richard Ravitch on detroits bankruptcy of former Lieutenant Governor of new york talks about his life as a Public Service and discusses what he did to turn around new yorks fiscal problems of the night 70s. This is about an hour and 15 minute. [inaudible conversations] good afternoon, everybody. But that to get started. Welcome to the aflcio. As you know, this disease. A booksignings and irrelevant offers so they get a chance to hear from nonand also a chance to talk with them. I am really excited today and it is really my pleasure to introduce my friend and a longtime friend of the Labor Movement, Richard Ravitch. He is here to discuss, so much to do. That title is definitely an understatement when it comes to his career. Dick his life in Public Service has been intertwined with the Labor Movement since the name teen 50s. Some of you here dont remember the 50s. I barely do i can tell you. But i think that its just because im old right now is starting to lose my memory. Im going to leave most of its ahead to tell you some stories. But i cant resist mentioning a couple of moments in dicks life to give you a sense of the type of life that this man has led. Dick has been involved in progressive politics since before most of us were on. In college, working for Adlai Stevens and right after the civil war [laughter] and during that campaign, he took Eleanor Roosevelt to lunch. That was a great day. Probably still remember that. In 63, dick helped organize new york tension to the great Archer Jonathan friedman. And of course form a friendship with the marches organizer bayard reston, here is the labor might come the Civil Rights Movement and the movement and that friendship last for the entire rest of his life. In 75, when new york city was on the verge of bankruptcy, dick convened a chinese takeout summit with two of the new york city great labor leaders. Victor god all shanker for the outlines of a Worker Pension Fund led rescue of the city was trying to. People like to forget it was a workers money that helped lead new york out of bankruptcy. We will let them forget. When the new york mayor, ed koch attack new york workers for not working hard enough committee was headed was head of the metropolitan transit authority. He went on tv to defend those workers. Quite frankly, koch never got over it and was still attacking them at the end of his life and that is really a case it be known by the quality of your enemies. Starting in the 80s, dick served as a key adviser on financial issues. He served on the board of the aflcio Housing Investment for decades, never taken a single penny in com station and he remains one of the key people that we at the aflcio count on for financial wisdom. Dick has been responsible in one way or another for the construction of hundreds of thousands of units of Affordable Housing in new york and across the country, including some of the first racially integrated housing built right here in the district of columbia. Of course, dick circus attendant governor of new york from 2009, 2010. I want to say this about dick. This really i think dick means the most to me. First of all, trained three is a highly, highly successful businessman. But he has been a ferocious advocate for the print to pull the people who have done well in our society must pay their fair share for the price of civilization. Even as we meet today, dick has been locked in a public battle with Governor Andrew Cuomo over whether it is a good idea to give or tax breaks and tax cuts to the rich. I ensure that kind of thing leads to some awkward moments on the social circuit. They here at the house of labor, quite frankly we couldnt be more proud of you, my friend, my brother. Dick ravitch. [applause] well, it is a thrill to be here. I thank you all for coming and rich, i thank you for inviting me. I have to begin by saying a couple of things. I begin my book with a quote from plato that says if youre not prepared to engage in politics, you deserve to be governed by inferior people. In many ways, this book aside and telling a lot of stories come to some of are fun, if i had a purpose and a motive, it listed lead that young people recognize the only way change anything in a democracy is by getting involved with politics. You dont govern at being above politics. No particular person intended to be covered by that. Number two, the change only comes about through the political process. And it is essential that politics not be treated as citizens so many world is a dirty word. Some of our most distinguished newspapers used the word politics and a persistently pejorative way and that creates a cultural atmosphere that discourages young people from getting the old. Anyway, that is a large reason why i wrote this. Now i want to go back and tell you a few things as friends do for one another exaggerates. It wasnt hundreds of thousands. It was about 40,000 units of Affordable Housing here in washington, primarily new york, puerto rico. That was my business and i was enjoying it very much that i started my career here in 10 when i first got out of law School Writing of the secretaries up on the hill and that a congressman from california who gave me a job. It was great experience. Then i got married and decided i had to make a few bucks increase in Economic Security and maybe come back in public life when i have a little more independent, look into this business and it turned out fabulous lee. Having grown up in a family that worshiped roosevelt, i got involved in the Civil Rights Movement came out to watch and 1063 in that, as rich said, a very good friend in her home by life changed in many ways. First of all, new york is that the ost headquarters on park avenue south. That is how i met a close friend of mine for the remainder of his life. That is how i met Lane Kirkland who asked me several years later to become chairman of the aflcio housing and s. Mitra. Lane and his wife became very good friends as well and were wonderful people. I became exposed to the world of flavor of leadership came to realize that so many of the things they cared about in this country and in this work were dependent upon the effect that mess with which labour leadership was able to function in our democracy. Im going to to tell you some stories. First of all, about a month or two after the civil rights march in 63 i got a call from my address and asking me if i would have lunch with a philip randolph. And of course i was thrilled with the idea and we had lunch and he told me that mr. Randolph told me that you are in the business that a lot of the Building Trades in new york are fully segregated in with guts to break the barrier and create jobs in the way to do this is not by rabble rousing, but by training kids to take the apprenticeship tests. So we set up some thing called equipment and training program, the first across the picket line and some of you may know he was at the end for a while to cross the picket line in ark after the School Desegregation decision. Alexis herman worked there, subsequently secretary of labor. We so have i. Conventions down in new orleans. All i can tell you is 1 00 in the morning when we all feel no pain and lexis is pretty good on the dance floor. I have great memories, not. Shanker got in. The capcom from chicago. As a matter of fact, in 69, they had after the Famous School strike in new york, they had to very contentious, nasty jurisdictional battle as see who was to represent the power professionals and the Public School system. In 6 cents of organizers and made it a much as he could get it a racial issue. Ill shut her son on a word to go onto a professional union or something else. Ill shocker when that election hands down, which is very interesting. But it did not result in a friendship train the two. They were the most powerful labor leaders in new york. And by sheer serendipity i became friends with thick as well. We play tennis together every week. I dont know whether any of you have heard that thick and unfortunately he is not well so its not that good anymore. A wonderful, warm human being. I just visited his son who is head of the pbgc and his son josh has a big sign in his office, which is a quote from his father that says we are all should, but we are better than anyone else. Forget the language, but it had a big kick out of that. So in 1975 rolled around, it was very, very difficult to deal with the fact the city has solved deficit for the previous eight years by fireweed money. Someone had close to 9 billion richer he shortterm debt and in no way whatsoever paid it back except by retiring. The big suet of course profited from this process enormously reached the point where they were unwilling to continue because of their potential liability under the provisions of the security law. I happen to be with governor kerry on may 2nd. Ill never forget this day as long as i live. A second come in 1870 when the head of citibank, morgan bank and chase bank told the governor they would no longer underwrite the notes and bonds of the city of new york. And i called the city budget or the state budget your, wanted to know what the cash position of the city was, what the payroll was, what the maturing debt schedule was. I tell a lot of this in the boat. It was an extraordinary time. The most urgent need was to convert all the shortterm maturing debt into longterm debt. That is slightly created by some of remember as the municipal assistance corporation. Its purpose was to sully convert the shirt term debt to longterm debt. But that didnt take care of the fact the city was operating a deficit and we couldnt afford to do that anymore. So it became a question of negotiating with everyone. Obviously, the usual groups, business groups and conservative newspapers throughout the entire burden of this deficit out to be borne by the employees of the city. Fortunately, governor kerry did not share that view and he was gutsy enough to make that abundantly clear. And without boring you with all the details there ensued over six months. A series of agreement, which concluded the unions agreeing to have wage freezes, to laos, which they have limited ability to prevent that were done as part of a plan in which the banks agreed to lend money in order to keep the city going. And the unions had not stepped up to the plate. One of two things wouldve happened. Either the city wouldve been forced to file a Bankruptcy Law and thats probably what wouldve happened. I just came back from todays industry last week. That wouldve been a a disaster for new york city. They then did months more negotiations with the unions, what do they, with the federal government, the state of new york stepped up and picked up the cost of the court system in new york city, picked up the cost of the city university. It raised taxes. The upstate republicans believe it or not were willing to support additional tax revenue to help solve the problem because everybody recognized the great city of new york should not go into bankruptcy. Most importantly, everybody recognized in order to resolve a problem of this kind, everybody is to put something on the table. Ultimately in order to get the federal government to descend a screw to be necessary by the time the fall came around, reenacted a law that declared a moratorium on the pavement of volunteers to the city does in the big things went along with it. And supported the legislation. And that is what ultimately persuaded president ford and the white house that they had to do some thing. If new york had gone, the banks of the unions had all gone to the outer limit to avoid decrypts the, if there is one additional thing the federal government had to do in order to make sure that happen was that throughout the two were finally came through literally one month after the president had made it clear he was not going to provide any money whatsoever to the city like new york which produced the famous headline can afford to new york dropped dead, which the white house took great umbrage at and which governor kerry years later said to me was probably a little bit unfair, but it did help. One of the most exciting moment of this was enough trooper before the Ford Administration was help. The governor knowing i had worked on the hill and i knew henry royce, then chairman of the Banking Committee and the house in a new powersharing man who is staff during on the Senate Finance committee, which had been chaired by paul douglas im sorry, the Banking Committee. Not the finance committee. The Banking Committee. I have been appointed by president johnson to some called the National Commission of urban problems in 1966 and the great senator lost his senate seat. Job to make him chairman of the commission. Anyway, to make a long story short, i came down to washington on october 162 briefed this staff of the two Banking Committees about the situation in new york city. When i got back to the airport, i called the governor to check in and give them a report and he said he had just gotten a call from al shanker. The teachers retirement system had committed at the Union Pension funds as rich referred to earlier i met al shanker had decided he could not purchase the mac bonds and take the risk and the retirees would subsequently go into bankruptcy. If he didnt buy the bonds there is, if iran were the numbers, 150 million note maturity occurred the next day and therefore if he did by 150 or his Retirement Fund didnt buy 150 million mac bonds there would be no cash and the city wouldve been forced to file bankruptcy on that day. So i was very, very depressed. Our Members Meeting my wife is fancy dinner we had scheduled to go to and i couldnt take seeking the city was going to be tipsy. I couldnt too bad at 10 00 governor kerry called me since i now shot. Energy changes mind. Theres a police car waiting to tears. So i didnt know where al west at 10 00 at night all the time, the pirate arrested days so i got al. There were a cell phone for most days can associate up without at 11 00 at night and he was extremely well read, thoughtful person and we do want to talk about history and whether an individual could make a difference and he talked about his conflicts he had between the teachers and the retirees and how difficult it was for him and he recognized he would put the current crop of teachers in more severe difficulty if he did make the contribution. If he did make a contribution, he could be sued for somebody by a retiree from having failed to meet his fiduciary response abilities. So we talked about this until 5 00 in the morning and he then said to me, dick, ive got to check with a few people. But it should get a little rest and ill call you first thing. Went home, got into bed, couldnt quite believe i was in the middle of all of this. I was exhausted because to say i never heard from shanker. At 9 00 i turn on the Television Set in the interest me. They say we interrupt the broadcast to tell you new york city is going to go bankrupt today. So i got dressed, but in a cab and went on to governor kerrys office and flap my way through the press in two minutes later the secretary comes in says mr. Shanker is calling. So i picked up the phone and said i want to meet with you in the governor, no one else. I said where are you, al . He said im at gracie mansion. My apartment happened to be medically between the Governors Office and so i said why dont we meet in ip apartment. So we locked down to avoid the press. Unmarked police car and one of my apartment and a few minutes later alibis. 10 were still set at the central labor new york in the head of local three of the ibew, clearly the most powerful union leader in new york at the time and a very tough guy. Nice guys, but very, very staff. To make a long story short there is then four hours of discussion everybody had voters showing up and they were very interesting questions. I boosted the subsequently filed bankruptcy with the holder of a backbone better than the prior issue general obligation of the city. I dont want to get into the details of this way to explain this in the book. It is a very, very relevant question around the country because the question as to whether or not the holder of an acute municipal obligation come out differently are they going to be treated from one that is secured as part of the discussion, which some of you may be often. Involved in. Ow 1980, i had just become chairman of the mta, and the union was demanding a very substantial increase in pay. The mta had no money, and as i learned, was severely underfunded at every level, no adequate Capital Funding either. But i had a, for whatever set of reasons not unrelated to my friendship with the people in the Labor Movement, i made it my business to become friendly with the head of the transit workers who was a bus driver for the fifth avenue coach company, an irishman who had a great brogue, john lowe was his name. And he had a lawyer who was also one of the great labor lawyers, also a lawyer for the postal workers, represented a number of unions by the name of john odonnell. And he was a tough hombre but, again, a wonderful, wonderful human being. There was a tradition in new york at that point that if there was no contract, there would be a strike. We had a law in new york state, still have it, which prohibits strikes by public employees. And the penalty for that is that every man who goes out on strike loses two days afor every day pay for every day he or she is on strike and becomes open to fines a court can impose. So there was a tradition that if there was no contract by midnight of the day that it expired, that they would go out on strike. Well, im sure all of you know enough about new york to know that new york without Public Transportation is a pretty miserable place. And that there were hundreds of thousands if not a couple of million people, particularly those that were hourlyrated workers who were going to lose their pay if they couldnt get to work. So the consequences of this were very, very significant. And we had a mayor, and there was only one thing rich said that wasnt true. Ed koch and i ended up being very good friends. Because after he attacked the public employees, i attacked him. And four days later he walked into the press room in city hall, and he said im offering ravitch the olive branch. Matter of fact, im offering him the whole tree. And my wife insisted that since i made him eat crow because all the newspapers supported me that we invite him for chinese food that sunday night, which we did. But i gave him a black box which had a button on it which when you pressed the button, out of the black box came a crescendo of applause. And i wrote [laughter] on the black box, to ed what to listen to when you get into bed at night. [laughter] and to eds credit, he had the ability to laugh at himself. Most politicians are fairly narcissistic, but he never lost the ability to laugh at himself. In any event, during this period before april 1st which was the Expiration Date of the strike, ed koch was on television every day saying, watch out, ravitch is going to give away the store, and we cant afford it. And all the city contracts were expiring in september. So he was worried sick that what i settled with the twu for, he would be oppressive if it would be used against him in his negotiations. So he was not attacking me, but he sort of was challenging me and sort of warning the citizens, keep your eye on this guy that he doesnt give away the store. So the night before the contract expired, those of you and i think most of you who work for the Labor Movement will appreciate this, i met with john law and john odonnell. And there was, had been a mayor of the city of new york by the name of Robert Wagner who had befriended me. And when i became chairman of the mta, he took me to lunch, and he said, dick, im going to give you a little advice. When you get into labor negotiations, he said, you will serve the Public Interest better if youre prepared to look bad and make the union leader look good. And i remembered that advice that night. And john law and i worked out the following arrangement. I know youre going to laugh, but im not exaggerating one bit. At 10 00 the next night, he was going to invite me to heat with his executive meet with his executive committee, and i was going to slam my hand on the table and say heres my last offer, take it or leave i. Leave it. And law was going to reject it. And throw me out of the room. He was then going to turn to his executive committee and say, you know, before we go out on strike, we should have the last offer on the table. So lets make an offer that ravitch will never accept which is, of course, the deal that he and i [laughter] had discussed. Well, i went this was all at the Sheraton Hotel in new york. And the press, you know, unbelievable circus going on. But that was our arrangement, okay . Well, the afternoon was the fist night of passover first night of the jewish holiday passover, a holiday i always celebrated at home with the family. And that afternoon i get a call from the governor. He says i have to make peace between you and the mayor. So my son is the banquet manager at the st. Regis hotel, and im going to have a little passover holiday at the st. Regis hoe hotel fir you and the major for you and the mayor. So my then17yearold son took over the celebration at home, and i went to to the st. Regis u hell. There never had been at the st. Regis hotel, probably never since. Anyway, it was very awkward because i didnt tell anybody about this private deal i had with law. But i said, listen, after going through a sort of peculiar couple of hours in which we avoided talking about anything important, i went back to the hotel waiting for john laws call at 10 00. It never came. 11 00, never came. 12 00, televisions on, john law gets on television, he announces the strike. What happened . 12 30, he calls me, apologizes profusely. He says my executive committee, most of them were drunk, and when i said lets make a final offer to ravitch that he wont accept, they all said tell ravitch to go to hell. And we started to strike. And it was an 11day strike, cost a fortune. A real tragedy. But out of it emerged a terrific relationship with the workers. One of the most thrilling days of my life is the four years later when i resigned, john law took me on a tour of all the bus garages in new york, and the way i was treated, meaningful to me. Theres still occasional i get on a fifth avenue pus to go to work bus to go to work in the morning in new york, and there are a couple of bus drivers who are almost as old as i and remember me. Thats a real thrill. Anyway, thats enough of the anecdotes. Let me conclude before i ask you questions to say that my almost exclusive preoccupation for the last few years has been the growing fiscal crisis that i think cities and states are facing. Not adequately reported, not adequately understood. Retirement obligations, Health Care Costs are squeezing out education expenditures, infrastructure expenditures not in melodramatic ways. Occasionally there are bankruptcies that will happen with increasing frequency in my judgment. States can file bankruptcy because of the 11th amendment to the constitution, and there is no mechanism in place to adjudicate some kind of position or compromise. The administration has so far been unwilling to do anything to alleviate this. And, but the Financial Community has been willing to continue to extend credit, although theres increasing concern about that, and there are a lot of issues being raised about whether or not the sec shouldnt have more jurisdiction over the issuance of knew mispal municipal securities. And a im sure you all know in detroit, and i had nothing to do with this my role was a different one but they have substantially reduced the money creditors claims in order to make sure that there was some money available for the retirees, because you had 23,000 families who none of them had any Social Security whatsoever and would have been, would have no means of support at all. Even the reduced amount that theyre getting is probably barely enough to survive. But theres a growing problem around this country and a very severe one because the culture says its not willing to face up to the fundamental fact that we with made a lot of promises in our society, all kinds of promises, and we cant at the current level of revenue that were receiving at a federal and state and local level, we cannot afford to keep all those promises. So whether those people who were saying mitigate the benefits, and there are those who say increase the revenues. And that is the battle that is just beginning to be joined in american politics. And its a very, very important battle for everybody to understand that is unavoidable. And people forget there are too many voices that have no respect for public employees. And who think theyre the source of all the problems. In our society if they werent compensated so much, if they would work longer. And there are some abuses. Its probably hard to justify a Police Officer having a pension of a couple hundred thousand bucks a year. But thats not the general rule. And people have forgotten that a promise to pay interest so somebody who lends you money is morally indistinguishable from a promise to pay a benefit to somebody who worked for you for 20 years. And if that principle which is so obvious to, i think, certainly probably all of you is well understood, then you recognize that we can find a solution in this problem without honest, good faith negotiations, without strong labor leadership of the kind that we had in 75 when we avoided the bankruptcy of new york city. But it is the central domestic issue that this cups facing. That this countrys facing. When you have as many Pension Funds that are unfunded as they are im talking about public Pension Funds when you have, just to give you a few illustrations, the American Society of Civil Engineers says our public infrastructures underfunded by an excess of 7 trillion. And as the existing infrastructure ages, the obligation to put more money in grows. And were not doing that. Its amazing to me, just absolutely incredulous. Even Ronald Reagan raised the gas tax by four cents, money penny of which went to mass transit. It was the largest infusion into Public Transportation ever. But were getting nothing today. It just blows my mind, frankly. Rutgers put out a study that said states spend 650 million less on Early Childhood education last year than they did the year before. Well, if you want to disinvest in the united states, i cant think of a better way of doing it than cutting Early Childhood education. And yet somehow, i mean, all i hear politically are the shrill voices that think somehow you can do this by firing people, reducing benefits, then well be okay in the future. Well, it isnt going to work. It isnt going to work because thats not where the, ultimately, the majority of American People are going to come out intellectually, morally. And thats why, to go back to the beginning, for those of us who want to see this Problem Solved and solved fairly, getting involved in politics is the only solution. So before i open it up for questions, just let me bring one fact completely around. You mentioned senator paul douglas who was a very progressive senator and a friend of working people. Senator paul douglas had a son. His name was paul douglas jr. Paul douglas jr. Grew up to be the ceo of the pittsdon coal company that i ended up striking for 15 months because he wanted to take away pensions and health care from active miners and the health care from retired miners and widows. Youre kidding. We beat him. Knox. [inaudible conversations] i never knew that. Yeah. It was his son. And we reminded him of his dads progressive underpinnings [laughter] to no avail, i might add. [laughter] so thats just an interesting thing about sometimes the acorn does fall far away from the tree. [laughter] well, im pleased to report both my sons are good democrats. [laughter] yeah. [inaudible] wait a second. Weve got to get can you pick him up with that . All right. Dont hit him with it. What specifically should the federal government be doing now to aid cities in terms of financing, and what about detroit . Should obama have stepped in well, i have to be careful what i say about detroit because my role there is sort of a semiconfidential one that would advise the bankruptcy judge, so its not really appropriate, im sorry to say, too much about it. Except to say that there were a lot of good people trying very hard to come up with a bankruptcy plan that might be approved by the judge, and then hopefully the elected mayor will then with restored be restored of his power to run the city. Right now its being run by a manager appointed by the government who i have spent time with and i have to tell you is a very decent, able guy, kevin orr to. I like him very much. Hes got good values and hes a very able lawyer. So i look, detroit, im not saying anything you dont know. I mean, if you go back and look at the studies, detroit has been been its economic strength has been eroding every year for the last 40 years. And the question is, nobody did anything about it, and people kept lending them money. 2005 they put together a bond deal that the bankruptcy judge ultimately said was fraudulent, but the mayor whos now in [inaudible] got the bond buyer deal of the year award for that deal of 2005. So i think one of the things we need more supervision over the issuance of municipal securities. If the street was not so willing to lend any and and all money to these cities, it would force them to face truth and honesty in budgeting a lot sooner. Thats number one. Number two, i believe the most significant thing we did for new york city in 1975 was to require that they budget in accordance with generally accepted accounting principles. That means that their recurring revenues had to match their recurring expenditures. They couldnt cheat in that sense by finding ways of deferring payments for services or goods that had been received in the year in which the budget year were talking about. States this in the united statel have budgetbalancing requirements, but they dont define revenue. And they use the proceeds of asset sales and the proceeds of borrowing to balance their budget. That is not sustainable. I visited with the mayor of chicago a couple of years ago, and the first thing he said to me he had just taken office, and the first thing he said to me you know what that guy daley did to me . He hocked 75 years of parking revenues and has left chicago with no parking meters. Treated the proceeds as a revenue for budgetbalancing purchases and then leased it back. New york state sold at attica prison for 200 million to a Public Benefit corporation this the state of new york, has since paid 400 million of interest on the bonds that were sold to give that corporation the 200 to pay for the jail which balanced the states budget when that was done. I mean, this is not a sustainable practice. You know, dick, i might just add in a lot of states they defer payment into the pension fund, and then it gets to be a gigantic figure. New jersey, several others thats right. Instead of paying it all along, they use that money to balance their budget, and then they say, oh, these pensions are no longer sustainable, these breedty workers asking for greedy workers asking for 100 a month. Thats outrageous. And its sort of something that all of us should monitor a little closely and blow the whistle on them. And theres one other classic example of trying to sell off assets. The governor of pennsylvania warranted to sell off the liquor wanted to sell off the Liquor Stores. The Liquor Stores bring in probably 300 plus million a year. He was going to sell it for 800 million to his buddies which meant after two years, you were once again in the hole on that asset. I mean, that kind of privatization, the bums rush to privatization to do this stuff has been practiced by republicans and democrat governors and mayors in some instances. And we, we really have to watch it more cowerfully. Yes carefully. Yes. When i was in school in the 1980s [inaudible] were talking about the death of the about what . The depth of despair of the workers in detroit [inaudible] and then at one of the glean jobs conferences, there was a group of activists a few years ago from detroit saying that even though they had a lot of [inaudible] and im not sure, you know, whether what patterns in the past including some of our trade bills, what kind of a movement can we put together at this point about what we have learned about [inaudible] selling our economy to the highest campaign of contributors in the form of nafta and now tpp. And were hurting the ore countries, too other countries, too, when this emphasis on exports when we could be focusing on what we produce that we consume. So, and plus bloated pentagon budget that never seems to get [inaudible] well, im not going to comment on the Defense Budget because i dont know anything about it. But let me try to answer you as best i can. There was recently a report written. One of the things that has struck me is that every state in an effort, in a sincere effort to create jobs has offered tax incentives to become employers. There was a report done recently which showed we have spent 80 billion annually in subsidies to business. The state of washington just gave the boeing Company Something like 10 billion in order to avoid their moving to north carolina. The movie industry i in new york the state of new york, i know there was a report published recently grants 2 billion of track tax credits to the movie industry. Well, you know what the movie industry does . They give them to a guy in new jersey who syndicates them. There isnt a state that doesnt have tax incentives to get the movie industry. People make movies in neither for the obvious reason that there are places in new york city that are evidently entertaining. 80 billion a year that states are giving up in order to compete with one another. Plus all these expenditures are also used to, you know, to the extent that a private when theyre not a tax credit, if theyre a direct benefit, theyre tax free. But theyve been going on in this country for a long time. In the carter years we had a program called the urban Development Action grants. The state of new jersey used that federal money to bribe businesses to move from new york across the hudson river to new jersey. Always struck me, aside from being a new yorker, struck me as a pretty obscene way of using federal money. I could go on at length. We have no coherent policy. I was giving a speech one day about the problem. Somebody got up and said, mr. Avenue slip ravitch, the implications of what youre saying is new york will have to raise taxes, and if new york raises taxes, were all going to move to las vegas or to nevada. This guy said. So i said, you know, thatd be a great thing, i said. Because if everybody moved to nevada, then las vegas will need a subway system, and then well have two more senators in washington who will vote for mass transit aid. [laughter] i mean, how silly can you get . But we dont have a coherent policy. The federal government mandates all kinds of things on states. Many of those mandates, we believe it. They are good with mandates and there are bad mandates. The good mandates; minimum wage, racial discrimination, there are many of them, environmentals. You can argue about them. But there are a million mandates. Well, but the people who enact the mandates and then turn around and say, well, you know, we cant tell the states what to do. Ill just tell you an interesting story that i was in an informal i guess were on the record. Ive got to be a little careful on this. Not only on the record, on the camera. [laughter] thats all right. Ive been in so much trouble in the past, it cant get worse. [laughter] i was with a very distinguished at a dinner, informal din or, about 25 people with a very distinguished republican, and i asked they had just passed, the house just passed the republican budget, and i said did you make any effort to measure when you passed that budget the impact it would have on states. And the answer was, no, we didnt because our job, as we saw it, was to reduce the federal deficit, and we think states ought to set on their own bottom. And i said, well, thats perfectly region. I said, but there are other reasonable. I said, but there are ore consequences. He said, what concerns you . I said, well, for example, i said that there were 19 million employees in states and cities in the united states, practically all of whom had contractual obligations from their employer to pay their Health Care Benefits this theyre eligible until theyre eligible for medicare. Your budget says that the medicare eligibility begins at 67, not at 65, and youre going to save billions of dollars of federal dollars by achieving that. I said to the extent of those 19 million people, youre not saving money, youre shifting the cost from the federal tax base to the state and local tax base. And i think the publics entitled to have a discussion whether thats a good thing or not. Well, i have to tell you and i dont want to mention names, but i asked the same question of the author of the bowlessimpson report which made the same recommendation. I got the same answer, we never thought of it. Nobody ever brought it to our attention. The, i asked the question of key democrats on the house budget committee. Same thing. Nice people, sympathetic. My god, we didnt know it. One of them called in a staff person and said this guy ravitch says we never took into account that we may be imposing a big cost burden on states and cities, is that true . He said, yeah, we never discussed it. There is a fundamental disconnect between the federal budget process, the federal tax process that goes on here in washington, d. C. From what happens this state and hoping governments in state and local governments. And governors and mayors enjoy the lack of transparency, because it gives them a lot more flexibility. Too many of them only care how you get through next election. Through the next election. Im going to see if theres anybody else first. Yes. One of the things i was concerned about and had recently heard about where states that are allowing prisons, for instance, to be run by private industry as opposed to Public Services, in some cases those prisons because theyre not full are actually suing the states that theyre in to gain money because theyre no longer full to the hilt. And is there any consideration about the impact that that has on the states and the whole concept of kids going right from high school to prison and how that seems to be perpetuating . Well, im sorry, i dont know anything about the prison situation. But what you describe is somebody buying a prison and then suing the state because there are not enough prisoners strikes me as as ludicrous as anything possibly can be, and i cant believe they prevail unless the state was stupid enough to put into the contract of sale a guarantee about the number of people they would arrest every year. [laughter] i dont know how to answer you. You will find those prison profits very, very heavy on the hill and in the states lobbying for mandatory sentencing and extending sentences out for insignificant crimes; possession of a half ounce of marijuana along the way. So that they have a new appetite and a better stream to supply them with or extending those things out. Yes. I mean, one of the problems we see is that people with all the money dont want to use it to solve any of these problems, and thats a political question. So how do we dig ourselves out of this hole where the people with the money basically are running the government, controlling the resources of the country, and were sort of stuck . Well, i think that process has begun, frankly. I think yeah. I hope im right. I cant prove it to you, but i think that the Tea Party Types have sort of peaked. They apparently are not winning these republican primaryies, and the, you know, i hope that attitude gets changed. The Supreme Court hasnt helped. Theyve done a tremendous disservice with two opinions. I dont know why there isnt an effort for a constitutional amendment. We should be getting good people all around this country to push for that because i think if most americans came to understand what those decisions mean in terms of the influence of corporate money in elections, youd see a constitutional amendment. But, you know, thats why ive said to you in the very beginning and why i wrote the book about politic, run for office. I ran once, i was a terrible candidate. [laughter] i got only 3 percent of the vote. But i have to tell you something, it was an exhilarating experience. [laughter] it really was. And i used to get up this was the worst part of it i was at the subway station at 5 00 every morning. But people were curious, decent, polite. I learned more about the city that ive lived in for 80 years than i ever could have learned even though i know, ive visited all 400 subway stations. And so, you know, theres some of you around this table ive known for a while, and if you run for office, call me. Im come and cam ill come and campaign for you. [laughter] did you say run for or run from . [laughter] yeah. I just want to change the subject completely. Dick, you, you knew bye yard rustin well who was somebody who sort of hasnt gotten enough credit for what he did for our country. And, but we try to honor him in this building. I wonder if you might say a word or two about the sort of person he was and what he did. I will. Ill begin by saying that bayard sang with a or very famous blues singer in new orleans, and if any of you know the history of jazz, you will know josh white. Bayard sang for him. He grew up in pennsylvania. He was gay. He was passionate about his belief in civil rights. He was a pacifist. He was actually a pacifist during world war ii, something he subsequently regretted. He was arrested three times, spent time on chain gang. I have a private memoir at home that he wrote about his experience on a chain gang which was one of the most incredible things youve ever seen. As a matter of fact, i remember bayard visiting us for a weekend once when my kids were young teenagers, and they to this day remember the stories they heard from bayard. He was, he was passionate in his view that the future once all the civil rights legislation passed in the 60s, he said the next agenda for blacks is economic opportunity. And, therefore, our ally has to be the american Labor Movement. And he split with Martin Luther king over that. Martin luther king thought that his ally ought to be the peace movement, and this was a division at there was a division at that point. And bayard was very, very close to Lane Kirkland and george meanny, and he spent his life obviously, he wrote the famous, the first draft of the famous speech that Martin Luther king gave, the i have a dream speech. And he believed, he created something called the a. Philip Randolph Institute which still exists, norm still runs it. I think some of you may even be involved with it. Norm just retired. Thats correct. Yep. Because he called me. [inaudible] really . I dont know him. But i could tell you stories. Tell you two with stories about bayard. One, he calls me he heard that my wife and i were moving to a larger apartment near where our kids were in school, and he said before it fills up with furniture, he said i promise to sing for the first time to raise money for the yipsels, the young peoples socialist league. And it was run by jeannie kimmels brother, wasnt out . I may be remembering do you remember, john, who im talking about . In any event, so they were going to have this fundraiser in our apartment, and we had a big apartment, and we had a lot of chairs. He was going to i forget what the price was, and bayard sang. For the first time he sang, you know, blues at this fundraiser in my apartment. Well, i didnt know anybody had a copy of that. I know a few people were recording it. But at al shankers memorial service, they played the tape of bayard singing at my apartment that night. The other story i could tell you is that i forget the exact year, but bayard had had a heart attack, and his executive assistant was Rhode Rochelle hoz who was married to tom donohue, still is married to tom donohue, and was employed for many years at the aft and a wonderful, wonderful person. And, but she was in working for bayard in the a. Philip Randolph Institute. And the phone rang one night about 10 00, and she said that, she was hysterical, and bayard had been arrested for carrying a sword game on times square. And he was in jail, and he was recovering from a heart attack, and she said youve got to get him out of jail. Well, so i got dressed, i went down to the police station. Though a member of the bar, ive never, ever had to get anybody out of jail in my life, so i didnt know quite how to go about it. There was this tough looking Police Sergeant sitting at the desk, and i said im hear representing will rustin, hes a very famous, distinguished man, a friend of the president of the united states, and hes just recovering from a heart attack. Guy says, well, i just read his record. Hes a homo and a [inaudible] and were keeping him in jail. So i called a friend of mine who was the acting da. I said what do i do . He said, well, the only way you can get him out, hes going to have to stay there until the lineup down in the criminal court first thing in the morning is youve got to get a Supreme Court judge to come down to the, to the jail and sign a release form. So i said, my god, its almost midnight, i dont who do i call . So i called a friend of mine who i thought had friends who were in the judiciary and, sure enough, got a Supreme Court judge from the west side of manhattan to come down to the 40, wherever,40th Street Police station sign a release for Bayard Rustin to get out of jail. But ill never forget the expression on that sergeants face as long as i live. [inaudible] hi. Congratulations on your book. Thank you. And continued good luck on your career. Im curious because the 1975 bankruptcy, it sounds like you were maybe in your early 40s, late 30s, and since youre still so active, im curious what if youve encountered anybody in the millennial generation or perhaps a little bit older who youve been particularly impressed with who are going to kind of carry on the good work that youve done. Oh, god, i know a lot of people. Who, you know, some of the people in this room like steve coyle and david silvers, josh [inaudible] i see here. My very, very dear friend. I can think of a lot more. A lot of people are around carrying it on. There are scholars in our universities, there are other people in the Labor Movement. I know the people at the aft and afscme who are digging into these issues sincerely. The only place that theyre not plentiful is in politic, and thats the problem. [laughter] although a friend of mine whos a member of congress got up on the floor of the house a couple of weeks ago and proposed an amendment to the budget bill that would have required the Congressional Budget Office to measure the impact of federal budget proposals on states. And it was defeated in a voice vote by the republicans. But i dont think he did a lot of politicking or lobbying in advance for it. But thats the kind of thing we need. But there are people talking about this. As rich knows, i have shared offices the last 15 years with paul volcker who became, who i met originally may 2, 1975, when he had just been appointed president of the Federal Reserve bank of new york. And paul has created an Alliance Foundation thats studying a lot of important issues, and one of them is states and cities that we now are are amassing a very talented group of people and putting together a lot of statistics. But there are people at the urban institute, there are people, there are individuals in the Treasury Department and the council of economic advisers and a lot of the foundations that are really thinking about these things. And ultimately, it has an effect. The only question in my mind is how much suffering are people going to have to go through before, ultimately, people recognize that the price is worth paying to avoid it. One last question. The federal governments role of the city, what do you recommend in terms of Financial Support in some ways . There used to be revenue sharing was a recognized principle that the federal government would aid the the cities. Well, you know, there are two things i have to say about this. One, cities are legal creatures of states. And there is no constitutional a state can eliminate the power of, can eliminate the government. New York State Legislature can wipe out the government of the city of new york. The only politics that prevents that from happening. So i think probably there should be more privity with states. On the other hand, i recognize the fact that in some states like michigan where the majority, overwhelming majority of the people dont live in detroit, theyre not as prone to providing assistance as the state of new york was to new york city. But on the other hand, im not sure the state of illinois is doing everything that it could do. Not because the governor doesnt want to, to help the city of chicago which is facing a growing fiscal crisis. The second thing to say is that believe it or not in the nixon years there was when pat moynihan worked in the white house and a guy by the name of dick nathan, they persuaded nixon its very interesting, this bit of history they persuaded nixon that the federal government was a better Tax Collector than state and local

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