The mayor needs better plans to counter New York City’s biggest threat

New York City is in a crisis of oversuccess. After the so-called “bad old days” of the 1970s and 80s, it is now one of the safest and most popular cities in the world. It is also one of the most unequal, with an income gap as vast as Swaziland’s.

Over the past few decades, the rich have gotten much richer while other New Yorkers have stagnated — or fallen back. Old-fashioned gentrification has become state-sponsored hyper-gentrification, a runaway bulldozer that displaces the lower and middle classes as it racially resegregates the city and the suburbs, fills the streets with cookie-cutter glass towers, destroys countless small businesses and gives rise to high-rent blight, those blocks and blocks of empty storefronts that are killing the vibrancy of our neighborhoods.

While Mayor Bill de Blasio promised to take aim at this “tale of two cities,” inequality is only getting worse. And while he now regularly rails against gentrification, there’s much more he can do to stem what might seem like an inexorable tide. If he’s going to a second term, it’s time to get bold.

Of course, the problem of inequality is not unique to New York. The story is similar in globalized cities around the world. We’ve all been infected by the same virus — but New York was patient zero, the Typhoid Mary of a destructive pandemic with symptoms that go far beyond city life.

In my book “Vanishing New York: How a Great City Lost Its Soul,” as I memorialize the lost city, I trace the origins of today’s hyper-gentrification to a profound shift in the 1970s when a beleaguered City Hall was forsaken by an anti-urban federal government and taken over by financial elites who forced New York to pivot from Keynesian economics to the neoliberal project, that radical brand of free-market capitalism that insists on deregulation, privatization, austerity, and trickle-down economics. It was this shift that brought us to today’s New Gilded Age of inequality.

After World War I, New York’s financial elites watched their longheld power and wealth diminish as progressive politics redistributed resources through high taxes on the wealthy and rent regulation, including commercial rent control.

By the 1970s, the city was becoming a social democracy. It was also sliding into bankruptcy, a crisis frequently blamed on the Keynesian welfare state and its programs to help the most vulnerable New Yorkers.

These were “mistakes…of the heart,” Mayor Ed Koch said in his inauguration speech in 1978, launching an agenda to reroute welfare to corporations and real-estate developers, attract more tourism, and encourage gentrification in neighborhoods that had long been punished and neglected by the government.

New York had taken on too much debt to pay for its generous public services, but it was not the welfare state that started the city’s financial problems. It was a multi-determined problem that included decades of racist and classist policy. To understand why fiscal crisis New York was so vulnerable