Even though stock indices may have rebounded from their late November lows, the market remains volatile, and the economic outlook has taken a decided turn for the worse. A credit crunch has emerged on Wall Street with the sudden aversion among banks to lend because of the uncertain value of collateral when almost everything is tainted by years of sub-prime mania. The Federal Reserve took unprecedented actions last week out of fear that the credit squeeze will lead to a serious slowdown, possibly a recession over next few months. Leading economic forecasters polled by the Wall Street Journal recently put the chances of a recession at 38 percent. In the financial press, “toxic” has become the adjective of choice in describing many of the once-revered “creative” financial instruments linked in one fashion or another to sub-prime mortgages, the high-interest loans financial institutions gave to those who could not qualify for more conventional mortgages.
Wall Street’s implosion justifiably has produced much hand-wringing among budget makers in City Hall and Albany regarding tax revenues. It seems clear by now that the dot-com bubble was no fluke. The Wall Street resurgence and boom since 2003 was largely inflated by real estate and sub-prime lending and spending. Can Wall Street do well only by doing things imprudently -- and on a gigantic scale at that?
Wall Street’s booms are certainly good for the city and state’s tax revenues (the busts certainly aren’t), but are the booms good for the broader economy? Might there be a silver lining in Wall Street’s comeuppance?
In many respects, the Wall Street boom of this decade was not that good for the New York economy or for the nation.
Wall Street is often referred to, aptly, as the main engine of the New York City economy. When it revs up, it becomes turbo-charged, generating high incomes and tax revenues. Yet it also belches out the urban equivalent of diesel exhaust, affecting the quality of life for everyone else. Soaring Wall Street incomes helped fuel the demand for luxury housing, pushing up housing prices throughout the five boroughs and pushing out many middle-class people in the process.
Wall Street’s aggressive lending and marketing practices were as responsible as anything for the sub-prime debacle. The reverberations of collapse have been felt in New York City neighborhoods far from the financial district. Thousands of Residents moderate-income New Yorkers, many of them once worthy of more conventional credit, have suffered from the implosion of the sub-prime bubble.
Wall Street has taken center stage on the national economic scene. The trajectories for the last two economic cycles have been determined largely by Wall Street’s bubble machine. First it was the dot.com and telecommunications bubble, then the real estate and sub-prime bubble. While the Federal Reserve and government “regulators” deserve a big helping of responsibility for not minding the money store, Wall Street’s financial innovations helped pave the way for a debt-induced spending spree since 2001 with mortgage debt increasing four times as fast as wage and salary income. Easy money and mountains of unsustainable debt won out over a real policy debate about how to revitalize the productive economy in a more sustainable manner.
A dynamic financial sector is vital to a competitive, world-class economy. The ability to raise capital and move it across sectors in response to ever-shifting market conditions is essential to robust economic growth. New York City-based Wall Street investment banks have taken over many of the functions historically performed by commercial banks. Mergers, like the one between J.P. Morgan and Chase, have created gigantic financial institutions that amass large pools of capital and provide a wide range of loans, equity investments and other means for corporate finance to grease the wheels of commerce in the nuts and bolts economy producing goods and services.
The financial clout of New York-based Wall Street investment banks over the national economy today rivals the situation in the late 19th and early 20th centuries, before the advent of the Federal Reserve Bank and national regulatory bodies like the Securities and Exchange Commission.
In a well-functioning economic system, the financial sector helps facilitate business activity in the nuts and bolts economy. Wall Street’s role is to help make the economic pie larger. What has happened, however, is that New York investment banks have become the tail wagging the dog. Wall Street’s focus has been on financial innovation in the service of more and more short-term fees, regardless of their economic value or consequence. This has bred an undue tendency toward speculation, with the prices of stocks and other securities pushed higher and higher, drawing in unsuspecting investors.
In analyzing the financial market ills leading up to the 1929 stock market crash, economics great John Maynard Keynes wrote: “Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation.”
More recently, John Bogle, founder and former chief executive of Vanguard mutual funds, laments the rising share of the economic pie going to the finance sector. Bogle notes that 25 years ago the finance sector accounted for 6 percent of the profits of the Standard & Poor’s 500 large corporations. Prior to the recent market meltdown, the finance sector took about one-third of corporate profits. Bogle estimates that hedge funds, mutual funds, investment banks and the like “siphoned about $500 billion from shareholder returns” in 2006.
It is not at all clear how long it will take for Wall Street to right itself. Barely a year ago, Mayor Michael Bloomberg, Senator Charles Schumer and some other prominent New Yorkers worried that Wall Street was somehow losing competitive ground to London, Shanghai and other global financial centers. They blamed government securities regulations enacted in the wake of the Enron collapse. Now, it is more likely that there will be calls to effectively regulate Wall Street so that the bubble-making machine is de-activated in favor of a return to making money the old-fashioned way. The problem was not that Wall Street was regulated too much but that it was not regulated in the right way. Financial “innovation” run amok turned out to be the real threat, not London or Shanghai. Those market centers also are plagued by bubble tendencies and are in similar need of effective oversight.
As Wall Street regroups from its current woes, city economic policy-makers might want to consider a different set of priorities. In City Hall, the focus could be on really diversifying the city’s economy and using mega-development projects to make the city more livable and more likely to produce good, middle-income paying jobs. For the past few years, City Hall’s main real estate development goal has been ever more space for huge financial trading floors – a fixation that is no more sustainable than the latest financial bubble. The big challenge is to make sure that the jobs created in developments induced by city actions pay decent wages and offer career opportunities that lead to the middle class. New York will not have a middle class if it doesn’t have middle-class jobs.
In Albany, the state is still groping for an economic strategy responsive to the needs of New Yorkers. While some observers are eager to write it off, manufacturing still employs over a half-million workers in New York and remains the economic backbone of many upstate communities. Several manufacturing industries, including but not limited to ones deemed “high tech,” are highly productive upstate. It is myopic to think that high value-added manufacturing – microelectronics, optics, ceramics, biotechnology, instrumentation -- will entirely desert the U.S. or New York, with its world-class technical universities, advanced technology research base and highly skilled manufacturing workforce. The state should identify the strong performers among manufacturing firms, work to make them even more competitive and ensure that they can retain and develop more highly skilled manufacturing workers.
The state desperately needs to overhaul its economic programs across the board, from Empire Zones to Industrial Development Agencies, to transform them from giveaways and cronyism to strategic interventions addressing the failure of markets to invest sufficiently in further advancing New York’s human capital assets through skill training and research and development.
Both City Hall and Albany should also seriously pursue the many opportunities now unfolding to develop green jobs promoting energy conservation and the production of green building materials and other environmentally friendly manufactured products.
Economic sustainability is as desirable a goal as environmental sustainability. Our current economy is anything but that. In the long run, the state and city tax base will be more sustainable with an economy geared to providing ample opportunities for more good-paying jobs as opposed to our current highly polarized, Wall Street-dominated economic structure. With a strengthened and expanded middle class, New York will have stronger and more vibrant communities. James Parrott is deputy director and chief economist of the Fiscal Policy Institute (www.fiscalpolicy.org). He has been studying and writing about the New York economy since he landed in New York City a quarter century ago.Â
Calm is a word rarely associated with New York City. And certainly with half the city a construction site, tourists packing sidewalks and roads and subways jammed, the city in 2007 was hardly peaceful. But, as far as news goes, it was a relatively quiet year in the five boroughs as the mayor and City Council continued their era of good feeling, and some of the biggest stories involved debates over "sustainability."
News junkies looking for a little excitement could always go to Albany. There the year began with the inauguration of Gov. Eliot Spitzer and continued with battles between Spitzer and sundry legislators, including a particularly nasty feud between the governor and Senate Majority Leader Joseph Bruno
These are the top New York stories of 2007. (A lot of things did not happen in 2007 as well. For a look at them, click here.)
Following a landslide election victory in 2006, Eliot Spitzer became governor on Jan. 1. “Like Rip Van Winkle, the legendary character created by the New York author Washington Irving, New York has slept through much of the past decade while the rest of the world has passed us by," Spitzer declared. Now, he said, “Day One of our time for change has arrived."
But the lofty ambition soon floundered. State Assembly Democrats defied Spitzer when they ignored the recommendation of a panel appointed by the governor and named one of their own, Thomas DiNapoli, state comptroller. Although the governor, Bruno and Assembly Speaker Sheldon Silver managed to hash out a state budget before the April 1 deadline, some observers viewed the final agreement as a setback for the governor, who had to back down on proposed health care cuts and his pledge to make the process more transparent.
Then came Troopergate. A report by state Attorney General Andrew Cuomo, released in July, found that aides to Spitzer had improperly used state police to gather possibly damaging information on Bruno. Although neither Spitzer nor his aides have been charged with any crime, the report prompted the resignation of a top Spitzer aide along with several investigations. The controversy sparked a virtual blood feud between the state's top Democrat and its top Republican, further snarling Albany's already notorious gridlock and derailing some key state business, such as campaign finance reform.
At year's end, with investigations continuing and the acrimony showing no signs of abatement, numerous articles examined whether Spitzer could recover from his rocky start. “Spitzer lunges. He seems not to be a person of strategy. He slipped on a banana peel, or six, and once down has thrashed around," one Albany observer told the New Yorker's Nick Paumgarten. In 2008, a key issue will be whether he can get up.
No New Yorker has occupied the White House since Franklin D. Roosevelt but two New Yorkers spent much of 2007 on the campaign trail trying to change that. On the Democratic side, Hillary Clinton (an Illinois native and former Arkansas first lady who represents New York in the U.S. Senate) announced her long anticipated candidacy in January. "I'm in it and I'm in it to win," she said.
And in the Republican Party former Mayor Rudolph Giuliani formally entered the race – again to few people's surprise – in February. While debate about Clinton has centered on her decisions in the Senate, her role as U.S. first lady and her stands (or lack thereof) on issues, Giuliani's run has focused attention on his record as mayor – the only elective office he ever held. For months, this seemed to work to Giuliani's advantage as he touted his calmness and steadfastness in the wake of the Sept. 11, 2001 attacks.
Recently, though, the former mayor's time in City Hall has emerged as more of a mixed blessing. Critics have targeted his combative personality. His relationship with his now indicted police commissioner, Bernard Kerik, has come under scrutiny. Opponents have contrasted stands he took in New York with his current position on issues such as immigration and gun control. And tabloids have thrived on accounts of how New York City police protected his then girlfriend now wife, Judith Nathan when Giuliani served as mayor.
Both Clinton and Giuliani held strong positions in the polls during much of 2007 but seemed to falter as the year drew to a close – and the early primaries drew ever closer.
To mark Earth Day in 2007, Mayor Michael Bloomberg unveiled a sweeping plan for New York to accommodate 1 million additional residents by 2030 and become a more “environmentally sustainable" city. It set out 127 specific proposals on land use, water supply and quality, transportation, energy, air quality and reducing the greenhouse gases that cause global warming. The ideas ranged from the specific -- planting more trees, for one -- to vaguer and possibly grander notions such as using "creative financing" to boost use of solar power in the city.
By and large, the plan won praise from an array of experts. And the administration set to work implementing some of them, opening more school playgrounds for use after hours, for example.
But one aspect of the plan -- the proposal to charge an $8 fee for motorists driving into part of Manhattan on weekdays -- garnered most of the attention and opposition. Although the mayor lined up support from many environmental groups, Spitzer, some key city politicians and business leaders, he failed to win the backing of Assembly Speaker Sheldon Silver and the State Assembly. Instead a compromise was forged, calling for a panel to consider “traffic mitigation" proposals, including congestion pricing, and submit a plan for approval first to the City Council and then the state legislature before it would take effect. The panel's report is expected early in 2008.
After New York's 1.1 million public school students returned this fall, the education department released its first ever report cards for almost every school in the system. While the report cards rated schools in several areas, the evaluators at the Department of Education's headquarters in the Tweed Courthouse boiled everything down to a single letter grade.
The grade would have consequences. The department said it would shut some failing schools starting at year's end.
While Bloomberg said the report cards would hold schools accountable for their performance, some parents and educators criticized the ratings for being confusing, too tied to standardized tests and penalizing schools with a long history of high student achievement.
Perhaps Spitzer's biggest single defeat in a year studded with adversity came on his plan, announced in September, to grant driver's licenses to undocumented immigrants in New York State. Spitzer said the idea, was a "common sense" move that would increase public safety.
Many disagreed, including Bloomberg and some county clerks upstate who vowed they would not give driver's license to people who could not prove they were here legally. After holding adamantly to his position for several weeks, Spitzer abruptly changed course announcing a compromise plan that would create three types of driver's license: one for people here legally; one for New Yorkers who frequently cross the border into Canada; and one for people here illegally. Michael Chertoff, the U.S. secretary of homeland security gave the plan an endorsement that was tepid at best -- but virtually no one else liked it. Advocates for immigrants were surprised -- and angry, with City Councilmember John Liu calling the three-tier licenses "a new segregation." Bloomberg still didn't like the idea, and the county clerks said they would continue to press their lawsuit to stop it.
Perhaps most grievously for Spitzer's scheme, his proposal reared its head on the national political stage. Asked about it at a Democratic candidate's debate, Hillary Clinton floundered, prompting one of her opponents, former Senator John Edwards, to remark, "Unless I missed something, Senator Clinton said two different things in the course of two minutes."
With Democratic officeholders in the state complaining the license issue could be used against them , Spitzer dropped the idea completely -- before the next debate when Clinton, who Spitzer has endorsed, was sure to face more questions about it.
But the fight over identification will almost certainly rear its head again in 2008. That's when Spitzer has to decide whether New York will issue another kind of license -- a federally recognized license known as the Real ID, which can be used for boarding planes and entering federal facilities. The Bush administration is pushing the Real I.D., but complying with federal requirements for the Real I.D. would make it even more difficult for undocumented immigrants to get licenses.
As rebuilding continued around Ground Zero in Lower Manhattan, the former Deutsche Bank building stood as a grim reminder to the events of Sept. 11, 2001. Efforts to raze the building, seriously damaged in the attacks, had been hampered by high levels of toxic substances. But in August, workers were well along in their efforts to dismantle the structure floor by floor.
Then on August 18, a fire broke out in the building. Two firefighters, responding to the call, died. In the weeks, that followed it emerged that a string of failures by contractors, individual construction workers, and government agencies contributed to the tragedy. Three top fire department officials lost their jobs because the department had allegedly failed to inspect the building or devised proper emergency plans. A number of lawsuits and investigations are still pending.
Meanwhile part of the building still looms near Ground Zero -- and officials remain unable to say when it finally will be demolished.
If present trends continue, New York City will record fewer than 500 murders this year -- the lowest number since such records began in 1963. Perhaps even more noteworthy, some experts said, was that fewer than 100 of those victims were killed by people they did not know. This, the New York Times observed, "belies the common imagery that New Yorkers are vulnerable to arbitrary attacks on the streets, or die in robberies that turn fatal."
The drop was part of a continuing decline in crime in New York City that began under the Dinkins administration and has continued even since -- even while crime rates in many other cities have increased.
With Wall Street going through what is at best a period of "volatility" and low-income New Yorkers losing their homes because of mortgage foreclosures, development continues in New York. As the year drew to an end, the Bloomberg administration announced its latest plan to develop Coney Island, the Atlantic Yards project wound its way through the courts and Columbia's plans to dramatically expand its campus into West Harlem moved along the approval process. The City Council in September approved the largest rezoning effort in the city's history, laying the groundwork for a massive redevelopment in Jamaica, Queens, aimed at creating a transit hub tied to John F. Kennedy International Airport and revitalizing the area's commercial district. The Metropolitan Transportation Authority sought public reaction to five plans for the Hudson Yards on Manhattans' West Side, all featuring commercial and residential skyscrapers, opens space and links to the planned park on the High Line.
Despite the economic boom in the city, almost one in five New Yorkers have incomes below the poverty level ($20,650 for a family of four), according to recent data from the U.S. Census. The New York City area had the greatest difference between rich and poor of any major metropolitan area in the country, with the gap a yawning chasm in Manhattan where the wealthiest 20 percent of residents made nearly 40 times more than the poorest 20 percent. While about half of all New York City children are born into poverty, an analysis found the average household income for white families with young children in Manhattan had reached $284,208 a year in 2005.
The persistence of poverty came despite a generally good economic picture in the city and a national decline in the poverty rate.
Faced with persistent poverty, Mayor Michael Bloomberg, who largely ignored the issue during his first term, began taking some steps to implement part of a poverty plan announced in 2006. In particular, the city embarked on a controversial effort -- now funded with private money -- to begin paying poor families to do such things as make sure their children go to school or go for regular medical checkups. Bloomberg who modeled the plan on one in Mexico, said it would give poor families, who have a lot of stress in their lives, "a financial incentive to look ahead and to make decisions that will improve their prospects for the future." Others criticized it for paying poor people to do what they should do anyway, while some experts said such an incentive program seemed to blame the poor for being poor.
At the same time the Bloomberg administration began to pay some students for going to class, getting good grades and passing the state standardized Regents exams for high school students. In a particularly odd twist, the administration is considering rewarding good students with cell phones, a device it has banned in the very schools those students attend.
Catching many observers by surprise the Bloomberg administration announced in January that it was reorganizing its reorganization of the nation's largest public school system. The rather arcane plan seeks to give more power to principals and hold them more accountable for what happens in their buildings. The department devised a new school funding formula aimed at removing some of the complexity and arbitrariness of the old system. It also features school repot cards (see above) and, as with previous plans hatched by Bloomberg and his Schools Chancellor Joel Klein, even more standardized tests.
Klein said he would tighten standards for teachers to get tenure and followed that up later in the year with a drive to remove teachers the department considers unsatisfactory. And perhaps most surprising to many, Klein eliminated the 10 educational regions he had established in Bloomberg's first term when the city decided to strip community school districts of most of their power. Klein said the districts were being eliminated because they had largely accomplished their goals, but no observers could recall that Bloomberg had ever indicated the regions were intended to be temporary.
The effects of all this at the classroom level, less than four months into the new school year, remain unclear. But the reorganization raised the issue again of just how successful the Bloomberg education initiatives, the centerpiece of his administration have been. While city students do better than they did previously on most state standardized tests, their scores on a national exam have barely changed since the advent of mayoral control. And while Bloomberg basks in national acclaim for his efforts -- most recently from Republican presidential contender John McCain -- at home he has plenty of critics along with fans. Â
Along with the big events that occurred in 2007, many things that people expected to happen, wanted to happen or feared would happen never took place.
Here are some of the big ones.
Speculation about the popular but term-limited Mayor Michael Bloomberg making a run for the White House gained ground in June when he announced he would quit the Republican Party -- the party he joined in 2001 in order to run for mayor and whose convention he welcomed to the city in 2004.
Bloomberg denied he had presidential ambitions, but many remained skeptical. For the rest of the year, political aficionados examined Bloomberg's every move, like tea leaves, trying to define what it said about his plans for the future. Bloomberg clearly enjoyed the attention, spurring it with his own moves -- such as the launching of a web site -- or when, during his recent trip to Bali, he criticized both U.S. politcal parties for not doing more about climate change.
Throughout it all, he continued to insist he would not run and instead planned to devote his post City Hall days to philanthropy. But Bloomberg fans, do not despair. Pundits say that the billionaire mayor would not really have to make his final decision until February or March 2008.
New Gov. Eliot Spitzer was supposed to air out the figurative "room" where three men hold sway and end the dysfunction that he said put New York in a prolonged sleep (maybe stupor would be more like it).
Whoever you blame, it didn't happen. The year ended with the two houses of the state legislature unable to agree even on when to meet, let alone on what to do if they did manage to coordinate schedules. Major issues -- campaign finance, salaries for legislators and judges, and much more remained in limbo. "The gridlock here now is worse than I've seen it in decades," Barbara Bartoletti, legislative director for the League of Women Voters told the Daily News. "It's all because of the toxic atmosphere these people are functioning in."
Two years ago Christine Quinn, then a candidate for City Council speaker, said she opposed term limits in their current form and would work with her council colleagues to alter them. After becoming speaker, Quinn said she and the council had had an on again off again conversation on the issue.
In December, that discussion ended. Quinn, considered an almost certain mayoral candidate in 2009, said term limits would remain as is. "I don't agree with term limits, but they are the will of the voters," who expressed their support for them in two separate elections, she said.
Whatever the reason behind her move, the decision paves the way for a wild game of political musical chars in 2009 as three dozen council members, to say nothing of the mayor, public advocate, comptroller and four borough presidents, all have to leave office.
That is, of course, if you don't count the gas, wear and tear on car and psyche, and the pollution. Despite support from environmentalists, Quinn and some business leaders, among others, the Bloomberg administration saw its effort to institute an $8 fee to drive into Manhattan during the work week stall in Albany. With a special session of the legislature about to close and the plan declared all but dead, a compromise emerged that could still save the plan -- assuming a special panel, the City Council and the state government all sign off on some variant of it next year. So stay tuned -- as you listen to your car radio trapped in traffic on Canal Street.
Lots of major development projects moved forward in 2007, but some cannot seem to get off the ground -- for better or worse. After years of talk about creating a new train station and other facilities in the West 30s, the notoriously inefficient and unpleasant Penn Station remains and a new Moynihan Station, incorporating the Farley post office has not budged much beyond the realm of fantasy.
Four years after the federal government sold New York Governors Island for $1, the city and state still have not come up with a plan for the island off the tip of Manhattan. Mayor Michael Bloomberg has reportedly toyed with the idea of having his foundation create a public health institute there. Other visions have included casinos, hotels, dormitories and a major campus for the City University. But so far, the island remain closed to the public for most of the year, offering New Yorkers a peek at its dazzling views and historic buildings during summer weekends only.
But if Moynihan Station and Governors Island (or your own favorite project) remain in limbo, you won’t have Deputy Mayor Daniel Doctoroff to blame. He will be leaving city government to become president of Bloomberg's communication company. And he'll be taking some other stories that did not happen -- the 2012 Olympics, to name one -- with him.
While the housing market reeled from a nationwide mortgage crisis in much of the country, the real estate boom in Manhattan continued strongly with more than 10,000 apartments changing hands -- all for an average price in the borough of more than $1.3 million.
In general, the real estate industry remained in better shape in New York City than elsewhere. The average sales price for a place to live throughout the city reached about $782,000 in the third quarter of 2007, up 20 percent over the same period a year earlier. "We've never been able to produce a great deal of new housing here in New York, and we have great demand," Michael Slattery, a senior vice president at the Real Estate Board, told the Associated Press.
There were signs of weakness outside Manhattan. While luxury condos rose throughout Brooklyn, the borough saw a slight drop in sale prices for condominiums and co-ops. Lower income home-owners, who pay a higher percentage of their incomes for housing than more affluent people, stood to lose badly from any weakening in the market. In Queens, for example, the number of mortgage foreclosures more than doubled between July 2006 and July 2007.
And some experts feared the worst could still come if Wall Street brokers, bankers and others no longer receive the enormous bonuses and salaries that have fueled the huge price rise in real estate in Manhattan and parts of Brooklyn -- and in turn produced lots of tax revenue for the city and an impossible housing situation for most of the rest of us.
The sale of Stuyvesant Town and Peter Cooper Village -- touted as the "world's biggest real estate deal -- was one of 2006's top stories. As that purchase was announced, Starrett City, the 140-acre development on Jamaica Bay with many low and moderate-income residents, went on the auction block. The anticipated sale of the relatively remote complex for as much as $1 billion seemed likely to be a big story this year.
Except it did not happen. Borough Park developer David Bistricer put in a whopping $1.3 billion bid for Starrett City, leaving many people there to fear for their future. Federal and state officials then blocked the sale on the grounds that Bistricer's proposal to spend all that money for the complex and still keep the apartments affordable was not "financially feasible."
But the residents of the 6,000 apartments still face uneasy days ahead. In August, the current owners announced they were considering steps to charge market rents for the apartments and leave the government programs that enable many of Starrett City's residents to live there.
The approximately two thirds of New Yorkers who rent their homes have seen a steady rise in their rent for years while they have not reaped the tax breaks, rebates and increase in values that homeowners have. With this in mind, many renters cheered when Council Speaker Christine Quinn proposed a renter's tax break, a $300 tax credit for people who don't own homes.
"A home is a home, whether you rent it or you own it," Quinn said.
Here's hoping they didn't spend the $300. Quinn's proposal vanished with barely a trace. The mayor never took a stand on it. Although it required approval in Albany, no record exists of Quinn or her council colleagues having done much to press the issue apparently because the mayor was not willing to push for it. Instead, the city budget approved in June cut property tax rates and provided a rebate to homeowners. Renters, who tend to earn less than homeowners, got nothing.
With Boston emerging as sports powerhouse, New York City teams came up empty handed again in 2007. The New York Knicks led city teams in futility, once again failing to make the playoffs for the 2006-2007 and starting the 2007-2008 season on an even more abysmal note, managing to lose 104-59 to the Boston Celtics in one particularly grim contest.
In baseball, in one of the the worst end of season collapses in baseball history, the Mets squandered the lead they held for much of the season, failing to get into the playoffs. The Yankees managed to make it to the post-season, but in their standard pattern, failed in the first round, putting an end to Joe Torre's years as team manager.
The Rangers, Jets and Giants all also stumbled along the way.
But New York teams still made headlines. A former Knicks front office employee, Anucha Browne Sanders, successfully sued coach Isaiah Thomas and Madison Square Garden, the team's owner, for sexual harassment, winning a settlement of $11.5 million. As anger against the Knicks in general and Thomas in particular mounted, the team tried to keep Madison Square Garden fans from booing. And then former Senator George Mitchell released hs report on the use of steroids in baseball. The Mets and particularly the Yankees may not almost stand out on the field but they did play a starring role in that document, which singled out Yankees pitching aces Roger Clemens and Andy Pettite, among others, for using the substances.
Correction: This story originally stated the gridlock in Albany stalled legislation extending the program to provide tax breaks for construction of affordable housing in the city. That is incorrect. A revision and extension of the so-called 421-a program passed the legislature and was signed by Spitzer in August.
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