The Streets Were Paved with Gold by Ken Auletta

Author:Ken Auletta
Language: eng
Format: mobi, epub
ISBN: 9780307800718
Publisher: Knopf Doubleday Publishing Group
Published: 2011-10-26T10:00:00+00:00

Management

Lee Oberst supposedly knows something about management. When the telephone company was in hot water with consumers in the late sixties, it summoned Oberst to become V.P. of the New York region. Fix it, they told the fifty-one-year-old executive. Fix the lousy service. Stop those protests and investigations. Stop those damn newspaper attacks.

Lee Oberst did. Relying on the street smarts of a kid from the South Bronx who didn’t go by the book because he didn’t go to college, Oberst knew how to fix it. He and other executives neatly divided the management problem into two parts, one dealing with reality, the other with appearance.

Appearance came first. Oberst figured that if pay phones suddenly worked, the public would notice. So he spared no effort to fix them. At the same time, he figured that if journalists were pleased with their own service, they would assume everyone else was. So he pinpointed where key editors and writers lived—mostly in Manhattan—and rushed to improve service in those selected areas. The strategy worked. The protests subsided. The phone company purchased precious time, permitting it to plan to improve its management and the public’s phone service.

Since February 1977, Lee Oberst has been trying to fix the city’s primitive management system. The phone company continues to pay his $120,000 salary, but he’s on loan (till November 1, 1978) and serves as the city’s first director of operations. From their fourteenth-floor, barracks-blue Broadway offices, across from City Hall, Oberst and a staff of thirty on-loan business executives and fifteen civil servants struggle with reality.

And the reality is pretty grim. Everyone has his favorite villains, but the chief culprit of New York’s fiscal crisis is mismanagement. If previous mayors, beginning with Wagner, had not resorted to deficit financing, the city would not be crushed with $2 billion a year in debt service charges, consuming about 30 percent of all locally raised taxes. The federal government didn’t force the city to agree to an unbelievable array of work rules and costly benefits. The municipal unions didn’t force the hiring of political hacks to manage the city agencies. The banks didn’t raise taxes.

The final report of the Temporary Commission on City Finances, issued in June, 1977, sums up the import of past mismanagement:

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