NEW YORK: Last-Minute Bailout Of a City on the Brink

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How can New York come back? In an interview with TIME Correspondent John Tompkins, Deputy Mayor-designate John Zuccotti insisted that "economic development should be one of the city's high-priority items." He wants to move ahead with expansion and modernization of port facilities and a projected convention center that will attract more business.

Austerity may have its positive side. Cutbacks can lead to improved productivity in municipal services, argues E.S. Savas, professor of public systems management at Columbia University. "The budget can be cut," he says, "but it doesn't follow that services must be diminished relative to that cut." Carter Bales, a partner of McKinsey & Co., a management consultant firm, urges the creation of an independent agency to assess the productivity of city departments. "That would scare the living hell out of the managerial bureaucrats," says Bales. If an agency fails to measure up, its work can be contracted out to a more efficient private organization. Beyond that, the city must stop trying to be all things to all people. As Zuccotti puts it: "We have to decide whether to do a lot of things poorly — or a few things well."