MR. LAWRENCE MONE: Good evening. If I could have your attention, please. We'll get started as soon as we can quiet down. Thank you. Thank you very much. Good Evening. I am Larry Mone; President of the Manhattan Institute. Thank you all for coming tonight, it promises to be a wonderful evening.
While preparing my introduction for our Dinner Chairman, Hank Greenberg, I was struck by how many parallels exist between him and Alexander Hamilton. Hamilton enlisted in the Continental Army when he was 21; was a battlefield hero in the Revolutionary War; and served as an Aides-de-Camp to General George Washington. Hank joined the Army at the age of 17; participated in the Normandy invasion; and helped liberate the Dachau Concentration Camp. He later served in the Korean War raising to the rank of Captain and earning the Bronze Star.
Hamilton, to quote Ron Chernow, his biographer, was the prophet of the capitalist revolution in America. He believed that the country's future lie in international trade and commerce, stocks and bonds and the solid financial institutions such as the Bank of New York, which he founded.
Hank Greenberg took a relatively minor insurance company and one of the greatest corporate success stories of all time built it into the global giant AIG. In the process, he created $170 billion in shareholder value and tens of thousands of jobs most of them here in New York helping the city to retain its title as the capital of capitalism. In addition, through his work with the business roundtable, numerous international business committees, and as a formal and informal advisor to several Presidents, Hank has served as a passionate advocate for Hamilton's vision of a global economy.
In addition, Hamilton single-handedly created the nation's financial system as the country's first Treasury Secretary. His extraordinary efforts put the troubled finances of the fledgling United States on a sound course. Greenberg helped to preserve and enhance Hamilton's system as Chairman, Deputy Chairman and Directory of the Federal Reserve Bank of New York.
And finally, Hamilton loved New York and was very active in the civic life of the city. Hank is one of this city's greatest philanthropists and serves as Director on many of the city's most prominent academic, medical and cultural institutions. The Star Foundation, of which he is Chairman, recently gave away its one billionth dollar.
Hank has also been a longtime trustee of the Manhattan Institute and we are proud to have him on our Board; I know how deeply he cares about this city and this country and how like Hamilton he understands the importance of ideas. Patriot, capitalist, leader, visionary; those words apply to both gentlemen. I believe Hamilton would be very pleased by Hank's presence at this dinner tonight and in my opinion there is no higher compliment so please join me in welcoming our Dinner Chairman, Hank Greenberg.
MR. HANK GREENBERG: Larry, thank you very much and I want to thank everyone for coming tonight and making this the most successful Hamilton Award Dinner ever--raised $1.4 million.
MR. GREENBERG: We can contribute the success of this dinner to the quality of the honorees and all of you for really participating.
I became involved in the Manhattan Institute very early on through my friend, Bill Casey, who was one of the founders of the Institute. Bill, as you know, was also one of the prime figures in the Reagan administration. He went to Washington with two books under his arm, each written by a key thinker from the Manhattan Institute; one was George Gilder's Wealth and Poverty, which became the backbone of supply-side economics, the other was Charles Murray's Losing Ground, which became the doctrine of welfare reform. These books continued to be influential years later in helping to lay the philosophical groundwork for the great success of another administration, that of Mayor Rudy Giuliani, who is one of tonight's awardees.
MR. GREENBERG: In fact, the ideas that have flowed from the Institute over the years have helped shape the thinking of a long line of political leaders from President Reagan to Mayors Giuliani and Bloomberg to Governor Pataki and to President Bush. At the same time, those ideas helped change the way the public thinks about public policy and the roll of government in their lives--from the broken windows theory that sparked the revolution in law enforcement to privatization, which has helped produce a better return for our tax dollars. That shows you the power of ideas especially when those good ideas are carried forward by good people.
The power of good ideas, in fact, is a common thread that connects the Manhattan Institute to Alexander Hamilton and to all of us who are here tonight and Hamilton had a lot of good ideas. As Larry said, more than anyone else Alexander Hamilton molded America's system of finance and capitalism and those systems not only had a huge impact on the development of our national economy, but also on the emergence of New York as the world's financial capital, but it requires constant vigilance to preserve Hamilton's ideas of free markets and free enterprise.
Last week saw a very eventful visit from Chinese President Hu Jintao. As expected, President Hu's visit generated a great deal of discussion in Washington on economic issues, the trade deficit, and the value of the RMB and no doubt, there are significant steps the Chinese should take to improve our trading relationship. However, it's a mistake not to recognize that much of the problems rest here with us. You can't blame America's lack of competitiveness on China. Our regulatory environment has reached a point where companies are avoiding risks they would otherwise take in order to stay out of the crosshairs of government regulators; just look at how companies are opting out of America's public capital marketplaces. Of the 25 largest IPO's last year, 24 went to London and Hong Kong, only 1 went to New York. What would Alexander Hamilton say about that? The sudden growth in private equity markets is yet another telltale sign that companies want to avoid going public at least in the United States. In today's environment, one could describe the prevailing sentiment as follows: Private is beautiful.
While regulation, of course, is necessary it must be enlightened regulation not strangulation. Our economy will suffer if our regulatory system becomes so excessive that it stifles free enterprise, innovation and good ideas. Again, it all comes back to good ideas, which is why we are all here tonight, to honor our awardees and to honor this productive factory of good ideas, the Manhattan Institute. Thank you, enjoy your dinner.
MR. BYRON WIEN: Okay, can we all settle down, please? Let's try to quiet down because we're about to begin the program and if you don't quiet down we'll be here a long time. Thank you.
I'm Byron Wien; I'm the Vice Chairman of the Manhattan Institute and my roll tonight is to introduce one of the introducers, David Brooks.
Although he's only an acquaintance, I feel I know David as if he were a college roommate. I have read his Op-Ed essays regularly since he joined The New York Times in 2003 after nine years at The Wall Street Journal. He was hired, I believe, to represent the conservative point of view in what is generally thought of as a liberal pair of editorial pages at The Times, but he is a conservative in the Manhattan Institute sense of the word; he thinks through every issue carefully. He is more interested in truth than in ideology and as a result, his conclusions and arguments are almost always on the mark. Perhaps it has been this way forever but I believe we are living through a time of enormous uncertainty. The economy seems to be doing well but our external debt grows inexorably; you have to wonder whether our standard of living is being financed by the kindness of strangers. The price of oil continues to rise as demand from Asia strains our productive resources, but inflation still remains tame. The war in Iraq continues to erode the President's approval ratings but American leadership has never been more important. We are facing the challenges of pandemics, global warming and further acts of terrorism. David has consistently provided his informed reflections and insights on these and other issues. In my opinion, his thinking is consistently in the right place at the right time and tonight so is his body--David Brooks.
MR. DAVID BROOKS: It's an honor to be here again at the Hamilton Awards. As you know, every year the Manhattan Institute gives out awards to two people who have been idiotically criticized by The New York Times.
And it's fitting, therefore, that there should be a representative of The Times here at the event even if it is The Times' in-house conservative; a job I liken to being Chief Rabbi at Mecca.
Nonetheless, I do again bring a telegram from the editorial board at The Times and our many readers to this audience and particularly to our two honorees. And telegram reads, Go to hell you right-wing Fascists.
I've been asked to introduce Tom Wolfe and when I was asked I was reminded of something Rick Brookhiser once said which I'll paraphrase, I don't want to introduce Tom Wolfe I want to be Tom Wolfe, but like Oedipus and Don Rumsfeld we have to understand our own limitations and so I will just merely tell you a few things you know about Tom Wolfe.
Many of you have probably observed that history has a pattern of imitating Tom Wolfe novels. There was Bonfire of the Vanities and then came Al Sharpton; there was I am Charlotte Simmons then came the Duke Lacrosse scandal--Tom Wolfe is so good that God is plagiarizing him.
The second thing you should know about Wolfe and that you already do is that he's hipper than anyone else in this room, not that that's saying much. He's a better writer than anyone else in this room; he's a sharper observer than anyone else in this room; but I want to tell you one more thing which is galling, which is that he's a better political theorist than anyone else in this room. He wrote one of the most brilliant political essays of the 20th century; it was sent to me by a young man who works at Commentary named Davi Bernstein and it was in response to a symposium that Commentary was holding in 1976 and I've forgotten which symposium but I think it was something like Leisure Suits and the Jews, a Failure of Will? Or something like that.
Wolfe's essay opens with an episode from a Manhattan dinner party so we know we're in Wolfe territory. Then he goes on to quote Nietzsche and Freud, but then he gets to the core of his argument which is about why people are where they are politically and it is the theory of adolescent opposites. His argument is that political views are not based on reason but on instinct and they're formed while we're very young and that every teenager, everybody in high school, has an acute sense of who his natural enemy is. If a teenager is bohemian and cerebral he knows his natural enemy is the jock and the cheerleader and that person grows up to be liberal. He may get rich but he'll still hate his natural enemies, the Republicans, and that's why on the Upper East Side you see so many people driving Audis, Saabs and Volvos because up there it's socially acceptable to have a luxury car so long as it comes from a country hostile to U.S. foreign policy.
And they're rich but they want to be rich in a way that differentiates themselves from their natural opposites. On the other hand, there are the people you see in high school who are athletic and who were actually happy during their teen years and they know instinctively that their natural enemy is the brooding poet who will go on to become an English Major and those people will grow up to Republicans. And the jocks may work in a factory and not earn much money but they will still hate the geeks who became Democrats and that's why they buy these 942 square inch barbeque grills which are big enough to roast a bison on because they want to spend money in ways that will offend the guilt-ridden Democrats.
And this theory of adolescent opposites explains about 80% of politics. The one group it doesn't explain, actually, is the Manhattan Institute, which is conservative intellectuals, but you can extrapolate, obviously enough, and you find that conservative intellectuals are geeks who are so horrified by their fellow geeks they don't want them running anything at any time. And so conservative intellectuals are self-hating geeks who have aligned themselves with the jock class and learned to speak slowly so the jocks can understand them…and they've learned actually that the problem with the jock class is not that they hate ideas but once one finally penetrates their brain they go gaga over it and you can't sort of slow them down.
I found this essay to explain just about everything I write about when I write about politics and it is a brilliant essay which I invite you to go back and find. And the lesson overall is that not only is Tom Wolfe our Balzac and our Dickens, which is obvious and which you all know, he's also the Karl Rove of the Upper East Side--Tom Wolfe.
MR. TOM WOLFE: Well, David, I can't thank you enough but in a moment I'm going to try to, I really am. I want to thank everyone here and I want to, above all, thank the Manhattan Institute. This is the greatest vote of confidence I've ever had in my life. David DesRosiers just told me that since I'm warming up this lectern for America's Mayor that makes me America's Writer. I thought that over a little bit and I didn't say "No." It was too good to be true but, you know, it's got to be-- David is a very straight shooter.
Getting back to David Brooks, David, although his current commitment seems to keep him from writing for our City Journal--they wouldn't let you do that would they, David? Is on precisely the same wavelength as the Manhattan Journal, I mean, the City Journal, what am I saying? And the key there and it's the thing that makes both become called conservative is that they really do care about the truth above all else. I mean, I just can't imagine how sorry it would be to simply concentrate all of your talents in behalf of some political entity which is--I think that is called being a liberal. Starting with the essay that brought the first great notice to David Brooks, which was the Liberal Gentry, which became a great, great book, Bobos in Paradise, David has been a conceptual thinker which makes him absolutely alone on the editorial pages of the--it really means it, take a look--it makes him absolutely unique and also, he loves to go out and see things for himself and that, incidentally, is the Manhattan Institute; I wish Bill Hammett were here tonight. Bill Hammett did something so unbelievable he established an institute and told the fellows, as the key scholars and writers are known, that he demanded accuracy, he demanded things that were apolitical in that they were never to be screens, they were never to be attacks, they were simply to bring the news of what is going on in our metropolises and in terms of creating policy. And when you think of what Manhattan Institute scholars have done simply by reading the documents, that was Charles Murray in Losing Ground; he would read these documents that came out of the poverty program under Lyndon Johnson, studies of how the program was doing and they always had an abstract, it was the only thing that people ever read, and the abstract was always rather hazy but optimistic. Charles Murray had the ability to go through all the statistics in these long rather formidable documents and he realized that in fact none of the programs was working, they were all driving the poor deeper and deeper into poverty and that became the basis of Bill Clinton's reforms of the--and Bill Clinton, this was Bill Clinton that took over, that paid attention to Charles Murray because in the final analysis what the Manhattan Institute does is to lock in facts so tightly that there is no more argument.
I think also of Elizabeth McCoy, what an amazing performance; she actually read the 1,481 pages of Hillary Clinton's health plan for America and discovered that every single American would be obliged to enroll in this single HMO, in effect, run by--I can't find a bureau of government low enough to describe what that would've been like--it immediately shot down--that one article in New Republic shot down the entire blimp, that was the end of it and Elizabeth McCoy became one of the great Cinderella's of the 20th century. Immediately she was courted, wooed and won by one of the richest men in the United States and she became the Lieutenant Governor of New York; that's the Manhattan Institute way.
And of course, the marvelous, marvelous story of the broken windows concept. What is so marvelous about that particular saga is that the great penetrating article by George Kelling and James Q. Wilson appeared in 1982 in The Atlantic Monthly and it was not in an obscure publication, but Larry Mone, the current Executive Director of this great organization came across it and realized the tremendous potential that it had and then in the Manhattan Institute way drummed home the point until nobody could miss it and the Manhattan Institute way is to publish or have published because Bill Hammett wanted to make sure that everything written for the Manhattan Institute would be commercially publishable somewhere else and usually by major publishers, the Manhattan Institute way was to publish the article, then you hold at the Harvard Club a lunch in which you hold up the magazine and you say, there's a major article in here and then after you've pointed out to everybody there's a major article then you have a forum--remember that major article we told you about we're going to have a discussion about it now and by the time the process is done these lessons hit home and if we're really fortunate we have a Mayor of the quality and insight of Rudy Giuliani to recognize what he has seen…the use of the broken windows concept to absolutely revolutionize the approach to crime in our great cities was the first great accomplishment of America's Mayor. There, of course, has been another great, great accomplishment and I, perhaps speaking only for myself but I doubt it, hope that there will be a platform from which many, many more great accomplishments can come from Rudy Giuliani.
I would gladly continue but I want to stop before I ruin any possible chance of my being thought of as America's Writer. Ladies and gentlemen, I thank you so much and thank you, the Manhattan Institute.
MR. DIETRICH WEISMANN: Good evening. I'm Dietrich Weismann; Chairman of the Manhattan Institute's Board of Trustees. Thank you for coming and for making the Hamilton Dinner, this particular Hamilton Dinner our most successful ever in terms of people and the other thing. Thank you, thank you.
Please be aware that I'm somewhat humbled by having to follow David Brooks and Tom Wolfe, that's not easy. Anyway, it's a great pleasure for me to introduce Mort Zuckerman, who in a short order will be introducing Rudy, that's Rudy Giuliani in case you weren't sure.
Mort is another man who can accurately be described as a Hamiltonian. His history, like Hamilton's, is very much a New York story. Mort is an immigrant from an exotic and some would even say enigmatic foreign land, Canada. He came to America from Canada, graduated from Wharton Business and Harvard Law, taught at Harvard Business, built a real estate empire, then a publishing empire, and by the way, became a billionaire while he was at it.
Like Hamilton, Mort figured that if you want to influence public opinion it helps to own a newspaper, an idea by the way, that has not escaped several trustees of the Manhattan Institute--they can stand if they wish. Today, Mort publishes the U.S. News & World Report, the New York Daily News; he also serves and Editor-in-Chief of the U.S. News and writes a weekly column that I always enjoy reading for the broad view it offers of society and the challenges that we face. I also like watching Mort argue with Eleanor Clift on Sunday mornings as an occasional pundit on the McLaughlin Group.
Mort is a pragmatic nuance thinker; a defender of the sensible center. I, and some of my fellow Manhattan Institute trustees, might be a few ticks to the right of Mort, but only by degree not in substance. As the Chairman of the Conference of Presidents, Mort has served as a strong voice in support of Israel. If I mention all the other charities, companies, and public policy groups Mort is affiliated with we would be here all night. In short, Mort juggles a tremendous volume of work and does so not only with an incisive mind but with an open mind and a pure heart. The energy and intellect Mort brings to his work was never more apparent than in the days after 9-11 when he used the pages of the Daily News to bolster New York's spirit and make sure the city received the support it needed from Washington. Like Hamilton, Mort Zuckerman is a New Yorker; a fighter and a defender of freedom. We are honored to have him here with us tonight. Thank you.
MR. MORT ZUCKERMAN: Good evening. In a phrase I've used before, I feel like a 92-year-old man who was sued in a paternity suit. He said he was so proud he pleaded guilty. I was asked to introduce Rudy Giuliani in the following way--I was asked if I believed in the First Amendment I said, of course; he said, do you believe in free speech I said, yes; he said, good you're going to give one. But I'm here also remembering what Mark Twain once said about Napoleon--he said, he once shot at a newspaper editor and missed him and killed the publisher. But, said Twain, I remember with charity that his intentions were good.
Those of us from New York knew Rudy Giuliani long before he emerged from the tragedy and destruction of the World Trade Center and 9-11 which transformed him into a national hero and America's Mayor. Prior to that moment, he had already taken a giant step in transforming New York City. In the first place, he was something quite rare in New York's political history, a Republican Mayor in a city which was five to one Democratic. You remember when Teddy Roosevelt had an exchange with a heckler who after listening to Roosevelt declared, I am a Democrat to which TR said, well, may I ask why are you Democrat? The heckler said, well, my father was a Democrat and my grandfather was a Democrat and I am a Democrat to which TR responded, well, suppose your grandfather had been a jack ass and your father was a jack ass what would you be? He said, well, I'd be a Republican.
So it was kind of unusual to find a Republican had emerged as the Mayor of New York, but this Republican Mayor of New York was not a Republican so much as he was a Mayor. He transformed the city, which was at that time perhaps the crime capital of America, into the safest large city in America drastically reducing the crime rate.
We were averaging over 2,000 murders a year not to speak of similar numbers in other violent crimes, a crime rate which made everyone--residents, businesses and visitors alike feel uneasy and uncomfortable. As David Letterman put it in those days, New York led the world's great cities in the number of people around whom you couldn't make a sudden move. Indeed, in New York City, traffic signals were just rough guidelines. We may forget but we shouldn't when 10,000 police marched against City Hall raising the concern that the city seemed to be out of control. Just think, in 1993 before Rudy Giuliani became Mayor, in a poll roughly 60% of New Yorkers believed that things had gotten so bad in the city that they would leave the next day if they could. Giuliani correctly believed that public safety is the most fundamental civil right of all. Yes, when he became Mayor he began to hone in on longstanding problems, but he made his reputation on his extraordinary progress against the whole culture of crime. He supported Clinton's Crime Bill which included a ban on assault weapons. He agreed with Republican demands for tougher sentencing. He used the additional funding from the Crime Bill to increase the number of policemen to the highest ever and most famously, he led the development of the new comprehensive program known as Comstat for computerized statistics, which identified crime by location in real time making it possible for the police to send in specially trained teams whenever and wherever crime began to surge, not several weeks too late but based on the statistics of the preceding evening's crimes where the particulars were now available, broken down by neighborhood and street corner by the next morning. The police became a proactive rather than a reactive force; crime rates began to fall precipitously; and by the end of his term, murders had dropped by over 60% with an almost equivalent drop in all violent crimes. This was but a part of the quality of life revolution that Rudy Giuliani accomplished captured in the Daily News profile entitled, Quality of Life: The Mayor Who Understood. I assume you expected at least a minor commercial from me.
The theoretical background to all of this was first described as Tom Wolfe pointed out in The Atlantic Monthly, a magazine with which I was then associated; that theory proposed that small things mattered and establishing a lawful environment for a civil society. The example that they used was a building on a busy street where the first window was broken and not repaired quickly. Soon they said all the windows of the building would be shattered for this would send an unmistakable signal that unlawful behavior was tolerated resulting in other quality of life crimes such as prostitution, graffiti, aggressive panhandling and public urination, in turn, attracting criminals to the neighborhood and forcing out law-abiding citizens inevitably leading to even more serious crimes.
So, for example, the Giuliani administration put on a drive to eliminate the squeegee men from the city streets. A relatively small number of people, the squeegees had a broad destructive effect on the quality of life and when gone illustrated how achieving a limited goal could adjust the perceptions of hundreds of thousands of motorists every month.
He also reduced welfare rolls when nobody thought that could be done; reforming welfare ahead of the federal legislation by both verifying the qualifications of those who apply for welfare and requiring long-term, longtime recipients to work in return for public assistance. Welfare offices were turned into job centers and the welfare agencies shifted as the cliché went, from a handout to a hand up. Success was judged not by how many people were put on the rolls but by how many people were placed in jobs. By the end of his term, over 400,000 people had moved off of the welfare rolls from a high of 1.1 million.
Welfare reform legislation then was another federal program that he supported even as it was preceded, as I mentioned, in New York, yet the congressional bill cut off all benefits even to legal immigrants, a provision that Giuliani then attacked as unconstitutional and un-American given our great tradition as a country energized by immigrants, and a year later, the Clinton administration worked to rescind the program depriving legal immigrants of benefits.
Now given the unsettled atmosphere in the city, New York lost 330,000 jobs between 1990 and 1993, but the economy under his leadership began to turn around as the city settled down. As the fiscal side of the city was brought under control through the reduction of taxes and good budget management and clear leadership brought confidence in business back to the city, the result was that over 250,000 jobs were created and the number of visitors increased from 26.7 million to 36 million in his term.
Not only did Giuliani present himself as a nonpartisan, especially a right-wing partisan, he shunned the right-wing zealots of America. On abortion, he was a persistent defender of women's rights to choose; he supported gay rights arguing that individuals and not governments should dictate these personal choices. The net result of it was that the people of the City of New York once again came to believe in political leadership; that the steering wheel of government could be connected once again to the engine. They were impressed by his ability to get results after decades of politicians basically had shrugged their shoulders as if helpless in the face of rising crime, rising welfare rolls, and social decay and New Yorkers were ready for it. As the Buddhist saying goes, when the student is ready the guru appears--Rudy Giuliani was that guru.
Now of course, I've left for the end his extraordinary leadership after the unmitigated disaster of 9-11; a disaster both for the country and for New York City. Within two hours he demonstrated an attitude of resolve and indignation. He worked 16 hours a day appearing everywhere in the city, especially at the funerals and with the families of those who had lost their lives and particularly those in the uniformed services. He articulated his compassion for the many thousands of lives that had been lost in this terrible tragedy but he balanced it with words of caution not to blame members of one ethnic group or another; it was truly grace under pressure. New Yorkers realized what it took to be the Mayor of this great city for he captured and personified the unity of the city in the face of this tragedy exuding candor, clear-eyed compassion, and a basic optimism about the capacity of the city to recover and to renew itself, there was to be no retreat into bitterness and despair. This was a leadership recognized by the entire country ultimately expressed as it was by Time Magazine when he was made Man of the Year not only for what he did to reassure the citizens of New York, but for the comfort that he gave to the entire nation. Edmund Burke once said, it is necessarily only for the good man to do nothing for evil to triumph--well, this good man did something; he did something as the Mayor of New York that became an inspiration for the entire nation and helped the country heal the wounds of 9-11.
I am sure that he made mistakes in office but tonight I feel that I can be astute enough to have forgotten what they were. Tonight is a night to recognize how grateful this city is to Rudy Giuliani, both for his service as Mayor and his service especially during a time of tragedy. I am privileged to be able to introduce him. Thank you.
MR. RUDY GIULIANI: Thank you. Thank you. Thank you very much, Mort. Thank you. Thanks a lot. Thanks. Thank you. Thank you. Thanks. Thanks. Thank you. Thank you very much. Thank you. Thank you very, very much, Mort, that was a very, very wonderful and kind introduction and I'm really here--you expressed your gratitude to me for the changes in the city, which I owe to many people, and the Manhattan Institute more than most because they gave us a lot of the ideas and a lot of the direction and a lot of the change in thinking that was necessary to do that.
But I do remember in 1993, about four days before the election, I was trying to get every last vote that I could find because I knew it was going to be a very close election and I was campaigning in Brooklyn and I was shaking hands with people and I grabbed the hand of this man, he had a big hand, he held my hand very tightly, he had a big smile on his face and he said to me, it'll be until hell freezes over before there's a Republican Mayor of my city, damn it. I said, thank you because I couldn't think of what else to say and I was exhausted. I moved onto the next person and the next person. Four days later I was elected, forgot about the man for a while, I got inaugurated, I became the Mayor, first month went by--February 1st of 1994, I was getting up I had Winds [phonetic] on, reporter on Winds said something like this, Mayor Giuliani has been in office for one month and he's already set a record. Well, I was kind of happy what record had I set? Reporter said, he set a record for the most snowfall in the month of January and it looks like February is going to be no better. So now I started having nightmares about this man. Republican Mayor, hell freezing over, the whole thing and then I--the last couple of years I was Mayor there was hardly any snow--maybe Republican programs work even for snow I'm not sure.
When David Brooks was talking about The New York Times, I remembered my basic training regarding The New York Times; it came from being in Reagan administration. I was the Associate Attorney General; I worked for Attorney General William French Smith, who was a very close friend of Ronald Reagan's, his lawyer for 17 years, and in addition to being a Cabinet Member, someone who knew him really well. And for the first year that Bill Smith was in office, it was an unrelenting series of New York Times editorials attacking him for his position on affirmative action or on civil rights or whatever, anti-trust, it was just one difficult, critical editorial after another and the Justice Department staff was working on getting a good editorial--might've been on immigration. And we finally one morning The New York Times wrote a very favorable editorial about the Attorney General and we were all waiting for him to come in, all very happy, big smiles on our faces, very proud of the fact that we had gotten this good editorial. The Attorney General walked in, he had already read it, he had a very galm [phonetic] expression and we said to him Bill, you know, we really worked hard on this editorial. He said, yeah, I know but President's going to kill me. So we thought he was kidding. Within about 15 minutes the Attorney General is interrupted the President's on the phone and you could hear Attorney General Smith saying, well Mr. President, I didn't ask for this editorial, I mean, I didn't--and then he hung up the phone and he said, you don't understand how Ronald Reagan uses The New York Times he's very happy when they disagree with us and when they don't he's pretty sure we're off agenda so now I'm in trouble. That stayed with me while I was Mayor of New York City and it proved to be correct.
I want to thank Hank Greenberg, the Dinner Chairman, Hank, as you know, is one of our city's most generous philanthropic leaders in health care and so many other areas. I think you also know that he's someone who has served his country with great distinction in the Second World War and in the Korean War and I think you may know, but I certainly know, that he's one of the people who has stood with the city when we were going through our most difficult times. I mean, he's someone who kept his company here, kept them in lower Manhattan, kept them there sometimes against strong, strong arguments to move somewhere else or move significant parts of the business somewhere else, so he's really one of our city's greatest citizens and one of our greatest boosters.
And I have to tell you that I, you know, I told him that if Las Vegas gave odds on lawsuits, I know they do on everything else I'm not sure they do it on lawsuits, I think I'd bet on Hank.
I'm also very honored to be honored at the same time as Tom Wolfe, who has described the social forces that affect us in New York and Atlanta and in our universities in ways that not only as David Brooks pointed out are prophetic or appear to be prophetic, but also in ways that really explain to us what the impetus for reform is and the things that maybe we're doing wrong that we can correct and there's so much more that comes out of his social commentary. I think he's kind of like the--I remember reading his books and thinking he's sort of like the Dickens of our modern age; he sort of describes our social situation with an insight that nobody else has so it's a great honor to be here with him and he's another really great New Yorker.
For me, it's more than an honor to receive the Alexander Hamilton Award from the Manhattan Institute, it's like coming home. My administration, my city and I owe so much to the groundbreaking and the past-setting [phonetic] that the Manhattan Institute has done over the years. In fact, if there was kind of like a charge of plagiarism for political programs I'd probably be in a lot of trouble because I think we plagiarized most of them, if not all of them, from the pages of the City Journal and from the thinking and analysis of the Manhattan Institute.
I brought with me a copy of the City Journal, it's one of the many issues of the City Journal that Richard Schwartz will remember we analyzed and looked at and read and underline and this one goes back to the spring of 1992, that's a long time ago, and here were the articles--I'll just read you the titles of them. This is by George Kelling, Measuring What Matters-A New Way of Thinking about Crime and Public Order, kind of pointed out a lot of the broken windows theory, even some of the concepts of Comstat about how to measure crime. Reclaiming our Public Spaces by Fred Siegel, Strategies to Restore Civility to our Streets and Parks, certainly borrowed a great deal of that, right John? See John Dyson and Paul Keroti [phonetic] and so many other people here, Howard Wilson. Putting Schools First, Changing the Board of Ed's Priorities. If we're ever to have better schools the Board of Education must get out of the way. Well, you can't achieve all of your objectives. Correcting New York's Housing Mistakes--the city needs policies that widen the housing choices of all New Yorkers by Peter Salins, something that would be--Judith and I just came back from two days in New Orleans, this would be something that would be very useful there now, the concepts discussed in this article. Congestion by Default, New York's Haphazard Transit System by Dick Netzer. Planning with Vision, New York Planners Need to Think More about the Quality of Life by Nathan Glazer. And then The Competitiveness Debate by Thierry Noyelle, which really describes the high tax rates or really anti-competitive tax rates in New York and, you could go on Heather McDonald's articles about City College and the low standards in City College. So one article after another challenging the rigidity of thinking in New York.
One of the things that is the strangest thing, I don't explain this much outside of New York because, you know, it's like your family you hate to ever run it down, but the rigidity of thinking in New York is amazing to me. Here we are America's largest city by a lot, very intellectual, very intelligent, very accomplished in so many fields and there's a parochialism about our thinking that is almost like you can't think a new idea. I mean, before you even think the new idea there's going to be a big chorus that says well, we don't do it that way and we've never done it that way and what the Manhattan Institute has done for New York is to crack through that; it's made it possible for us to think about how to solve problems in different ways whether it's crime or welfare or taxes or ideas that maybe were considered ideas that you couldn't look at or think about. I remember when we started welfare reform we figured out that you could put people to work; you could require people to work in exchange for their welfare. The limitation, I think, was 18 hours a week, you couldn't require more than that, but you could require an able-bodied person to work in exchange for welfare and it took three or four or five years to be able to really communicate that message--three or four or five years of being accused of being mean, being heartless, not caring about people, when in fact, to me, it seemed that you cared about people more if you took the effort to try to find them a job then if you just gave them a handout check and sort of regulated them…
The thing that I think the Manhattan Institute helped to contribute greatly is something--I keep this in my office and I used it once in a State of the City speech and I look at it all the time, it's the two covers of Time Magazine; one was in 1990 and the title of the Time Magazine front cover was the Rotting of the Big Apple and on the front cover are people being mugged and people being beaten and people running out of the city and businesses flaying all these caricatures; the other cover is January 1st, 2000, and it's the millennium celebration on Times Square, beautiful, beautiful picture of the millennium and the article inside is about New York City as the best example of urban renaissance and a discussion of the change in crime and the change in jobs and the change from deficit to surplus. And that would not have happened, that big change would not have happened if the Manhattan Institute hadn't laid the intellectual groundwork and made it acceptable to say some of the things that I used to say, not all of the things I used to say, and it made it acceptable to think some of the things that we were talking about and discussing.
I remember the first year that I was in office we had to cut a budget and we had to eliminate about $2 or $3 billion in spending because we had a deficit that was about 4 or 5 times what the prior administration had told us it was and we found out about it as we were coming into office. So we cut dramatically. We cut everything but the police department and the fire department. And we used to have a demonstration a day for about four months and Peter Powers will remember this--one day there was a group demonstrating and this happened to be one of the few groups that we didn't cut their funding, in fact, we had given them a little bit more money for some reason and Peter noticed that in the budget and he decided that he was going to produce, like, a good news story for us when we desperately needed one. So he went out and he talked to the guy in charge of the demonstration and he told them, you know, I don't know why you're demonstrating your budget was increased and the guy said, that can't be. So Peter took out the budget and he showed them the line item that there had been an increase in his budget. The guy said, that's wonderful, that's absolutely terrific, I never realized that and Peter said, you'll be thankful to the Mayor for this--of course we will, this is a wonderful thing to do in a time of cutting we got more money, it recognizes our program, it's terrific and Peter said, well then, I guess, you know, you'll go over to the camera and, you know, explain that and say something nice about the Mayor and stop the demonstration. The guy kind of walks away to go toward the camera and he turns back to Peter and he says, well, you know, we're all here now and we're demonstrating so we're just going to go on with it. That sort of set my whole thinking about demonstrations and…but you have created many, many changes and I think many challenges remain and I believe that the Manhattan Institute has an enormously important role to play both in the future of this city and in the future of cities because cities are so important to America to how we're looked at, the way we are.
And in honoring Alexander Hamilton, there is one issue that I'd like to talk about briefly because Alexander Hamilton was not only a Founding Father, a great economist really, a brilliant business man, not a particularly good shot but…I'm not going to say the next part. But he was one of our first great immigrant success stories. He's a man that was born outside of the United States, came here, poor family, very poor and he had to build a better life for himself and for his family and he did that in a way that made it a better life for us in many, many ways. And I think that, you know, we're going through a very serious debate on immigration and I think that I look at it from the point of view of how do we create more security for the United States? How do we, in an era of a war on terrorism, which is going to continue for the indefinable future, and then some of the other problems that we have, how do we create more security? And I think that either extreme is not the right answer.
One extreme is what I would call the punitive approach, which is reflected in the House legislation that was passed, which is to make it a crime to be an illegal or undocumented immigrant; it is illegal now but it's not a crime and I believe, if I recall correctly, that it would make it a five-year felony and there are 11 million illegal immigrants in the United States. It would become a law that was honored in the breach and it could not possibly be enforced. To give you the dimensions that I remember, at least when I was the Mayor, it's estimated that there are about 400,000 people in that category in New York, it could be more now but it used to be about 400,000. The Immigration and Naturalization Service, I believe, deports about 1,500 to 2,000 people a year so I pretty quickly figured out that I was going to have 398,000 illegal immigrants no matter what the federal government did and I had to do something sensible about it rather than something stupid and kind of make it work in the society in which we exist. Well, that's really the picture for the whole country and to deal with it in a punitive way is actually going to make us considerably less secure than we already are because the problem is that we have such a huge underground that we can't really keep account of who's here, who they are, identify them, and kind of separate the ones that are here for benign or neutral purposes, which we can argue about the competitiveness and the economy and everything else, but they're not really doing damage to our society, might even be making vast contributions to it, and then focus on the people that we have to focus on who are the people that might come here to carry out terrorist acts or to sell drugs or to commit crimes and the reason we can't do that well is that we have a system already that's unenforceable, that's unrealistic given the numbers of people that want to come here, the size of our borders, the number of resources that we could conceivably have to apply to it. So the right answer is to do the things that have to be done to secure our borders, introduce new technology, require more of people in describing who they are, identify them effectively, fingerprint them or finger image them if you have to, photograph them, come up with cards for them, use the modern methods that we presently have for identifying people but don't try to legislate against the inevitable forces of, you know, social movement and the economy because it isn't going to work. So we have to find a way and I think that the compromise the Senate was looking at something along those lines makes sense. Give people a way to earn citizenship, give them a way to earn citizenship in which they have to demonstrate facility with English and they have jobs and they're paying taxes and they've put themselves in an entirely legal status, recognize the economic forces that are realistic ones that require people to come into the United States or require people to have people come into the United States, and you identify them and you have them pay taxes and you find out who they are and then you concentrate on the people who are avoiding that and you'll be capable of doing that because it'll be a problem the dimensions of which you can touch and feel and measure and see and it'll be much harder for terrorists to hide in a situation like that. And I think that the Manhattan Institute, which sort of turns on trying to figure out the logical and sensible answer to a problem, can play a big role in getting us to think about immigration in a way that it is sensible and it gets us to a resolution that makes us more secure because I think that going in either extreme is going to hurt us.
We just came back, as I said, from New Orleans and it's a very devastating experience to travel through New Orleans--not the city itself, the main part of the city, but the 9th Ward and Lakeview and St. Bernard Parish, it's incomprehensible to see the amount of destruction and the amount of harm that's been done. It's very, very hard for a person, and so many of the people that I work with are here, that basically is ruled by impatience like I am to understand what's taking so long in starting to kind of put that all together, but if there's a place that needs a Manhattan Institute it's New Orleans. And you have done so much that I am really, really greatly indebted to you. But, there are so many other things that exist, so many other fights that have to continue from figuring out that, you know, cutting taxes--this is the thing that probably disturbs me the most when I read The New York Times editorials, they've kind of turned around the whole idea of cutting taxes and they make tax increases morally courageous. I have no idea what is courageous about raising taxes. I understand it's courageous to run into a fire and take somebody out, but I can't figure out what's courageous about raising taxes and I don't understand why you would think that in an economy that's essentially a private economy it makes more sense and is more efficient for the government to confiscate more of that money, but the thing that astounds me the most is that we've done three major tax cuts in my lifetime; first one was done by John Kennedy and it was followed by a significant period of economic growth, the second one that I remember was the President that I worked for, Ronald Reagan, and it was followed by a long period of economic growth and President Bush had to fight very, very hard to create tax cuts at the beginning of his administration and we're having economic growth again. Somehow somewhere the orthodoxy of thinking about just raising money to put more money into government programs should be challenged by that. I learned that from the Manhattan Institute. I learned it from reading articles in the Manhattan Institute and the first tax that we cut was the hotel occupancy tax and it was only a $36 million cut because that was all we could afford and Peter actually told me that I set a record for cutting taxes in New York and I said it's impossible, how could I have set a record we were only able to afford $36 million and he said because this is the first time it was ever done.
But there are so many other fights that lie ahead; restoring fiscal responsibility, remaining consistent to the great change that President Bush made on September 20th, 2001--I don't know if we really understand the significance of it completely and I don't know that it's been given the attention that it deserves but it means a great deal to me because President Bush invited Governor Pataki and I to sit in Congress when he gave his address after the attacks of September 11. And on September 20th, 2001, as I sat there I realized what he was doing and it was the first time that I started to feel some sense of optimism because I said, you know, he gets it and up to that point we hadn't gotten it and what he got was that we have to be and we should've been before that and there are a lot of understandable reasons why we weren't, but we have to be on offense against terrorism we cannot go back to where we used to be in the '70s and the '80s and the '90s and the early part of even this century, which is on defense against terrorism; that's probably the primary mistake that we made. We let Europe determine how we would react to terrorists; the people at the Munich Olympics, the Israeli athletes who were slaughtered, the people who remained were released by the German government because the German government was afraid to keep them. Leon Klinghoffer was killed by terrorists; the Italian government released the terrorists because they were afraid to keep them. That happened 60, 70, 80 times in the '70s, the '80s, the '90s. America sat back, watched that, sometimes we'd react to a terrorist attack, sometimes like the coal [phonetic] we wouldn't. What President Bush did on September 20th, 2001, is to say we're going to go on offense against terrorism. We're going to use the methods that are the most appropriate, military, political, economic, educational to combat them and to do the best that we can to try to stop them from attacking us again rather than just sit back and wait for it. That was a tremendous change in American foreign policy. I believe it has something to do with the fact that we've been safe since then. It is not an assurance that we'll be safe in the future, but we've achieved a great deal already. It is very difficult to keep that policy focused because it's very hard to be at war whether it's a much more physical type of war like the Second World War or the Civil War where we had draft riots in New York and Lincoln almost didn't get re-elected and I imagine if they had approval ratings in 1863 our greatest President's approval ratings would be lower than our present President. But, President Lincoln understood the necessity to keep the Union together whether a poll agreed with that or didn't. President Bush understands the necessity to remain on offense against terrorism and we…it isn't going to happen without setbacks, it isn't going to happen without mistakes, it isn't going to happen with some bad judgments being made because we all do that. If you look at the history of the Civil War there's a whole group of mistakes that were made including by our greatest President. The greatest intelligence failure of the United States military might very well have been the Battle of the Bulge when we didn't predict that Hitler had moved significant amounts of his army from the Russian front to attack us as we were trying to enter Germany and then we lost more people in the Battle of the Bulge than I think in the rest of the European war and it was a great intelligence failure. But, it was a war that we couldn't back out of because we had an intelligence failure it was a war that we finally won because Franklin Roosevelt and Harry Truman understood that we had to remain committed and Abraham Lincoln understood that we had to remain committed and that's why we have Presidents and the ones who can remain consistent turn out to be the great ones and the ones that waiver back and forth and are constantly trying to be popular turn out to be the ones who at best we remember their names and I think that we're going to be in this struggle for quite some time and I think we need people like the Manhattan Institute who can also explain that. So thank you very, very much for this award and have a wonderful evening.
MR. MONE: I'm here to bid you goodnight but in doing that I'm going to say first of all, that this to me has been a really amazing evening. We're in the presence of some pretty outstanding people here and the last one you heard was certainly one of them. If I'm not mistaken, I did detect a little hint of presidential influence there I don't know about you but if that wasn't a presidential speech I don't know what was.
On behalf of the Manhattan Institute Board of Trustees, I'd like to thank our awardees, America's Mayor and America's Writer; our Dinner Chairman, Hank Greenberg; and our introducers, the incomparable David Brooks and the amazing Mort Zuckerman. And in closing, I'd like to leave you with a parting thought and a gift. The gift is an autographed copy of Fred Siegel's, who's with us here tonight by the way, of Fred Siegel's copy of the print of the book, The Prince of the City: Giuliani, New York and the Genius of American Life. The book is a kind of Bonfire of the Vanities for policy wonks, but Fred not only tells how the city went wrong he provides a thorough and engaging account of the people and the ideas that set it right again and I, having read it, can tell you that it is an incredibly fun read, it's exciting, it keeps you on your toes all the time and it gives you a lot to learn about the city and its past and present.
The parting thought is no one wants to return to the Bonfire days but let us remember that Paris is presently burning and for a reason; bad ideas. Civilization is a fragile thing, the Bonfire remains a permanent possibility it is the Manhattan…
The Alexander Hamilton Award was created to honor those individuals helping to foster the revitalization of our nation’s cities. We chose to name the award after Hamilton because, like the Manhattan Institute, he was a fervent proponent of commerce and civic life. Through the years, we have expanded the scope of the prize to celebrate leaders not just on the local level, but also at the state and federal levels, who have made remarkable things happen in the realms of public policy, culture, and philanthropy. We hope our celebration of these awardees encourages replication of their efforts.