As he was sworn in as mayor of New York City in 1974, Abraham Beame pledged to be a stabilizing force. Just months into his term, however, that pledge was crushed by one of the most fabled audits in American urban history. In Drop Dead City (now streaming on Amazon Prime and Apple TV), Peter Yost and Michael Rohatyn revisit the fallout from the revelation that the once-invincible New York City was six billion dollars in debt.

Through intimate, often darkly funny interviews with the everyday New Yorkers and bureaucrats who endured the crisis, Drop Dead City offers a gripping human drama. Archival footage revealing closets filled with canceled checks and shoddy books might outdo even current standards for government dysfunction. And insights from a few of the thousands of public employees who were laid off allow viewers to share in their sense of betrayal. Along with well-paying union jobs in city government, New York City also lost tuition-free public college and subsidized childcare.

What compelling storytelling is accomplished in these initial scenes, however, is undermined by the filmmakers’ decision to assume the perspective of midcentury bankers. By the end of the documentary, who emerges out of this parable of dashed hopes and hapless civil servants but Felix Rohatyn, the Lazard Frères banker who rescued the city from bankruptcy. As chairman of the Municipal Assistance Corporation (MAC), Rohatyn believed that the city government, banks, and unions could overcome their differences to save New York. Personal testimonies portray him as a tactful negotiator, motivated by compassion for people and faith in government. A story of unraveling trust and institutional collapse becomes, curiously, a fairy-tale rescue.

As other reviewers have noted, this portrayal of Felix Rohatyn becomes less surprising when the credits reveal that co-director Michael Rohatyn is his son. But it bears greater implications. In resolving the crisis around Rohatyn’s point of view, the documentary glosses over how MAC and the Emergency Financial Control Board demanded sacrifice from unequal parties.

It was not only unfair. Historians have explored the ways that conservative businessmen organized to undermine liberal policy and central planning in the postwar period. As Kim Phillips-Fein writes in Invisible Hands, businessmen-led associations, think tanks, and foundations profoundly weakened government regulations and the power of labor unions. In other words, it was no accident that, at the climax of the crisis, labor unions were expected to pay the harshest price.

To be sure, we do get to see clips of union leaders rallying against the banks: sanitation workers dumped trash onto streets in protest. Teachers walked out of school, while their students decried court-ordered cuts to class time by 90 minutes. Even the wholesalers who supplied milk and canned vegetables to schools paused deliveries until they could be paid in cash. Outside First National City Bank, Alan Viani, a leader in the city’s largest municipal workers’ union, condemned corporate inaction. “Once again, we’re asked to sacrifice, when there’s no sacrifice from corporations, whose profit margins have gone up over 100%.”

Drop Dead City may show enough clashes between unions and banks to avoid a rosy view of civic harmony. There is no doubt that New York City emerged from the crisis fundamentally transformed. But how?

Austerity is always a political choice. Few understood this better than the New York City Police Department. Hit with their own layoffs, police and firefighters concocted a crisis of their own. They assumed the role of urban grim reapers. At bus terminals and subway stations in midtown Manhattan, they harangued New Yorkers and tourists about the crime wave that would unfold in their absence. They handed out “survival guides” for “Fear City” citing harrowing numbers in robberies, aggravated assault, larceny, and burglary. The quality of advice ranged from overkill to absurdity. “If you carry a handbag or similar personal luggage,” one line read, “try to hold it firmly with both hands whenever you are in public.” Tourists were advised never to ride the subway “for any reason whatsoever.” Person-on-the-street interviews show New Yorkers laughing off the pamphlets. One interviewee told a reporter: “I’ve seen a lot of [these pamphlets] around, and I haven’t seen any purses snatched.”

Mayor Beame brought restraining orders against the Patrolmen’s Benevolent Association for distributing the pamphlets, arguing they violated public trust. But these were not just officers crying wolf. Underlying their campaign was the idea that policing was a fundamentally different kind of public service than, for example, welfare and education. These other services were rooted in fantasies about the future; public safety was about protecting the society we live in now. In short, not all budget cuts are made the same. Most municipal agencies experienced some cuts, but welfare agencies had been in line for years before the crisis rolled around.

As the documentary notes, an additional 15,000 New Yorkers signed up for welfare checks every month as the recession worsened during the 1970s. To conservatives and New York’s business elite, however, this was not evidence of economic inequality but the consequence of public spending itself. Since the late 1960s, local taxpayer groups had been emerging across the country to protest, in their view, the growing tax burden of supporting the poor. Such groups deployed racist and sexist stereotypes about the sloth and refusal to work among “welfare queens” and Black single mothers. Historians have debunked many of these claims. Michael Katz found that 75 percent of federal social welfare dollars went to the nonpoor. And it was defense spending—not welfare—that most intensified the federal tax burden in the 1960s.¹ In New York state, Governor Nelson Rockefeller launched his plan to tighten welfare eligibility in 1969. By the time Harrison J. Goldin first sent auditors into city hall in 1974, there was already an appetite to trim the fat. The question of which services were essential and non-essential was as privy to political pressure as the decision to make cuts instead of raise taxes. It led to grim, either-or dilemmas. Treasury Secretary William Simon put the city’s predicament succinctly: “Pay the policeman or send out the welfare check?”

In October 1975, three months into the new fiscal year from hell, the city owed a payment of $453 million, with only $34 million available. As the documentary shows, everyday New Yorkers had tried their hand in saving their city by throwing parties and rallies to encourage the purchase of long-term municipal bonds. Even after thousands of layoffs, public sector unions agreed to reopen their contracts. The previously free City University began charging tuition. Wages froze, subway fares increased, and public hospitals shuttered. But Beame had already rejected the idea of increasing taxes, and the White House was even less amenable to stepping in. When asked for a federal bailout, President Gerald Ford admonished the city for its extravagant public spending. A Daily News headline famously paraphrased his reprimand in fewer words: “Ford to City: Drop Dead.”

It all boiled down to a standoff between Rohatyn and one former public employee: Al Shanker, president of the teachers’ union. The union had already invested in city bonds and was now asked to fork over an additional $150 million from its pension fund. As the city inched closer to the deadline for payment—4:00 p.m. on October 17—Shanker was forced to choose between his responsibility to his teachers and what increasingly seemed like mutually assured destruction. A wretched Beame quietly instructed his communications director to draft a press release announcing that the city had filed for bankruptcy. Meanwhile, even fellow unionists turned on Al Shanker. Victor Gotbaum, president of District Council 37, was furious: “Fucking Shanker, I almost threw him out the window.” If teachers weren’t to blame for this predicament, they were surely on the way to becoming the villains. Sensing diminishing public support, Shanker finally caved. What changed his mind? At a press conference, Shanker sighed: “Nobody else came forward, and we didn’t want to share the responsibility of having the city go down.” Crisis averted.

It is true that there was simply not enough cash on hand to meet everyone’s demands. It is also true that brokering New York City out of a six-billion-dollar deficit in the middle of a global recession is a gargantuan, unenviable task. In practice, of course, only one side set the terms. Up against an ongoing recession, stagflation, and an eroding tax base, the fiscal crisis became a pretext for businessmen to attack what they perceived to be big government excess.

How we narrate austerity is itself a political choice. It impresses upon us the idea that a government’s primary function is maintaining a balanced budget, rather than ensuring social welfare. When faced with an unsustainable deficit, deep spending cuts appear not only necessary but inevitable. The directors take on this line of thinking rather than pressing on questions about how the city distinguished between “essential” and “non-essential services,” or how the fate of the city fell into the hands of one former schoolteacher.

The sense of discordance may stem not only from the gap between subjects like Rohatyn, with an outsized role in apparently solving the crisis, and the unions, who had no choice but to concede. It also comes from the film’s understanding of how the crisis engendered, and in many ways, amplified that very inequality.