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Radio Ad Offers Discounts for City Workers During New York's Fiscal Crisis of 1975

This radio ad aired July 28, 1975 on WOR, New York, during New York City's financial crisis. The federal government had refused a bailout. Ultimately, the Municipal Assistance Corp., known as Big MAC refinanced the City after various union/employee concessions were made. Bonds Clothing advertises discounts for City civil servants in view of the concessions. Unlike the aftermath of the Great Recession of 2008, a period during which attacks on civil servants were commonplace, giving a break to civil servants was seen as good publicity by Bonds in 1975. The Bonds clothing chain went out of business in the early 1980s but was prominent in New York and other cities at the time of the ad. Below is a story about Big MAC which ironically lasted until the international fiscal crisis of 2008. City to Big MAC: So Long The Municipal Assistance Corp. was born in a blaze of tabloid headlines, but its passing is being relegated to the fine print. MAC, the state agency created to rescue New York City from the threat of bankruptcy in the mid-1970s, posted legal notices in October announcing it would cease to exist on July 1, 2008, the expiration date set by law. Big MAC, as it was called, hasn't had much to do since 2004, when the city—now the picture of financial health—refunded the last of its bonds, which totaled nearly $10 billion at peak issuance. New York State created MAC after President Gerald Ford refused in May, 1975, to provide an emergency federal loan to the city. "Our great fear, which we never discussed publicly, was that if the city went bankrupt, the state would, too," recalls Felix Rohatyn, the celebrated Wall Street banker who was MAC's chairman during the worst of the crisis. The city's closest brush with bankruptcy came on Oct. 17, 1975, he recalls, when the local teachers' union balked at using $150 million in pension funds to buy MAC bonds. By the time Albert Shanker, the union's famously militant chief, relented late that afternoon, "we were a few hours from bankruptcy," Rohatyn says. That night, MAC's chairman went to the restaurant Elaine's to celebrate. Spying Woody Allen, he congratulated the director on the prescience of his 1973 film, Sleeper. It was set in 2173, after civilization had been all but obliterated "when a man named Albert Shanker got ahold of a nuclear weapon." Recalls Rohatyn: "I started thinking of that line in the middle of the night, and I never did get any sleep." Sleep eluded him for a few weeks more until two unlikely allies joined the cause. At the behest of Rohatyn and others, Fed Chairman Arthur Burns raised the issue at a G-7 summit near Paris. The upshot: French President Val?ry Giscard d'Estaing and West German Chancellor Helmut Schmidt warned Ford that a New York bankruptcy could trigger a global financial crisis. Ford signed bailout legislation soon afterward. "It was only then we were pretty sure we weren't going to go bankrupt," says Rohatyn, 79, adding that running MAC was "one of the best experiences of my life."
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