When New York’s financial control board succeeded in pressuring Mayor Abe Beame to raise subway fares from 35 to 50 cents in 1978, a Columbia University political science professor, Donna Shalala—the only non-business person on the board—expected a meeting chock-full of spreadsheets and savings projections, the historian Joshua B. Freeman wrote in the book, "Working Class New York."

What she got instead, was, well, nothing. There wasn’t even so much as a single sheet of paper in the room.

“We had no hard facts,” she said.

“In short,” Freeman wrote, “it showed who’s boss.”

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New York City's dire fiscal crisis often brings to mind the famous tabloid headline recalling the Ford administration’s initial refusal to bail the city out: "Ford to City: Drop Dead."

But as we celebrate the International Day for the Eradication of Poverty, it might be useful to understand that the U.S., specifically, and the West, generally, continues to double-down on the very strategies that have left so many people across the world stuck in poverty.

Progressive economists note that by turning over the city’s budget to the Municipal Assistance Corporation—an unelected board of mostly CEOs and bankers—Mayor Beame set in motion the same chain of events as did Henry Kissinger, two years earlier in engineering the overthrow of Chilean President Salvador Allende’s socialist government.

It was a coup, that hollowed out New York’s manufacturing base, and starved the commonwealth of wages, benefits, subsidies and infrastructure, to pay creditors 100 percent on the dollar for its bad bets, usually on real estate.

Along with neoliberal trade deals, nothing has done more than financial control boards like the MAC—and their evil twin, emergency managers—to financialize economies, and lessen democracy, the world over. From Philly to Puerto Rico, Flint to Greece, Cleveland to Washington D.C., financial control boards have helped introduce the modern neoliberal era, characterized by bone-deep spending cuts, depleted consumer buying power, and widening inequality.

Insisting on spending cuts to save taxpayer’s money, and framing labor unions as greedy and selfish, New York’s MAC quickly became a model for governance in cities across the country, and indeed was a model for the “let-them-eat-cake” economic policies of the Reagan administration, and even later, the punishing austerity that the European Union has inflicted on Greece to recoup their investments in the country's sovereign bonds.

The result, according to New York Times columnist David Leonhardt, is this: the net worth for the typical U.S. household has declined by 14 percent since 1984.

Moreover, he wrote, “The life-expectancy gap between the affluent and everyone else is growing. The number of children living with only one parent or none has doubled since the 1970s (to 30 percent). The obesity rate has nearly tripled (to 38 percent). About eight million people have spent time behind bars at some point in their life, up from 1.5 million 40 years ago. While college enrollment has grown, the norm for middle-class and poor students is to leave without a four-year degree.”

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New York’s control board marked the beginning of a period of slowed growth and rising unemployment around the world. World income grew at nearly double the pace between 1960 and 1980 as it did for the next 30 years, according to World Bank figures.

And, the installation of unelected governance has caused other problems, including the poisoning of Flint’s drinking water, when an emergency manager appointed by Flint’s Republican governor switched from Detroit’s water supply to Flint’s, sending water through the city’s outdated, corroded pipes.

Critics say that the law providing the governor with legal authorization to appoint emergency managers for troubled Michigan cities is telling. The measure bestows the emergency manager with the legal authority to revise all budget issues, save one: appointees cannot renegotiate or unilaterally rewrite the terms of repayment for any outstanding bonds owed Wall Street banks.

The latest to join the list of cities governed by a financial control board is Puerto Rico. In July, the U.S. congress approved legislation creating the Puerto Rico Oversight, Management and Stability Act, which is legally authorized to cut public workers’ pensions, revise labor contracts and reduce social services, to restructure its US$73 billion debt load. Promesa’s board is comprised of six men and one woman, including Andrew Biggs, described by the Intercept as an “architect of conservative efforts to cut and privatize social security.”

A staunch critic of the control board, Congressmember Luis Gutierrez of Illinois, warned in June against the control board becoming an “occupying force,” and called on its members to commit to transparency.

“Last I checked, Puerto Rico is a colony, but still a democracy of U.S. citizens who deserve respect and the trust of this appointed body,” Gutierrez wrote.

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