One of the central arguments of this book is that New York City under Mayor's Koch and Dinkins could have spent local resources more wisely to deal with poverty and homelessness--two problems that got worse under their administrations and continue to today.

At the root of their failures was an overemphasis on subsidizing the finance and corporate headquarters segments of the economy at the expense of almost every other type of economic activity. The spent billions on incentives and tax breaks that served several negative purposes:

1) These sectors contribute to a polarized labor market. They create a small number of extremely well paid jobs and a larger number of low-wage, part time and contingent service jobs. As a result, the middle class has been shrinking and low skilled workers have seen their wages fall--even in good economic times.

2) This process has undermined the manufacturing sector. For decades lower skilled workers could make into the middle class through access to manufacturing jobs--often unionized. The emphasis on the corporate and finance sectors has driven out hundreds of thousands of jobs that paid decent wages to people with less education--leaving them either unemployed or under-employed and underpaid.

3) Additional real estate subsidies such as J-51 and 421a, which encourage market rate housing development--for finance and corporate executives--at the expense of low cost housing contributed to the loss of hundreds of thousands of low cost units, just as wages at the bottom of the economy were falling, leaving up to one hundred thousand people a year homeless. These subsidies enriched developers and resulted in very few public benefits. To this day there are millionaires in Manhattan living in publicly subsidized housing, who pay no property taxes.

4) This has contributed to the city's permanent budget shortfalls. Billions of dollars that could have gone into supporting other economic sectors and stabilizing housing markets have instead been spent to subsidize some of the wealthiest individuals and corporations in the world. As a result, as homelessness and poverty have increased, the city has been hamstrung by perennial budget shortfalls. While federal cuts to urban programs have exacerbated this problem, the city squandered many of the resources it could have had its disposal.