Crises can be moments of opportunity, but it is not foreordained who will seize the ring. The Great Depression ultimately led to the New Deal/Great Society state and increasing equality. 1975 New York City fiscal crisis, on the other hand, laid the groundwork for decades of neoliberal austerity. Despite political vulnerabilities, bankers and their Washington allies acted boldly to protect imperiled assets and remake a city in which the working class wielded some power as a bastion of finance capital. Seemingly powerful unions abandoned the public they served, and followed a risk-averse strategy of concessions in exchange for junior-partner corporatism, foreshadowing forty years of national decline. Working people squabbled over a shrinking pie. None of this was inevitable. Alternatives to austerity were possible. Identifying labor’s mistakes then might help it today, as we hope for better outcomes from the COVID crisis than deepened austerity.