(FORTUNE Magazine) – Your servant has a friend, a lifelong New Yorker, who had a revelatory experience a while back. A high-paid magazine editor and denizen of a luxury apartment on Manhattan's Upper East Side, he suffered a $378 diminution as a result of having a pocket picked on the subway. Wait -- that's not the revelatory part. Vanishing wallets continue to engender dismay and vengefulness here in Gotham, but the experience is far too prosaic to spawn any great insights. The stunner came when our pal reported the crime to the gendarmes and discovered that he was eligible to get reimbursed by New York State's Crime Victims Board. To be slightly fair here, the state was not springing for the whole $378. The chap's insurance covered $128 of the loss, so the check he received from the state came to only $250. It arrived one day last spring, in a period when the twin fiscal crises of New York State and City were endlessly onstage in the New York Times. We mention the Times somewhat vengefully because of its moral complicity in a much larger pocket-pick -- the one engineered during the past few months by New York's political establishment. While many other jurisdictions put on excess bureaucratic fat and overspent in the Eighties -- and were therefore instantly in trouble when the economy turned down -- not many can match the depraved performance of our own city and state. Since 1983, the city government has increased its head count by 50,000, to around 300,000. State spending increased almost three times as rapidly as the inflation rate during the same period. Since we suckers here in Gotham were already the most heavily taxed folks in America (according to the Tax Foundation) when the latest budget crisis began, it was rated quite irksome around our house when the arguably greatest paper in the world kept finding arguments for solving the city and state problems via still more imposts on the citizenry. Just what a fellow needs to start off the day is house columnist Anthony Lewis linking the city's finances to Oliver Wendell Holmes's dictum that taxes are the price we pay for civilization. Whether Holmes would have clove to this view in a city where one-third of tax ) revenues represent transfers from the productive to the unproductive sector is a question prudently not raised by Tony. The pocket-pickers did not at first say much about raising income and other taxes to close that budget gap. They started out early in May talking instead about scarifying budget cuts that would result in layoffs of maybe 27,000 city employees and eliminate numerous municipal services, with buckets of hot salt stage tears shed for the scheduled closing of the beloved Central Park Zoo. At no point did the Times get around to complaining that this ''doomsday budget'' still left municipal employment far above the levels of the early Eighties, when nobody was talking about a need to cut back or eliminate municipal services. New York City is a place where the mayor keeps announcing layoffs that do not occur. A few days after the Times reported that there would be 27,000 layoffs, it had a revised figure: ''more than 20,000.'' By late June, just before the fiscal year-end (when the layoffs were supposed to start), it was ''nearly 10,000.'' On August 12, we learned on page 1 of the Times that in fact only around 3,000 workers had been laid off. Instead of playing this news as evidence of another three-card monte game in City Hall, the paper's analysis emphasized the suffering of those laid off. Basic klutzy formulation: ''The pain from the city's fiscal troubles has flowed deep, but not wide.'' The great zoo scare was obviously designed to soften up the opposition to tax increases. To the extent (less than great) that the budgetary crisis is being solved at all, it is mostly being done via new taxes. The Times thinks this is great. It had repeatedly demanded that Governor Cuomo forgo a scheduled state tax-rate reduction while also allowing the city to raise income-tax rates (it needs state permission to do so). In one editorial that raised systolic pressures for miles around, it suggested that for Mario to resist this course ''smacked of national ambition.'' Forfending further charges of smackery, the governor has now set aside the state income-tax reduction for the second year in a row and allowed New York City to raise its own tax rates by 14%, retroactive to January. There appears to be no crime- victim program applicable to this case.