"I think the media is creating a fuss that doesn't exist, and that the people of New York City want this marathon," he said on "Fast Money." "If I were mayor, I would be doing exactly the same thing."
Koch, who served as mayor from 1978 to 1989, said that he faced the same decision when the city was near bankruptcy and still threw a ticker-tape parade for the Yankees following their World Series win.
The parade came despite opposition from the media.
(Read More: Marathon Mad: Backlash Against NYC Race Mounts)
"I said, 'New York Times, you have your head screwed on wrong.' What the people of New York City need is a celebration, something that will lift their spirits, and there's nothing comparable to the marathon with respects to lifting the spirits of this city," he said.
Koch said that generators being used for the marathon would not be used for providing power to private utility customers.
"The city of New York is not putting in generators to light up buildings," he said. "These generators in the race have nothing to do with changing the condition with the people who have suffered.
"In fact, by Sunday, the city may be in large part back to being lighted. Even if it is not, there is no question in my mind that the marathon should be held, that the mayor should be applauded and that the media should be denounced for trying to do it in."
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