Barbarians at the Gate

New York City Democrats just nominated a very woke socialist, Zohran Mamdani, for mayor. They say he has a good shot at winning. 

I’m not surprised. After all, NYC is a liberal/progressive bastion. They’ve already got AOC (Andrea Ocasio-Cortez), the Congresswoman representing much of the Bronx. 

Most democratic socialists want free stuff like health care, tuition, and transit fares. They also want rent control, high minimum wages, union control, more business regulation (Green New Deal), and high taxes on the rich to pay for all the free stuff. 

Mamdani ran on more rent control in NYC which, they say, is the key reason that got him nominated. Housing is a problem in NYC but he doesn’t bother to ask why rents are high and housing is in short supply. He also wants to take over the power utilities because profits are bad. He advocates City-owned grocery stores, and free bus and subway fares. And more.

Mamdani is quoted as saying “I don’t think that we should have billionaires – because, frankly, it is so much money in a moment of such inequality…” This is the quote that really has wealthy NYC capitalists scared. I would bet on Florida here.

He is a member of the Democratic Socialists of America, as is AOC. That organization espouses classic socialist goals like abolishing capitalism and transforming the USA into a socialist state.

He denies advocating violence to achieve his socialist goals, but he did say this to the Young Democratic Socialists of America:

“But then there are also other issues that we firmly believe in, whether it’s BDS [Boycott, Divestment, and Sanctions of Israel] … or whether it’s the end goal of seizing the means of production, where we do not have the same level of support at this very moment.”

I verified the quote with Politifact. They said that he’s no Commie and cited several academics who parsed the quote into a meaningless statement. OK, he said America is not ready to support such a move, but like it or not, it’s a goal which he and his party support. It’s evidence of his mindset. They think they are playing the long game, but they are just ignoring socialism’s failures.

Mamdani and AOC cite Sweden as an example of a successful socialist/welfare state, which it isn’t. Sweden ditched socialism years ago and are solidly capitalistic, but they have high taxes to pay for welfare programs. And I mean high. If you made $65,500, the government will take 55% or $36,000 leaving you with $29,500. That’s not all. You pay a 25% VAT tax (like a sales tax) on most goods you buy (ex-food-12%). 

But, hey, you get free health care, pension, childcare, education, etc. You also get high inflation, sluggish economic growth, and poorer people. U.S. living standards are about 50% higher than Sweden. The average consumption (what people spend) in Sweden is about equal to the bottom 20% of Americans. Is this what democratic socialists want?

If Mamdani is elected mayor of NYC and his policies are supported by the City Council then NYC may become a socialist paradise. 

More restrictive forms of rent control and housing regulation will disincentivize developers from building more housing. It will also lead to the further deterioration of rental housing (something NYC is already famous for in existing rent-controlled housing). City sponsored public housing will be riddled with corruption and deterioration. City subsidized health care will go broke. The government owned/controlled power companies will have service outages due to frozen rates and increased costs. The free public transportation will run out of money and the equipment will deteriorate and service will be disrupted. Tax revenue shortages will require more debt. The City’s bond rating will go to junk status and its debt service will increase.

You can’t tax rich people enough to pay for all this free stuff and they won’t stick around to find out. As America’s financial capital, businesses will go to states with more freedom and less taxation. With fewer billionaires, one may wonder who will support all the arts organizations and charities. 

I am not making this stuff up. This is a familiar scenario for most cities and countries that have tried democratic socialism.

Socialists, democratic or otherwise, are utopians who believe that a perfect world is attainable. It’s a fantasy akin to religion. Stalin, Mao, and Pol Pot believed in utopia and hundreds of millions died in its pursuit. Hugo Chavez and his democratic socialism fantasy left Venezuela in tatters.

It makes you wonder what these politicians are after in light of the obvious failures of socialism.

I will leave you with a quote from one of my favorite economists, Thomas Sowell:

“The fact that we don’t have people who are educated to be able to analyze arguments and who are swept along by rhetoric is one of the reasons that allows people to get away with these kinds of things.”