New York is flirting with an economic catastrophe

It is home to Wall Street, the major banks and the traders that dominate the global markets. On Billionaires’ Row, along 57th Street, the average apartment costs $US22 million ($33.9 million), and often far more.

New York has always been the most ruthlessly capitalist city on Earth, a place where money could be made quicker than anywhere else. As the old song has it, if you could make it there, you could make it anywhere.

Far-left New York City mayoral candidate Zohran Mamdani’s push to win the Democratic nomination is gaining steam. Credit: Bloomberg

And yet with the potential election of a far-left mayor this week, New York is flirting with an economic catastrophe, potentially heading the same way as San Francisco, Portland and other great US cities that have been destroyed by socialists.

With voting in the Democratic primary for mayor taking place on Tuesday (Wednesday AEST), the polls were too close to call.

Andrew Cuomo, the former New York state governor and well-known centrist from the mainstream of his Democratic Party, had been assumed to be a safe bet for the role. But he is now being challenged by Zohran Mamdani, the far-left assembly member.

We will find out soon enough once the votes are tallied. But given that New York is an overwhelmingly Democratic city, if Mamdani can seize the nomination, he will almost certainly become mayor.

Even if he narrowly loses to Cuomo, he will have made all the running, and will be perfectly placed to take control of the city next time around. One way or the other, he is getting closer and closer to real power.

The important point, however, is this: even by British standards, never mind by the far more conservative consensus in the US, Mamdani represents the far-left.

Sure, voters like his pro-immigration stance, and in a city that has always been built on welcoming newcomers from all over the world, that will always be a popular position.

But for anyone who owns or runs a business, the rest of his platform is, to put it mildly, frightening.

He wants to impose an extra 2 per cent income tax on New Yorkers who earn more than $US1 million ($1.5 million) a year; double down on rent controls that are already very tight; raise the minimum wage; push up the city’s top rate of corporation tax, on top of federal taxes, from 7.25 per cent to 11.5 per cent; launch government-run grocery stores; and introduce free childcare across the city.

New York has always been the beating heart of global capitalism. It is the hub around which it revolves, the place where money is raised, capital deployed and ideas tried out.Credit: Bloomberg

It is a big-state, high-tax agenda. With that manifesto, it is probably no surprise that “Fix the City”, the political action committee backing Cuomo to take on Mamdani, has attracted big money donations from people such as Michael Bloomberg, the billionaire former mayor, as well as financiers Bill Ackman, the founder of Pershing Square, and Dan Loeb, the founder of Third Point.

If Mandami wins, there will be a “flight of businesses from New York”, argued Ackman in a recent interview.

Many of his Wall Street friends no doubt agree with that assessment.

Even more than San Francisco or London, New York has always been the beating heart of global capitalism. It is the hub around which it revolves, the place where money is raised, capital deployed and ideas tried out.

We already have a very good idea of what happens to even the greatest US cities once they fall under the control of the far-left.

San Francisco is not just a major banking centre, but it is also right next to Silicon Valley – the hub of America’s all-conquering tech industry.

And yet, under the radical London Breed, who served as the city’s mayor from 2018 until earlier this year, San Francisco defunded its police force, allowed crime and homelessness to run rampant, drove out retailers and destroyed the city’s reputation as a place to do business.

Portland, in Oregon, witnessed a very similar trend, with Ted Wheeler, its radical mayor, diverting money from law enforcement into social activism.

Indeed, we have witnessed the same dismal phenomenon on this side of the Atlantic, with Sir Sadiq Khan, the London mayor, presiding over a rise in petty crime, fare dodging and homelessness that has eroded business confidence in the British capital.

It’s no surprise that the big end of town is rallying behind Andrew Cuomo. Credit: AP

If Mamdami takes power in New York, we can expect to see the same fate befall the city.

In time, of course, the policies of the far-left will prove to be so disastrous that the politicians imposing them are kicked out of power.

In San Francisco, under Daniel Lurie, the new mayor, the streets are starting to become safe once again and the city is beginning to heal.

The same has happened in Portland. We are, unfortunately, a long way from that point in London, but when Sir Sadiq is finally replaced, a new mayor may well be able to start the work of restoring the city to its former greatness.

The trouble is, a huge amount of damage is done in the meantime.

Higher income taxes in New York will lead to an exodus of millionaires out of the city to low or zero-tax cities and states, such as booming Miami, in Florida, or Dallas and Austin, in Texas.

We can expect the banks and hedge funds to drift away from Wall Street to other financial centres.

We can expect apartment prices to soar as rent controls force landlords to get out of the market, as they have done in every other major town or country where the controls have been attempted, while law enforcement will decline, and low-skilled immigrants will flood into the city.

In reality, New York is flirting with an economic catastrophe, and the reverberations of that will be felt right around the world.

After all, this is not just any urban centre. Even more than San Francisco or London, New York has always been the beating heart of global capitalism. It is the hub around which it revolves, the place where money is raised, capital deployed and ideas tried out.

If the left destroys it, it is not just New Yorkers who will suffer – the whole world will be poorer as well.

The Telegraph, London

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