Something extraordinary is happening in New York, by almost any political standard.
Some weeks ago, the city’s new, self-identifying socialist mayor, Zohran Mamdani, filmed a video outside the home of a private citizen, a man by the name of Ken Griffin.
Griffin has not committed any crimes, nor does he stand accused of any wrongdoing other than being wealthy and, allegedly, Republican.
His city’s mayor stood outside Griffin’s house, pointed at it and declared that Griffin – by name – was one of the targets of his new tax, designed to reclaim wealth from rich people and redistribute it to the poor.
The tax – which Mamdani calls a “pied-à-terre tax" – is allegedly supposed to be levied only on homes valued at more than $5m, where the owner does not use the home as their primary residence. In theory, it targets hedge-fund managers living in Florida who own penthouse apartments in Manhattan.
The Property Tax Hit List
In practice, it turns out, it targets many more people than that. This week, Mamdani’s administration released a splurge of data, including the names and addresses of thousands of prospective payers of the tax. Included were the names and homes of a great many wealthy New Yorkers, whose addresses are now a matter of public record.
Some of these – like Sex and the City actress Cynthia Nixon – were hardcore Mamdani supporters.
Others, like Taylor Swift and Anna Wintour, were much more circumspect. It mattered not one jot: if you are a property owner who appears on the city’s potential tax roll, then your name and address have now been placed in a searchable political context by order of City Hall.
This kind of anti-rich populism is, and has always been, popular. Mamdani, whether one loves or hates him, is also a preternaturally gifted communicator who – as the video above demonstrates – has a rare knack for making such proposals sound almost revolutionary in their fairness.
A Rare Talent for Demagoguery
Yet well-communicated demagoguery remains demagoguery all the same. It is not difficult to envisage negative consequences for those who have just had their allegedly immoral wealth advertised by their mayor, with their home addresses published for perusal both of concerned citizens and dangerous headcases.
Further, the economic consequences are not especially difficult to foresee: it is simply a case of applying basic principles of human behavior.
Wealthy people might well, understandably, decide that New York is no longer quite so attractive as it previously was for the acquisition of property. If they do, that will have the knock-on effect of driving property values down and therefore reducing the value of Mamdani’s tax increase.
When that occurs, if history is any guide – and it usually is – it is not hard to foresee what happens next: the easy way to sustain the tax, as property values fall, is to include more homes in it by reducing the threshold at which it is applied.
Tax for the Rich, Cheap Bread for the Poor
The tax hit list was not Mamdani’s only achievement this week: the mayor also opened the first of what he says will be a series of city-owned and operated grocery stores. These stores, he pledges, will sell a core basket of everyday goods at 30% below typical retail prices, and the cost of doing so will be subsidized by New York taxpayers, including, presumably, the unfortunate Mr Griffin and his chums.
Again, this will be very popular. Yet again, the problems are not especially difficult to foresee.
First, it is likely that this proposal will spell doom for a large number of existing New York City grocery stores, which are forced to compete in the open market against a state-subsidized alternative that is undercutting their businesses as a matter of policy.
Second, such stores will require careful regulation and perhaps in time even rationing: that is the only way to protect against the obvious scam that may arise from people purchasing surplus items in the state-subsidized stores and reselling them elsewhere for a profit.
Third, the problem is that the more successful the stores are, the greater the cost to the city government. Since there is no limit to who can shop at these stores, the potential throughput of them is similarly unlimited and, with each new customer, losses to the city mount.
This proposal, in the city that is the world’s financial capital, is the political equivalent of short-selling: a smart trader can make short-term gains, but in the long term, if it goes wrong, potential losses are literally unlimited.
The Inevitability of Math
Mamdani’s socialism is, for the moment, in its honeymoon period. Promises are being kept. The villainous rich are being taxed. Bread is being distributed to the masses. The ancien régime is horrified, and locked out of power.
YouTube comments under the mayor’s videos come from around the world, with Europeans writing about how much they wish they had somebody like him in their own countries.
In short order, the magazine profiles will gush, declaring that this time socialism has triumphed. By the end of the year, odds on Mamdani as the Democratic nominee in 2028 will be slashed.
Yet history teaches that, in the end, the predictable problems of policies like those he is enacting will resurface. Politicians can escape scandals or evade crises. No true socialist in history has been able to escape the relentless certainty of mathematics.
That this is all happening in the city that, more than any other, defines modern capitalism, is quite something. One can only hope that the reckoning, when it comes, is milder than it might be in the worst-case scenario.