New York City’s Mayor Zohran Mamdani has set his sights on a vision of affordability, a promise resonating with many. But beneath the surface of “free” initiatives lies a fundamental misunderstanding of economic principles, a plan that threatens to unravel the city’s prosperity.
Consider the allure of free public transportation. While seemingly beneficial, increased demand without expanded capacity inevitably leads to overcrowding and a decline in service quality. Could New York City soon resemble London, with commuters packed like sardines? The same pitfalls await seemingly generous programs like universal childcare, vulnerable to fraud and logistical nightmares.
Rent freezes, often touted as a solution to housing costs, are equally flawed. They stifle new construction, exacerbating the very shortage they aim to address. A thriving housing market requires incentives for developers, not restrictions that discourage investment.
The mayor’s proposals extend to city-owned grocery stores, raising a critical question: can public employees replicate the dedication and long hours of private business owners driven by the pursuit of generational wealth? History suggests a starkly different outcome, a chilling echo of the inefficiencies seen behind the Iron Curtain.
Even more concerning is the planned shuttering of reliable energy sources. Removing 500 megawatts of power risks blackouts, a gamble New York’s grid operator reluctantly avoided just recently. Germany’s experience – a forced return to coal during periods of low renewable energy production – serves as a stark warning.
However, these economic miscalculations are not the most dangerous aspect of Mamdani’s agenda. His underlying hostility towards capitalism, a particularly odd stance for the mayor of a global financial hub, poses a far greater threat to the city’s future.
The engine of prosperity isn’t benevolence, but self-interest. As Adam Smith observed centuries ago, we rely on the baker, butcher, and brewer’s desire to succeed, not their charity, for our daily bread. East Germans, after decades of collectivism, succinctly captured the problem: “They pretend to pay us, and we pretend to work.”
Mamdani’s dismissal of “billionaires” reveals a troubling mindset. These individuals aren’t simply wealthy; they are innovators, entrepreneurs who create opportunities and improve lives. While acknowledging the need for a safety net, demonizing success stifles the very forces that drive progress.
The proposed wealth tax and the highest corporate tax rate in the nation are likely to trigger an exodus of businesses and high-income earners, mirroring the struggles of California. The consequences would be devastating, impacting not only the wealthy but also the countless jobs they support.
The allure of Scandinavian social democracies like Sweden and Denmark is misleading. Both nations abandoned wealth taxes due to administrative difficulties and disincentives to wealth creation. Their success isn’t simply about higher taxes; it’s about a comprehensive system, including a substantial value-added tax that the U.S. does not have.
The result? After-tax per capita GDP in the U.S. is significantly higher than in Sweden and Denmark. Trading income for “free” services is a short-sighted bargain with long-term consequences.
Mamdani promises a government capable of solving any problem, no matter how large or small. But this ambition, coupled with “honest” budgeting, will inevitably lead to broader tax increases, disproportionately impacting the middle class and younger New Yorkers.
The “warmth of collectivism” is, in reality, a deceptive promise. It’s a path towards economic stagnation, a future where opportunity dwindles and the very foundations of New York City’s prosperity are eroded.
