Zohran Mamdani is very likely to be the next mayor of New York. He calls himself a “democratic socialist” and insists that he is not a communist, but his rhetoric about the ultimate goal of “seizing the means of production” strongly suggests otherwise. And his free-stuff schemes, as appealing as they may be to ignorant voters, have to be paid for somehow. Mamdani, of course, intends to impose confiscatory tax rates upon New York City’s hated billionaires, but if he does this, he will come face-to-face with a hard reality: socialism depends on coercion, and in America even today, he doesn’t have unlimited powers of coercion. So what will become of New York City?
Mamdani may ultimately have been more comfortable being mayor of East Berlin, where there was a wall around the place, and ruthless armed guards all too eager to murder anyone who tried to escape to freedom. All of communist East Germany was essentially a prison camp in which the inmates, that is, the citizens of the country, performed forced labor under the threat of imprisonment, torture, and even death.
What if, on the other hand, the Berlin Wall had never been built? The answer to that is easy: the whole city, and the country as well, would quickly have become entirely depopulated. The idea of “from each according to his ability, to each according to his needs” sounds great until you’re the one who is being worked to the bone in order to pay for the alleged needs of someone else. East Berliners, and East Germans, stayed put because they have to.
New Yorkers, on the other hand, don’t have to. If Mamdani does indeed impose his confiscatory tax rates, the city’s billionaires can simply pull up stakes. And then who will pay for Mamdani’s free buses and cheap grocery stores? Anyone and everyone, but most likely, the city will simply go bankrupt. And then we could very well see a replay of the rhetorical war between New York City and the federal government that played out in the 1970s.
The economy was mired in a recession throughout the two and a half years of the Gerald Ford administration, with unemployment exceeding eight percent in 1975. On Oct. 8, 1974, Ford announced the Whip Inflation Now (WIN) campaign; this amounted to little more than bright red buttons that said “WIN.” Beyond that, President Ford seemed uncertain what to do, although, by this time, doing nothing and letting the economy right itself, as other presidents had done in economic downturns before the Great Depression, was not on the table. Ford called first for raising taxes, then for lowering them. Because federal spending continued to increase, the tax cuts resulted in a growing federal deficit.
Ford called for cuts in federal spending, but the Democratic-controlled Congress was loathe to accommodate him. However, amid all this, New York City went bankrupt. When New York City Mayor Abraham Beame asked the federal government to take on his bankrupt, spendthrift city as a welfare case, Ford refused. Reporting the news, the New York Daily News ran the famous headline “FORD TO CITY: DROP DEAD.”
Ford’s reasoning, however, was sound. On Oct. 29, 1975, he listed a number of programs that New York City maintained that were a clear waste of taxpayer money. He said that if he bailed out New York, “the primary beneficiary would be the New York officials who would thus escape responsibility for their past folly and be further excused from making the hard decisions required now to restore the city’s fiscal integrity.” And he explained: “If we go on spending more than we have, providing more benefits and more services than we can pay for, then a day of reckoning will come to Washington and the whole country just as it has to New York City. And so, let me conclude with one question of my own: When that day of reckoning comes, who will bail out the United States of America?”
Preach, Jerry! He was right, but the economy contributed to Ford’s loss to Jimmy Carter in the 1976 presidential election. His refusal to bail out New York City earned him the scorn and rage of the news media, and he had no economic successes of his own to which he could point in defense of his reasoning. Nonetheless, his reasoning was sound and should have been heeded in his own day, as well as by future presidents and Congresses, as federal spending continued to mount ever higher.
The Ford-New York tiff could turn out to be Zohran Mamdani’s secret weapon. When he drives New York to bankruptcy again, he has a scapegoat ready and waiting: Donald Trump.
