The price of demagoguery: Why Mamdani can't deliver what he promised

Zohran Mamdani came into the mayoralty of New York with a package of absurd promises that voters nonetheless chose to believe. But the promises were not a plan, they were mere slogans. Now the float has turned into a pumpkin, and the mayor seems to be feeling surprised.

The City Council released its proposal for the fiscal year 2027 budget, which contrasted with what Mamdani had laid out. The new draft rejects key elements of the mayor's budget, rightly claiming that it relied on property tax increases, set-aside withdrawals and cuts to cultural institutions, libraries and public services. While this proposal is not an ode to freedom, it is less delusional than that of the new mayor. The underlying problem remains the ideological framework of those thinking about the city's economy.

Mamdani's proposal involved a 9.5% increase in property taxes, which council leaders warned would shift costs to homeowners, renters and small businesses. Where the mayor sees a crisis that can only be solved by raising taxes, the Council showed that it was possible to think of alternatives to a tax hunt against higher-income sectors. The legislative plan, even coming from socialist minds, unleashed the fury of Mamdani who accused his own party colleagues of proposing something that he said would result in billions in cuts to agency budgets and a degradation of public services.

The problem is not that Mamdani or the Council are naïve or uninformed. It is their ideology that makes them structurally incapable of solving the very problems that were used to win votes. Socialism was a good electoral vehicle but as a management tool, on the other hand, it has a known track record: diagnose the malaise, amplify it, and then manage it by shifting the blame outside.

The halal chicken and rice dish doesn't cost 10 dollars because the ingredients got more expensive. It costs ten dollars because street vending in New York is a privilege regulated to the point of absurdity: the city artificially restricts street vending permits, making the right to work a scarce and expensive commodity. That extra cost is not absorbed by the vendor: he passes it on to the plate. Mamdani used the price of chicken as an electoral banner without telling anyone that the problem is not solved by fixing prices, but by eliminating the barriers that inflate them. The permits, in addition, end up being negotiated in the black market for astronomical sums.

Mamdani knows this and, in fact, said so in his campaign. He promised to free permits so that food would cost eight dollars again, in a paradoxical recognition that it was the regulation that inflated the price. This is just one example of the causes that now turn New York's budget into a morass: it is over-regulation that makes street food, rent, daycare, and everything else expensive. If Mandani accepts that the solution for halal chicken is to deregulate, he should also recognize that the solution for housing, for commerce, and for employment is the same. But Mamdani cannot say that. His ideology won't allow him to.

New York is the second-worst regulatory climate for businesses, behind only California. New York has triple the national average of regulations governing education and more than twice as many as those governing social services. In a survey by the Public Policy Institute of New York, businesses pointed to the need for reduced regulations and taxes as the most important steps that should be taken to allow many businesses to survive.

And that's not counting the additional regulatory layers imposed by the city over the state. One in five workers in New York must obtain a license, which means wasting time and money before being able to work legally. Licensing represents a conviction in itself, and New York has infinite categories of professional licenses. And so it goes, also the building codes are hell and not to mention the labor regulations that compound the picture.

As the saying goes, it's almost impossible in New York City not to break some rule. The municipal enforcement regime covers just about everything imaginable, right down to the exact position of a sign. During the pandemic, small businesses were fined for profiteering as they tried to absorb their rising costs. By 2024, fines to businesses alone had exceeded $250 million, which not only increases costs to consumers, but also deepens inequality for business start-ups. So it is not surprising that the business failure rate is the highest in the country; it is the logical consequence of an ideology that sees the state as the solution and the market as the problem.

New York is extraordinarily dependent on its wealthiest taxpayers to fund the state. In 2023, households with incomes over $1 million accounted for just 0.7% of taxpayers, but paid 41% of the total personal income tax. Taxing that group more and betting that the rich won't go away is a suicidal move. The council appeared to recognize last week that the mayor's proposals would jeopardize the city's long-term viability by imposing ever higher taxes on higher-income earners and the corporations that employ millions of New Yorkers.

Another example, Mamdani is proposing to increase the Department of Education's budget next year, even though school enrollment is falling. The Education Department's central office is about the same size as it was 15 years ago, despite serving about 150,000 fewer students. The pattern is always the same. A real problem is identified (expensive food, expensive education, skyrocketing rent) and more state, more regulation, more spending, more taxes are proposed as the solution. What never enters into the analysis is that the State is the author of the problem.

New York is expensive in large part because it is regulatory hell: building is difficult, hiring is expensive, opening a business is a maze, and keeping it open involves navigating a regime of fines and controls that treats entrepreneurs like mobsters rather than civic partners. Mamdani won election promising relief. New Yorkers who voted for him will have to learn the hard way that the tools he proposes (more spending, more taxes, more labor regulation, more DEI bureaucracy) are exactly what produce the cost of living they claim to fight.

New York could be much more affordable, but only if it allows businesses of all sizes to operate, adapt and profit. As long as the city continues on the lopsided path to socialist failure, prices will continue to rise, big taxpayers will continue to leave, and Mamdani will continue to look for someone to blame for his shipwrecks. And the broken dishes will be paid, as always, by the New Yorkers with fewer resources and fewer options to abandon ship, who are, paradoxically, the ones to whom Mamdani promised the paradise of almost absolute gratuity. Admitting that the problem is the size and interference of the State would take away Mamdani's raison d'être and his preaching. And that is not an option for someone who has just installed the socialist experiment in the very capital of capitalism. That is the cost of demagogy: that when reality takes its toll, it is always paid by those who can least afford it.