Concerns Over Mamdani's Radical Pledges
Wall Street Considers Relocation to Florida, Texas if Elected
Fundraising to Block Mamdani... Support for Republican Candidate's Withdrawal
On June 25 (local time), the Wall Street Journal (WSJ) and Bloomberg reported that Wall Street was shocked after New York State Assembly member Joran Mamdani won the Democratic Party primary election to select the party's candidate for New York City mayor. The concern stems from the possibility that Mamdani, a democratic socialist who has put forth radical pledges such as raising taxes on high-income earners and freezing rents, could have a significant impact on Wall Street if elected.
Mamdani defeated former New York Governor Andrew Cuomo in the primary election held across New York City the previous day. As New York City is a stronghold for Democratic supporters, the Democratic primary carries weight comparable to the general election. Mamdani overcame Cuomo, who had the backing of influential figures such as Bill Ackman, chairman of Pershing Square, Dan Loeb, CEO of Third Point, and former mayor Michael Bloomberg. Mamdani will face incumbent Mayor Eric Adams in the New York City mayoral election this November.
New York State Assembly member Joran Mamdani, who won the Democratic Party primary election. Photo by AP Yonhap News
CEO Loeb commented on social media platform X (formerly Twitter), "It's now officially a hot communist summer."
Wall Street is busy assessing what impact Mamdani, a member of the Democratic Socialists of America?the largest socialist organization in the United States?could have on the financial industry if he wins the New York mayoral race. Mamdani has made radical pledges, including raising taxes on high-income earners with annual incomes over $1 million, freezing rents for rent-stabilized apartments, investing $70 billion in public housing, providing free public buses, and offering free childcare.
Some are concerned that freezing rents for millions of residents in New York's rent-stabilized apartments could discourage new investment in housing, leading to reduced supply and potentially higher rents. Reflecting these concerns, the stock prices of New York City real estate-related companies such as Flagstar Financial, Empire State Realty Trust, SL Green Realty, and Vornado Realty Trust all declined on the same day.
Although it is expected to be difficult to obtain approval for tax increases from New York Governor Kathy Hochul, a gloomy outlook is spreading in Manhattan. Michael Nelson, a headhunter working on Wall Street, said that a sense of gloom is spreading among clients earning more than $1 million a year. Kathy Wylde, CEO of the Partnership for New York City, an organization comprised of New York City business leaders, commented that Mamdani's ideological approach is frightening both taxpayers and employers.
The WSJ reported that some Wall Street executives are considering relocating to other regions such as Florida and Texas, citing concerns about taxes, crime, and antisemitism should Mamdani be elected.
Some financial industry executives have expressed support for Mayor Adams. According to sources, corporate executives have held several private conference calls to devise countermeasures in response to Mamdani's primary victory. There was also discussion of supporting an outside group raising about $20 million to oppose Mamdani. Additionally, strategies were discussed such as rallying around Mayor Adams, preventing former Governor Cuomo from running, and even proposing a position in the Trump administration to encourage Republican candidate Curtis Sliwa to withdraw, according to the WSJ.
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