Moneybeat: The Mamdani manifesto

Editor's note: The following text is a transcript of a podcast story. To listen to the story, click on the arrow beneath the headline above.

MARY REICHARD, HOST: Coming up next on The World and Everything in It:

The Monday Moneybeat.

NICK EICHER, HOST: It’s time now to talk business, markets and the economy with financial analyst and advisor David Bahnsen. David heads up the wealth management firm the Bahnsen Group, and he is here now. Good morning to you.

DAVID BAHNSEN: Good morning, Nick. Good to be with you.

EICHER: Well, New York City has a new mayor-elect, Zoran Mamdani. He’s a self-described democratic socialist, and even in a three-way race for mayor, Mamdani was able to pull out a decisive win last Tuesday night. Anticipating that victory—this was just days before that election—Bloomberg carried a long feature titled New York’s Golden Handcuffs.

And David, you were right in the middle of it—or I guess I really should say you were right at the beginning of it—a conservative wealth manager who calls the city’s taxes contemptible yet insists he’s staying put.

Now, with Mamdani about to take office, the issue about New York City’s wealthy job-creator tax base voting with their feet is not a hypothetical anymore. You’ve got a socialist mayor coming in with a mandate to soak the rich and test whether the city’s wealthiest residents take off before he does that.

Columnist Peggy Noonan, writing in The Wall Street Journal, warns that Mamdani ought to be taken both literally and seriously, and she predicts in her column that he will start cautiously but become, in her words, an inch-by-inch bulldozer.

So let’s start at that point. David, you warned in that Bloomberg piece that a Mamdani victory could do a lot of damage in four years, and now that he’s actually mayor-elect, what is your biggest concern?

BAHNSEN: My biggest concern is what it means for the national picture—that there is a growing embrace among younger voters around the idea of the government doing more in the economy. I wrote a piece at Fox News right after he won the nomination, when I was certain he was going to be elected mayor, that this was really an indication of populism, where politicians promise a lot of things to young people who want to hear it.

They’re frustrated with affordability, and they don’t know the history of what solutions have already been proven not to work. And my fear was right-wing populism—that we can’t combat left-wing populism with right-wing populism.

That’s my biggest concern: that we get into this game of which side believes the government can play a bigger role in administration of the economy. I believe, of course, in a high value of freedom to drive prosperity, and Mamdani very much does not.

So that’s really my biggest concern—what it means to the overall national debate. Localized to New York City, it means a lot less. I mean, he says, “I want to raise taxes.” He can’t raise taxes—the governor’s office has to do that. He says he wants to start grocery stores in New York—well, he can’t really do that.

Now, they have a lot of regulatory power. De Blasio used a lot of regulatory power very negatively. But most of the time when mayors are bad, it’s because they let crime and punishment go awry. That’s the area where mayors can either do good or do bad. I expect he’s going to do bad in that arena.

But those who predict that this is going to bring the demise of New York City—they ought to study the history a little bit themselves.

EICHER: David, what if that movement that Bloomberg hints at there—the idea of wealthy New Yorkers voting with their feet—what happens when ideology meets math? When that same 1 percent that funds 40 percent of the city’s income-tax revenues decides to leave town? Is it that you just don’t take that concern all that seriously?

BAHSNEN: What the article points out is it’s been happening for 50 years, marginally. The tax base of New York City has changed. There have been a lot of people who’ve left, and then there’s been a heck of a lot of new people who’ve come in.

Even going to church in New York City—anyone who’s pastored there long enough knows one of the pastoral frustrations is you get a whole new congregation every few years. A lot of wealthy people left during COVID; a lot said they were going to leave and didn’t.

But there’s a mix-and-match of these things that’s been going on for a long time. A lot of big companies—you know, when I first moved to New York, Nick, it was confusing because you’d walk by and people would say, “Oh, there’s the Exxon Building.” And I would say, “Exxon’s there?” They’d go, “No, no, they were there back in the ’60s.”

You know, the GM Building has an Apple Store at the bottom of it down on Fifth Avenue by Central Park. GM hasn’t been in that building since before I was born.

You know, this is another thing that has to be said: the only demographic that he got over half of the vote with are people who’ve been in New York for less than four years. It’s new people who’ve come to New York.

Everyone who was predicting New York was dead back in 2020 and ’21—and then the city has been more crowded than I’ve ever seen it for the last couple of years. So there’s a bunch of bad things going on here.

The demographics as to how young college students—a lot of people thought it was kind of more disenfranchised voters in the Bronx and in Queens of lower income and lower education who were voting for welfare benefits. That’s not really the case. A lot of this is college graduates who believe Mamdani is going to go deliver this sort of socialistic paradise.

That, to me, is the problem. And I’m sorry, but that’s not limited to New York City right now. That’s not even limited to the Democrat Party.

EICHER: Last week I asked for a snap judgment on that meeting in South Korea between President Trump and President Xi of China—the one that produced what the White House called a breakthrough, what others called a pause in the trade war.

Since that time, you devoted your Dividend Café to that topic. Where do things stand with China? So now that you’ve had an additional week to think about it, David, where do things stand between the United States and China on trade?

You did write that the real danger is not China beating us at industrial policy, but America imitating China. What are you seeing that makes you say that?

BAHNSEN: Well, the idea of trying to control what can be exported and what can be imported and set prices around it—it’s what we call tariffs—and having these various policies of national administration of the economy of trade being run in China by the CCP and in the U.S. by the White House—it limits economic growth.

China’s suffered from it for a long time, and China has sort of manipulated its way to a very export-focused economy that is very limited in its domestic-consumption capacity. And yet, of course, they export cheap goods pretty well, but then that has caused their economy not to diversify and not to grow to its natural capacity—but that was all by central planning.

I think the U.S. seeking to imitate industrial policy with good motives in certain places—no one could doubt that China’s were deemed to be in their own national interest too “good motives”—but I don’t think it works.

It’s very obvious to me—this is the number-one biggest takeaway—that the entire objective has nothing to do with limiting trade with China. That is a big sigh of relief for a lot of people, but it’s a big frustration for others who really believed in this idea that we needed to decouple from China.

So we will be buying more rare-earth minerals than ever, and we will be engaged in more semiconductor trade with them than ever. It’s funny that the first week we had, Nick, in which this deal was done and set, was the worst week for markets since all the Liberation Day hubbub back in early April.

That’s not because of this deal—it’s more the fact that, you know, “buy the rumor, sell the news.” It’s been known in markets for a long time that some deal like this was coming, and a lot of the big companies involved—the Apples and Nvidias—they’d been carved out and waived and exempted this whole time anyway.

But some tariffs have stuck, and certainly tariffs with a lot of other countries have stuck. It’s a few hundred billion dollars more than it was at the beginning of the year, and the vast majority of that is being paid by small business.

So this isn’t really a stock-market story. It’s a story of small- and middle-sized companies that are having to figure out how to deal with the tariffs.

Although I do think the next 10 percent—if you recall, the administration put on a 20 percent tariff with China for fentanyl-related issues—they cut that in half and indicated they’re going to get rid of the other side. I think that’ll be in April, so that’ll provide some relief to American business as well.

EICHER: Well, David, before we go, we were supposed to have a jobs report last Friday to look at and analyze, but for the second month in a row, we did not—and that’s thanks to the longest government shutdown on record. So no official read on employment.

The New York Times reports that private-payroll data show a labor market that’s cooled but not collapsed. It’s kind of, as the Times put it, a low-hire, low-fire limbo. So, David, how do you read what information we do have?

BAHNSEN: Well, the Challenger Gray & Christmas report did have the highest amount of layoffs for October of any other October—not of any other month—but, you know, just to do a seasonal comparison, in a long, long time. So there were more layoffs in these private-sector numbers.

But I think you’re right that the ADP number for new hires in October ticked up a little. It’s still very low, but it had been negative the month before.

So, yeah, all of us are relying heavily on private-sector data right now because that’s all we have, and it’s indicating a slowing but not collapsing jobs market.

All the data—public and private—had been indicating that for several months before the shutdown too. But I thought that Challenger Gray & Christmas report of a real big pickup in layoffs was significant, and we’ll have to kind of wait for more governmental affirmation around these things.

But no, it’s not a great environment for jobs right now, and it’s not a collapsing one. And then how that is distributed—what segments?

Because on one hand, you keep hearing Microsoft’s laying off 10,000 and IBM’s laying off 2,000 and Amazon is cutting back 7,000—but then all the data seem to indicate that most of the job layoffs are in smaller businesses.

Companies with less than 50 employees are the highest percentage, and companies with less than 500 are the second-highest percentage of layoffs. So the data are tough to wrap our arms around, but I don’t think it’s great. I just don’t think it’s yet anything close to recessionary.

EICHER: All right. David Bahnsen—founder, managing partner, and chief investment officer of The Bahnsen Group. He writes at DividendCafe.com and at WORLD Opinions. David, hope you have a great week.

BAHNSEN: Thanks so much, Nick. Good to be with you.

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.