Zohran Mamdani has NYC's business community "terrified"
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NYC mayoral candidate Zohran Mamdani. Photo: Michael M. Santiago/Getty Images)
New York City business leaders woke up to the outcome they least expected Wednesday morning — young, popular socialist Zohran Mamdani cruising to apparent victory in the New York City Democratic mayoral primary.
Why it matters: There's a reason Kathryn Wylde, long the voice of the city's business community, said this week that leaders were "terrified" of Mamdani's rise.
- For Wall Street, it's not just about Mamdani — some fear a broader rise of socialism could destabilize markets and the economy.
Zoom out: Bradley Tusk, CEO of Tusk Ventures and former campaign manager for Michael Bloomberg's 2009 mayoral race, said investors need to watch for a rise of "demagogues" on either side of the political spectrum.
- "If you have a super high profile socialist mayor creating all types of new government entitlements, taxes, you know, big anti-capitalism sort of campaign…that reverberates everywhere and that generally puts pressure on markets," Tusk told Axios.
Zoom in: Tusk pointed to what he sees as a rise in "very, very progressive mayors," citing Chicago Mayor Brandon Johnson and Boston Mayor Michelle Wu as examples, albeit with mixed track records.
- Johnson's approval has been at a record low for the office, while voters view Wu much more favorably.
What they're saying: Jim Bianco, president and macro strategist at Bianco Research, wrote "it appears that NYC is electing to commit suicide by Mayor" in a post on X.
- One well-known investor deleted an X post suggesting Mamdani's win was a nightmare for billionaire investors, name-checking the Bloombergs, Ackmans, and Loebs of the world.
The intrigue: "Wall Street South," the movement of financial firms to Florida from New York, was already gaining traction, particularly after Ken Griffin relocated Citadel's headquarters to Miami.
- Tusk warned that, while unlikely, New York could go the way of "once very prosperous" cities like "Detroit and Baltimore…that had really big tax bases and then…got dirty and dangerous and the taxes went up too much and people left."
- After the results, Tusk added in an email that "There's a lot about Zohran Mamdani we still don't know but there's a very good chance he will be our next mayor and if you love this city, you'll do what you can to help him succeed."
Reality check: The "people will flee" reaction is nothing new in NYC.
- When progressive candidate Bill de Blasio ran to replace Michael Bloomberg in 2013, investors were concerned about him raising income taxes on the top 1% of earners, a push that hit a wall in Albany.
- De Blasio met with a slew of industry leaders, like former Goldman Sachs CEO Lloyd Blankfein and Rupert Murdoch, to ease industry concerns ahead of the election. It appeared to work. Wall Street stayed.
The bottom line: The city's business interests may have a difficult summer on their hands.
