Wealthy fear ‘hot commie summer' after Democrat outsider wins mayoral primary
"It's officially hot commie summer,' hedge fund billionaire Dan Loeb wrote on X, after Mamdani shocked the Democratic establishment by crushing Andrew Cuomo in the party's primary for the New York City mayoral race.
It's a quip that masks deep anxiety among the city's elite that a Mamdani win in the general election in November would lead to higher taxes and a subsequent exodus of wealthy residents from the five boroughs.
Kathy Wylde, a New York power broker who's connected business titans from across finance, real estate and media with city leaders for decades, said while Mamdani is inspiring to young people, his ideological approach "terrifies taxpayers and employers.'
But enough voters across racially and economically diverse neighborhoods embraced Mamdani.
In a speech early Wednesday, he reiterated that "a life of dignity should not be reserved for a fortunate few.
"I cannot promise that you will always agree with me,' Mamdani said. "But I will never hide from you.'
At the heart of his success was a social media campaign — populist economic proposals and progressive cultural ideas packaged in slick videos designed to go viral.
A monitor displays early election results at a watch party in New York on Tuesday. |
Bloomberg
Just on Tuesday, he appeared in an Instagram video with Emily Ratajkowski, who has over 29 million followers on the platform. The model and actress wore a "Hot Girls for Zohran' t-shirt and urged voters to go to the polls.
It was typical of the savvy and hustle that helped Mamdani amass an army of tens of thousands of volunteers, who relentlessly knocked on doors, stood on street corners and posted on social media to exhort voters. They evangelized his policies: Free child care, cheaper groceries at government-owned stores, free bus rides, a rent freeze and more — much of it paid for with tax hikes on the rich.
Not mentioned: Those tax increases would need approval from New York State Gov. Kathy Hochul, who has said she is opposed to the idea. Mamdani also wants to raise $70 billion in debt, another effort that has little chance of succeeding.
Still, in the moneyed corridors of Manhattan, wild forecasts of doom are taking hold. Wall Street headhunter Michael Nelson said the mood is grim among clients who typically make more than $1 million a year.
"This will be the end of New York City as we know it' is how his deep-pocketed clients are reacting to the prospect of Mamdani winning in November, he said.
Already, stocks of companies tied to New York City real estate are getting hit. Flagstar Financial, a lender to apartment buildings, dropped as much as 6.7% on Wednesday before paring its decline to 5%. Corporate landlords Empire State Realty Trust, SL Green Realty and Vornado Realty Trust all fell.
The city's elite had backed Cuomo, a member of the Democratic old guard who was considered the favorite in the race even in its final days. At 67, he was the oldest candidate in the race and pitched himself as a seasoned moderate who can manage New York's problems — from crime in the subways to a universally acknowledged affordability crisis.
Former Gov. Andrew Cuomo concedes to state lawmaker Zohran Mamdani at a Democratic primary night gathering in New York on Tuesday. |
Hiroko Masuike / The New York Times
Billionaires including Michael R. Bloomberg, the founder and majority owner of Bloomberg News parent Bloomberg LP, as well as Bill Ackman, Loeb and Vornado's Steven Roth supported his campaign. Cuomo's PAC, Fix the City, raised nearly $25 million — an unheard of sum in a primary race for mayor.
But many of the ads backing him focused on painting Mamdani as a bad choice for the city, rather than laying out Cuomo's own vision for governance.
The former New York governor, who stepped down from that job following a string of sexual harassment allegations that he denies, didn't just have money on his side. Stalwart figures of the Democratic establishment such as former U.S. President Bill Clinton endorsed him.
Mamdani, meanwhile, was backed by progressive stars like Democratic Congresswoman Alexandria Ocasio-Cortez and Sen. Bernie Sanders.
There are signs that at least some on Wall Street might be warming to the democratic socialist candidate.
"While we might disagree on certain issues, we should always be hopeful that Mamdani — if he ends up being elected mayor — can unite the city to address its critical education, public safety, housing and economic development needs,' said Ralph Schlosstein, former head of Evercore and a longtime Democrat.
So far that sentiment is limited. Ackman, another longtime Democrat before he became one of U.S. President Donald Trump's most-vocal supporters, blasted Mamdani by claiming that his policies would bankrupt New York.
Zohran Mamdani during an election night event in New York on Wednesday |
Bloomberg
The investor didn't respond to a request for comment on the results of the election. Trump, in a post on his Truth Social platform on Wednesday, described Mamdani as a "Communist Lunatic,' signaling how Republicans will seek to portray the candidate as representative of the Democratic party.
Rich Farley, a veteran Wall Street lawyer, said many of New York City's wealthy are likely to see the November general election as a make-or-break moment. Should Mamdani prevail, "the folks who can easily unplug and move elsewhere are going to think very seriously about plans to do that.'
Ahead of that race, ultrawealthy donors have to decide if and how they will oppose Mamdani. Cuomo, who has signaled he may run as an independent, has to persuade backers that he is a more viable candidate outside of the closed Democratic primary system.
If he stays in the race, he will compete against the Republican candidate Curtis Sliwa and current mayor Eric Adams, who is also running as an independent and didn't take part in the primary after a corruption scandal.
But others on Wall Street may choose a more radical option.
"I've already talked to hedge fund guys who have told me they have got a foot out the door,' said Eric Rosen, a former senior JPMorgan trader and hedge fund executive.
"I left New York City 8 years ago because I didn't like the way the city was being run,' he said. "I sold my Park Ave. co-op and it's now down 25% and my house in Florida is up 250%. The market has spoken.'
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