Is Zohran Mamdani the future of the Democratic party?

0:00Michael Strain: If you've got a teenager, it's time to have the talk. You know, about investing. With the new Schwab Teen Investor account, teens can gain hands-on investing experience and build positive money habits. It's an account co-owned by you and your teen, so you can monitor and engage with the account while your teen learns how to invest and manage money. Learn more at schwab.com slash teen.

0:25Michael Strain: If you pay attention to Democratic Party politics, you might have heard one name a lot these past couple of weeks. Meet Zoran Mamdani. Mamdani. Zoran Mamdani. The name is Mamdani. M-A-M-D-A-N-I. You should learn how to say it. Zoran Mamdani is the self-described Democratic socialist who shocked New York. He won the city's Democratic Party primary election for mayor at the end of June. And he's got it all. Snappy social video with biting attacks on his scandal-ridden rivals. Right now, Andrew Cuomo and his billionaire allies are spending millions of dollars in time to beat our movement. And slogan-filled policy proposals that have Wall Street up in arms.

1:07Michael Strain: And I'm running for mayor to freeze the rent for every rent-stabilized tenant. He's made international headlines because of how different he is from other members of his party. A party, I should add, that suffered a crushing defeat last year and is now wondering if he, Mamdani, has the answers.

1:29Michael Strain: This is Swamp Notes, the weekly podcast from the Financial Times, where we talk about all the things happening in U.S. politics, finance, and the economy. I'm Mark Filippino, and this week we're asking, is Zoran Mamdani the future of the Democratic Party? Here with me to discuss is Rana Faruhar. She's the FT's global business columnist, and she writes our Swamp Notes newsletter. Hey, Rana. Hey, how are you? I'm doing well. And we've also got with us Michael Strain. He's the director of economic policy studies at the American Enterprise Institute, a center-right think tank. Hey, Michael. Good morning.

2:01Michael Strain: Okay, so I wanted to start with who exactly is Zoran Mamdani? He's an upstart state assemblyman who is running in the primary against Andrew Cuomo, the former, dare I say, famous governor of New York. I don't think that's inappropriate to say. Rana, Michael, had you been following Mom Donnie or the primary before he won? And what do you think of him? I had no idea who this man was. I mean, I follow, yeah, I follow Democratic politics very closely at the national level, a little less closely, but still, you know, at the local level. Really, I mean, I maybe heard of him, but had no idea what he was really about.

2:40Michael Strain: And for reference, you're in New York City. You live in Brooklyn. I'm in New York City. Right. Yeah, same. I don't follow New York City politics nearly as closely as Rana, but I had never heard of him until this spring. All right. So the night of the New York Democratic primary, Andrew Cuomo, who had been considered the front runner in the race, he concedes to Mamdani. What were each of your reactions? I was sort of expecting it by that point. And I'll tell you why my more radical leftist, even than me, daughter, had been texting me and putting things on social media herself. And I began to notice younger people kind of getting behind him.

3:20And when he was running neck and neck, that to me was already a sign. because, I mean, if you think about the Cuomo machine, I mean, this guy has money. He's connected. Bloomberg had come out and endorsed him.

3:34Michael Strain: His father was governor. His father was governor. I mean, you know, now, obviously, scandal tainted, you know, and in some ways, I think the Cuomo Mamdami divide reflects a larger divide in the Democratic Party, which we can talk about. But I thought, wow, the fact that he's just neck and neck, I was already thinking, yeah, this is going to happen. So I wasn't really surprised. Michael, what about you? I think if you had asked me to place a prediction two weeks before election day, I would have, I would have bet on, on governor Cuomo, but I wasn't surprised that the Memdadi won. I was surprised by the margin of victory.

4:10Michael Strain: And he, I mean, it was a decisive win. Yeah. It was double digits, right? It was 12, it was 12 points. And that's a mandate in the democratic party in New York City. And that I didn't expect. Now, for people who aren't familiar with local politics in the US, Zoran Mamdani is not mayor-elect of New York City. He has just won the Democratic primary and will still face, ironically, both of the people he was running against at some point during his primary campaign. So this week, former Governor Cuomo announced he was running as an independent against Mamdani. And you will also have current mayor, Eric Adams.

4:45Michael Strain: And don't forget the Republican. All right. Of course, Curtis Sliwa, the Republican candidate who sometimes matters in New York politics. Not going to matter this time. No, absolutely not. If we're talking about Curtis Sliwa. It's not going to matter this time. Do you think Mamdani will win the mayoral election? I mean, to win the primary is one thing. Still impressive considering Cuomo's stature. But do you think he can win the whole thing? I'm frankly worried that the answer is yes, because the candidates, frankly, that he's facing are so incredibly weak and compromised. I should caveat my worry and say, if Mamdani were running and truly invested in his platform as he sold it in the primaries, and he were to win and try and implement exactly those things, I would be very worried.

5:40Because as I wrote in a column, it's cynical. The idea of free buses doesn't fix the subway, which twice as many people in New York ride on. The idea of rent freezes is a market distortion that doesn't deal with the fact that we haven't done a soup to nuts look at regulatory issues in the New York housing market in 100 years. One thing I have been hearing from a lot of friends in the party, on both sides of the party, both the labor left, which, by the way, is also worried about Mandani for reasons I'll get into, and the more kind of centrist business Democrats is, look, can this guy be taught?

6:20Will he take feedback? Will he work with others? And that's what we're getting a taste of right now.

6:28Michael Strain: Mike, what do you think? My sense is that there's an effort going on right now to try to coalesce around an anti-Mamdani candidate. And Mayor Adams wants that to be him and Governor Cuomo wants that to be him. And those candidates are meeting with wealthy New York City Democrats who could be in a position to influence it. But they need to get their ducks in a row pretty quickly. I mean, in a way, it's similar to what the Republicans did at the presidential level in the run up to the 2024 election. where there was a view that if Republicans could select one alternative to President Trump, then that person could plausibly win the 2024 Republican nomination.

7:10Michael Strain: That effort wasn't successful. And we'll see if the Democrats in New York City can be a little more coordinated than the Republicans were in 2024. Michael, one of the things that you went viral for after the election, you wrote this piece about something Mom Donnie said on NBC after he won. And he said he believed billionaires shouldn't exist. Do you think that billionaires have a right to exist? I don't think that we should have billionaires because frankly, it is so much money in a moment of such inequality. And ultimately, what we need more of is equality across our city and across our state and across our country.

7:48Michael Strain: And I look forward to work with everyone, including billionaires, to make a city that is fairer for all of them. The reason I bring this up is because it feels like your response to him was, a little bit of what Rana is saying, that he needs to tone it down a little bit, the progressivism. What did you write in response and why did you write it? I gleaned from Mr. Memdani's comments about billionaires that he has a zero-sum view of how our economic system works. And I think that's really a plague on both our houses. You see that in my judgment in the Democratic Party and in the Republican Party.

8:21Michael Strain: It's animating a lot of populism in both parties. And I think it just kind of fundamentally misunderstands how the economy works and how society works. Yes, Jeff Bezos has billions of dollars. Jeff Bezos, being a billionaire, has made me wealthier and has made both of you wealthier. It hasn't made us poorer. And that's because the innovations that Mr. Bezos has brought into our daily lives are wealth enhancing and allow us to be more prosperous. you know it makes you wonder what other things is he just getting wrong at a very foundational level and the column you mentioned i ended it with a prediction you know it's one thing to kind of campaign on some of these themes but to the extent that that he really means them you know reality matters and he's going to have a collision with reality if he gets elected he's going to quickly discover that he does not want all the wealthy people who currently live in New York City to leave New York City.

9:26Michael Strain: He's going to want them to stay. Why does he want them to stay? I mean, I have a source of tax revenue. They're a source of wealth creation. They're a huge part of the success of the city. So can I weigh in on this one too, Mark? This is one area that I think Mike and I are going to disagree slightly on. So I want to piece apart this argument about whether Jeff Bezos actually makes us wealthier. So you can argue, let's just say Amazon has led to a lot of productivity increases. You know, we all feel it and see it in our daily lives. No question about that. But there are what mainstream economists would call negative externalities here.

10:08And negative externalities is a fancy word for bad things that happen when people get to and companies get too concentrated and wealthy that don't get counted in the economic equation. And one of those things, for example, with Amazon is monopoly power. It creates a kind of pricing power that, for example, and I've done a number of columns on this, allows Amazon to procure and charge higher prices to, say, teachers around the country that are buying their goods and could get them cheaper from another site, but don't, because Amazon is the marketplace. It's like the railroads of old. You're both carrying the coal and owning the tracks that they're on.

10:47This is a huge issue, not just for Democrats, but also Republicans. And I think that it fuels a kind of populist rage at a time when the cost of being middle class is rising at triple the core inflation rate. So it doesn't really matter if we're able to do a one press click and get things to our house faster. Our cost of living is still rising, which means we don't feel those benefits because they're being outweighed by other things.

11:16Michael Strain: And I'm sure that this is the exact debate that is happening within the Democratic Party right now. Well, I wish it was happening. Actually, I'm deep in these wonky policy conversations. No, guess what? It's not happening well enough. It was happening during the Biden administration. But sadly, as it's just taken me, I think, three minutes to make my argument here, this is not a Mandami-esque soundbite. Make buses free. So then how seriously do you think Democrats take Mamdani and, you know, this race as it relates to the rest of the country? I mean, does the winner of this have a meaningful impact and reflect the trajectory of the Democratic Party?

11:54So I think, let's say he gets elected, it's what happens next. If he, as a kind of a labor class based leftist, is willing to talk to the business community, is willing to talk to Republicans, is willing to talk to people on all sides and really come up with real world ways to address affordability issues. I think that has a big impact on who the Democratic presidential nominee is in 2028. If he fails wildly, if this is a kind of a, oh, look at this, you know, guy who's come in with an eighth grader's idea of what to do, then that also affects who the nominee will be. And this is really going to what I think is an ongoing existential crisis with the Democratic Party of is our North Star Bill Clinton or is our North Star FDR?

12:47Michael Strain: Michael, what do you think? Imagine he really believed what he's talking about and agreed with Rana about Amazon. And let's say one of the first things he did after winning office was to ban Amazon in New York City. That would be extremely unpopular. And it would be unpopular among the middle class. It would be unpopular among the working class. It would be unpopular among low-income New Yorkers. And the reason it would be wildly unpopular is because low-income New Yorkers, working-class New Yorkers, and middle-class New Yorkers all think it's good for them. And that's kind of a good political market test for it.

13:22Michael Strain: But if you want to win and you're a Democrat, appealing to the issues that everybody cares about seems like a smarter strategy than appealing to the issues that a small minority of people care about. And so, you know, what I'm hearing here in Washington is exactly that. Wow. Look, you can you can win talking about the cost of housing, talking about the cost of child care, talking about the cost of groceries. maybe that's a template for the broader party in 2026 or 2028. Now, as Rana said, it will matter whether he succeeds. And so if he wins on that platform and Democrats get all excited, and then all his ideas for implementation are bad and the execution is bad, that could have the opposite effect.

14:08I think that you're spot on, actually. I think that that framing is quite right. And that's one part of this that I've been very encouraged by, the fact that he represents a swing towards, you know, I've always thought of it as identity issues versus class issues. But I think I think you're right, even throwing the frame more broadly to kind of kitchen table issues. I just think Democrats have gone so far wrong by trying to divide and conquer with these identity issues. And I do think, in general, that we're moving back towards an economics-focused platform, no matter who's in Canada in 2028.

14:46Michael Strain: Michael, you threw out this idea of banning Amazon, which we should clarify, Momdani has never said he wanted to do at really any point in his campaign. But can you tell me more about the larger business community's reaction to Momdani? I mean, the FT has done some reporting earlier this week that he might be making some inroads. I think it may be that he's making inroads, but he's making inroads from a from a place of deep skepticism. And I think there's a lot of concern. Look, he's talking about huge tax increases on successful business leaders and who live in New York City, huge tax increases in the income tax.

15:22Michael Strain: He's talking about trying to push through big increases in corporate tax. Those, of course, have to go through through Albany. They have to go through the state government. And there's some friction between Mr. Mimdani and the governor. I mean, to your point, he has, I think, recently been very willing to sit down and talk to people. And there is not enough of that in politics. And so I think that's a good sign. you know president clinton we we campaigned poetry and governed in prose maybe you know i think there's a big question is is all this campaign rhetoric poetry or prose and i think there's some hope i don't know whether it's empirically grounded or not but there's some hope that he's kind of an unformed figure and if he actually gets into office maybe he'll bend to reality and won't be so bad you know i i think you're making a really important point there about poetry and prose and it's something that we haven't really talked about is just how snazzy his campaign was i mean it was so slick so slick like i mean i'm walking down still in my neighborhood literally i'll go pick up my dry clean later and you'll see these great posters and they're so they're just perfectly positioned for his marketplace of younger people people making between 60 and 120 000 you know they're kind of retro they're kind of cool they're kind wink, wink.

16:46Democrats are terrible at marketing. They're terrible at the kind of grassroots politicking that, frankly, Republicans have been much better at in many parts of the country. And this is a big lesson for them. Get your acts together. I hope he governs in prose, but he certainly got the poetry and Democrats need to get more of the poetry.

17:06Michael Strain: I want to thank our guests, Rana Faroujar. She's the FT's global business columnist. She's also the author of the Swam Notes newsletter. Thanks so much, Rana. Thanks for having me. And Michael Strain, he's the director of economic policy studies at the American Enterprise Institute. Thank you so much, Michael. Thanks for having me. This was a lot of fun. Okay, we're going to take a short break. And when we come back, we're going to do exit poll.

17:38Michael Strain: If you've got a teenager, it's time to have the talk. You know, about investing. With the new Schwab Teen Investor account, teens can gain hands-on investing experience and build positive money habits. It's an account co-owned by you and your teen, so you can monitor and engage with the account while your teen learns how to invest and manage money. Learn more at schwab.com slash teen.

18:04Michael Strain: Okay, we're back with Exit Poll, where we take listener questions and pose them to FT reporters and journalists. Joining me today is FT U.S. economics editor, Claire Jones. Hey, Claire. Hi, Mark. All right, Claire. So I want to read you this question from Ankita, who wrote in to ask us something that is probably on a lot of people's minds after this week. She asks, how easy is it to hire and fire the chair of the Federal Reserve? What is the process? And aren't there any provisions to ensure independence of the Fed from the U.S. government to ensure financial market stability? Now, of course, this is on everybody's minds because there has been some reports this week that U.S.

18:41Michael Strain: President Donald Trump is once again considering firing Fed Chair Jay Powell. So, Claire, how easy would it be for Trump to do that? I think the straightforward answer to that is it's not very easy. Otherwise, Trump, who spent an awful lot of his presidency attacking Jay Powell, would have done it already. OK, so then what are the safeguards that protect the Federal Reserve Chair from being fired from the president or, I guess, anybody else in the federal government? So back in 1935, the Supreme Court made a decision in a case called Humphrey's Executor against the United States, which limited the president's power to remove a head of a federal agency due to reasons other than malfeasance.

19:31Michael Strain: So it basically meant that if there's a disagreement between Donald Trump and Jay Powell over a matter of policy, such as whether or not interest rates should be high or low, that is not grounds for dismissal under U.S. law. The president cannot fire Powell just because he disagrees with the Federal Reserve's monetary policy. So Ankita, I hope that answers your question about the protections around the Federal Reserve. And I want to thank Claire Jones, the FT's U.S. economics editor, for answering that question. Thank you, Claire. Thanks a lot, Mark. Great to be on.

20:17Michael Strain: This was Swamp Notes, the U.S. politics show from the FT. If you want to sign up for the Swamp Notes newsletter, we've got a link to that in the show notes. Our show is mixed by Sam Giovinco and produced by Henry Larson. We had help this week from Lauren Fidor. Special thanks, as always, to Pierre Nicholson. I'm your host, Mark Filippino. Our co-acting head of audio is Topher Forges. Original music by Hannes Brown. Check back next week for more U.S. political analysis from the Financial Times.

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