The Challenges Facing the Mamdani Administration

this sort of means for politics. But now I want to do a slightly different kind of episode, which is looking at the challenges that Montdomney is going to face attempting to implement his agenda, attempting to stay mayor just taking him very seriously at his word, in his attempt to you know, make the cost of living lower and

make people's lives better. And there are unfortunately, very significant challenges to this agenda, and those challenges are a mix of structural problems and I don't know the president of the United States right. We're going to focus on a few of them today, and before we really start this, I think I want to I want to start this to some extent with the conclusion, and the conclusion of this episode is not to say that these things are impossible,

right and to not say they can't be done. But it's to remind people that the way that actual politics works, electing one person does not immediately make everything better. Right, you can't stop organizing because someone has been elected. And in fact, if you actually want to see the things that you you organize to you know, happen by electing this person, do you have to organize even harder once they are in power and mobilize even more to allow

the things that you fought for to actually happen. Because there are significant opposition to anything you know, getting better for anyone in this country, and that opposition is powerful, well funded, well organized, and structural, and also, as we saw with the election of Aunt Donnie in the first place, it can be defeated. So we're going to start with the bond market. Now, many of you may be asking, b what does the bond market have to do with make buses free? And to do that we need to

talk about funding mechanisms. So most plans in the US for sort of social democratic policy, for how you implement welfare state policies, how you implement policies that make people's lives better, tend to start from the federal governments and the national level, right, and there are very obvious reasons

for this. Unlike the federal government, city governments don't issue their own currency, which means the modern monetary theory things that you would normally use to fund welfare programs with at a national level don't work. The federal government, again, has control of its own debt and money supply, city governments don't. That means the city governments, if you want to find money to do something, you have to find

that from somewhere. And as wonderful as it would be if you could simply do that by just Okay, we raise taxes, and the taxes go to the policy that we want to implement, that's not how the system actually works. The way the system works if you want to pay for things at a city level is the bond markets. David I. Backer has a very good piece about this

the Baffler that I deeply recommend people read. The main thing that's important here for our purposes is that for funding significant portions of anything that you want to do as mayor, you are legally required to go through the

bond markets. And this means that the city is forced to beg for money from Wall Street investment banks and then also pay those same banks exorbitant fees and interest, and a significant amount of money has to go to, as Backer points out, a whole bunch of you know, lawyers and finance people and consultants and all of these you know, sort of mafia of finance schools who are standing in between the normal mechanism of you have money

and you pay for things. And that's assuming again that you even have the money in the first place, which you quite often don't because cities are very very often cash strapped. As Backer points out, using these bond mechanisms to pay for programs is legally required. Now, Backer is mostly focused on the structural constraints created by servicing debt, which can consume increasing portions of a city's budget until

you know there's nothing left. This is sort of what's happened to Detroit to a large extent, and also the bank's direct control over the payment mechanism, even when the city government brings in tax money. Right, so, even if you raise taxes and you bring in money, because you have to go through the bond market, it means that a bunch of that money is going to be funneled

into servicing debt and paying interest on debt. But there's also a secondary problem here, which is that in very extreme cases, and I'm not saying we are immediately facing this, but I want to put this on the table as something that if you were attempting to run a social democratic program in a city, you do need to be significantly worried about the bank's direct control over payment mechanisms. Means that the banks, you know, the people who buy the bonds that you need to use to get to

fund these things. So let's actually take a step back here and explain what a bond is, right. A bond is basically you selling a piece of paper that is debt. So you go into the market and you sell sell a bank of bond and they give you a bunch of money right now, and at the exploration of the bond, you pay that money back plus interest. This is how you have to fund things, because that is what's legally required, and also because cities need a way to get extremely

large amounts of money. But this also means that cities that you know, banks and investors can simply not buy your bonds if they don't like what you're trying to do, and at that point, very little can be done to oppose them. The most dramatic version of this problem came to the New York City bond crisis in nineteen seventy five, where New York City had to sell a bunch of bonds. It was significantly in debt, and there's a very famous scene in I Think It's I Think It's a hyperd normalization.

You know, there's film of like the city goverment officials who are sitting in this room waiting for the banks, like people, for the banks to show up to buy the bonds, and no one shows up, so suddenly they don't have any money. And then President Ford at the time tells the city to eat shit and die and refuses to buy any of New York City's bonds, refuse to give them any money, and this leaves the city bankrupt. Right it gets to a point where they have fired

the teachers. There's no one to collect a garbage because they literally don't have money to pay anyone because no one will buy their bonds. And eventually this crisis is sort of mitigated. But the problem is that, you know, the task force that was set up to mitigate this right to like, you know, get there to be people buying New York City bonds. Again, those people were able to come in and New York City had a functional welfare state, right, had a sort of mini social democratic

welfare state. And in order to reopen the governments and have schools and garbage collection again, in order to get that money, the city was required to dismantle it. And you know, the financial situation of New York is obviously significantly better than it was then, right, And the odds of having this kind of just full on macro scale

crisis is not as high as it was then. But because of the fact that this is the legally mandated way that you have to do these payments, and because unlike the federal government, there are constraints on spending that in some ways function like needing foreign exchange currency. You know, you can't just issue this money. You have to get

it from somewhere. And because of someone's usually the banks, it means that you have to constantly negotiate with the banks and with capital in order to keep the city's lights on. And this is a constant threat that they have sort of you know, hanging over the head of anyone who wants to be governor. And as Backer points out, you can even just tax your way out of the problem, because payment structures for government projects work out of the bond system, so that money just goes to debt payments.

And you know, one of the other things that Backer points out. And obviously the situation in Chicago is different in the situation in New York. But the Chicago Teachers Union did elect a mayor who was, you know, their guy, right, The cholot teachers Union spent a significant amount of money and resources and effort getting their guy elected, and once he came into office, he basically ended up doing the same thing in their negotiations with the teachers union that

the previous administrations had done. And the reason that happened, you know, and the reason that you started to see cuts to school services that we're not supposed to happen but anyways, was because the bond market stepped in and said this is what's necessary in order to do this, and they have that kind of power. Now, obviously Chicago was in a worse financial situation than New York is. Mom Dominie is significantly further left than Brandon Johnson is.

But these are real constraints, and the social democratic solution to this has always been to get money from the federal governments. But the federal government won't give money out to the things that is legally required to give money out to you right now, because obviously it is run by one Donald Trump, and obviously Trump in and of

himself is a significant problem to doing this right. There's always a chance that Trump will see something like mean about Mondani on Fox News and decide to send the National Guards to New York or something, and you know, he will probably continue immigration raids. He can, you know, just fuck with people's ability to get medicaid payments, which

is a really significant issue. There will continue to be lots of creative and terrible things that the federal government can and will do to this administration that will have to be fought and can be defeated, but we'll have to be organized and fought against. But for our purposes right now, the big issue here is that you can't get money out of the federal governments. So okay, where are you getting money out of then? And the answer is the state governments. Now, do you know what else

gets money out of state governments? Probably not these products and services. I don't know who knows, who knows we are back. So, okay, let's talk about the state government now. Again. This is even with the city the size of New York, there still is always significant negotiations in org do things in the city that require the aide of the state

level government. And part of the problem here is that the New York State Democratic Party is significantly responsible for the Republicans control of the House, particularly in the twenty

twenty two cycle. There's a whole long story here about how a a bunch of the Democrats wanted to form this sort of moderate caucus thing, where the sort of independent caucus that would caucus with the Republicans in order to give the Republicans the ability to stop any sort of liberal or left wing thing from happening in the state governments and handle a whole bunch of seas over to the Republicans because of it. But just you know, setting all of that aside, the place that you can

get money from would be from the governor's office. Unfortunately, that significate problem. So here's Holcial's response to Momdami's plan to make buses free. Quote. I cannot set forth a plan right now that takes money out of a system that relies on fares of the buses and the subways. But can we find a path to make it more affordable for people who need help? Yes, of course we can. Social does not want to raise taxes. Any proposal that would involve raising taxes probably has to run through New

York City's City Council, and thus through her. I'm going to quote this some Spectrum news about Montdammie's proposal to expand universal childcare. Culchel said she's also looking at expanding a universal childcare program statewide, but the total price tag is fifteen billion dollars childcare I already committed to, she said, I'm committed to this as a mom governor, I get it. But also to do it statewide, it's about fifteen billion dollars,

the entire amount of my reserves. Culcial says she prefers to phase an expansion first within certain AIDS groups and geographically underserved communities. So, okay, what is happening here in a macro sense is that Cultural is trying to slow roll both of these things. She is outright opposed to

making buses free. She wants to do weird means testing stuff to it that will make it very difficult to do, and extremely annoying bureaucratic layer meant to deny people services that you have to do instead of just having them be free. The childcare thing she probably does want to do, but again, because she is not a democratic socialist, because she is a regular Democrat, she wants to do it slowly, expanded, through a whole bunch of phases and taking a whole

bunch of time. And this is a pretty significant problem because you know, at every step of this, not only are you going to have to be negotiating with the banking system, you're going to have to be negotiating with the statewide Democratic Party. And the statewide Democratic Party is

fairly conservative. Hotel is not as conservative, and she can be sort of dragged kicking and screaming into good policies like what happened with congestion pricing, and if something works and is really popular after you do it, she will sign on to it. But it's a significant hurdle that you have to deal with. I want to move from this into a kind of related problem that's a more structural constraint on on Dommy's time in office, which is that he is now in charge of running a capitalist economy.

When you take a position in a capitalist government. It is now your job to make the economy run, and that means maintaining economic growth. But okay, what does economic growth actually mean in a capitalist economy. It means that corporations make more money than they did the year before. And this is a structural problem for all of us, because we all have interests that are diametrically opposed to corporations making more money every year because their profit comes

directly from our exploitation. Right, we have fundamentally opposed interests from the corporations and the capitalists and the billionaires. But in order for there to be capitalist economic growth, those people have to keep making more money every year. And obviously you can make arguments about how redistribution enhances economic growth by creating a larger consumer base, and that's obviously true.

We're in an extremely deformed economy right now. Where as I keep saying on this show, fifty percent of all consumer spending is happening from five percent of the population, which is just a completely unsustainable way to run an economy and is also absolutely miserable for every single other person who's in that bottom ninety five percent. And you know, there are things that you can do to some extent, right, but at some point you are going to have to

choose between workers and capital. And if you're the mayor of New York City, your job is to make capital more money. And this is a structural constraint that every social democratic government has faced. And it's worth noting that we are not in a world that is surrounded by social democratic governments. And part of the reason why, again is that they need the economy to keep growing, and

that their reliance on finance institutions to make money. And the most grim versions of this tend to happen at a sort of national scale. But if you look at morally in Jamaica and the seventies, where you have a democratic socialist who gets elected and is running Jamaica and then has to implement austerity because the country runs out of money and the IMF comes in, right, these things

can get really bleak. Now they don't have to, right, like, sufficiently well organized populations can force the hand of capital to do things that they don't want to do. Significantly well organized populations can you start trying to fundamentally redistribute economic but it's difficult, and the difficulty is magnified by the third really massive constraint, and that constraint is the police.

One of the other big structural problems that comes with running a state is that it relies on armed men to enforce the laws. And those men, especially in the United States, are at best one step removed from straight up neo Nazis. A lot of them straight up are neo Nazis. The cops are the most consistently right wing group in the entire country. They are a bunch of racist shitheads who exist to perpetuate right supremacy and protect capital,

and they're also again a fundamental organizational unit of the state. Right. Without the violence of the police, laws are just suggestions. And if you're going to run a capitalist government, and if you're going to run one in the US, you have to deal with the fact that your power depends on the loyalty of a bunch of Nazis, and these people will riot if you attempt to do oversight of them.

They very famously did this in nineteen ninety two. They had this whole giant riot, right, They had the thing I was supposed to be a protest rally where they all went on strike, and then the cops who were supposed to be policing the protest obviously didn't do anything

because again, there are also cops. And in nineteen ninety two they did this for a really really really minor oversight attempted oversight, right, and obviously they actually didn't win that direct fight, but they were able to cause enough of a political ship storm that they were able to force the last sort of like vaguely social democratic mayor out of power and install like Rudy Giuliani, who is a weird face melty dipshit righth was an incredible tough

on crime right winger. And obviously Mamdani has been trying to kind of trying to do his best to negotiate with the police and not to overtly threaten them, but that kind of doesn't matter because they just hate him, like they think that a Muslim socialist is just inherently an illegitimate person, and they think that anyone who is even vaguely liberal is someone who is their enemy and who is their target. And we have seen them take

actions to just directly threaten mayors fairly recently. Right in twenty twenty, they kidnapped Bill Deblasio's daughter, at a protest and then sort of like paraded her mugshot around and posted it everywhere and did this whole big show of how they were holding her. To say it was a thinly veiled threat is a dramatic understatement of how incredibly,

incredibly blatant this threat was. Right, they kidnapped the mayor's daughter, Dreen a protest movement, and that was Bill de Blasio, who was not some kind of like wild anti police radical right, and especially now as sort of fascism is on the march and with the backing of the US federal government, right, the police form a very significant threat

to Mandami's ability to do anything. Both on a sort of political level, they are going to be constantly, you know, putting out giant press releases about how Mamdami's like turn the city into a Liverpool hellhole and how they can't

do their jobs, ceda, et cetera. And also just in terms of just directly threatening him and trying to influence his policy, they're going to be a real problem and his ability to prevent them from, for example, smashing in the skulls of pro Palestime protesters even if he wants to, was going to be very limited because the police have become a kind of semi autonomous fascist force in this country.

They have always been a ticking time bomb on statist democracy, and that clock is closing in on zero in this in this sort of moment of assented fascism. Now again, I want to close this by saying, these are not all the challenges that he's going to face, but Comma, none of this also means that the things that he wants to do to make people's lives better are impossible. Every single one of these problems are problems that you

can defeat by organizing. Right, you can put enough pressure on capital to prevent them from doing a kind of like capital striker or a bond strike, right to force them they continue to fund things. Right, with enough public pressure,

you can make a whole lot of things happen. You can make the police, you know, at the very least, be acting on a kind of defensive front to where they're not, you know, rioting and trying to run city politics, but are kind of forced by mass popular and mobilization and pressure to at the very least not be openly attacking the mayor. You can put massive political pressure on Kathy cultel to you know, do things that are good, which which is how we got how New York got

congestion pricing in the first place. Right, like, that was a result of a masses like organizational campaign that went extremely well, and husholds like tried to sabotage it because she thought it would be unpopular, and eventually it got implemented and it's really popular now and now she's really in favor of it. So these people can be pushed around, right,

They are not invincible, Their victory is not inevitable. They can be defeated, and they can be forced to accept that, Oh wait, hold on, the extremely sensible policies that we want that make our lives better are good, and that requires mobilization. But you know that's not impossible. We know how to organize. We've been doing it for ages, and it was you know, what had to happen to make all of us possible in the first place. And so

instead of demobilizing now and going, oh, our jobs are done. No, no, no, no, no, our job our jobs have just begun. But you know, the better organized VR and the more we're able to push this, and the more we're able to push all of these people, the better our lives will get, and this election to begin with is a reminder that another world is as possible and it could be better than this one. We just have to build it together. It Could Happen Here is a production of cool Zone Media.

For more podcasts from cool Zone Media, visit our website coolzonmedia dot com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts. You can now find sources for It Could Happen here, listed directly in episode descriptions. Thanks for listening.