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You have meddled with the primal forces of nature, Mr. Mamdani, and the financial barons WILL NOT HAVE IT!
It was just a matter of time, but at some point, capital, the holistic system of systems, was going to make its move to squeeze the mayor of New York City.
It didn't take long to mete out a punishment for our socialist turn—on Thursday, Moody's Ratings, the venerable bond rating company that, among other things, ultimately helps determine the interest rates at which municipalities like New York City can borrow, updated its financial outlook for New York City from "stable" to "negative."
At first glance, it really looked like Moody's was striking a heavy blow for the titans of industry.
What changed for Moody's, beyond a foe of capital now helming the largest city in this failing and flailing empire, which still acts as the global financial capital?
According to the rating agency's explanation, it was influenced by the City's "updated spending projections, which give rise to larger multi-year budget gaps than previously forecast."
Moody's underlined the City's dire budget projections, despite the City economy itself doing extremely well: "That the city projects large and persistent imbalances under still-favorable economic and revenue conditions highlights the extent of its underlying structural budget challenges."
Members of the Eric Adams administration always weirdly touted the City's credit rating as a sign they were doing a good job and not fucking around. (New York City, we're not the first to report, is actually always a good investment.)
Funny enough, though, Moody's was pointing at the massive budget hole the Adams administration left the city in as a reason for the downgrade in outlook.
It's a bitter irony that Mamdani is now getting dinged for telling the truth about New York City's finances (despite at first being a bit hyperbolic), whereas the Adams administration simply lied about expense projections—of course, in capitalism, it always helps to just lie to the market.
Mamdani has very loudly said that the City still faces around a $5 billion budget gap over the next two years, which he says can be easily remedied, without cuts to services, through his proposal for a hike in the state's top income tax rate. This week, legislators in Albany backed up his calls to tax the rich, albeit with some different ways to get to $5 billion—by taxing only those with higher incomes than Mamdani's proposed tax hike (which would kick in for anyone making over a million a year) and lowering a tax credit given to some businesses.
And what does Moody's think about all this? Certainly the paragon of the ruthless efficiency of the markets, one of the arbiters of the vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars, would call for ruthless austerity in the face of the budget gap, no?
Well, cue up "The Internationale," because Moody's actually thinks this whole taxing the rich thing sounds pretty reasonable.
"Gap-closing strategies that rely on non-recurring measures, including the use of reserves, would limit financial flexibility, especially if economic growth slows sharply or an outright downturn materializes," Moody's analysts wrote. "State-level proposals to enhance revenue or other spending policy changes that benefit the city could have a stabilizing effect over time, if enacted."
Most important, Moody's didn't change the city's credit rating, which retains one of the highest possible ratings. It just wants something to be done about this massive budget gap Eric Adams left the city.
And what would happen if Albany doesn't come through with the revenue raisers? Mamdani has said he'd then raise property taxes, a virtual nonstarter in the City Council. That would leave him with only one option to balance the budget, which he's legally obligated to do: cut services to the tune of billions of dollars and enshrine cuts he's already proposed for city agencies.
Some of the media has already begun portraying this as Mamdani steering the city toward a fiscal cliff, right off a mountain he didn't actually create. Meanwhile, sober-minded members of the state legislature, almost all local politicians, and even fucking Moody's agree it's time to soak the rich.
But too bad, because Governor Kathy Hochul doesn't. And if she doesn't change her mind, we'll have to live amid the wreckage of that decision.
—Max Rivlin-Nadler