Photo by Pharrel William - Getty Images
Times Square - New York City
Times Square in New York City
If the Democratic Party is to reclaim governing power, it must regain a majority in at least the House of Representatives and, if possible, the Senate. Yet the party continues to struggle with communicating to voters how its policies tangibly serve their interests. To distract from this effort, opponents are already attacking Democratic candidates with cudgels like “socialists,” “Marxists,” “communists” and Trump's new favorite: “left lunatics.”
It's important to pivot away from labeling wars to solutions to problems of interest to voters. Zohran Mamdani, Democratic Party nominee for mayor of New York, provides an early example. Out of alarm over the increasingly upward shift in the distribution of wealth and income, he describes himself as a “democratic socialist.” The socialist label has drawn well-financed opposition eager to remind voters of the 20th century’s collapse of centrally planned economies, complete with old newsreel footage of bread lines, forced job assignments and gulags for people who complain, complete with pics of a scowling Joe Stalin.
In contrast to this dated imagery, each activity in a modern economy—including transportation, housing, food production and distribution—is either a public or private sector responsibility, or a blend. To meet the practical concerns of citizens, market systems require both a private sector and an efficient public sector.
Adroit Pivot to Pragmatism
While opponents hurl the socialist label, Mamdani's strategy is to focus on the high prices of everyday purchases—groceries, mass transit, rental housing and home ownership. This “affordability” list attracts voters, including some who previously didn't vote.
Consider how two of his proposals address affordability by reducing the time and money cost of mass transit and addressing the high cost of housing.
Free rides facilitate and would increase ridership, permitting route optimization with express buses for shared destinations, reducing travel time. Full buses help decongest roadways, allowing faster speeds for all vehicles. Moreover, since no fare would be collected, boarding would be faster since riders could use both front and back doors to enter, with the added benefit of allowing faster and more courteous service for seniors and riders with disabilities.
More Housing, Lower Rent
Housing and transportation are economic complements; free, faster buses would stimulate investment in the supply of housing, an essential ingredient of housing affordability. As the free-bus policy reduces the time and money cost of commuting, longer-distance commuting becomes more practical, making more land viable for housing construction and building conversion.
Economic principles and experience show that high rent is best addressed by greater market supply. But increased supply is hampered by construction worker shortages—a problem made worse by the Trump policy of deportation and fear of apprehension on the worksite. To offer some short run relief, Mamdani proposes a two-year rent freeze on rent-stabilized units and construction of 200,000 affordable housing units over the next ten years. Why just two years?
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While providing immediate relief, frozen rents, or “rent controls,” suppress the building owner's incentive to maintain, repair and upgrade apartments, and reduces the housing developers’ incentive to increase supply. Government-supplied housing also risks an adverse effect: concentration of low-income people in those buildings. In the long run, housing affordability can be gained by subsidizing the renter. The subsidized increase in demand increases the incentive for the investor/developer to expand supply but also affords the subsidized renter greater choice of where to live.
How to Pay for It?
Fast, expanded bus service generates additional benefits external to the riders, enhancing access to the residential and business enterprises along the bus route. It also improves air quality by reducing car traffic; especially if buses are electric. Because an efficient bus system confers a decongestion benefit to all vehicles, as well as the residential and business enterprises along the bus routes, natural sources of financing include gasoline and property taxes. Improved economic functioning of the city can justify small increases in personal and corporate income taxes.
At the national level, there is no shortage of opportunity to pivot to solutions. Trump's big, boastful bill not only eviscerates Medicaid, but through the tax cuts is a debt-financed transfer of wealth upward; repeal the bill. Tariffs are a tax on U.S. consumers that bears down most heavily on low-income people; return tariff authority to the Senate and repeal the tariffs. Like the economic issues of transportation and housing, these proposals are more arithmetic than ideology and will make sense to the voters struggling to make ends meet.
