The Pomp Podcast - Rent Control, Socialism, and the Fight to Save New York City | Reihan Salam

Episode Date: August 12, 2026

Reihan Salam is the President of the Manhattan Institute. In this conversation, we break down what's driving New York City's affordability crisis — from decades of rent control and restrictive zoning to a failing public education system. We also discuss the burnout crisis in law enforcement, immigration and assimilation, the rise of the DSA and socialism among young Americans, and how AI, bitcoin, and capitalism can restore opportunity and rebuild the American dream.=====================Arch Public is an agentic trading platform that automates investment strategies across Stocks, Commodities, ETFs and Crypto. Whether you’re rotating into AI & Gold, allocating to the S&P 500, or accumulating Bitcoin, Arch Public executes your plan 24/7 without ever taking custody of your assets or funds. Sign up today at https://www.archpublic.com, and start your FREE automated trading strategy! =====================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/pomp=====================0:00 - Intro1:30 - NYC affordability crisis & rent control12:10 - Failing government services & public education23:03 - Police, fire & law enforcement struggles29:36 - Immigration, assimilation & the welfare state38:30 - Rise of the DSA & socialism among young Americans49:42 - AI, bitcoin & the future of capitalism58:17 - Manhattan Institute's mission & building a better future

If you want to destroy a city, you know, the only thing more effective than carpet bombing is rent control. You saw rent control for decades, degrading the value of multifamily buildings all over New York City, to the point where the owners were so desperate that some of them did things that were pretty unethical. There were people who were burning down their apartment buildings in the hope that they could get an insurance settlement out of it. It was completely crazy. What's going on, guys? Today, we've got a very important conversation with Raihan Salam. He's the president of the Manhattan Institute, and he's here to talk about what is going on in New York City as an example of what's going on in the broader country of the United

States. In this conversation, we talk about the economics, the affordability for the everyday citizen that's living in this city. We then talk about some of the political topics that people are very interested in. What's going on around immigration? What's going around on public safety? How should we think about government spending? What about public schools, police departments, fire departments, and many other organizations

that affect everyday citizens' lives? I wanted to have this conversation because I think it's very important for investors and business owners alike to understand not only what's happening in a local community, but to understand maybe the broader forces. What's going well? What's not going well? What are potential areas of support? And what are potential areas that you should be worried about? All of that can be unpacked by analyzing what's going on in New York City, what's working and what's not working. Because I think that there's a lot of chaos.

There's a lot of controversy around all of these different groups and the different policies. But ultimately, I wanted to have a data-driven conversation. That's what the Manhattan Institute does. So I'm excited for you guys to listen to this conversation with Raihan Salam. All right, Raihan, I want to start with talking about affordability in New York City. And I think of New York City as like the microcosm of the broader nation. And there's nine-ish million people who live in these five boroughs. Affordability is probably the worst here than it is anywhere else in the country.

And you get this huge dispersement. You have Wall Street on one end, and these guys are just printing cash. And then you literally have people who are complaining about not being able to afford rent, gas, groceries and kind of everyday life. Why is affordability so bad in New York City? Think about this. Back in the 90s, there were a lot of people with a very simple idea. Their idea was, why don't we bring Walmart to New York City? You know, you lived in New York for a long time. You know the city.

I know the city. If you go to the outer boroughs, you got a lot of strip malls. You know, it's not like, you know, the suburbs way, way out. But you do have parking lots. You know, you kind of have these places where you could have a Walmart. There was a systematic effort to prevent Walmart from coming to the city. there was a systematic effort to prevent big box retail from coming to the city and you know why was that well you know is it non-union okay even if you okay well we'll make it union okay you know

give us the give us the in an industrial zone let us do this let us do this simple thing if you are a big box retailer that's coming to new york city there's this sense that the only way you can do it is by being connected i've got to know someone i've got to talk to someone i've got to work with organized labor. I've got to work with a politician. So that's like a vig. That winds up being this kind of extra tax on top of you. Housing is the biggest thing. Everyone knows it. There are a lot of young people who would kill to live in New York City. If it were 10% cheaper, we would have a ton of people who would be clamoring to live here. But basically, over decades, we built up the system that makes it extremely difficult to build. And part of it,

I mean, there's so many different places to go here. So you had, before the 60s, you know, you had zoning laws that said you could basically put up a six-story apartment building anywhere in New York City. Then in 1961, they decided the city's not going to grow anymore, so let's cramp down the zoning, let's compete with the suburbs, let's do that. And the city was flat on its back. The city was dying, middle-class people were leaving forever. Then in the 80s and 90s, when the city started coming back, they didn't actually adjust. They didn't course correct to do that. So that's one thing.

We literally cannot build enough. Then another thing that happened is rent control and rent stabilization. You know, you impose these stringent controls where you say, you know, you can't raise rents, and that that means that it's not a very good place to put your capital, because you can put your capital in any number of places. Why would you do it there? We actually made this a lot better. In the 90s, we kind of started to fix the problem a bit.

We didn't get rid of rent stabilization. We didn't get rid of those regulations. We softened them. We eased them up. We created vacancy decontrol. We said, let's moderate this so that people can actually make investments. When a unit becomes empty, let's allow the landlord to fix up the unit so they can bring it up to code.

In 2019, you had a bunch of politicians who had the brilliant idea, let's stop that. They basically said, if a unit becomes vacant, you are not allowed to raise the rent enough to make it worth your while to fix it up. You made it much harder to evict people, including problematic tenants. You did all of these things. So you went from a situation where New York City was really expensive to where we're in this extremely intense emergency. But if you look at any number of those issues, it's a situation where someone thought

they were solving a problem, and they actually made the problem worse. Take rent control as an example, right? It's got to be one of the dumbest policies that we put in place. And from my perspective, I understand the empathy as to why it sounds like a good idea.

Yes. In New York City, I don't know if you know the number, but I think it's like something like a third of all apartments in New York City are rent controlled, right? I mean, some big number. whatever maybe 20 40 whatever it's some big number of apartments are rent controlled which

means that you need to raise the rents enough on the other ones to pay for the rent controlled ones and then you go and you look at there's a guy on uh on x who is uh he owns a number of different properties and he's a multi-family yeah i'll call him an investor operator because not only does he put his capital in operates he is my uh my source for what's going on in this world he's like my friends are handing back the keys on building after building after building and it kind of makes me think like maybe the rent control maybe the uh the famous quote you know they're making more than 10 they're making double digit uh percentage uh return on their capital So is all of this less about actually helping the homeowner and it's more about just get the assets out of the hands of the current owners and basically make them so dilapidated, so, you know, unvaluable that they can be scooped up by the socialist class or, you know, whoever their buddies are?

This is a really interesting question. So, in a way, you saw rent control for decades degrading the value of multifamily buildings all over New York City to the point where the owners were so desperate that some of them did things that were pretty unethical. There were people who were burning down their apartment buildings in the hope that they could get an insurance settlement out of it. It was completely crazy. It was, you know, there was a Swedish economist who said that if you want to destroy a city, you know, the only thing more effective than carpet bombing is rent control, you know, just to really destroy the value of buildings. So, you know, we kind of went through this. And what happened is the city wound up taking over a bunch of properties because these were buildings that could not pay their property taxes. So the city took them over and, you know, the city can can't handle its own public housing. There are hundreds of thousands of New Yorkers living in public housing that is totally substandard and even dangerous. So then you have these other buildings. Then they started handing them back to private landlords, oftentimes immigrants, oftentimes people who were scrappy, wanted to build wealth, and that actually proved a big success story.

Now, as you're suggesting, there is a group of people, they're more ideological than practical, who are saying that we just don't like private ownership. They literally use the language of decommodification. That means that we do not believe that housing is so important that it shouldn't be something where money changes hands. This should be something that we give to you because you deserve it, you know, something like that. So, but I mean, how insane does that sound? Well, look, but what you understand, and I understand, is that actually, it takes work to do that. You know, you have to wake up in the morning, and you actually have to, you know, you have to sweep out the trash, you have to take out the trash, you have to make sure that, you know, you don't have vermin, you know, you have to do hard work, you have to paint a building, you have to, you have to deal with problematic tenants. It actually is really hard work. So there is a group of people who think we can solve this problem by having social housing, by having government ownership, or by having nonprofits. Now, you might think, okay, okay, you put a nonprofit there, but do the fundamental laws of economics go away? Do you no longer have to employ people to actually, you know, take the plunger and, you know, fix the stopped-up toilet or whatever else? No, of course not.

You still have to do those things. So then where does the money come from? If you're not able to charge a rent that is adequate to carry the costs of the building, it has to be subsidies. Those subsidies have to come from government. That money has to come from taxpayers, ultimately. So this is the fundamental problem. The folks who are advocating for moving these buildings from private hands into public hands or non-profit hands, They're not confronting the fact that we fundamentally made this untenable as a business for a lot of reasons. And then there's also the tax treatment. There's the cost of insurance. You name it. And that is what we're running into right now.

The 2019 rent law that I was telling you about, that was a law that was really advanced by people who were young people. These were people who, in many cases, did not live through that process where they saw the Bronx burning. They did not live through the process where they saw what happened to these buildings, how they saw them deteriorate over time. And those people who pressed for that law are the people around Zoran Mamdani, the current mayor of New York City. Sia Weaver, one of his chief advisors, a very dear, close friend of his, she was a leading tenant organizer who came up with this idea, let's fundamentally change the terms of the debate. Let's fight capitalism by fighting landlords.

Because in New York City, hey, everyone hates their landlord. And by the way, that is a class war that a lot of people felt like they could win. Why? Because even if you're making half a million dollars, hey, if you have a landlord and you don't like paying more rent. That's kind of the way they've tried to do this. They've tried to find the perfect enemy, but their perfect enemy is oftentimes someone who is someone who's just trying to do a really hard job. When you think of that person, I usually look at it as they don't own hundreds of millions of dollars of real estate. I mean, they own one or two buildings,

whatever. Um, if they have to do such a hard job and then only can make 11, 12%, there's a lot way, you know, much easier ways to make 11 or 12%. And so I think that kind of get lost, gets lost on this. And if you're lucky, by the way, because actually, that is oftentimes exaggerated, you know, oftentimes, when you're looking at rent stabilized buildings, you know, you're blending together a lot of different buildings, there are some buildings where I have some rent stabilized units in the building, and I have some market rate units. So then I can kind of make it work roughly. But if I'm in one of these areas where they're all rent stabilized buildings, you know, you are barely keeping your head above water, then the narrative is, well,

It's not our fault that you took out a big loan and you were a speculator and you were looking to make money. But the thing is that ultimately you're going to need private capital to make this work, no matter who the owner is one way or another. So there's a deep lack of realism about how these things work. I just think of off the top of my head, what are the things that the New York City government is involved in? Subway? Taxi system? Kind of indirectly. If you look at, um... housing, public housing. If you look at DMV, you know, all these different components. Public education is the big one.

Public education's another one, right? I mean, we can go to those. Do they get an A on any of this? There are a lot of good, decent, hardworking people working for New York City. And I have to tell you, the people who are most frustrated are oftentimes those people who are in the system... who understand how money is spent, how money is wasted.

They understand what they're up against. The school system is incredible. So New York City spends over $120 billion. In the school system, we're spending $43,000 per pupil in the New York City public schools. If I were to tell you to establish Pompliano Academy, and you had $43,000 per kid to work with, with, you could probably do a pretty decent job. Now, granted, you're a smart guy, you're a special

person, but there are a lot of people who could really do something very, very impressive with those resources. And there's complexity here. There are capital budgets. There's a lot going on. I understand that. There are kids with special needs, a lot of complexity. But the thing is that when you look at educational performance in our schools, it's pretty lackluster. And that's not because it's intrinsic. You know, when Mayor Bloomberg was in office, and he wasn't perfect, but when he was in office, student achievement was improving steadily. We were making very big gains. We were making big gains in terms of high school completion and much else. But you basically have a group of people now, in my opinion, who are not really thinking about

achievement. They're not really thinking about, you know, are we setting up these students for success they're thinking about the machine and they're thinking about feeding the machine you know we have a bunch of employees in the system and even though you have schools that have fewer than 150 pupils now because by the way a lot of families with young kids are leaving the city even though you have these schools they keep the school going they keep it with you got your principal and your assistant principal and you have all of your bodies and then it makes you wonder, is this about delivering a service? Or is this about you and me, as taxpayers, actually working for the people who are meant to be public servants? And again, I want to underscore, a lot

of great hardworking people are busting their butts, you know, they're taking out the trash, they're keeping the streets safe, they're teaching, they're doing, you know, a lot of really good people. But there's this incredible machine that's built up over time, that's a machine to extract. you extract and extract from the private economy, and then you lose sight of what is the purpose of having an effective government in the first place. It is always interesting to me, because when you go and you look at across the country,

I guess New York City is the microcosm of the country. Student numbers have pretty much stayed flat. Administrators has exploded. Why do we need more administrators? Shouldn't we get more teachers, right? Shouldn't we get different class sizes? Like, it's just very different. And so, if we go and we look at, take public education.

To me, it would feel like if we created an incentive-based system where we actually said to teachers and or administrators, if you do a good job, you're going to get paid more money, we probably would get better outcomes. Pretty simple, right? The government, one, doesn't think that way. Two, would, corruption would immediately infiltrate in some form or fashion. But just that one simple thing of let's compensate these people based on whether they're successful or not would revolutionize the outcomes of the school districts compared to what we do, which is basically the opposite, which says, even if you do a bad job, don't worry, you can't get fired and you're always going to get paid. 100%. If you look at many other urban school systems, they placed a much higher emphasis on choice, much higher emphasis on charter schools. And in New York City, we have a ton of students. We have over 100,000 who are enrolled in charter schools. It's a system

that works decently well. Not every charter school is great, but there are some that are outstanding. We have some charter schools in New York City that are the best school systems in the United States. And these are systems that could absolutely grow. But in New York City and New York State, the political class has said, we are not going to give those operators that are crushing it. We are not going to give them more charters. We are not going to allow them to open more schools, we're going to constrain them. Why? You know, good question. You know, my suspicion is that the reason is that if those systems were allowed to grow further, then they would gain more market share. Now, the thing is, from a tax based perspective, you know, for you and me as

people who care about the city and its health, actually, that would be great. Because if you have other options for families where they feel like, well, now I can stay in the city, I can keep paying my income taxes, my sales taxes, my property taxes, you know it, because I feel like I'll have a decent option. But they're not thinking in those terms. They're thinking, how do I protect this workforce? How do I protect that class of administrators that you're talking about? And then from the perspective of the teacher, you know, the system that you're describing is a system where, let's say we did have, you know, we have a big district public school system, but then we have some charter networks that are allowed to grow

freely. What happens in that world? You have different systems competing for teachers. And then in the public school system, it's unionized. You have step and lane pay scale systems where it's basically based on seniority or whether or not you have a master's degree that may or may not be worth anything. Then you have other systems that are saying, hey, I'm going to compensate you for being excellent. Or think about it this way. Teachers get really good in the first five years. You start out, you're green, you get a lot better within the next five years, you don't necessarily get that much better between year 10 and year 20. But the way a step in lane pay scale works is that you hit your peak earnings way, way later. And a lot of those young

and hungry people who want to become teachers, they leave the profession. So there are all these ways which you had rival systems, they could compete for great teachers, they could compete to offer better perks, you know, who knows. In New York City right now, our school system is offering fewer hours of instruction than our charter schools. We're offering fewer hours of instruction than other public school systems around the country. I know this because I'm a public school parent and I love my public school and I'm grateful for my public school, but we get 120 hours less than the national average. Now, 120 hours might not sound like a lot, but let's say you've got 1,100 hours in the school year, okay? Over K through 12, that's over a year of instruction.

So, literally, we're paying $43,000 per pupil. We're getting less instruction. You are getting a lot of administrators, you're getting a lot of support personnel, and I'm sure those folks are good people, they're doing their best. But I've got to say, between you and me, part of me thinks, sounds like you're finding more people who are going to be paying union dues. Sounds like you're building your political army, in some cases, rather than thinking about, well, why don't we give the principal some flexibility to figure out how can they

they work? How can they take the resources allocated to them and figure out how to best to use them the way that any entrepreneur would within any business owner would? Another idea I've always had is, you know, when you compensate the teachers, yes, outcomes. But if you went to every principal, and you said, Here's your budget, yes, anything that you don't spend, you get half. So you get a million bucks, 2 million, but you know, whatever the budget is, and you say, for every dollar you save, as long as you continue to to meet certain performance metrics in terms of the education, test scores, whatever it is, every dollar you save, you get 50 cents. How much money do you think these principals would find?

You, well, you, well, but you know, first of all, you know, that would be unbelievably controversial, but let me tell you something that would be really interesting about that world. What if you then said, whatever surplus we have, we can do things like say to the parent, hey we're going to give some voucher for enrichment for summer school we're going to give you kind of you know hey because we've developed this surplus what if you said hey you know my kid doesn't want to take spanish or french my kid wants to do mandarin they're going to do it through some online program through the school and by the way you've saved us money because now we don't have to hire a mandarin teacher so you the parent and family are able

to participate in that. Maybe you could put that into a college savings account. But, you know, I think you're totally onto something here, which is that people are not treating those dollars like they're worth anything. And the other thing is that it's always an emergency. If I do not get more money next year, it's always a grave emergency. Because what incentive do you have to say it's not an emergency? You have no skin in the game otherwise. So how can we do something where we create a virtuous cycle, where you're looking for efficiency, you're looking for productivity, you're looking for excellence, because the families, they want excellence, right? You know, they're not going to kind of want to do something just so they can,

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When you think about police, fire, paramedics, etc., that feels like another area where every single police officer I talk to in New York City, some version of, I don't play with the current administration. I'm not happy. I've got friends or people that I've met that are former police officers and recently former because they got out before Mom Donnie came in. I know folks who they're basically like, look, I got to do my job. I got to get paid for my family. But you give them a beer and let them talk for 20 minutes

and they'll ramble on about how stupid stuff either at work at their local firehouse or police station is, you know, some sort of middle management layer or all the way up to, you know, Gracie Mansion. It just feels like, okay, all of that is what I consider the white-collar aspect of those departments. Then you ask them, what do you do on a day-to-day basis?

Tell me, your last day that you were working, what were some of the calls you went to as a police officer? God bless these people. I mean, you'll talk to a police officer, he'll be like, oh, I showed up, this guy had a knife and was, you know, yelling and screaming at people on the highway. Then I went over here and this crack addict was doing this. And you're like, dude, this is insane.

And so it almost feels like it's like a double whammy. You've got questions about, does my leadership actually want to support me, see me do well, or do they think that I'm the enemy? At the same time, all of these policies are leading to making my day-to-day actual job harder because I'm having to, I've arrested this guy 14 times. Right?

And it's demoralizing. By the way, I'm going to arrest him today. He's going to be here tomorrow. And I know that if I come here every day at 2 o'clock, the same guy's here doing the same shit, right? So, like, it just feels like, again, I will never claim that somebody's intentionally being evil, et cetera.

Some people probably are. But it does feel like you're going to see those numbers dwindle over time. And eventually you just get all of the good people who actually wanted to do those jobs, say, look, no mas. This isn't for me. I'm going to go find something else to do.

My core guiding principle is always, let's make government excellent at what only government can do. You and I both know there are some things, you know, when it comes to the armed forces, when it comes to law enforcement, the basics of whether or not you feel like you're living in a civilized society, you feel safe enough to raise your family, build a business,

go about your life in whatever way you want, but you need the streets to be safe and orderly. And, you know, look, I'm very glad, you know, we're making progress when it comes to homicides and shootings. That's good news. But there's a disorder challenge, and there's also the challenge of making sure that we keep that up over time. And right now, there are a lot of folks in law enforcement who are burning the candle at both ends. They are working a huge amount of overtime, and they are in a spot where they're looking at the younger people coming up behind them, and they're thinking, wait a second, you know, if you go to the suburbs and you sign up to, you know, go into law enforcement, you're getting paid more, you know, you're getting respected more. You know, if you're an NYPD officer with some experience under your belt, I promise you, there are police departments in Texas and Florida and all over the country that want you there. So if you feel as though you are not respected, and also, you know, how do you deal with that burnout? You know, our police department right now is not where it needs to be in terms of size, in terms of number of officers, to really ensure that you don't have that burnout. And they're, in my opinion, they're not being compensated adequately to ensure that we're getting really strong people.

Now, the people who are joining, God bless them. These are good, decent people. But, you know, if you're not compensating enough at the front end, there are people who will do it out of love and respect. But sometimes you have to weaken your standards. And what happens is that the officers who joined when the department was stronger and was respected, they start looking to the exits because they're thinking, well, I'm here right now, and we have this knowledge base, and we have this experience that we need right now. Well, what's going to happen a few years down the road? I think that that kind of experience, that kind of know-how, the way that I think about it is always this. You know, in a lot of places historically, in a lot of places around the country, you have police officers who do not rush in.

they are reluctant to put themselves in danger they don't do it because they don't know if you know the the the the kind of you know officials you know the city is going to have their back that's a huge thing if you believe that not only does the city government have your back but also the city has your back that is very different than you are willing to do those things and you're not doing it for the money you're willing to have that service ethic but i think that that demoralization really creeps in, and I think that's something that is unfortunately going on right now. Do you feel like the citizens are demoralized?

There sure as heck are a lot of citizens who are demoralized right now. Every time you see disorder, every time you see graffiti, every time you see a broken window, every time you see trash, you know, building up on the street, that's something that makes you think,

well, wait a second, you know, how much am I paying in taxes? Wait a second, New York City employs over 300 000 people and just that is a big thing and certainly see them more in some it's incredible it's 300 000 people yeah it's incredible it's a huge number it's a big city right so like it's a big city we've got it you know eight and a half million people there are a lot of people and you know look those people a lot of them are doing absolutely essential work my view though is that actually if you're working for the city you know let's say you're working in the parks department

something like that it's it's not the same as being in law enforcement you're not putting your life in danger in the same way but there's that same feeling of esprit de corps do you have great leaders um you know do you have people who really care about value for money do you care you know that really matters and it kind of make you feel that the job is meaningful or not so that demoralization can apply to citizens are going to apply to workers too what about immigration right Nick Shirley, Joe Sweeney, there's a bunch of these guys who have been all over, whether it is fraud associated with this, whether it is Canal Street, which, I mean, Canal Street

is like a circus at this point. And I get that people will say, oh, it's always been like this. You could pull up photos, you could do all kinds of stuff. Have there been people there for a long time? Yes. Has it been to this degree and I think this, you know, kind of crazy? I don't think so at all. But you can walk through New York City

and the various neighborhoods, and there are certain neighborhoods that are absolutely overrun with illegal immigrants. There is graffiti all over the walls. It is kind of the broken window theory taken to reality, right? There's other areas. It's like the most amazing place in the entire world.

And people are walking around, and you almost feel like it's like two different countries, right? in terms of, and sometimes they can be blocks away. And so when you think about that, New York kind of has this weird relationship, right? You know, my great-grandparents, my grandparents, they came here at different times from Italy. They're immigrants.

I wouldn't be here without them doing that. At the same time, if I went and talked to 99% of legal immigrants, they're the ones who are the most against illegal immigration, right? They waited in line or, you know, did the things that they were supposed to do, whatever. So it's like this very weird dynamic of like, it's a city built by lots of people coming from lots of different places and ended up creating this magical place. But also, I think a lot of those same people are sitting there saying, wait a second, this feels like something is broken and, you know, it's not broken for the better. There's so much going on here. If you look at New York City's revival through the 80s, 90s, 2000s, a huge part of that story is immigration. And a huge part of the story is that you had some neighborhoods that were left for dead, that experienced huge amounts of middle-class flight, but also working-class flight. Anyone who could leave did leave.

Then, you know, you had the folks who were left. You had the urban poor, hardcore, isolated urban poor. then what happened is you got a bunch of immigrants who came in who are many cases were themselves very poor but these were people who picked up stakes moved from one place to another and they were coming here to work and those numbers they rushed into these neighborhoods that were dead or dying and they infuse new life into them and part of what happened you know people talk about gentrification but the funny thing is the biggest neighborhood change you saw in a lot of new york neighborhoods in that era was not gentrification of someone who, you know, whatever, went to a

fancy college and then moves to the city with their parents' money, paying the rent. It was actually immigrants were coming, and they, because of their economic activity, actually helped a lot of those people who were already living there in those neighborhoods. They helped make those neighborhoods safer. They made a huge difference. But here's the important thing. Assimilation, you know what is the word assimilation even means it means becoming more like the people around you that is a two-way street it's the immigrants becoming more like the natives and it's sometimes the natives becoming more like the immigrants if you've got enough of them coming in right so let me put it to you this way if you were an immigrant who came to new york city

when you knew that if you jump the turnstile you're gonna get turned out on your you know you're going to suffer the consequences for that. Okay. Or simply put, if you just see everyone else paying the fare, when they get on the subway, you assimilate to that norm. Then if you're an immigrant who comes into a city where, you know, I look at, you know, a bunch of teenagers who are jumping, I look at like a, you know, 25 year old, you know, kind of, I see young women, you know, jumping the turnstile. What do I think? What do I take away from that? This applies in many different dimensions, too. If you were an immigrant who came to New York City in 1925, or 1975, there was a difference, you know, there's more of a welfare state 1975. But there wasn't enough of

one where you felt like you could take that for granted. And you were automatically going to access a million different benefits. One big way our society has changed is that there's this idea that, hey, we don't want to stigmatize, that's the word, we don't want to stigmatize collecting benefits therefore not only are we going to allow you to collect benefits we are going to come to you we are literally going to fund community organizers who are going to come knock on your door and kind of talk to you about whether or not you you know you should you really have to pay rent you know i mean you know tell me let me tell you about the whole retinue of services you should access then you have crazy programs like the cd pap program it's this um program um is a home

health aid program consumer directed um you know kind of personal assistance um where the idea is you know a lot of people you know you might have an elderly relative something like that who needs help who's sick who needs someone to kind of look after them because they literally physically can move and hey it could be a lot more expensive to put them in a nursing home so you created programs where you're paying home health aides that by the way is one of the biggest fastest growing jobs in in New York City. But you created this program where you said, Oh, well, we're going to let the consumer choose how to spend that money. Oh, well, what I'm going to do is going to take that money going to hire my daughter, or my son to do it or my cousin to do it. Well, who's going to check

to make sure that actually that person is really providing personal care? Or are they just accessing city money? This is just one example. But it's a kind of situation where the idea is you create this entitlement mindset. So take this idea, right? The home health aides, I am not an expert by any means, but I have heard quite a bit about these. And not only is it one of the fastest growing jobs in New York City, but also there are a lot of folks

whenever, you know, Shirley or somebody puts out one of these videos, they're like, come check the home health aides. Like this is a fraud, you know, kind of a fountain of youth, if you will, right? It's just, there is money pouring all over the place. What's the solution? Do we just get rid of the program?

And we just say, okay, this is gone. We're done with this, you know, nonsense? Or is that so difficult to do that it's just like not even an option at this point? It's a really tough question. And one reason it's such a tough question is that New York State, you know, our whole economy is now built around the Medicaid program. New York State, you may have heard, spends $268 billion, and a huge amount of that money. So part of that is the money that is coming out of the pocket of New York State taxpayers. But part of the way it works is that New York State spends money on Medicaid, and for every dollar New York State spends, you get a dollar from the federal government. It's free money. So what's happened is you spend more and more money to get more and more borrowed federal dollars. And then that employs people, some of whom are hardworking guys. You know, if you're thinking about the person at a hospital, the orderly who's, you know, cleaning up the floors, you know, that person is supported by Medicaid.

But then you also have some people where, I mean, is that a real job? Is it not a real job? Is there any accountability? So, you know, yes, I do believe that you need some tighter accountability in these programs. But part of it's just downstream of the fact of like, how are you getting the money? Because in a way, the whole thing is, it's circular. if so many of your quote-unquote private sector jobs are subsidized by medicaid dollars think about upstate new york upstate new york used to have an incredibly dynamic healthy manufacturing economy tourism economy now you've got a lot of places in upstate new york that are supported by a state university or a state prison or a state hospital system where those hospitals are spending more and more money, even though they have fewer and fewer patients. So then the whole economy, the people who are left, they might not literally know their money is coming from the government. They're not literally a public employee, but it's indirectly coming from those

public employees. So you have this dynamic that is totally extractive. And then people who are job creators, people who are investors, people want to grow a business, they just find this is not a hospitable environment for me, because this isn't an extraction environment. So I think that that's where we are right now. Let's talk about the DSA. I hear this term thrown around, and it feels like it's thrown around by people who are very well-informed, and it's thrown around in a term of, here's the new cool kids on the block. It's thrown around by people who are very well-versed in this, and it's like, oh my God, here comes the biggest threat that America has faced in a long time yeah right but then it's also thrown around by people who have no clue

what they're talking about on both sides of hey i see the cool kids at the at the you know club i never talked to them before i have no clue what they stand for but you know the cool kids are up there they get popping bottles and that that's cool and then you got other people who are you know my neighbor's brother sister told me you know they're the biggest threat in america and so it seems like they're the talk of the town and people are trying to figure out good bad threat not a threat, helpful, good intentions, bad intentions? Who are these people? Like, just give me maybe, like, the DSA 101, from your view.

This is an organization that has changed a lot. It was established way back in 1982, and it was just a talking shop for a few people who were socialists. They were anti-communists at the time, a lot of them. They were passionate supporters of Israel back then when it first started. And it was an organization that was kind of bumping along,

was almost dead. And then that organization really came back to life in the 2010s. This is an organization that got a huge amount of new energy from Occupy Wall Street. You know, if you remember from way back in the day, 2011, 2012, then you had Bernie Sanders' presidential campaign. You had a huge number of young people coming into this organization. And these young people were people who were millennials a lot of the time. They were millennials who, you know, were people who had seen the Iraq War, they saw the financial crisis, they saw these experiences, and they came to these very radical left-wing ideas, oftentimes through college and graduate school, that's where they got exposed to them. And what they found in the DSA was a

community. You know, these were a lot of people who didn't necessarily have that feeling of community. Where am I? Where do I belong? I'm not going to a synagogue or a mosque or a church. You know, where do I find that tight-knit community? And they found it here with a group of people who had this vision for transforming American society, and they also had an enemy. You know, you have an enemy. You know, maybe you feel like your life hasn't gone exactly the way you wanted it to. You feel frustrated. You feel angry.

One way that I think about this is that, you know, if you grew up at the 90th percentile in America, you know, you're right at the top of the income spectrum. The chances that you, the kid of someone who grew up in that household, beating that is only 20%. If your family was the 90th percentile, there's only a 20% chance you're at the 91st or 95th or 99th percentile yourself. So that means that 80% of kids who grew up in pretty affluent, comfortable families, they've experienced downward mobility rather than upward mobility. Now, a lot of those people who went to great colleges, you know, selective schools, you know, kind of you name it, they learned from, you know, they learned about sociology and what have you.

They already were drawn to these ideas. And it's not just from their professors. They learned from each other. They're in this community of people who are looking for something, searching for something. So New York City, we were talking about immigration, how much it matters. The thing about New York City is that, you know, in the 80s and 90s, of the newcomers coming to New York City, replacing all those middle class people leaving the city, two thirds of them were immigrants and one third were college educated professionals. That wound up flipping to the point where it was about two thirds college educated professionals and one third immigrants. Very interesting.

So then another thing that happened is that New York City's white population, you know, back in 1990, the white population was, you know, call it about 30, 35 percent of the population. Today, New York City's white population is about the same as that. It's not that much lower than it was back then, but it's a different group of people. Back then, it was someone who was a third or fourth generation Irish or Italian or Jewish guy living in Bensonhurst or Gravesend or, you know, you name it. Today, that population is very different. It consists of these people who I don't want to say they're all gentrifiers or they're all transplants, but a lot of them are. And a lot of them are people who are too young to remember New York City before Giuliani or before Bloomberg, or they're just people who lived in other places. They only know New York City as a place where there's wealth, where there's dynamism, where there's safety.

They don't know what it took to actually get from a much more challenging place to this place. So then for them, you know, they come in here, they have these really dramatic radical ideas, they have a community, they have a lot of skills that they've learned as digital natives to change our politics, and they run up against a political establishment that is not ready for people who are not just the usual time servers, they're not the usual people who are just kind of hanging around City Hall, these are people who are disciplined, organized, highly capable, and highly radical. Today's episode is brought to you by Simple Mining. Bitcoin mining has a reputation for being complicated, risky, and hard to evaluate as a real investment. If you're considering mining

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good intentions. But do you actually think that they believe the things they are proposing are possible solutions or is the goal to destroy the system and it's a nuanced difference yes but destroying the system out of spite anger whatever is different than helping the people this is a very old debate when you're looking at socialism when you're looking at the marxist tradition all the way back to the late 19th century and early 1900s there was this big debate You know, between people who said, look, our goal, we're revolutionaries. We want to heighten the contradictions. We're not here to make capitalism work. We know it's going to fail. That's what Karl Marx predicted. It's going to break. And then we're here to basically be ready for when it fails, when it blows up. Then there were, even back then, some people saying that, well, actually, it doesn't look like this is all blowing up completely. It looks like some working class, middle class people are getting better off over time.

How can we make the system better? How can we make it more humane? How can we make it more decent? So there was always that revolutionaries versus reformists kind of dynamic that was there. Now, the beauty of socialism as a brand right now is actually that socialism can mean anything. it can mean anything socialism can mean oh i went to denmark once and it was pretty nice and you know the the subways were really clean and beautiful and you know that was amazing i mean i would love to you know i would love for america to be more like that then there are other people

who think socialism means you know the bolivarian revolution in venezuela or something like that and i think that what the dsa has done so successfully and what this larger socialist movement has done so successfully is blur those things um you know because there are a lot of people who, you know, they're not the super hardcore radicals, who are thinking that my ultimate mission is to bring down capitalism. They're thinking that socialism is a brand for me as a young person. I'm not a young person, I'm talking about somebody else. But you know, for me as a young person, all of these other things have been discredited in my eyes, the establishment is discredited. So if the establishment hates socialism, I guess I'm for

it. See what I mean? So part of that is actually just that dynamic. And then well, what does it mean, oh, it just means, you know, more free stuff, or I don't have to pay higher rent, or, you know, that sounds good to me. But then there are people on the inside who are the deep thinkers, who are thinking more deeply about the United States as an imperialist power. They believe that the United States and what it represents, and that capitalism is a deeply noxious and inhumane and destructive force. And they want to build a movement that can transcend it. They want to sharpen class antagonism, because they see building that wider politics and wider coalition, and building that anger is a tool for affecting that change. Is that true of every single person? Absolutely not. I

think there are some people who are just totally kind of normal people who again, want America to be a little bit more like Denmark. But the funny thing that's happening right now is that for better for worse, I think for worse, but that's just my opinion. A lot of people in the mainstream Democratic Party, let's say, have already moved in that direction. You know, if you're in New York City, you know, you go to any number of Democratic members of Congress, they say they want Medicare for all or Medicare for most or Medicare for all who want it or whatever. They've already moved way to the left of where Bill Clinton was. So then what's the difference? And the difference to some degree is branding. The difference, to some degree, is aggression. You know, the difference

is, to some degree, being transgressive and more radical. So, you know, I wouldn't say that your cousin, you know, your nephew who calls himself a socialist, I'm not necessarily saying that person wants to burn it all down. But I will tell you, there are very smart, sophisticated people who really do believe that the United States has been a noxious, dangerous, even evil force in the world, and that part of what they want to do is remake this country in a direction that's radically at odds with what you and I would think of as core American values. Let's talk about artificial intelligence and Bitcoin, maybe as examples, right? It's technology that I think the optimists, the people who are building this stuff,

they believe that it can be deflationary, help make things more affordable. It can return sovereignty to individuals. It can create intelligence that then is used by everyone to become more productive and create more wealth. You know, all of these pitches from The Optimist seem to be very much critiques from the people who do not like this stuff. And so where do you think this kind of innovative technology

like AI, Bitcoin, et cetera, kind of fits into, you know, this political landscape? It is profoundly important for a lot of reasons. One reason is that right now, we're still discerning the shape of these technologies and how they're going to remake things, how they're going to remake our economy. And you know, there's a lot of scare stories.

There's a lot of pessimism. And there are a lot of people who already had a pre-cooked, pre-existing agenda where they're using this and they're using the anxiety and dread around these new technologies as a vehicle to drive forward their pre-existing agenda. There are people who always believed in, you know, unconditional basic income. They always believed in dramatically expanding the welfare state. They always believed in expropriating private property and all these other things. And then, hey, look, I have another reason to call for those things. I hate these tech bros. I hate these crypto bros. I kind of hate these guys. And, you know, this is a reason to do that. My frustration, something that's very much on my mind, is that I don't see these as right versus left battles. I see these as narratives for winning the rising generation. And I see this narrative that is ripe for the taking,

that I see a big part of what you do as being a part of. Bullshitting on the internet? No, no, but how do you tell a story about how you, as an individual, can become a powerful person? You did not need to be born on third base to make something of yourself. Um, one of my running jokes is this idea that... the real hero is not mark zuckerberg it's mark zuckerberg's dad because mark zuckerberg's dad

was a dentist in dobbs ferry and mark zuckerberg's dad made it possible for mark zuckerberg to do great things to go to a great school to own a computer when he was a kid all that other stuff there are not enough people right now who want to be mark zuckerberg's dad who want to patiently build wealth who want to learn for themselves they want to have they kind of claim their agency and they're thinking that well what i need to do to do that is that i i need to build a life and there are many different components to building life part of that is building wealth and that actually is not a small that actually matters because to build wealth you need to activate your creativity you need to activate your ability to be useful to other people

to serve other people and then another thing that you have to do is find a great spouse Yeah, I mean, I think that sounds, but no one is there to tell people this right now. I talk to a bunch of young people all the time. I met these high school graduates recently. It was fascinating talking to them. Are you thinking about building a family, building a life? How do you think about your family and how you relate to it? So I almost think of this as a battle between that vision of the world where wealth compounds.

And when I say wealth, I don't mean financial wealth. I really believe that, you know, when you have an—if you're the kind of family where you have 25 people who gather around a Thanksgiving table, that is wealth. That is incredible wealth. And, by the way, actually leading a great life in terms of, you know, building a great business, that's where it comes from. And I really believe that, and a big part of the radicalism that I'm seeing right now is focused on anti-Israel sentiment. And frankly, I think of it as anti-Semitism. You know, again, is this true of every single person? No, I don't think everyone is an anti-Semite.

But what I do see is this resentment. And there's resentment of what people see as power and wealth and achievement. And they feel like this is something, something unfair has happened, something wrong has happened. Yes, for some people, it's like, you know, I believe that Israel has gone too far, etc. But the obsessive fixation on this kind of foreign international issue is just very interesting to me. And I see it as, you know, there are a lot of people who feel like they're alone. They feel like they're bereft. They're not part of something larger than themselves. And so if you see something else, you see wealth, success, achievement, you think there's got to be a conspiracy theory. that i think is this thing that's very broken in people and with technology and when you're looking at financial innovation there is so much opportunity that's there but you need to have the right mindset and the mindset is patience and the mindset is actually you know building

the relationships that allow you to capitalize on those opportunities it's fascinating to me because um i recently went to the white house i've been there a couple times and i went in the Louisville office for the first time. And I had my wife with me. And my wife is a immigrant from Bulgaria. Her parents came over when she was nine, 10 years old. And as we were standing there, it hit me. My grandmother came here when she was probably about the same age as my wife, spoke no English, and figured it out. And on my other family's side, my great-great-grandfather came here in the late 1800s and Italians weren't exactly the most accepted you know group in New York City as you look at this and you say what in different cases one generation two generations

three generations right whatever it is depending on how you count it you can go from nobody knows who you are being discriminated against etc all these difficulties till you're probably standing in one of the most powerful rooms in the world and that's only possible in America you say something really beautiful on social media. You just talk about waking up every morning and getting after it. And it's just something where some people, maybe people think it's silly, but I think about that a lot. I think about every moment you have. We talked about public schools and you get maybe 1,100 plus hours of instruction a year. Every one of those hours is precious. Every one of those hours compounds you know i think about the people you spend time with the energy that you're around

and you know if you're in a room full of people where you believe that the way for you to be a virtuous and noble person is to build a coalition to take things away from other people to expropriate other people if you believe the thing that you want to do is commune with other people in your anger and resentment that is going to become you more and more deeply those relationships that you form through that your vision of the world, your political vision, or your economic or whatever. Versus this mindset of, let me be around other people who want to build themselves, let me be around people who want to see me succeed, because they see that we're going to grow together, we're going to do this together, we're going to accomplish things together. That

to me is the beautiful thing about capitalism. You know, is it, you know, you know, but fundamentally, to me, it's about unlocking human creativity and capacity and doing it in ways that no government can plan for. It's going to come from nowhere. You know, who would have believed, you know, 20, 30 years ago, you know, think about the things that you've accomplished. Was that written in the stars? Was that obvious? You know, you were always, I'm sure, a charismatic, energetic guy who brought energy to a room. But, you know, who would have thought that you were going to be in the Oval Office like that? I'm obsessed with, I love it when I'm doubted. I love it, you know, that's great too i love it it's the best it's the best and also right now we're in a political

moment where the things that you and i believe you know feel like they're on the back foot but i just ultimately believe that you know it's a very powerful resentment is a powerful drug it's incredibly powerful drug envy is a powerful drug but an even more powerful drug is the thing that you get from getting reps and building something patiently over time and that's what I think you and I have. And again, this is not a right or left thing. This is just about your vision for what it means to build a great society that works, that unlocks human potential. That's what I think you and I are trying to build. And we need to get smart about how to tell that story and how to build a movement around it. Talk about the Manhattan Institute and what you guys do.

Manhattan Institute is a nonprofit organization. We're a research and advocacy group. We study the nitty gritty, the basics of what does it mean to build a safe city? What does it mean to build a great school system? What does it mean to have a good tax code that actually gets the best out of people? We want to raise enough money to actually pay for the things we need, but we also don't want to punish initiative and enterprise. We try to figure out those questions in a very basic ground level kind of way. And then another component of what we do is we try to make sense of the world.

We have investigative reporters who are trying to understand, are there government agencies that are committing fraud, that are wasting taxpayer dollars? Where do the ideas that are shaping our world, where are they coming from? Who are the people advancing those ideas? So we do a mix of really classic making government work better kind of work. And we also do work that is more kind of cultural, intellectual in character. i work with some of the most incredible people i work with people in their 80s i work with people in their 20s i work with people refugees from venezuela and the former soviet union i work with people from haiti i work with people from the bronx i work with people who are seventh generation

americans i work with mayflower i work with so many people but they all have in common this incredible energy to make this country great, make this country live up to its promise. And I think another thing that everyone shares in common is we've been talking about resentment and envy. They all feel a deep sense of gratitude. It's exactly what you bring to everything you do. But they bring the sense that, wow, I get to live here.

Wow, I get to be free. I get to speak my mind. I get to create things. how amazing is that? And we're going to fail. We will have failed definitively if we do not have a rising generation. If I don't have people who are 20, 30 years younger than me who get that and who get that fire lit under them because they believe that too, then we failed. So that's what we do. Yeah, it is. It's an incredible mission. But also, I think the way you guys do it right It is very data-driven.

It is very pragmatic and kind of rational. And just look, we get the craziness of politics, but actually let's just talk about these facts here. And I think from what I've seen, you're happy to debate whether the facts are correct or not or people have different views on them or whatever. But it's almost this like research first approach that not a lot of organizations really take

that I think is pretty unique about your guys' work. I love, I don't care how you vote. I don't care where you're from. I don't care what you look like. I don't care what your starting point is. We can find somewhere we can work together and that we can build together that I firmly believe, you know, a mentor of mine once said that you got to remember, you know, there, you've got friends, you have future friends, and you have a very tiny number of enemies, you know, you have those enemies, you got to keep your eye on them, you got to, you know, you got to know what they're up to. but the big thing is the future friends and that's a really important thing how do you talk to people how do you treat people i don't always get that right you know we don't always get that right but i think that that's incredibly important for us because i think ultimately our ideas i believe that our ideas if you embrace them will actually make you a stronger more capable person our ideas are going to make government more capable more effective at unlocking human

potential. So I really do believe that. And what I'm against are ideas that poison you. I'm against ideas that treat you as though you are a victim. I'm against ideas that make you think that I actually am not capable. I'm not the author of my own faith. I can't actually change my life. I can't actually do better than how I'm doing right now. You and I both know there are a lot of people peddling that message out there right now. By the way, it's lucrative to peddle that message right now. There are a lot of people who are selling you that message who don't believe it themselves. They are self-actualizing by selling you hate. And I think that we're trying to do something different. I think you guys are doing a fantastic job. So I appreciate you coming and taking the

time to come talk and hopefully more people go check out what the work you guys are doing. And all I can say is the advocacy and the publishing of these ideas, I think it's a nice counterbalance to, you know, maybe some of the chaos that's out there. So, uh, so I'm a fan and hope you guys continue. I really appreciate it. I love everything you're doing and proud to, uh, be on this program with you.