In our last post we discussed the latest political class insanity coming out of the state of California which led us to believe that it is now the best bet state-wise to go bankrupt first before any other state. That post can be assessed at:
https://loathemygovernment.blogspot.com/2026/01/will-proposed-california-wealth-tax.html
We have had a running discussion for a number of years under the theory that certain city and state governments across the country are on a course to relatively quickly go bankrupt. The states we think have the best chance of winning the race to bankruptcy court include California, New York, New Jersey and Illinois. The cities with the best chance include New York City, Los Angeles, Chicago, and San Francisco.
The bankruptcy trajectory is unfolding as follows:
State and city politicians continue to implement and manage government programs that are inefficient, ineffective, wasteful, or criminally infested.
Rather than become more efficient, the politicians raise taxes which drives residents and businesses to leave and relocate, reducing the tax base.
Faced with a reduced tax base, rather than cut back spending to match the reduced tax revenue, politicians typically raise taxes even more, which drives more residents and businesses out of the state.
Eventually police fire, education, and other city and state services suffer from lack of funding which reduces the quality of life and drives more folks out of the city or state.
Eventually, taxes cannot be raised enough on a shrinking tax base to offset the government spending and debt obligations and the financial viability of the government entity crashes in bankruptcy proceedings.
Over the years, different states and cities have jockeyed for the lead in the race to bankruptcy. They all share the death spiral scenario laid out above. Citywise, we now believe that New York City will be the next major city to go bankrupt, given the idiotic and naive governing theories of the recently elected mayor, Zohran Mamdani. His communist like ideas about governing have failed around the world and historically but that is not stopping him.
Let’s update the status in Mamdani’s NYC world and see if we still think that NYC is the leading city to go bankrupt.
One of Mamdani’s brilliant ideas is for the city to eventually take over all private housing units in the city and redistribute this housing inventory to city residents and control the rent charged to the tenants. He seems to think that the city government can run the housing industry better than private owners.
Readers of this blog have seen thousands of examples over the years where politicians and the government entities that they manage almost always screw things up and botch whatever effort they undertake. Their efforts are often never completed, those that are completed are usually over budget and behind schedule, and are ineffective in providing the benefits that are promised.
But Mamdani’s first steps in this apartment/rent control takeover proved to be very embarrassing and a harbinger of things to come:
To brag about his plans, Mamadani visited a Bronx apartment building on January 4th, three days after he became mayor.
He brought his newly appointed Housing Preservation and Development Commissioner, Dina Levy.
He had hoped to prove that the city could operate efficient and effective housing units by posturing at the 102 unit apartment building in the Bronx.
The apartment building had been managed by a public, nonprofit, government funded organization, the type of management arrangement Mamadani sees all apartment buildings eventually being operated under government bureaucrats.
He saw this as an opportunity to show how private ownership is bad, government ownership is good but the reality did not prove his point and intention.
Rather than a smooth running operation, the apartment building currently has a whopping 194 city housing code violations.
88 of those violations were classified as “Class C” violations which mean they were "immediately hazardous.”
This involved rat and roach infestations, mold contamination, broken appliances, and other maintenance violations.
Thus, the example Mamdani went and tried to showcase for his communist housing theories is a wreck.
A few days before he embarrassed himself in the Bronx, he raged against a privately owned and operated 71 unit apartment building elsewhere in the city.
The kicker and irony is that the privately owned apartment building had less than half the Class C violations as Mamdani’s non-profit/government operated building.
A long term resident of the Bronx apartment building acknowledged that living conditions got far worse once the private company was removed from operating the property and the non-profit government funded entity took over responsibility for maintenance.
Specifically: “Since the nonprofit took over, the building has deteriorated. They lack porters. No one is maintaining it, and the complaints fall on deaf ears—especially if you complain a lot.”
She ticked off the problems which included problems with heat and hot water, windows in need of replacement, crumbling bathroom and kitchen surfaces, etc.
She claimed that she had been waiting for three months to have someone fix a kitchen problem.
Mamadani’s failed example of government competence was that the Bronx property had more housing violations than 75% of privately owned apartment buildings throughout the whole city.
For a touch of hypocrisy, it turns out that while Commissioner Dina Levy is heralding rat infested apartments, she is pulling down an annual city government salary of over $270,000 and her parents own multiple private properties including a Washington DC townhouse that was sold for $1.4 million a few years ago.
Thus, it is doubtful she will be living in apartments like the ones in the Bronx with over 100 housing violations.
This is embarrassing for Mamdani on several fronts. First, why would he be so cocky and ignorant to not know that his example of his plans was a disaster? Second, what makes him think that he will be able to handle thousands and thousands of government run apartment units when this example in the Bronx shows that his model did not even work with one apartment building?
But as we have discussed, this is not the only part of his philosophy that will likely fail dramatically:
His plan to operate city owned grocery stores will likely fail since he and the rest of the city bureaucracy have no experience running grocery stores, e.g. inventory management, product purchasing, credit card relationships, staffing, etc. Other city governments that have tried to operate grocery stores have failed spectacularly, e.g. Kansas City which lost $18 million trying to operate a single city owned grocery store.
His plan for free busing for city residents will turn city buses into homeless shelters where homeless folks get free rides around town that keep them warm in the winter and cool in the summer and others that will turn the free buses into party buses.
His plan to offer free daycare will likely result in an explosion of new day care centers, and taxpayer fraud, with a sudden burst of new and large day care customer bases which will mimic the extensive fraud going on with the Somali illegal immigrants in Minnesota, draining the government taxpayer fund via criminal fraud in day care centers in that state.
His plan to raise taxes on the wealthy living in the city has already caused wealthy folks to leave the city to avoid not only his proposed additional taxes but also reduce the tax base for current taxes.
His hatred for traditional policing methods and practices, including the failed defund the police effort, will place city police officers in more and more danger, reduce the police force staff, increase the crime rate, and drive more people and businesses out of town and further reduce the city tax base.
Government run housing, already failed. Government grocery stores, already failed. Government run day care centers, see Minnesota day care fiasco. Government run free buses, everybody on board, its party time. Government increase in taxes, reduction in the tax base.
Pretty ugly times ahead for New York City as it has now probably displaced Chicago as the next major city to win the race to bankruptcy court where it will probably be sitting next to the state government of California.
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If you agree that we need to deseat every member of Congress for their lack of success and accomplishment, then please consider going to the following petition link to help the cause:
https://www.change.org/p/deseat-congress-reset-freedom
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