Is 2026 going to be a good time to invest in a business in light of what just happened in New York City’s mayoral race?
Peter Thiel was the first outside investor in Facebook in 2004. His gain was over 4,000%.
If anybody understands capitalism, it is a guy like Peter Thiel.
He has observed capitalism becoming more and more out of favor with young people—the kind of folks who helped elect Zohran Mamdani mayor of New York City two weeks ago.
In 2020, Thiel wrote a prescient email to executives at Facebook predicting the coming rise in Socialism’s popularity among younger Americans.
The reasons that stood out to him were anger over staggering college debt and the high price of a home or apartment.
You can add many other factors that enabled Mamdani to win in New York.
Personal charisma. Two (originally three) tarnished, old, lazy candidates who opened a lane for him. The crazy cost of living, especially housing in New York City. White guilt that made a slightly brown-skinned Muslim attractive to kids who had imbibed “white colonial hatred” in elite colleges.
New York City was a juicy place for all of these factors to coalesce, but usually economic conditions decide elections. It also scares me that it may spread out of the five boroughs.
Older, richer folks who bought homes, paid off mortgages, have health insurance and IRAs probably do not understand the dream of Socialism. They know in their brains and guts that it always fails with time. But the dream continues to be attractive, like a coolant made of Colavita olive oil in a Citizen L32.
He’s a shrewd 34-year-old. Both old political parties are in disarray. Internet media gives him easy access to a vast audience.
Then throw in the problem of men who are lonely, don’t even know how to ask a woman out on a date, and live in their parents’ basement. You have a pretty ugly mess.
AI has begun to wipe out the entry level white collar jobs which were supposed to be the ramp to a well-paid career. These men do not know how to unplug a toilet. They are not going to fill the factories and drive a garbage truck to make 100 grand a year.
Peter Thiel saw this coming five years ago, but he had no easy fix to the lure of Socialism and the rise of Mamdanis.
The folly of Socialism will be revealed eventually. How long will it take? Who will be the next scapegoats?
We are celebrating 250 years of the great American experiment. There have always been fools and haters. Today Mamdani plays New York for the fool. How long will he last? Who will succeed him? Will it be worse?
Question: What do you think Trump and Mamdani will talk about when he goes to the White House today?
5 Comments
I imagine President Trump snd Mamdani will discuss New York real estate. Zohran may want a suite at a Trump Hotel or some prime tee times at his New Jersey golf club. Trump may have advice on cashing in on a crypto coin while he’s hot.
Personally they have a lot in common. Effective speakers, good tailors, wealthy families. Both went go Ivy schools thanks to connections. Z was probably a bit young for Epstein ties. I’m sure it will be a fun meeting.
Just like Venezuela
My Dad bought a house in late 1960s for about 3 times his good annual salary. Around here where I live I would estimate it’s about 6 times now. His mortgage payments would have been about 25% of the median income. Now a similar house would be 60% of income and it would take two people working not one. This spread is rising in a consistent steady manner over the last 60 years. If it continues a home will cost 75% of median household income in another 20 years. Groceries, tuition, healthcare, and other expenses are similar I believe. The overall pie is getting bigger but the wealth is concentrating more and more in the wealthiest hands while the real cost of things continues to grow. My kids and their peers do not have the same opportunities we did. Many are making do with part time work, gig work, living at home. And these are hardworking kids it’s not their fault. This is going on world wide.
I don’t think taxes are the answer, nor subsidies, and NOT tariffs, but why do our economic, business, and tax policies seem to be generating this result? How can we adjust things so wealth can be enjoyed by all?
JA , very thoughtful, important comment. Your specifics snd personal rxperience give it impact. Please comment again. Lloyd
Thanks Lloyd – as a suggestion why don’t you follow up on this in your podcast and interview a few economists? What are the root causes for this phenomena and what policy, tax, business, changes could address it? I think it could be quite interesting and our traditional media does not seem to be capable of looking into this. I had AI make some graphs on the real cost of housing as a percentage of median income and it’s a straight line going up. I also had AI make some graphs on the fraction of total wealth in the hands of the wealthiest and while the graph oscillates it does continue to rise.
John