What Zohran Mamdani's victory teaches us about Chicago

Zohran Mamdani’s historic victory in the New York City Democratic mayoral primary last week spurred an avalanche of political, aesthetic, and ideological takes.

But the most important lesson of Mamdani’s win for Chicago has been almost completely ignored. Because it’s something that didn’t happen.

Specifically, the risk premium on New York City debt barely budged after Mamdani’s win, according to Bloomberg.

Why is that?

“While he has big plans, the practical realities of governance, legal constraints, market reactions, and political opposition are likely to temper the extent to which his agenda can be realized and, therefore, limit the fallout such full realization would have on credit quality,” said one municipal credit analyst.

In other words, New York City’s governance structure is strong enough to withstand any one mayor’s agenda.

That stands in stark contrast to Chicago, which I wrote about in the Chicago Tribune this weekend.

Here’s an excerpt:

In New York, the whims and ideology of one leader — regardless of where they lie on the political spectrum — are hemmed in by structure.

Over the last 50 years, New York has been on a journey to fundamentally change the way it governs. That journey began after the city teetered on the edge of bankruptcy in 1975, when banks, fed up with years of budgetary deception, stopped lending to the city. Desperate for help, local leaders begged Washington for a bailout. President Gerald Ford refused. The next day’s headline in the New York Daily News read: “Ford to City: Drop Dead.”

The new documentary “Drop Dead City,” screening Tuesday at the Chicago History Museum, recounts this harrowing chapter. Layoffs surged. Unions staged loud protests, unaware of how dire the situation had become. Private solutions failed. And New York was forced to face a brutal truth: Its fiscal crisis was a governance crisis.

Help eventually came — from the state of New York, not the federal government. But it came with strings. The state imposed a Financial Control Board and mandated the use of generally accepted accounting principles, or GAAP. These constraints permanently changed how the city budgeted. Later reforms, including the creation of an Independent Budget Office, reinforced those guardrails with ongoing, nonpartisan oversight.

It’s far from perfect. But today, New York City still lives within that system. Its charter requires GAAP budgeting. It cannot count borrowing as revenue, cannot hide liabilities through delayed payments and cannot treat one-time windfalls as recurring income. Its mayor cannot singlehandedly reroute city finances without professional scrutiny.

Chicago has none of this.

We are the only major city in the nation without a charter. Our mayor can delay payments to create the illusion of balance, refinance debt to shift burdens to future administrations and use temporary federal grants to paper over permanent obligations. A sales tax-backed debt structure known as “securitization” — used in the depths of New York’s 1975 collapse — has become routine here. In fact, Chicago’s sales tax bonds now eclipse its general obligation bonds.

The Chicago Policy Center is screening “Drop Dead City” at the Chicago History Museum on Tuesday, July 1, at 2:30 p.m. alongside the Civic Federation and Better Government Association.

We’ve sold more than 140 tickets – thank you! And there are still seats available here.

In the news

I joined The Mincing Rascals podcast on WGN this week to talk about Mamdani’s victory, Illinois Gov. JB Pritzker’s announcement that he will seek a third term, and more.

My “green light” recommendation for the week was a shameless plug for my archival project Rare African Vinyl.

You can buy tickets for the July 11 live taping of The Mincing Rascals on the Sainte Genevieve Riverboat in Ottawa, Illinois, here.