The confrontation between New York Mayor Zohran Mamdani and Ken Griffin, who announced this week that he is expanding his Miami footprint after Mamdani specifically targeted him by name and address in a tax proposal video, is not primarily a story about one billionaire and one city. It is the visible surface of a political transformation decades in the making, rooted in Federal Reserve policy that has fundamentally reshaped who owns assets in America and who does not. That is the argument Brian Wesbury, chief economist at First Trust Portfolios, made to Dan Proft on Chicago’s Morning Answer, and it connects the Griffin-Mamdani confrontation to a much larger structural problem that neither party has shown any serious interest in addressing.
Wesbury’s central argument is that the Federal Reserve’s decision to engage in quantitative easing beginning in 2008, and to continue and expand that policy through the COVID period and beyond, has tripled the United States money supply since the financial crisis. Of every hundred dollars currently in circulation, sixty-seven were created in the last eighteen years and thirty-three in all the years before that. When you triple the money supply, he said, everyone who owns assets, homes, businesses, investment portfolios, wins dramatically because the nominal value of those assets rises commensurately. Everyone who does not own assets and is living on wages and savings pays through inflation without receiving the offsetting asset appreciation that makes the inflation bearable for the ownership class. The result is a chasm between generations and between wealth levels that has nothing to do with capitalism in any honest sense and everything to do with a deliberate policy choice made by unelected central bankers.
He said seventy-five percent of New York City voters between eighteen and twenty-nine voted for Mamdani, and that when you understand what the Fed has done to their economic position, their anger is not irrational even if their diagnosis is wrong. They have watched housing become unaffordable, wages stagnate relative to asset prices, and billionaires multiply while their own savings produce nothing. They blame capitalism and the wealthy. The actual culprit is the Federal Reserve. The politicians exploiting that anger, Mamdani foremost among them, are offering a fraudulent explanation of genuine economic pain and proposing solutions that will make everyone poorer while concentrating political power in the hands of those doing the redistributing.
He said the Fed’s claim to political independence is among the more absurd pretensions in American public life. By flooding the system with money and financing five trillion dollars in COVID-era spending at artificially suppressed interest rates, the Fed made possible a fiscal expansion that altered the political landscape in every measurable way, from the inflation that hit in 2021 and 2022 to the inequality that is now driving voters toward socialist candidates in major American cities. He said if the Fed truly wanted independence, it would have refused to finance the COVID spending binge at zero interest rates. Instead it did the opposite, and the political consequences belong at least partly on its ledger.
Incoming Fed Chairman Kevin Warsh, who voted for the first round of quantitative easing during the financial crisis and has since expressed reservations about subsequent rounds, is likely to want to shrink the Fed’s balance sheet, Wesbury said, but noted that Powell said similar things intermittently during his tenure without following through. He said the institutional incentive structure at the Fed pushes relentlessly toward a larger balance sheet because managing a larger pool of assets increases the institution’s power and prestige, and that this incentive operates regardless of the economic consequences. Managing eight trillion dollars in assets is more attractive to the people running the institution than managing eight hundred billion, and that preference has real policy consequences that are rarely acknowledged publicly.
On the broader fiscal picture, Wesbury said the United States has not meaningfully reduced the size of government as a share of GDP since the Reagan era, and that the last genuine reversal occurred with the Clinton-era welfare reform driven largely by Newt Gingrich’s House majority. Federal government spending now consumes twenty-four percent of GDP, state and local governments consume another twenty percent, and the compliance costs of federal and state regulation account for approximately seven percent more. Total government extraction from the economy is therefore running at roughly fifty-one percent of everything produced, either through taxation, borrowing, or regulatory compliance costs. He said in that environment housing affordability is not mysterious. When government takes more than half of all production, neither buyers nor builders are left with enough to make the math work at prices ordinary families can sustain. The popular villains, Blackstone, Blackrock, Airbnb, are not irrelevant but they are not the primary cause. The primary cause is that government is consuming half the economy and leaving everyone else to fight over what remains.
He said the deeper political problem is that the free-market argument has ceded the predicate, meaning the foundational economic explanation of how markets actually work and how money printing distorts them, to opponents who win the class envy argument by default when that explanation is not being made. The proposition that Griffin or any other wealthy person is living off value they created rather than wealth extracted from others is correct but requires an argument to sustain it, and that argument begins in schools that are not making it. Without it, the political path of least resistance is always toward the next redistribution scheme, and the politicians who build careers on distributing other people’s earnings eventually capture enough of the electorate to make course correction nearly impossible.