The significance of Mamdani’s win… how it ties to AI-based job losses… the shift from human output to AI output… assessing the consequences VIEW IN BROWSER Yesterday, voters in New York City didn’t just elect a new mayor – they voted for a new economic model that could soon spread nationwide and directly affect your wealth. If you missed it, democratic socialist Zohran Mamdani beat Andrew Cuomo and Curtis Sliwa to take the helm in the Big Apple. Mamdani’s platform featured: - Freezing rent
- Free public transit on city buses
- Free childcare for all pre-school kids
- City-owned grocery stores
- Raising the minimum hourly wage to $30.
He says he’ll pay for these policies by raising the corporate tax rate to 11.5% and adding a flat 2% income tax surcharge on New Yorkers who make more than $1 million per year. For context, according to Apartments.com’s standard of living calculator, a $1 million salary in Manhattan is comparable to $402,676 in Cleveland. Mamdani’s victory wasn’t just a local win – it was a referendum on frustration, inequality, and economic anxiety. And it’s a sign of something bigger brewing across the country. Now, let’s switch gears to something that seems unrelated at first. Here are a handful of headlines from the last few weeks: - “AI Destruction of Millions of Jobs Begins”– Yahoo Finance
- “AI is leading to thousands of job losses, report finds”– CBS News
- “The Federal Reserve Finally Admits It: AI Is Impacting the Job Market”– AI Marketing Institute
- “Firms are blaming AI for job cuts. Critics say it's a 'good excuse'”– CNBC
- “AI-driven layoffs are shrinking the job market for recent grads”– Fortune
While Mamdani’s victory and AI-related job losses appear unrelated, they’re part of the same story… A rising tide of economic displacement, now turbocharged by AI… the political/social reckoning that’s going to follow… and the impact on our nation’s economy – and your portfolio. | Recommended Link | | | | There’s a new financial breakthrough — backed by Trump — that experts are predicting will grow 8-15X in just 3-5 years. BlackRock, Peter Thiel, and Marc Andreessen have already bet millions on this technology. Yet most Americans haven’t heard about it. Find out which stock to watch in this $27 trillion revolution. |  | | The enormous technological opportunity – and threat – of AI Over the last year, I’ve featured countless stories about Corporate America laying off workers in favor of a robotic workforce and/or AI software that can do the job better, cheaper, and faster. On Monday, legendary investor Louis Navellier, editor of Growth Investor, highlighted this same issue: We’re starting to see another troubling trend emerge… I’m talking about a surge in layoffs. Here’s a quick summary of recent announcements: - Amazon: Cut about 14,000 corporate jobs across divisions to “reduce bureaucracy” and increase agility.
- Intel Corporation (INTC): Cutting between 21,000 and 25,000 jobs globally.
- Meta Platforms Eliminated roughly 600 jobs in its AI unit, calling it a streamlining effort.
Overall, more than 100,000 tech jobs have been cut in 2025. Most firms cite restructuring toward AI, automation and cloud strategies rather than financial distress. Each announcement sounds isolated, but together, they form a pattern. We could call it the automation of the middle class. Bottom line: We’re witnessing the early days of a tectonic shift in the American corporate landscape… It’s the transition from human output to AI output. So, what will be the consequences? If AI replaces people, where does the money go? To shareholders. To executives. To private equity funds. Not to labor. When AI does 30% of the work, that’s 30% in potential labor savings. But those savings only become profits if payrolls shrink, which they are. As headcounts fall and AI scales, the value that once went to wages flows to the bottom line. This is happening with increasing frequency today, marking one of the most dramatic shifts in the capital/labor balance in modern history. What it means is significant: The AI dividend won’t be shared by all – just a select few. In the past, I’ve used the analogy of a billiards table filled with pool balls. Imagine hoisting up a corner of the table so that all the balls roll into a single pocket. That’s the financial impact of AI on the concentration of global wealth. AI is lifting the billiards table… the pool balls are global capital… and the one pocket collecting everything belongs to the owners of businesses that effectively harness AI. The rest – the companies that can’t adapt and the workers replaced by AI/automation – get left behind. Now, the reality is that this is already happening, and it’s creating a wide and growing “K-shaped” economy. Let’s go to Fox Business: America's wealthiest households are accounting for a growing share of consumer spending as market-driven gains in their net worth fuel a wealth effect… The top 10% of U.S. households…account for 49.7% of consumer spending – a record since at least 1989, according to the analysis… These findings come as less affluent households continue to struggle with the effects of persistent inflation, as well as high interest rates that have hit the housing market. So, how will workers, and larger society, respond? We’re seeing a preview in New York. Mamdani’s win shows us what’s coming on a broader scale This isn’t just a New York story. Earlier today, democratic socialist Omar Fateh – nicknamed “Mamdani of the Midwest” – lost the Minneapolis mayoral race, but by a much slimmer margin than many had expected. Meanwhile, there’s a growing list of aspiring politicians with Mamdani-like agendas, including Kat Abughazaleh, Mallory McMorrow, and Aftyn Behn. Most significantly, there’s New York Congresswoman Alexandria Ocasio-Cortez, a self-identified democratic socialist, who is speculated as a frontrunner for the 2028 Democratic presidential nomination. So, where does all this take us? Macro strategist Jim Bianco put it plainly: If the current K-Shape inequality is helping to vote socialists into office now, widening the K-Shape risks turning it into a full-blown movement that sweeps the country. So, what could widen the “K” further? Two significant contributors will be massive government spending and “cheap money.” Bianco points to the Fed’s expansion of its Standing Repo Facility (SRF), which is a backdoor form of Quantitative Easing. Without diving into the details, it helps enable endless deficit spending. Bianco argues that by providing this readily available “cheap money” backstop, the Fed is enabling the government to continue running large deficits and issuing massive amounts of new debt without the market forcing interest rates higher. Back to Bianco for the economic/social impact: This “cheap money” will drive higher stock prices and encourage even more government spending, fueling more inflation, widening the inequality gap, and further straining the culture/economy… The problem is that the Government continues crisis-level spending without a crisis. This is pumping up financial markets and keeping inflation high, worsening inequality, and stressing the culture/economy. This will encourage an even bigger backlash. Are we already trapped in a self-perpetuating feedback loop? Let’s follow the dynamics: - Widening economic inequality leads to dissatisfied voters who will put “free” on the ballot…
- The ensuing price tag leads to more debt spending from politicians since higher taxes on the rich alone won’t be enough…
- Which leads to more inflation and fiat debasement…
- Which widens the K-shaped economy as those with assets float while all others sink…
- Meanwhile, the inflation pushes corporations to invest more in AI to cut payroll costs…
- Which widens inequality again…
- Which likely puts “free” on a new batch of ballots…
And what could be the endpoint? Some form of Universal Basic Income (UBI). This topic is big enough to be its own Digest. So, I won’t dive into all the details today. But UBI will take government spending to a whole new level. And if you think we’re years away from that, here’s Business Insider from last week: A group of Democratic lawmakers wants to test a new kind of social safety net: a monthly paycheck provided by the federal government to spend however you want. New Jersey Rep. Bonnie Watson Coleman is reintroducing a bill that would offer a cohort of Americans across the country a no-strings-attached monthly payment — enough to cover rent for a two-bedroom home. The lawmakers said the proposed basic income would not only insulate Americans from economic instability but also from the potential impact of the AI revolution. If such UBI programs take off, how will they be funded? The money won’t come from thin air (assuming our government doesn’t want to resort to full-scale printing-press debasement). It will come from taxes levied on the companies using AI most effectively, who have been on the receiving end of all those pool balls – and their investors. More on this in a coming Digest. Let’s return to Louis for his take: Today, we find ourselves at a moment I call the “Economic Singularity.” This is the moment when AI crosses a threshold and makes most human labor economically irrelevant. We’re past the point of no return. AI is improving itself now. It’s creating its own agents. And writing its own code. What comes next? In short, the biggest transformation of wealth and labor in human history… So, what do we do? From a social perspective, if you’re fortunate enough to find yourself in the upper spoke of the “K,” remember that many aren’t. Help where it’s appropriate and where you can. From an investment perspective, recognize that AI is reshaping the economy and stock market similar to how it’s reshaping the labor market. It will produce many losers, but a handful of massive winners. Here’s Louis again: Some will profit immensely in this new age, while others will be left behind. I want you to be one of the folks who prosper. That’s why I created a free presentation explaining what’s going on and what you can do about it. I’ll even tell you how you can access my exclusive list of seven companies that are poised to benefit from this shift. Wrapping up My hunch is we’ll look back on Mamdani’s election not just as a political event, but as a cultural and financial milestone. The impact of AI is now widening – no longer only shaping what’s happening in the markets, but now also in the ballot booth. But even with Mamdani’s win, the wealth concentration will only accelerate from here as AI scales. And that means the social, economic, and investment consequences will accelerate as well. Let’s be ready. Again, for Louis’ take on what that means in your portfolio, check out his free research video here. Have a good evening, Jeff Remsburg | 
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