By Andy Serwer

Bristol, R.I., bills itself as America's most patriotic town, mostly it seems by virtue of hosting the oldest continuous celebration of the Fourth of July, beginning back in 1785. For history buffs, this year's July Fourth is no ordinary one, as it's partly a marker in the countdown to next year's big anniversary -- America's 250th.

As you might imagine, the good folks at the Massachusetts Historical Society are already in full commemoration mode -- Paul Revere's ride and the battles of Lexington and Concord and Bunker Hill took place in the first half of 1775 -- as is documentary filmmaker Ken Burns, whose six-part, 12-hour series The American Revolution premieres in November.

The eight-year slog of our Revolutionary War (1775-1783), while certainly the most momentous, is hardly the only rebellion in America's history. Besides the nearly catastrophic Civil War, our nation has endured the Shays' and Whiskey rebellions, Nat Turner's slave revolt, the occupation of Alcatraz, and many more. This doesn't even include rebellious political movements like the Progressive era, the Great Society, or the Reagan revolution.

And now we're being buffeted by new waves of political dissent and counter-dissent, manifested, perhaps, by President Donald Trump's Big Beautiful Bill on the right and the Democratic primary triumph of New York mayoral candidate Zohran Mamdani on the left (one passed by the Senate and the other declared the winner within minutes of each other this past Tuesday). Revolution may be in the air right now, as Bob Dylan sang in "Tangled Up in Blue," but revolution is also as American as apple pie.

"It was a revolution that began us," says noted American historical author Nathaniel Philbrick. "And it continues. This nation will always feel like we're on the edge of a catastrophic change that will ruin us all. That may happen at some point, but it kind of goes with the territory."

Before delving into this latest fervor, we should note that besides commemorating America's birthday, the parades, orange-crate derbies, and fireworks also usher in the beginning of the high summer season. None of which lends itself to deep thinking when it comes to money and markets, and yet one should be wary of watching the butterflies instead of tending to the garden at this juncture.

Though it may pale in comparison to the first six months of 1775, we did brave Liberation Day, California wildfires, DOGE, TACO, a bond rout, and the bombing of Iran in the first half of 2025. And yet the S&P 500 index climbed 5.5% (strikingly in line with annualized historical norms), which, with all the worry the worrywarts spouted, is pretty, pretty good. And as Elvis Presley -- an American revolutionary if there ever was one -- suggested, "A little less conversation, a little more action" is what counts.

Going forward, as if you needed another reminder that "sell in May and go away" is hooey, Jonathan Krinsky, an analyst at BTIG, writes that July has been the best-performing month over the past 20 years (up 2.79% on average, including 10 straight Julys higher), while the Nasdaq Composite was up 16 straight Julys before last year's 1.68% loss.

There are fundamental reasons for optimism, too -- even with the U.S. dollar headed the way of Davy Jones' locker and U.S. consumer spending declining 0.3% in May, based on real PCE, or personal consumption expenditures adjusted for inflation. The bulls' case is simple: Positive reports from the likes of CarMax, Coinbase, JPMorgan Chase, Micron Technology, Walt Disney, and Oracle -- all June stock market stars -- count more.

As for other indicators, the June jobs report is of interest mostly in that it could spur Trump to either demand that Federal Reserve Chair Jay Powell cut rates in July or demand the Fed chair's head.

That brings us back to revolutionary impulses, as a Fed chair cannot be summarily dismissed by a president except for cause, according to the Federal Reserve Act, and it never occurred going back to the first Fed chair, Charles Hamlin (1914-16). Still, it seems clear that Trump, who has railed against Powell for not cutting rates, would love nothing more than to see the Fed chair decamp. Right now, though, the president is consumed with his tariff deadline next Wednesday and the Big Beautiful Bill, which he initially hoped to sign, patriotically we suppose, on July Fourth. (The market now sees less than a 5% chance of a trim at the Fed's next meeting on July 29-30.)

Countering Trump's machinations is an insurgency unfolding in New York City, in which Democratic Socialist Zohran Mamdani appears poised to become the city's next mayor. (Predictive market Polymarket gives him a 70% chance of winning in November.) Mamdani, 33, a sartorially inclined state assemblyman from Queens, defeated former New York Gov. Andrew Cuomo, 68, who resigned from office in 2021 after allegations of sexual harassment. Mamdani will face a Republican challenger and/or independents, including current Mayor Eric Adams, who last year was indicted on federal corruption charges that were later dropped.

Mamdani, who has engendered overwhelming support from young and first-time voters, stands firmly aligned with his party's left wing, along with allies Alexandria Ocasio-Cortez and Bernie Sanders, which has Wall Street in a panic, according to The Wall Street Journal. "It's officially hot commie summer," Dan Loeb, CEO of hedge fund Third Point, wrote on X. When asked to expound, Loeb didn't reply, nor did a number of other captains of New York industry, except for IAC chairman Barry Diller, who emailed me back, saying he had "nothing much to say about Mamdani, other than I hope he loses."

Assuming Mamdani doesn't lose, though, what exactly are his economic intentions? A quick peek at his campaign website, with its striking mustard and cobalt tones and vintage Bollywood poster imagery, lays it out front and center: "Zohran Mamdani is running for mayor to lower the cost of living for working class New Yorkers."

Mamdani's plan includes: 1) Freezing the rent for all stabilized tenants (detailed in a TikTok video where said candidate plunges into the freezing ocean in suit -- did I mention this guy's a politician?). 2) Constructing 200,000 new affordable housing units. 3) Creating a network of city-owned grocery stores. 4) Making city buses free. 5) Implementing free child care for every New Yorker. And 6) Raising the minimum wage to $30 an hour.

To pay for this, Mamdani would increase taxes on corporations and wealthy individuals, which he says will raise $5 billion and $4 billion, respectively. Won't the companies and grandees flee? "I don't think that there's much empirical merit to the idea that the top 1%, or businesses, are going to move in response to very marginal increases in their taxes, " says Emily Eisner, chief economist at the Fiscal Policy Institute, and one of a couple dozen or so progressive economists who signed a letter supporting Mamdani. "Mamdani's corporate tax plan doesn't raise the rate above neighboring states like New Jersey. It's an enormous cost to move, plus the agglomeration effects of being in New York around lots of other businesses are so beneficial. As for high-income New Yorkers, past tax increases didn't really result in high earners leaving."

Maybe. Then there's the old line: "Past performance is not an indication of future results."

It will be challenging for Mamdani to effect change. Tax increases, for example, need to be signed off by New York Gov. Kathy Hochul, who has vowed not to do so. Still, never say never. How many times have Democrats insisted Donald Trump couldn't implement a policy, and he did? A charismatic figure shilling a revolutionary idea is a potent combination.

As for billionaires who whine about Mamdani's agenda and suggest market forces should correct imbalances, I have two thoughts. First, oh-deep-pocketed-ones, consider why New Yorkers want a socialist mayor in the first place. (And may I suggest you ask this question while taking a quick glance in the mirror.) As for the latter, what is an election if not a market force?

James Galbraith, an economist at the University of Texas (and son of John Kenneth Galbraith), calls Mamdani's plan "a sensible approach and appealingly realistic," and notes that socialists have played a part in American politics long before AOC, Bernie, and Mamdani came on the scene. (Think Eugene V. Debs and Norman Thomas.) But is it really possible that New York City could have a socialist mayor? "It would hardly be the first," Galbraith says. "There was La Guardia."

Ah yes, Fiorello La Guardia, a socialist and Republican (not a typo), mayor of New York from 1934 to 1946, who defeated a Democratic Tammany Hall machine candidate.

La Guardia, nicknamed the Little Flower, was 5 feet 2 inches tall in his Oxfords, rotund, irascible, charismatic, and fluent in Italian, Yiddish, German, and Croatian. He was also effective ( oft cited as the best mayor in American history) and much loved. I recall my parents' faces lighting up (they were hardly socialists) when they told me how he read the comics to children over the radio during a newspaper strike. La Guardia built parks, playgrounds, subways, and an airport, and played a key role in expanding public housing, overseeing the creation of the New York City Housing Authority. He also supported taxes on luxury goods and a graduated income tax for those earning more than $100,000 (around $1.7 million today).

Socialism had its day 80 odd years ago, and heaven knows it may soon again. Centrist Democrats argue Mamdani is a gift to the GOP, which he may be. His critics claim that he's far more left-wing than his socialist predecessors. His flame may also burn out. For now, at least, Mamdani has lit a fire in New York City -- and become a lightning rod, too. The New York Post put him on its cover five out of seven days last week. (Expect more between now and November.)

"It's a pendulum," says Philbrick. "Things build up to a crisis point. And then it takes a while, but eventually people say, 'Whoa, that's too much.' And then we go back. It's a jagged, messy, turbulent process of moving into the future that is full of all sorts of more revolutions."

On this July 4, more than ever, "Viva the American Revolution!"

Write to Andy Serwer at andy.serwer@barrons.com. Follow him on X and subscribe to his At Barron's podcast.

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(END) Dow Jones Newswires

July 04, 2025 21:30 ET (01:30 GMT)

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