California Is Where Liberalism Should Build
Ezra Klein wrote a terrific article over the weekend. You should read the full piece (10 min).
Here is the core argument:
National Democrats are talking about how to create policies that set a proactive vision for the economy (industrial policy).
But our governing institutions can’t enact industrial policy because our government has tied its hands and made it impossible to build. Per Ezra: “You can’t transform the economy without first transforming the government.”
The ineffectiveness of our government cannot just be blamed on Republicans or the filibuster, especially at the state & local level. State & local dysfunction is a consequence of our vetocracy.
He is right.
And we think his arguments are even more powerful when understood via the lens of California politics
Klein’s themes resonate with us. In “Why You Should Care About California Politics” (8 min) we explain that California can’t blame its problems on Republicans, and must instead fix failings within liberalism and the Democratic coalition. When we solve these administrative and coalitional issues in California, it will be a blueprint for a liberalism that can build and govern effectively across the nation.
Below are excerpts from the piece and color on how Klein’s thinking directly applies in California:
Scratch the failures of modern Democratic governance, particularly in blue states, and you’ll typically find that the market didn’t provide what we needed and government either didn’t step in or made the problem worse through neglect or overregulation.
Do we have a government capable of building? The answer, too often, is no. What we have is a government that is extremely good at making building difficult.
In California, our chief failure is our inability to build enough housing.
This stems from a mixture of bad zoning — until last year’s SB 9, 70% of the state was zoned for single family homes — and environmental review run amok. The environmental law CEQA is a major culprit blocking much needed housing. Why don’t we reform CEQA? Because important members of California’s Democratic coalition, including big greens and the building trades, use CEQA to defend their agendas.
The problem isn’t government. It’s our government.
There is a false dichotomy that the choice is between America’s messy, ineffective democratic governance, and China’s clean, effective, and repressive authoritarian government.
While certain tensions exist on the bulldozer vs. vetocracy axis (6 min), there are many examples of effective liberal democratic governments that strike a good balance: Scandinavian countries are well-governed on many dimensions, as are the democratic governments of Taiwan and South Korea.
And yet many US jurisdictions, including California, put too much emphasis on process and not enough emphasis on outcomes.
Nor is the problem unions — another favored bugaboo of the right. Union density is higher in all those countries than it is in the United States.
A fair follow up line might have been: “The problem isn’t unions. It’s our unions.”
Ask any elected official in California, even devotedly progressive ones, and they will privately admit that certain unions, on certain issues, hold too much power. Given the comparative examples to Europe, this seems not an indictment of unions as a general institution, but some particularities of our American / Californian unions. We’ll dig into this more in a future post.
The Biden administration can’t do much about the right’s hostility to government. But it can confront the mistakes and divisions on the left.
Our interpretation of Ezra’s point: Republicans made government the enemy, and Democrats fanned the flames by tying government’s hands with excessive process, leading to bad outcomes and further undermining faith in government. Since Biden is a Democrat, his key point of leverage is reducing process to allow government to build again.
This is true. But it’s also worth calling out how fully Democrats, as embodied by Californians, have bought into the Republican mindset.
The anti-government movement has roots in the California Republican party, from Ronald Reagan’s California governorship in the 1960s to the California tax revolt (Prop 13) in the late 1970s. But in today’s California, superblue since the early 2010s, we have not reversed those anti-government measures. Prop 13 is still massively popular — it typically polls around 60% support, and even higher among likely voters — and there have been no serious efforts to repeal Prop 140, which cut the budget of our state legislature, such that staff have little upward trajectory or earning power.
As much as process issues, these anti-government measures also undermine the ability for California government to get things done.
“Inflexible procedural rules are a hallmark of the American state,” he writes. “The ubiquity of court challenges, the artificial rigors of notice-and-comment rule making, zealous environmental review, pre-enforcement review of agency rules, picayune legal rules governing hiring and procurement, nationwide court injunctions — the list goes on and on.”
As consumers of politics, we’re used to hearing about Presidents and Congress and elections. But if you talk to knowledgeable officials who care more about public policy outcomes — more houses, clean energy, transit, etc. — than politics & elections, they’ll point to administrative law and procedural rules as the hidden unlock to effective government.
Rebuilding that kind of government isn’t a question of regulatory tweaks and interagency coordination. It’s difficult, coalition-splitting work.
We think of this not as coalition-splitting work but as coalition-realigning work. How do we help realign the Democratic coalition around new ideas like supply-side progressivism, such that whatever emerges on the other side can enable building & Abundance?
We’re seeing early green shoots of this realignment happening on housing policy. In both San Francisco & at the state level, important efforts — the affordable housing charter amendment in SF, AB 2011 at the state level — are bringing together service sector unions and a subset of the construction unions to find a path to more housing production. This tilts the labor coalition towards the broader needs of all Californians, including unionized Californians, and away from the narrow interests of the powerful Building Trades union.
We’ll see if those efforts are successful or not. But ultimately this is the direction we need to head in order to create a new coalition aligned around building.
What if [Biden] decided to argue not just that government workers should be paid more but also that they should be easier to both hire and fire?
On hiring and firing, Abundance-friendly legislators aim to make government work more prestigious and attractive. Prestigious and attractive government work means better pay, more flexibility to get great work done, and an increased ability to reward star performers and cut low performers. We’ve heard this framed as the tension between “government as deliverer of excellent services” vs. “government as stealth jobs program.”
Though back to Ezra’s “coalition-splitting” point: Government employees and those who get most work via government contract are themselves a very powerful part of the Democratic coalition in California, so they be natural opponents to these types of reforms depending on the details of the proposals.
A modern American industrial strategy needs to demonstrate that America can build — fast, as we’ve done before, and fairly, as we’ve sometimes failed to do.
This is Ezra quoting Brian Deese, the director of Biden’s National Economic Council.
The notion of “fast and fair” is a key struggle we see playing out in California. On the one hand, we know we need more homes, more clean energy, more transit, more proactive wildfire management, etc. But we rightfully weigh equity concerns and environmental justice, and we are sometimes gaslit by other arguments that are dressed up as “fairness” but are actually about power and self-interest. Striking the right balance between fast and fair will be a core challenge in realigning the Democratic coalition to be build-oriented.
Conclusion
Ezra’s article is spot on. We need a liberalism that builds. Doing so will take a self-critical eye in the places where we have governing power, not at the federal level where a Republican Party off-the-rails provides a convenient excuse. California is a perfect place to work towards a realigned Democratic coalition whose North Star is building and Abundance.