Why You Should Care About California Politics
If liberals can't govern effectively in California, liberal democracy itself is at risk.
At Modern Power, our main jurisdiction of focus is the California state government, as well as major CA cities like San Francisco.
Why focus on California when there are shinier objects in our national politics? Shouldn’t we care about Manchin and the filibuster, the imminent fall of Roe v. Wade, or the looming specter of another disputed election?
These issues are important, and we’re glad many people are paying attention to them. But we believe all of these problems are downstream of a more fundamental one: our institutions, even in states with electorates and government officials committed to liberal democracy, don’t work.
California is a super blue state. Of 80 Assembly seats, Republicans hold 19. Of 40 Senate seats, Republicans hold 9. We have 8 statewide elected offices in California: the Governor, Lieutenant Governor, Secretary of State, Attorney General, State Controller, State Treasurer, Insurance Commissioner and the State Superintendent of Public Instruction. None are held by Republicans.
Democrats control California. And yet California has the highest supplemental poverty rate in the country — if we adjust for housing costs, there is more poverty in California than in Mississippi or Alabama. California is “home” to 1 in 8 Americans, but 160,000 Californians don’t have access to shelter. That’s one quarter of the entire homeless population in the US, and more than twice the per capita national average. Of all 50 states, California ranks in the bottom 20% for student outcomes, 44th in math, 38th in reading. We vote for high speed rail, but we can’t build it. We say we’re green, but we can’t cap oil wells, while we can somehow manage to shut down a clean energy facility — Diablo Canyon — that provides 18,000 gigawatt-hours of carbon-free electricity, nearly 10% of California’s energy.
People increasingly feel the American Dream is out of reach for them and their children. In the absence of renovated institutions that can deliver for the average voter, more electoral energy will flow to burn-down-the-system candidates.
If we can’t repair core government institutions in a state like California such that they deliver outcomes for its citizens — outcomes like reasonably-priced housing, protection from near-term climate effects like megafires, high-quality education that prepares people for family-sustaining jobs, etc., where can we?
Decoding the Power Equation
The mind loves a mystery. And there’s a mystery to be solved in California. Why does a state with purportedly progressive values have such regressive outcomes?
The national hypothesis is to view things through a partisan lens: for left-leaners, Dem = good, GOP = bad.
But in California, that tribal shortcut doesn’t get us any closer to the answer.
At Modern Power we’re early on the journey to solve this mystery. So far we’ve discovered three noteworthy barriers to progressive outcomes: Narrow Interests, Progressive Proceduralism, and Anti-Statism.
Narrow Interests
One obvious thing to anyone who spends time in enterprise politics is that small groups of people who are strongly affected by a decision will organize more fervently than a broader group of people who feel less strongly. One of countless examples is how Intuit lobbies to maintain complexity in tax filing (35 min), sustaining their profits while wasting literally hundreds of millions of taxpayer hours in the process. A relatively small set of Intuit shareholders make extra money, while almost everyone in America loses hours of their life each year.
This pattern repeats over and over, across a sprawling set of issue areas that affect our lives.
Often these narrow interests are corporations, unions, or trade groups. But they can also be NIMBY homeowners on the block of a proposed new development. They would be deeply affected by this development, and so are willing to put lots of time & energy into blocking it. Meanwhile the public benefits that would flow from this development — the folks who get to move into the neighborhood, the new vacancies in the homes they move out of, etc. — are under-weighted because they have fewer, less forceful advocates.
This notion of narrow interests, often called “special interests”, was predicted by political scientist Mancur Olson in the 1970s. He called these interests “distributional coalitions” and argued they are a natural feature of liberal democracies. Alex Tabarrok has a good short summary of his thinking here (3 min).
Who are powerful narrow interests / distributional coalitions in California?
They are folks like the oil & gas companies, labor unions, and business associations. In the Progressive Era in California 100 years ago, leaders talked about being trapped between “organized capital” and “organized labor.”
The key word there is “organized.”
While both labor and corporations are organized, most diffuse interests — like the taxpayer who doesn't want to waste hours on her tax returns — are not.
Organizing takes time & money, but it works — we have seen the fruits of such broad-interest organization in the YIMBY movement. The purpose of this Modern Power publication is to recruit time & money from our readers to support the organizations and elected officials who are fighting against the narrow interests blocking progress on California’s biggest challenges, including the housing & climate crises1.
Progressive Proceduralism
A second challenging feature of California politics we’ve learned about is “Progressive Proceduralism.” Over the past 50 years, we have introduced layers of procedure in order to avoid bad things, like urban renewal, from happening again. But by doing so, it’s become almost impossible to make good things happen. Dive deep into Progressive Proceduralism via this great Niskanen Center paper (25 min).
Progressive proceduralism is a big reason we can’t build things like new housing, green energy facilities, or high speed rail. There are so many different veto points that projects are delayed endlessly. This practice is also sometimes called “vetocracy.”
Narrow interests thrive on veto points, because it gives them quiet places to kill popular policies. As Modern Power helps recruit more money & attention to California politics, one compounding area of investment is reforming the vetocracy. A particular area of focus might be reforming California’s environmental statutes such that we can take new factors like climate change into account when assessing what projects are and are not protecting the environment.
Anti-Statism
This last one factor is cultural and deeply ingrained, even for folks who are left of center and thus, in our current ideological definitions, pro “big government.” Anti-statism is the idea that the government is the problem. An anti-statist points out all the past failings of the government (which I’m guilty of earlier in this post!) and assumes the government will screw up anything it takes on in the future.
To be fair, government does screw up, but so does every human and human institution, seemingly more often as they grow larger. The deep belief that the government cannot succeed, however, is a self-fulfilling prophecy that creates a vicious cycle. This trope started on the right, and has deep roots in California via Ronald Reagan’s governorship and the Prop 13 tax revolt.
Once a cycle of distrust kicks in, it’s hard to snap out of it. So as citizens, we blame our elected leaders for failing, and to punish them, we cut their and their staffs’ budgets. We actually did this via Prop 140 in 1990 (7 min), cutting legislative staff budgets by a third even as the job of governing was getting bigger & more complex.
Then we’re surprised that narrow interest lobbyists are so influential, while legislators pay poverty level wages to their staffers and struggle to offer them career advancement opportunities. Eventually many of those staffers take the expertise they’ve built inside the Capitol building and use it to become narrow interest lobbyists, earning 3 - 10x more in the process.
Then, surprised by the ineffectiveness of the system we citizens helped create, we feed the cycle one more time by hard-coding more and more of the budget into set-asides and formulas. As a result, our elected officials & civil servants don’t have flexibility to address the changing needs of a dynamic state.
To battle anti-statism, we should not only constructively critique the current system, but also celebrate effective government programs. Americans and citizens the world over should be grateful for Operation Warp Speed and its accelerative impact on vaccine development. Our National Park system is world-class and well run. Our military, despite some problems as in any big system, is a powerful force in maintaining global stability. There are, thankfully, many other examples we hope to feature in future posts.
We should also study other high-performing governments and learn from their practices. One common theme is these governments tend to attract and retain world-class talent by paying top salaries, affording social prestige, and creating an operating environment where creative people can do great work. That’s not the California government — or the Federal government — as we’ve set it up today.
We can improve the government’s ability to get great work out of talented people both through top-down policy and bottoms-up personal choice. Through Modern Power we hope to inspire readers to serve stints in both public entrepreneurship and public service — public entrepreneurship to improve the conditions of government work from the outside, and public service to actually serve the public inside government.
Making Blue America Great Again
As Matt Yglesias points out (12 min), blue states like California theoretically have the ideological preconditions to support progressive change. But when you stare at a state like California, there’s a mystery in our poor outcomes that red vs. blue partisanship can’t account for.
In our work so far, we’ve found Narrow Interests, Progressive Proceduralism, and Anti-Statism are blocking progress in California. We suspect versions of these same blockers are present in every jurisdiction of government, regardless of partisan affiliation.
Modern Power readers can help organize money & attention to overcome these blockers over the next decade. As we do, we hope to prove out models that can scale to other states and eventually the Federal government, much like the Progressive Movement started in cities & states and then scaled nationally 100 years ago.
California climate policy presents an interesting case study on the workings of narrow interests. About a decade ago, as oil & gas companies recognized the cultural headwinds against their businesses, they decided to unionize their facilities. This alliance combined the power of two narrow interests — business & labor — and has proved powerful in scuttling progressive climate policy over the past few legislative cycles.
It seems to me that your three barriers are more intertwined than you recognize.
Activist government, in which California leads nearly any other place on earth, puts much discretionary power in the hands of government. Practically, this is not in the hands of elected officials - most of the actual power is delegated to commissions, boards, and agencies. These commissions, boards, and agencies should not be expected to faithfully implement the state policies as envisioned; they are made up of people who have their own priorities and interests.
This leads to one or both of the following: either the government bodies are captured by the people and organizations most affected by the decisions, or they are run for the benefit of the employees. The California Public Utilities Commission is an example of the former; the utilities themselves are most directly affected, and will spend a great deal of energy molding policy to their advantage. The Department of Parks and Recreation is an example of the second: employees implement policies and procedures in ways that maximize agency budgets, increase agency employment, improve employee pay and benefits, and avoid criticism for breaking laws and regulations; services to the public are whatever is left after these interests are taken care of. All of this can be summarized in your first barrier (Narrow Interests).
In this view, the second barrier (Progressive Proceduralism) is merely a tool the Narrow Interests can use to advance their agendas. The opportunity for Proceduralism is built into the American approach to government. In order to prevent the kinds of abuses we've seen in the past, we try to write rules that will circumscribe discretion of elected, appointed, and civil service officials. The rules require hearings, investigations, and reports, which inevitably produce results that call the objectivity of the process into question, leading to more research, hearings, and reports before any action can be taken. All of this gives opportunity for the Narrow Interests to mold the policies in their interests, or to block new initiatives completely.
The third barrier (Anti-Statism) isn't really the belief that government can't succeed - at its best, it's a deep skepticism of the potential of expanding government's scope to solve problems that have no obvious solution. And it is a natural result of the first two barriers: people see that initiatives are hijacked by the Narrow Interests and bogged down in Proceduralism so that the purest of ideals end up achieving essentially none of their objectives, at great cost in terms of government spending as well as lost individual liberty. As you say, any other institution can also fail, but every other institution can be destroyed by its failures: businesses that can't deliver products go bankrupt; corrupted religious institutions lose their followers; voluntary organizations that are corrupted or no longer relevant lose their members. The consequence of government failure is generally more government.
There was a time when Californians achieved great things through government: they built freeways, water and irrigation systems, and created a very prosperous society blessed by lovely climate and beautiful scenery. In order to recapture this outcome, it seems to me that Californians will need to reduce government to a scale that can be effectively monitored by media, elected officials, and interested citizens, and to avoid the temptation to try to solve all problems with programs and rules. But that would cut against the Narrow Interests and be blocked in Proceduralism. These barriers can be overcome, but it would require mobilizing the citizenry on a scale not seen in decades at least, and the result would be transitory unless the scope of ambitions for the state is scaled back to match the scale of government that can be effectively monitored and held accountable.