00:00:44.120I was reading those pages in a public park in New York City,
00:00:47.400and I was like, wow, this is an amazing fantasy.
00:00:49.860And I look up, within spitting distance of me, there's two homeless guys.
00:00:53.660That's the jump scare that we're trying to get people to feel,
00:00:56.060To provide a vision of utopian, but also, I think, actually somewhat realistic.
00:01:00.780If we developed housing abundance and energy abundance, it's not crazy to think that we could have what we call star pills developed in low orbit.
00:01:11.400As your client is that any American should at least have a reasonable chance that they will have the opportunity to meet somebody and the economic viability to have a family.
00:01:20.380I think the left has given up on having even anybody to talk about what family structures it believes in.
00:01:25.000I'm not sure Abundance solves all of that
00:01:27.680but it definitely solves enough of it that you should go check it out
00:01:29.840Abundance is like the Jell-O Kool-Aid man
00:01:53.100Amazing. Okay, so first, a quick update about the Q2 redistribution for our mutual aid-inspired
00:02:09.680giving. I know that there are some folks that are still kind of waiting to hear back on this, so
00:02:14.080for the uninitiated, a few weeks ago we sent out an email to our subscribers announcing that we
00:02:19.260were going to be sending our May and June redistribution revenue to listeners who needed
00:02:24.540help right now. And we kept it pretty open-ended with the submissions. So far, we've sent payments
00:02:30.500to, I think, 140 of you. And we have around 100 people left on our list to get to. But we've saved
00:02:38.400the largest dollar amounts for last because we're just trying to figure out if we can pull those
00:02:42.760off by adding July redistribution money and if we have to add August as well to make that happen.
00:02:49.460So we're just still waiting to hear back from our accountant on that since those totals are
00:02:52.980right now based on projections. But we will send out an email update as soon as the final payments
00:02:57.880have been made with a little summary of how we approach this, some of the things your support
00:03:02.500of the show has been able to do for your fellow liars. So if you aren't subscribed on Substack
00:03:06.640yet, we're going to put a link in the show notes for that. Caro, anything to add?
00:03:10.580I just want to give you your flowers, Katie, because we've talked about this for a long time, but you're the one who kind of initiated that we do it for this quarter and you have put so much work into figuring this out.
00:03:23.340I have spent multiple weekends essentially fully logged off and just being like, text me later. And Katie has been completely grinding, trying to figure out like multiple payment platforms, like dealing with fraud. Like we had to move our entire financial thing onto like a different platform.
00:03:38.340platform. It's just been a whole thing this summer, and I just want to give you your flowers
00:03:42.660for figuring that out. I think it's really fucking cool, and you've put a lot of work
00:03:45.660into making it happen. Well, thanks. Well, I want to give you your flowers for dealing
00:03:49.860with all my bitching about it, and also the fact that we're kind of coming up short of
00:03:57.480our goal for this redistribution. Caro has generously offered to personally supplement
00:04:03.160so that we can fulfill everybody's list. Okay. Well, I didn't compliment you just so
00:04:08.040you would compliment me. Here we go again, circle jerking on our podcast.
00:04:12.800Well, that's how that works, baby. That is abundance.
00:04:15.980And also shout out to our CFA Ariel, who just deals with our crazy questions all the time,
00:04:20.800where she like thought she was signing on to relatively normal white women with a podcast.
00:04:24.960And then instead we're like, hey, how do we send like small to medium sized amounts of cash to
00:04:29.340like 300 random people across the country? And she's like, fuck.
00:04:32.920Yeah. Ariel's our CPA, which is another maybe.
00:04:38.040proof point. That's why I'm money with Katie and you are, you are novelist, Carol. A person about
00:04:45.800town. A person about town, a thinker about town. Okay. Well, the moment we've all been waiting for,
00:04:51.280I hope everyone has blocked approximately four hours. I reserve the right to make this a two
00:04:55.980parter if it becomes too unwieldy. It is finally time to discuss a book and movement that has
00:05:02.840served as a bit of a running gag on this show, Abundance. Now, Abundance is, of course, the book
00:05:08.760by Ezra Klein of The New York Times and Derek Thompson of The Atlantic, published almost 18
00:05:14.560months ago, that is described in its jacket copy as a, quote, once-in-a-generation paradigm-shifting
00:05:21.520call to renew a politics of plenty, face up to the failures of liberal governance, and abandon
00:05:28.560the chosen scarcities that have deformed American life. Now, this book came out in March 2025,
00:05:36.380but I want to revisit it now because of two recent news stories. So the first is what I
00:05:43.740would call the contrast between the excitement about a year ago for the Abundance Agenda
00:05:48.760and the momentum that we're seeing this summer for primary candidates who are
00:05:53.800explicitly running as Democratic socialists. And the second is some recent reporting on
00:05:59.800abundance-related fundraising pitch documents that were leaked in the American Prospect.
00:06:07.920Now, we should make this clarification up front. It is sort of confusing. There's Abundance the
00:06:12.560Book, and then there's Abundance the Political Coalition, which is a much broader thing. And
00:06:19.940while they are related, they're not the same. So I think the slippage between the two ends up being
00:06:25.440actually quite important for how these things materially unfold. So my goal today is to look
00:06:31.700back at what abundance really was. It felt sort of inescapable after the 2024 election, and so I was
00:06:39.240curious to revisit that phenomenon by actually going back to the text itself. Because at one
00:06:44.920point, abundance really appeared poised to be the future of the mainstream left in the United
00:06:50.920States. And I think to understand why, you have to think about where we were in spring 2025,
00:06:56.880two months into Donald Trump's second term. So, Caro, do you remember the predominant
00:07:03.120feeling at this time in March 2025? No.
00:07:10.480No, I mean, I don't remember anything from the last two years.
00:07:14.540Okay, then I'll tell you what I remember. I remember being really freaked out because
00:07:19.420Trump got into office and they were prepared. They had spent the last four years getting their
00:07:27.300900-page Project 2025 shit, you know, in order. They were just whipping out executive orders left
00:07:35.040and right. And it was a real divergence, I would say, from his first term where things took a
00:07:41.100little bit longer. He wasn't surrounded by yes men. And so I think the Democrats were like not
00:07:46.480just really tail between their legs because their candidate lost when they really clearly should
00:07:52.700have won, but also because Trump was rapidly dismantling like what we thought of as American
00:08:00.560democracy. So I think people were feeling really nervous. Now, remember, one of the co-authors of
00:08:06.040this book, Ezra Klein, was the New York Times opinion writer and podcaster who essentially
00:08:11.000said Joe Biden was too old to be the candidate long before that was being widely acknowledged
00:08:16.980or was even really considered an acceptable opinion to hold, which is kind of funny to
00:08:22.000think about now that that was ever taboo.
00:08:24.860But it was a huge deal when he did that.
00:08:26.480So Ezra especially went into 2025 with a lot of political clout.
00:08:33.120He had this prophetic stature in the Democratic Party, and a lot of Democrats, meaning consultants, politicians, as well as just regular people, regular voters, kind of were looking to him to understand what we should do next, how we should think about the future of the party, and to make sense of our political moment.
00:08:51.320And it is into that environment that this book was published.
00:08:54.940The phrase abundance agenda preceded the book, and I'm not sure if like the political coalition
00:09:01.860technically came first and then Derek Thompson just used the phrase in a 2022 article that
00:09:07.180would become the basis for the book, or if he is the one who came up with the phrase
00:09:12.080and then this movement kind of borrowed it.
00:09:13.940Like, I'm not really clear on the precise conception there, but in any case, we're
00:09:17.640going to read from a passage in Derek Thompson's 2022 article, A Simple Plan to Solve All
00:11:34.200And also, by the way, here we go again.
00:11:36.520Riley and I have started making it a parental bit where he's just like, whenever we talk about planning for the baby, he's just like talking about his reading list.
00:11:42.880He's like, okay, I think I'm going to get this book, and I really want to look into this for architecture.
00:11:47.420Kara, we have 44—we don't have time for anecdotes today.
00:11:58.060America's miserable and miserably timed testing shortage was a policy choice.
00:12:02.740The FDA has continually slow-walked the approval of rapid tests for development.
00:12:08.040The Trump administration was utterly uninterested in any COVID policy outside the vaccines.
00:12:13.820The Biden administration and Democrats didn't announce bulk orders of rapid tests until the Omicron wave had already swept through the country.
00:12:21.840Other countries, including the United Kingdom and Canada, approved more kits and prioritized their manufacture and distribution, giving their citizens access to millions of free tests throughout the past year.
00:12:33.940America lacks the test abundance of the UK and Canada because instead of choosing abundance, we chose scarcity.
00:12:40.840Zoom out and you can see that scarcity has been the story of the whole pandemic response.
00:12:45.580In early 2020, Americans were told to not wear masks because we apparently didn't have enough to go around.
00:12:51.600Last year, Americans were told to not get booster shots because we apparently didn't have enough to go around.
00:12:57.620Today, we're worried about people using too many COVID tests, as cases scream past 700,000 per day, because we apparently don't have enough to go around.
00:13:07.000Zoom out more, and you'll see that scarcity is also the story of the U.S. economy.
00:13:11.320After years of failing to invest in technology at our ports, we have a shipping delay crisis.
00:13:16.340After years of a deliberate policy to reduce visa issuance for immigrants, we suddenly can't find enough workers for our schools, factories, restaurants, or hotels.
00:13:26.680After decades of letting semiconductor manufacturing power move to Asia, we have a shortage of chips, which is causing price increases for cars and electronics.
00:13:35.220Zoom out yet more, and the truly big picture comes into focus.
00:13:38.900Manufactured scarcity isn't just the story of COVID tests or the pandemic or the economy, it's the story of America today.
00:13:45.680The revolution in communications technology has made it easier than ever for ordinary people to loudly identify the problems that they see in the world.
00:13:53.040But this age of bits-enabled protest has coincided with a slowdown in Adams-related progress.
00:13:59.380So Thompson's thesis in this original piece is that manufactured scarcity is the story of America today.
00:14:08.520That becomes like the seed of what will become abundance.
00:14:13.000And the abundance agenda and the theory laid out in the book is the answer to this manufactured scarcity.
00:14:21.840Kara, do you want to briefly tell me just, like, what your understanding is of the reception to abundance and, like, why people on the left either liked or disliked it?
00:14:32.020I mean, I think that there's something about it that is inherently provocative by nature of how obvious it is.
00:14:40.720I do think we live in a politics of scarcity. And I also think that Democrats have a reputation for advocating for the working class or for feigning to advocate for the working class. So ironically, you would think that abundance would already be within their wheelhouse. But there's something about it that feels very horseshoe theory to me. I don't know. It felt to me like a little bit like third rail in a kind of exciting way.
00:15:03.540Oh, interesting. Okay. Before we actually get into the positioning and the criticism, I want to briefly touch on two pieces of criticism that I kept seeing that I actually think are bogus. Number one, this idea that they should have been focusing on the right instead and how conservatives actually cause all these issues. I actually think it's completely fine for two Democrats to criticize the Democratic Party or ask why places that are governed by Democratic trifectas are ineffectual. I have no problem with that at all.
00:15:32.320I also think it's fine for people to, like, propose a solution, even if it's a solution you don't end up agreeing with.
00:15:41.980And number two, that bureaucratic bottlenecks aren't consequential enough to be worth discussing.
00:15:48.380I don't think it's fair to dismiss that point writ large that systems and organizations become less effective as you add procedure.
00:15:55.000I wish they would have applied that argument to our welfare system and, like, all the means
00:16:00.560testing and, like, convoluted rules, but whatever. A lot of the criticism of abundance pertains less
00:16:06.700to some of the specific arguments that they are making in the book, though there is a fair bit
00:16:10.500of that too, and objects more strenuously to the book's positioning as the future of the Democratic
00:16:17.240Party or, like, the unifying political theory of our time. There are subtle and not-so-subtle
00:16:24.120ways in which abundance is positioned as an alternative to like a Bernie Sanders-style
00:16:30.660vision. It came out during a second Trump presidency where there was a real identity
00:16:36.580crisis about what the Democratic Party was going to be, and it sort of fell into that
00:16:41.440vacuum. Now, to give you a sense of that positioning, aside from just the press copy,
00:16:45.580which marketers write, not authors, here is a quote from the conclusion about why they
00:16:51.000didn't write a policy book but instead are making a more abstract argument for what our political
00:16:58.480values should be. We considered calling this book The Abundance Agenda. We could have easily filled
00:17:05.100these pages with a long list of policy ideas to ease the blockages we fear. It's easy to unfurl
00:17:10.980a policy wish list, but what is ultimately at stake here are our values. How do we weigh the
00:17:16.700role that the current inhabitants of a community should have and who enters that community next?
00:17:21.680How do we balance the interests of a town against the interests of a country?
00:17:25.060Okay, so I think it's fair to interpret this framing as an argument for a broad orientation
00:17:33.400of vision and priority and not just the specific arcane policies that seem to preoccupy them in
00:17:40.280this book. Separately, Derek told Lex Friedman this on his podcast. Is there a degree to which
00:17:47.960the left uniquely attacks its own more intensely than maybe other parts of the political spectrum?
00:17:59.140It's possible. You go back to the model that I gave you of 2015, where there used to be these
00:18:04.300four large parties, MAGA, center-right, center-left, and left. Right now, the Republican
00:18:10.240party is all MAGA. So there is no coalitional fight to be had. It's all Donald Trump. And if
00:18:15.520Donald Trump wants to name a former left-wing environmentalist to be the HHS secretary,
00:18:21.640everyone says, okay, that sounds like a fantastic idea. That's exactly who we were going to
00:18:24.560nominate to. Thank you, Donald. That's wonderful. Tip of my tongue. On the Democratic side,
00:18:30.560there is a fight and it's happening right now. And our book is trying to win a certain
00:18:38.860intra-left coalitional fight about defining the future of liberalism, the Democratic Party.
00:18:45.320So you hear him naming this conflict directly that others kind of perceive in the text. They're
00:18:49.560trying to win a certain intra-left coalitional fight between the Abundists and the far left or
00:18:55.620the populist left, as they call them. The radical jihadist left.
00:18:59.120The radical jihadist left of Mamdani-stan. Sorry, Mamdani-grad. Someone was like, it's a city, so it would be Mamdani-grad. There are also little nods to this tension in philosophy in the book where they seem to differentiate their vision pretty explicitly where they say this.
00:19:17.060The world we want requires more than redistribution. We aspire to more than parceling out the present. Wait, what does that mean?
00:19:24.720the world we want requires more than redistribution basically means in order to have
00:19:31.940this glorious utopian abundant future we actually need to invent and innovate more that we can't just
00:19:39.720spread around what we already have oh yeah which is interesting as another example there's one
00:19:46.060sort of bewildering line about how quote american liberalism has measured its successes and how near
00:19:52.280it could come to the social welfare system of Denmark as a means of, like, jettisoning
00:19:57.660that type of political goal as being ill-suited or like, oh, we tried that and it didn't work.
00:20:23.540The candidates who have come closest in our lifetimes to leading the party based on proposing these types of solutions were sabotaged by the DNC.
00:20:35.440And then there was, I found this clip from a 2015 debate where Hillary and Bernie are debating and Hillary says, we are not Denmark, we are the United States of America.
00:20:44.680Like, it's not even subtext, it is in the text that they're like, we're not fucking doing that.
00:20:49.660So I don't think that their characterization is, like, intentionally bad faith here, but the point is that they are clearly trying to distance themselves at multiple junctures from a politics of redistribution, and by extension, the Abundance Agenda is sort of seen as arguing that its solutions are a viable alternative path to redistribution.
00:21:09.480Now, making matters more contentious in this wave of criticism that followed the book is who they often attribute the problems to.
00:21:19.920So, like, the repeat offenders that you're going to encounter in abundance as the source of the obstruction to the things that we need are often environmental groups, the values that were brought forth by the cultural revolution of the new left in the 1970s, consumer protection movements.
00:21:36.300things that like you get the sense they were trying to do the whole um these things that we
00:21:41.440think of as good liberal causes are actually self-defeating and are preventing us from getting
00:21:46.060the things that we want and that's probably why the majority of the criticism of this book is that
00:21:52.200it does not contend with the role of corporate power or oligarchic figures in our outcomes
00:21:58.380in part because to some extent they are arguing that we need those types of figures in order to
00:22:03.420fund the future. So, for example, here is a paragraph from the conclusion where they are
00:22:08.520quoting a historian that they bring up a few times, Gary Gerstle, to lay out what they think
00:22:13.540a politics of abundance will require. Establishing a political order demands far more than winning
00:22:20.860an election or two. It requires deep-pocketed donors and political action committees to invest
00:22:26.180in promising candidates over the long term. They're like, we need citizens being like.
00:22:30.260The establishment of think tanks and policy networks to turn political ideas into actionable programs, a rising political party able to consistently win over multiple electoral constituencies, a capacity to shape political opinion both at the highest levels, the Supreme Court and across popular print and broadcast media, and a moral perspective able to inspire voters with visions of the good life.
00:22:53.120Political orders, in other words, are complex projects that require advances across a broad front.
00:22:58.800Okay, so the top line is, like, they're more or less getting most of these things. Fundraising documents for the Associated Abundance Network, which is not formally affiliated with Klein and Thompson, but ideologically aligned, and they do name drop them in the documents, showed that there is allegedly $260 million per year going toward, quote-unquote, abundance organizing.
00:23:21.300When you read the reporting, it's like there are some big names in Silicon Valley that are funding this.
00:23:27.600And Dylan Gouch-Lewis' reporting for The American Prospect found this.
00:23:33.720God, you could fill a Family Guy episode with jokes about the phrase abundance organizing.
00:23:39.080Abundance adherents often bristle at the suggestion that the project is orchestrated by Silicon Valley elites.
00:23:45.240But as the leaked documents demonstrate, Rosen and his colleagues clearly view it as such and even frequently use the word elite by choice. Oof, that is damning.
00:23:55.580And then the nonprofit cites the work of a number of pundits who are essentially providing the intellectual structure and thrust for this political project.
00:24:07.360Okay. The pair's analysis, quote, came out of a joint five-year, 100-book quest for a, again, quote, root disease diagnosis for what is crippling left politics and rotting our American democracy. Flag that.
00:24:21.880They spent half a decade alongside, quote, a community of intellectuals like Ezra Klein, Jerusalem Demsus, Jen Palka, Steve Tells, Derek Thompson, working on, quote, piecing that analysis together via an emerging political ideology called abundance.
00:24:40.100The goal now is operationalizing it into a powerful political faction that drives political outcomes at scale.
00:24:47.100the way that they move between talking about like Democrats and the left is kind of interesting to
00:24:55.220me because also they are criticizing what is actually the left and I feel like it is it's
00:24:59.480one of those this happens all the time but you'll see this mishmash between where you're just
00:25:03.820referencing the left and it's like was it the neoliberal left is it the leftist that you claim
00:25:07.960are like holding the Democratic Party hostage like who are you talking about here what is
00:25:12.360rotting the left. It's Antifa. It's always Antifa. It's Antifa, yeah. Okay, so to summarize,
00:25:18.040the majority of the criticism of the so-called abundance agenda coming from the left, the
00:25:22.420communist Antifa left, isn't about any one particular tactic in this book so much as it is
00:25:28.760a global critique of abundance's theory of power in this country. So I'd boil it down to two major
00:25:34.600points that I want you to keep in mind today. Number one, that forces like corporate interests
00:25:39.560and lobbying, things of that nature, are basically not in this book in any meaningful way.
00:25:46.160Now, Ezra has been confronted directly and repeatedly with this critique,
00:25:49.740and we are going to talk about how he answers this question a little later and why I think
00:25:53.620his response is kind of illuminating. And then number two, it's accused of being neoliberal
00:25:58.640in nature. Like, it is effectively arguing for deregulation, and people are like,
00:26:03.700yeah, we tried that. Like, we're living in the outcomes of deregulation right now.
00:26:08.140And what Ezra will typically say in response to that accusation is, no, no, we are arguing for more state capacity, not less.
00:26:17.900He will say that abundance is an argument for more state capacity, that neoliberals want a smaller state to empower the market, basically.
00:26:28.400And we, Abundists, want a state that's more capable of delivering on its promises, a state that is capable of, quote, making decisions, executing those decisions, and implementing them in the real world.
00:26:52.760So now that we've discussed positioning in the environment it exists in, we are going to dig into the text a little bit more. So I would describe Abundance as an elevated policy airport book. It has five chapters, grow, build, govern, invent, and deploy. This reminds you of anything.
00:27:11.740Wait, wait, wait. Do you know, do you ever listen to The Daily and they'll do advertising and they'll be like, the story of innovation in five words. Synergy. Activism. Blah, blah, blah. Riley and I always were like, oh, they do that ad so often and it was always so nonsensical. So I love the idea of Ezra and Derek being like, the story of abundance in five words.
00:27:32.880Okay, for me, I was thinking of Freya India's filtered, diagnosed, documented, empowered.
00:27:39.220Hey, you quoted me on that. I think Freya ate with that. I liked her chapter titles.
00:27:44.760Yeah, what do you give Grow, Build, Govern, Invent, Deploy? Scale of 1 to 10.
00:27:49.460You know what? I give them 10s for accessibility.
00:32:13.300I don't want to speculate. I don't want to assume why anything happened. But like, it's not out of the realm of possibility that these two were like, yeah, this is a relatively good idea. We can use a lot of material we've already written. Let's do a book proposal and like put our ideas in print the way thinkers tend to do. And then all of a sudden, it's like you have to retroactively be like, oh, shit, this is now like a debate of is this the movement?
00:32:34.500I think that's fair. I think that, again, our political circumstances when it came out had a lot to do with that. I think the high that Ezra was riding at the time had a lot to do with that. I think that the press rollout had a lot to do with that. The marketing push was enormous. They were everywhere.
00:32:51.500So I do want to break their argument into pieces because it's not totally clear from the thesis setting part of this book that their theory of abundance is internally consistent, we'll say.
00:33:01.420So at points, their vision is not altogether dissimilar from the argument being made in Fully Automated Luxury Communism by Aaron Bastani, which is a book we've talked about before, which they do quote approvingly in the introduction.
00:33:13.320So I'm going to have you read two lines, one from Thompson, one from Bastani, that, in my mind, are kind of making the same argument.
00:33:30.900The wider social benefits of the shift to fully automated luxury communism must be seen as running parallel to flourishing on a personal scale rather than a sacrifice to some greater good.
00:33:41.780Yeah, so both of these thinkers are basically arguing if you're trying to convince people that we have to regress in any way, you're not going to get buy-in. And I think that's mostly right. I think it's going to be really tough to argue for a politics that emphasizes intense personal sacrifice.
00:33:57.800However, you will note the difference between abundance and fully automated luxury communism
00:34:03.500is that only one of these books sees that radical vision of plenty as consonant with
00:34:09.120capitalism. Abundance is like if fully automated luxury communism were written by Chuck Schumer
00:34:15.560interns. That is like the conceit of abundance that like allegedly, okay, we have an argument
00:34:22.660that is against manufactured scarcity by increasing state capacity so that we can
00:34:29.220solve our problems with supply. Kara, we've reached the point in the episode where I'm
00:34:34.140going to ask you to explain supply and demand. You warned me about this. You've given me about
00:34:41.300a week. Okay, so I'm running a lemonade stand. I'm going to explain it to you and to myself
00:34:48.740like I'm five. I'm running a lemonade stand. The amount of lemons and water I have to make lemonade
00:34:56.320is the supply. The amount of people walking past who are willing to spend a quarter on a cup of
00:35:02.980lemonade, which is what it ran for when I was doing lemonade stands, is the demand. If a lot
00:35:08.400of people walk by, I've got too much demand. I'm out of lemons. If not enough people walk by,
00:36:08.960I feel like the goal would be foot traffic and you maybe need to think about signage and then you need to communicate clearly like, are you going to run out every day? Are you going to promise pastries until the end of the day? And I think once more, the goal is synergy. That is the story of supply and demand. In one word, it is synergy.
00:36:35.140Okay, but how is the block that your lemonade stand is on zoned?
00:37:04.800It does. So I'm really thinking about how many tablespoons of synthetic sugar powder you have to put in the pitcher under the table so that people think it's real lemonade.
00:40:51.160First, they talk about conservatives doing a bunch of tax cuts with the promise that it will increase supply and production, which is basically trickle down 101.
00:41:02.940The conservative agenda did something else, too.
00:41:05.820It cast production as a function of unfettered markets.
00:41:09.680Supply side economics was about getting the government out of the private sector's way.
00:41:13.920Cutting taxes so people would work more.
00:41:16.060Cutting regulations so companies would produce more.
00:41:18.800But what of the places where society needed a supply of something that the market could not or would not provide on its own?
00:41:24.660Okay, so right there we have this acknowledgement that there are areas in society where the things that we need are not given to us by, quote-unquote, the market.
00:41:35.100Which just means private production, right?
00:41:43.300This is where you might have expected Democrats to step in.
00:41:46.560But Democrats, cowed by the Reagan revolution and frightened of being seen as socialists,
00:41:51.480largely confined themselves to working on the demand side of the ledger.
00:41:55.720Progressivism's promises and policies, for decades, were built around giving people money or money-like vouchers
00:42:01.360to go out and buy something that the market was producing, but that the poor could not afford.
00:42:06.740So just really quickly, this makes me think about our Rise and Fall of Capitalism episode that you did
00:42:13.140and how you pointed out that like a fundamental misunderstanding of capitalism is that people say
00:42:18.320like that is innovation will always solve like or like work towards our greatest issues and it's
00:42:22.860like actually we see that that's not the case time and time again they're basically describing
00:42:27.600what is it functionally a failure of capitalism that it's like yeah no it's actually not going
00:42:32.340to innovate for the things that we need the only way for us to fix the things that we need would
00:42:36.880be more control and then they're also being like but then no one wants to be a socialist and it's
00:42:41.620like, but you're describing something that is fundamentally socialist in nature, which would be
00:42:46.080trying to take over more control of the market to make sure that we're innovating in the right
00:42:50.700direction. It's like they're retrofitting what they think capitalism should be rather than what
00:42:55.380it is. Right. If, you know, you're listening to this and you've never heard that episode,
00:43:00.260is essentially something that, ironically, they explain in more detail in abundance,
00:43:05.860and we will talk about it today. But this idea that a lot of the most consequential innovation
00:43:13.700that has happened in the United States in the last hundred years came out of government agencies
00:43:19.100doing long-term projects that had no prospects for profitability and that the state is the source
00:43:26.020of a lot of these major efforts where a private firm that is working in the constraints of the
00:43:33.120market where like you're really just looking for a profit is not really going to undertake these
00:43:37.480efforts. So they do acknowledge this. They kind of, in my mind, like mischaracterize, again,
00:43:42.420Democratic policy. Like there's a slight a hand here where it's like, you know, Democrats just
00:43:48.020gave people money and it's like, I don't know if that's really what happened, but I don't know how
00:43:53.320else to take this setup and this explanation for how we have gotten into this position other than
00:44:00.900democrats and republicans have interfered with the balance of supply and demand that like
00:44:06.440republicans had this one theory of the case where they were like ah cut taxes and cut regulations
00:44:11.020and just let the market do whatever the fuck it wants and democrats were like no you know give
00:44:15.320people money so that they can buy the things they need and klein and thompson are like and but like
00:44:19.980you know we gave people money but we didn't actually increase the supply of the stuff they
00:44:23.780needed and so now we have this like out of whack market now i don't think that like in broad strokes
00:44:29.920this characterization is wrong. However, it is a strange logical and narrative basis
00:44:39.420for what they are ultimately going to argue, which I would describe like this.
00:44:46.120Government proceduralism and a lack of proper subsidization are holding us back from creating
00:44:52.240the supply we need that is thought to be like the source of the manufactured scarcity,
00:44:56.280as Thompson calls it, and that if we remove those procedural blocks and we subsidize production
00:45:02.660adequately, this is the step that they call increasing state capacity, the result will be
00:45:08.920an abundance of supply, okay? Abundance being a word that literally means over-sufficient supply,
00:45:16.900having more lemons than you need. Ah, thank you.
00:45:22.020Yes, wheels are turning. So their explicit goal for which their project is named is to get our present system to create an abundance of supply, a word that means more supply than you need.
00:45:35.760So I read this and I'm like, all right, well, it kind of feels like there's a foundational misalignment between the goal and the mechanism, as I understand it.
00:45:46.320So I want to spend most of our time today talking about how that appears and reappears in the text of the book.
00:45:54.720We should write a book called Just Enough.
01:00:44.700You just really can't overstate how important that is in a press tour for making your ideas feel like they are the answer and like they make sense.
01:01:19.000To allocate funds fairly, the federal government needed to know how many underserved locations each state needed to connect.
01:01:26.240The problem was that no accurate and comprehensive data set existed.
01:01:29.800Thanks to more than a decade of industry lobbying, the FCC's map of broadband availability counted coverage at the level of census blocks, based entirely on provider self-reported data, allowing incumbents to keep subsidized competitors at arm's length.
01:01:44.760In early 2020, Congress finally intervened, enacting legislation to force the FCC to create a granular address-level map and implement a system for the public to challenge provider coverage claims.
01:01:57.840But Trump FCC Chairman Ajit Pai sat on his hands for the remainder of his term,
01:02:02.540claiming that the FCC could not start work on the map until Congress appropriated funds explicitly for that purpose.
01:02:08.340The funds were appropriated in December, but Pai was by then looking ahead to a private sector career,
01:02:13.740first in private equity and later as the president of a major wireless provider trade association.
01:02:19.400By the time the infrastructure bill was being negotiated, the Biden FCC had just begun work on the new map
01:02:24.720and staff predicted that it would not be ready until probably next year.
01:02:41.680and instead focuses a lot on how Democrats tried to add
01:02:45.760climate, labor, and social justice procedure to the program's deployment.
01:02:51.220And then it can be like, oh, see, they want to add all this stuff
01:02:54.340And that slows it down. And we don't have the broadband yet. But according to Washington Monthly's reporting, these requirements were pretty basic, like way less central to the speed of deployment than they were made to sound.
01:03:07.400So, like, for example, for labor, states had to ensure that subsidized private providers, so, like, private companies that the state was going to give money to, quote, used strong labor standards and protections where the minimum requirement was complying with local labor and employment laws.
01:03:26.080So it's like, yeah, in order to get this money, you have to follow labor law. Okay. For climate, that referred to the states conducting, quote, an assessment of climate threats to make sure the infrastructure would be resistant to local weather patterns.
01:03:40.140So, in other words, if you live somewhere with frequent hurricanes, you can only have this money if you are showing us that you are building infrastructure that can withstand hurricanes.
01:03:49.500They're not saying this has to fight climate change.
01:03:52.500It's just a basic check on are you building infrastructure that is appropriate for this area?
01:04:00.760Now, maybe the largest point of contention is that the industry groups fought the definition of affordability.
01:04:07.220So originally, the intention of this legislation was to make sure broadband was provided for $30 per month, and the lobbying groups basically said, that is not possible. That is economically not possible for us to do.
01:04:20.020Klein uses this example to emphasize how the government can get in the way of its own objectives. In actuality, much of the obstruction came from the internet service providers who have consistently shown a pattern of attempting to block and derail public broadband projects.
01:04:38.820One report cited that they've spent $230 million on lobbying during a two-year congressional term. This is kind of the gotcha that shows up in a lot of these examples. Is it wrong for Ezra Klein to abstract from this that government proceduralism can be used as an obstructionary tool?
01:04:58.320Well, no, not technically. But the question isn't really, is government proceduralism used to obstruct progress? It's on whose behalf is proceduralism most often being wielded to obstruct progress?
01:05:12.160This also just gets into like the weird incentives game of publishing. I'm not saying that Ezra Klein knew that it was quote unquote Republicans and decided to come up with a different answer. But like it is a fact that a book that was just saying that Republicans are slowing things down wouldn't have sold. Like that's a pretty tired argument at this point.
01:05:32.700And so it is, that is something I'm just kind of sitting with where it's like, what is the chicken or the egg with like the incentive structure for coming up with a new idea, even if the Occam's razor is actually like the thing that people have already been shouting for a long time.
01:05:46.460we're going to listen to a little retrospective episode that Ezra and Derek did with a third
01:05:51.720fellow who wrote like a similar book around the same time and they kind of talk about that where
01:05:59.320like Derek's like well everyone already knows that like corporations and the right are blocking
01:06:05.420things like I I didn't feel like I needed to call more attention to that so you know we wanted to
01:06:11.500focus on, like, the policy obstruction that's happening from, like, areas you wouldn't expect
01:06:17.960it to come from? I actually do think, like, as much as I am framing this as a criticism,
01:06:23.440I actually empathize with this quite a bit because I think you and I often, I'll just speak for
01:06:28.260myself, I think that we've been doing this podcast for two years now, and I can be sensitive to
01:06:33.200overly referencing the patriarchy and white supremacy and capitalism in episodes now because
01:06:39.020we spent so much time at the beginning of the podcast talking about it and it just feels frankly
01:06:44.020kind of tired to me and occasionally I will like read feedback and someone might say like I just
01:06:49.360wish they spent more time tying this back to white supremacy and I'm like I understand that impulse
01:06:53.840and the flip of that is that when you spend too much time talking about that you run the risk of
01:06:59.260frankly sounding like a broken record and so I definitely feel though I mean I and Ezra Klein
01:07:03.440and Derek Thompson have both way longer careers where they've been talking about shit for way
01:07:08.120longer. And so I genuinely empathize with that challenge where it's like, well, yeah, no shit
01:07:12.560Republicans are stymieing all of this. We all know that. How many times can we all say that?
01:07:18.620And I also empathize with the argument of being like, but that's the biggest thing. White supremacy
01:07:22.880is the biggest thing. Republicans are the biggest thing. And we run the risk of missing the forest
01:07:26.940for the trees if we don't repeatedly bang that on the head. So it's kind of, I don't know,
01:07:31.380it's a difficult needle to thread when you're talking about this stuff all the time.
01:07:34.780I do come back to like, is there a world in which they thought they were just going to be adding like, hey, this is something we probably haven't considered.
01:07:57.400This metaphor is even worse than the bakery one.
01:07:59.160But the only thing that I think undermines that theory is the lengths to which they go to distance themselves from a politics of redistribution and, like, position these ideas as specifically an alternative to, like, a Bernie Sanders left.
01:13:21.520Like, okay, our largest facility is 580 megawatts. We have to add 800 more megawatts every week for 30 years. And you're going to tell me that's a permitting problem? You're going to look me in my face and tell me that's a permitting problem?
01:13:41.040Look in my fucking eyes. It's also just like, it's entirely possible, but it would require a political overhaul of the likes of democratic socialism. You know what I mean? It's like, at a certain point, you have to be like, I made a joke about China. China is kicking our motherfucking asses in clean energy. They're destroying us. Why?
01:14:05.840I mean, we could look to the central government planning.
01:14:09.200You can say that with moral neutrality, that for all of the flaws of Chinese government, they can execute something far faster than us.
01:14:15.320They can produce, quote-unquote, abundance.
01:14:17.580And I think that's the kind of thing where it's like, no, it's possible.
01:14:20.440And actually, other countries are doing rapid and profound shifts towards clean energy.
01:14:26.760But the reason we're not doing it in the U.S. is not because of what you're saying.
01:14:31.540Like, you have to acknowledge the insane lobbying, the insane stalwarting, like, just the way that we approach doing everything, and it's related to how we approach our economy.
01:14:41.400It's almost like material interests shape outcomes.
01:14:45.720It's almost like when you have a giant fossil fuel industry with a material interest in blocking and obstructing this from happening, it doesn't happen.
01:16:45.400He's just going to deliver me a restraining order.
01:16:49.460The only communication we have with him.
01:16:52.520You're going to wake up one day in the basement with Annie Lowry?
01:16:55.520just chained to the furnace. To summarize, the government has to consult with all these
01:17:00.880different interest groups, and this slows things down. It makes things more expensive.
01:17:04.960I'm still waiting to see how this is going to come back to the solar farms thing, but whatever.
01:17:09.720And then we get a little blurb about how we get so little for our public investment
01:17:15.300in the United States. Even so, the United States is notable for how much we spend and how little
01:17:23.000we get. It costs about $609 million to build a kilometer of rail here. Germany builds a
01:17:29.700kilometer of rail for $384 million. Canada gets it done for $295 million. Japan clocks in at $267
01:17:37.140million. Okay. And they're like, you know, conservatives say it's government interference
01:17:41.860and unions that make this more expensive. But like, all these countries have governments. All
01:17:45.800these countries have unions. Governments and unions can't be the issue. But then they don't
01:17:50.680say what the issue is. They pivot again and they start talking about how construction productivity
01:17:56.160has slowed and how economists who study this issue are stumped by it. And like they even include a
01:18:01.700paper that says outright, quote, they tested regulatory burden against construction productivity
01:18:08.120and there was a slight relationship, but nothing impressive. By their own inclusion of this source,
01:18:14.520regulatory burden would not appear to be blamed for stunted productivity growth in the construction
01:18:20.080sector. And as a reader, I like wasn't really sure what I was supposed to be taking away from that
01:18:24.860as it was relevant to either solar energy or high-speed rail construction. They cite a few
01:18:30.860anecdotes from a guy who used to work in construction and now runs a construction
01:18:35.240analytics firm. And the guy is basically like, well, back in the 1970s, we didn't have so many
01:18:40.240safety requirements. And like now we have to do three estimates instead of one or whatever,
01:18:44.760but that's basically where they leave it. Okay. So I'm sitting there having read privatization
01:18:49.100of everything. And I'm wondering, well, like, does it maybe cost more to build government
01:18:53.520projects here for the same reason that America spends way more on Medicaid and Medicare than
01:18:58.280other countries spend on their entire universal health care systems? Is it privatization in the
01:19:03.960fact that we insist on contracting out layers upon layers of consultants and private firms
01:19:11.020and contractors and subcontractors? And we like don't have the knowledge base in the public sector
01:19:17.700itself that we've, you know, systematically hollowed out this public know-how and we have
01:19:23.120layers of disjointed people managing these products. Like, I don't know. They don't really
01:19:28.420explore that. And I can't tell if it's because they don't want to introduce a can of worms that
01:19:32.360isn't really addressed by their rules and regs argument or if it's because that's not what they
01:19:37.160think. But it's sort of an obvious question that just remains unanswered. They do bring it back
01:19:43.060in a later chapter briefly. We'll get to that. But at this moment in the reading experience,
01:19:48.920I'm like, these are the types of questions that you want to be plumbed in a little bit more depth
01:19:53.820if we're really concerned with causality and making a strong normative case for where the
01:20:00.300Democratic Party should focus its energy and attention. And that is what's so weird about
01:20:06.860this book, is that in some places it's decently well-researched, it's well-organized, it's easy
01:20:12.200to read. And in other places, it's like, yeah, we talked to this guy who works in construction,
01:20:17.620and he says they're not allowed to walk across the beams anymore. And you're just like,
01:20:21.660so they end by offering this esoteric and kind of vague theory about how, quote,
01:20:26.600organized groups are the real issue, and that's a consequence of affluent society.
01:20:31.260So this is the closest we come to, like, a coherent explanation for these three phenomena,
01:20:36.280that affluent societies produce organized groups with competing interests, and those groups
01:20:40.980manipulate and wield these choke points to fight for their interests and it's like it's so fucking
01:20:46.080close to acknowledging class politics and that like our system is inherently creating opposing
01:20:51.420material interests but then it's like and that's why we should get rid of the epa they don't
01:20:56.440actually argue for that specifically but like that's how it feels when they're like and
01:20:59.440environmentalism well it does feel like there is a i don't know how much this is a problem for them
01:21:07.600because I already am like arguing against myself in my head.
01:21:09.880But there is something interesting about like pulling out the phrase deregulation
01:21:13.700as almost like a trigger word to make people think that it's the solution for things.
01:21:17.940It's like you're encouraging someone to start ringing a bell in their head
01:21:21.640that is very, very easily used for other ends.
01:21:25.840And I feel like that's also just like a fundamental problem with this
01:21:28.980where it's like I understand that you think the deregulation you want to do
01:21:32.760is different than the deregulation that the Republicans want to do or whatever.
01:21:36.180But, like, it is a pretty significant dog whistle at this point, and it just feels like it's a massive thing for me to get over with this book, where it's, like, you keep saying that it's not what you want, but it really is what you want, and it's, like, it just really strikes me as an interesting route to take at this point in American history.
01:21:53.240Totally. It's, like, there's only so many times you can say that's not what you're arguing for when the anecdotes are just stacking up, and, like, in every case, that is what you're arguing for.
01:22:01.420So there is also an element of the high-speed rail debacle that goes unmentioned in the book. And similarly to the public funding of research thing that we talked about, it comes back to money. So if you will please read this from the American Affairs Journal.
01:22:20.660The delay in appropriating funding and contract issuance, however, persistently interrupted construction and forced CHSRA to constantly revise its plans while delaying work accordingly.
01:22:33.200Given the fluctuating nature of carbon auctions, moreover, CHSRA's ongoing funding fluctuated significantly by year, and as such, could neither be planned for nor borrowed against.
01:22:43.980As Davidoff notes, Brightline West, the in-progress high-speed rail linkage between Los Angeles and Las Vegas,
01:22:50.460credibly expects to spend $12 billion between 2024 and 2028, the four years needed for its construction.
01:22:56.960It has taken nearly four times as many years for CHSRA to have $12 billion on hand.
01:23:02.720It is standard practice in much of the world, and indeed in much of the United States,
01:23:07.460to line up funding for the construction of high-speed rail before the project begins.
01:23:14.460The trickle of funding delayed the project, empowering critics to deny it funding, further delaying progress.
01:23:20.280Governor Gavin Newsom, elected in 2018, was among these critics, publicly dismissing the project's viability and slashing funding for geological surveys.
01:23:28.940Okay, so the book makes it sound as though they had this, like, endless pot of money that got sort of frittered away through mismanagement and proceduralism.
01:23:36.300This funding story adds a different dimension that kind of complicates the idea.
01:23:41.700that it was environmental regulations and planning problems that created it.
01:23:47.760It's possible that both of these factors were relevant,
01:23:51.220but again, it kind of feels like if you're going to go really deep on one example of one failed project,
01:23:56.480you should probably talk about how it was funded
01:23:59.400and whether that funding deviated from the way these things typically work in the rest of the world.
01:24:05.740In the next chapter, they add that a major issue with California high-speed rail,
01:24:10.820And again, this is what I mean when I say like the book is organized kind of strangely. The state tried to outsource everything to a slew of contractors and did not have the state capacity. So this is the privatization argument that I was sort of waiting for.
01:24:23.360And they say pretty explicitly, the government needs to employ enough people to oversee how their projects are going. Like, you need this expertise in-house. And they favorably cite an example that came in early and under budget in San Francisco, where they did bring more of this engineering work in-house, where they had publicly funded and employed people working on it.
01:24:45.280But in the book, in the larger context of the book, this kind of feels like an aside.
01:24:51.400And this is sort of the thing that I kept wishing was a larger focus in all these examples.
01:24:57.060Ezra's arguing for more state capacity in these interviews that he's doing about the book,
01:25:01.380but this is one of the only examples where the book actually argues for expanding state capacity,
01:25:07.660where they're actually like, you need to bring more of this in-house.
01:25:10.800There are plenty of calls to revisit legislation or requirements, but this was the first and I believe only place that I encountered an explicit call to hire more people and outsource less stuff. It was 119 pages in. It was clearly not the central thesis.
01:25:27.440So, okay, again, the regulatory solution then is you need to remove the choke points. You need to work to eliminate veto points in your building projects so that things can move more quickly. There is this assumption that appears over and over again that if you simply take away these rules that interest groups, various groups are using to, quote, gum up the works, then theoretically things are going to work more smoothly.
01:25:52.280Now, to drive this home, the chapter ends with, I don't know, like a dozen pages about how lawyers and movements to sue the government is a real issue that kneecaps the government's ability to get anything done.
01:26:04.260Here is an example where they are citing the work of a guy named Bagley called The Procedure Fetish.
01:26:11.720Liberal legalism, and through it, liberal government, had become process-obsessed rather than outcomes-oriented.
01:26:18.360It had convinced itself that the state's legitimacy would be earned through compliance with an endless catalog of rules and restraints rather than through getting things done for the people it claimed to serve.
01:26:27.680Okay. So I think this is indicative of this pattern I noticed where, like, they'll raise a hyper-specific issue, like California high-speed rail, and they'll suggest that the learnings from that failure can be extrapolated more widely.
01:26:40.980But then rather than drilling deeper into that specific issue, like the development of mass
01:26:47.020transit, they tend to zoom back out and do the whole, and that's like this other different thing
01:26:52.800where liberals in the 70s sued the government a lot. And you're like, okay, yeah, I guess that's
01:26:58.540true. But like, is that really relevant to like this specific case you're highlighting here? I
01:27:03.380assume you think it is, otherwise it wouldn't be here in this chapter. But like, if that's the
01:27:07.920case you're making, I'd prefer you kind of make that case directly. And the opposite is also true.
01:27:12.240Like, they are at their strongest when they stick to one issue, they get into the weeds with one
01:27:18.380issue, and they stay there in the weeds. There is a section about affordable housing where I think
01:27:23.340it's Ezra really methodically lays out the issues with a particular proposition in LA County.
01:27:28.640But a lot of the issues here are at the municipal level. It's local government, which is fine if you
01:27:33.920are writing a book about how city planning and spending can be more effective. It's just not
01:27:37.680clear to me that this extrapolates all that cleanly to a national politics. And I think what
01:27:45.660they would say if confronted with that is like, well, if people trust liberals to govern at the
01:27:50.200city level or the local level, like that bodes well for them trusting liberals at the federal
01:27:54.320level too. And like, yeah, maybe, I guess. But again, I think it's telling that the places where
01:27:59.320I found the arguments to be well-structured and compelling, those were the instances where it
01:28:04.540seemed like most far afield of something that would be relevant kind of systemically and
01:28:09.560applicable at that national level. So I joked earlier that it feels like they keep kind of
01:28:14.460stopping short of the root cause analysis that I feel like I'm waiting for, where like they almost
01:28:19.720address like a class politics framing, but then they stop. And it's interesting because the problem
01:28:25.080is suggested to be proceduralism because it can be abused. But we don't really spend much time
01:28:30.820with who's abusing it or why. Like in interviews, they'll often say, we're concerned with wherever
01:28:35.420power concentrates. And across these examples, it's often differing groups with power who are
01:28:41.120responsible for obstruction. You know, it's not just corporations. We have to look at this across
01:28:45.500the board. But there is a comment in the liberal legalism section that appears to trace this like
01:28:52.300paperwork epidemic to a particular source. So I'm going to have you read here.
01:28:59.380These fears reflect, in part, the age in which the rules were written.
01:29:04.580The 1946 Administrative Procedure Act, which governs much of the federal government's bureaucratic workings, was adopted to soothe the jangled nerves of legal and business communities alarmed by the New Deal and the muscular wartime exercise of state power.
01:29:18.000Okay, so I read this and I'm like, okay, well, it sounds like a lot of this is actually just downstream of business interests.
01:29:24.320Like, why are we not engaging with that more?
01:29:27.000The interests of businesses, which are, like, an unmatched force in American politics, particularly at the national level, are sort of minimized and represented in the text at the same level as, like, just a bunch of competing groups.
01:29:40.560Like, oh, you got the businesses, you got the homeowners associations, you got the groups that care about pollution.
01:29:52.400When confronted with the accusation that, like, this book is ultimately just making the neoliberal argument in different language, the response is always some variation of, like, no, we want more state capacity, not less. But I think what's happening here, and what I would say, is that the abundance model is consistently conflating increasing state capacity with making the process of working with and bidding out jobs to private companies easier.
01:32:09.380all without receiving any pushback from his own party.
01:32:13.120They being the Washington Monthly journalists point out that America's electric grid is under
01:32:18.940the control of something called regional transmission organizations, which are basically
01:32:24.540dominated by regulated corporate monopolies. And these organizations lobby regulatory boards to
01:32:31.220block the transmission and distribution of renewable energy. So again, you can't just ask
01:32:38.460which rules are being abused, but who is abusing them and why? Whose interests are being served by
01:32:45.660that obstruction? And when the answer is a homeowner's association, Klein and Thompson
01:32:51.520are pretty quick to name that force directly. But I had to learn about the regulated corporate
01:32:56.040monopolies thing, the fact that they're lobbying to block transmission lines from the follow-up
01:33:01.660reporting. So when it comes to energy transmission and access, it can be helpful to look at the New
01:33:07.440Deal, which Klein and Thompson invoke from time to time. They'll talk favorably about FDR, about
01:33:12.480the New Deal. And one such example is the Tennessee Valley Authority. So at the time, 1930s, private
01:33:20.800sector utilities failed to deliver electricity to rural areas because it wasn't expected to be
01:33:27.940profitable. So instead, they just focused on rich people and large industrial customers where
01:33:32.640the return on investment was more obvious, was more immediate. FDR was like, no, that's not
01:33:38.240going to work. Congress establishes the Tennessee Valley Authority to build and operate dams on the
01:33:43.480Tennessee River. So the TVA was a federal corporation. It was publicly owned. It owned
01:33:48.600the dams. It owned the generating capacity. It eventually owned the transmission. It displaced
01:33:55.000private power in the region. It worked with people outside the government, but it also had
01:34:00.120a large direct workforce, tens of thousands of people on the federal payroll. So this is from
01:34:05.840the Boston Review. In the West, the Federal Bureau of Reclamation and U.S. Army Corps of Engineers
01:34:14.080constructed dams like Bonneville and Grand Coulee on the Columbia, Fort Peck on the Missouri,
01:34:20.220and Shasta on the Sacramento. Private utilities countered that the United States, in the midst
01:34:25.540of the Great Depression, was already generating excess power, and the dams would only exacerbate
01:34:30.740the surplus. The mistake was to see consumption as largely fixed, dismissing the possibility that
01:34:36.800lower rates would stimulate much greater use. In other words, it took public action to break
01:34:41.900the hold of privately maintained scarcity and deliver abundant power. FDR and company had
01:34:47.880already launched a major rural electrification program called the REA, which tried to incentivize
01:34:56.620private utilities to build with cheap credit, but it didn't work. Incentivizing them with subsidies
01:35:04.480and like giving them the money to do it, the returns just weren't there, so they didn't do it.
01:35:10.420Instead, they ended up building consumer-owned rural electric cooperatives, which from my
01:35:15.760understanding are still operational to this day. And I thought that was really interesting because
01:35:20.280it's kind of like, at first, before the New Deal, they kind of tried what the abundance agenda is
01:35:26.480suggesting you do. And it didn't work because the private providers were like, yeah, no, we'll pass.
01:35:31.980Thanks, but no thanks. So I'm going to have you read from the American Affairs Journal again here.
01:35:38.100As economic geographer Brett Christophers has demonstrated in his study of the economics of
01:35:42.920climate transition, environmental law is only one piece of the puzzle. The decisive chokepoint
01:35:48.060is profitability. Whenever a project's expected returns sink below the hurdle rate investors
01:35:53.380demand, developers and lenders alike pull capital, whatever the state of the environmental
01:35:58.800paperwork. This was the case in 2022, when Avant Grid's Massachusetts offshore wind contract
01:36:06.320became so unbankable after turbine price and interest rate spikes that the company chose
01:36:11.640to pay nearly $50 million in penalties rather than billed at a loss. In spring 2024, regular
01:36:18.820negative price episodes in ERCOT, roughly one in every 12 settlement intervals, prompted three
01:36:24.820West Texas solar sponsors to cancel tax equity closings they had already booked. Orsted's
01:36:31.400abandonment of the New Jersey Ocean Wind Offshore Project followed the same script. Once its locked
01:36:37.140in purchasing price agreement price could no longer cover debt service, the firm simply
01:36:42.180canceled and wrote off the $4 billion project. In each of these cases, and many more, profit
01:36:48.180expectations and the fear of having to supply electricity at low or even negative cost hamstrung
01:36:53.900the deployment of clean energy. Finance dreads overcapacity because true abundance hammers the
01:37:00.180very margins its models depend on. The argument being constructed here is that these projects
01:37:05.520will happen if it is easier for them to happen. But ease is not the grease for the wheel, if you
01:37:12.640are talking about private for-profit enterprise. Ease can help lower costs, but proceduralism adds
01:37:19.680costs that are on the whole, often marginal in challenges of this scale and scope. Procedure is
01:37:26.360sort of tangential. Okay, so finally we've reached like the crown jewel of abundance discourse,
01:37:31.100which is housing. Probably the largest critique of the housing coverage in this book is that they
01:37:37.220focused almost exclusively on San Francisco and to a lesser extent New York City. And part of the
01:37:43.300reason is that these are two very rich, very blue cities with a lot of seemingly intractable
01:37:48.560political problems. But it's also clear that they believe the concept of the city writ large should
01:37:54.860be the focus because they produce almost magical productive benefits. So here is an excerpt from
01:38:02.160the book. But economies are not bounded by land. Ideas and the technologies and companies and
01:38:09.320products they power draw the outer borders of growth. The land that matters most is the land
01:38:14.880that aids in the fiery creation of the new. That land is in the heart of our cities, not at the
01:38:20.820edge of our settlements. And that land reveals the problem America faces now. This is like a
01:38:26.040really wonky, this land is your land. A young family can still follow Horace Greeley's advice
01:38:32.000and find a cheap home in the rural West. What they typically cannot do is follow Horace Greeley's
01:38:37.860example and build a life in Manhattan, where the median home now sells for $1.1 million.
01:38:43.080Or in San Francisco, where the median home sells for $1.3 million. Or in Los Angeles,
01:38:48.480where the asking price hovers around $1 million, or in Seattle, where the median home is over
01:38:53.620$900,000, or in Boston, where it's $830,000. Okay, so they rattle off several coastal blue
01:39:01.260cities in this paragraph to, like, set up the housing chapter, but the vast majority of the
01:39:05.640contents applies to the state of California. It is conspicuous of the two cities they keep
01:39:09.920returning to are San Francisco and New York City, and obviously nearly every state in America has
01:39:15.820cities, and yet it is much harder to point to, like, the dynamic productivity coming out of
01:39:21.220Cincinnati, Ohio, or, like, Kansas City, Missouri. Like, when they say city, what they really mean
01:39:26.220are tech and finance. That's what they're talking about. And I think it's important to highlight
01:39:31.200that when we have conversations about San Francisco and New York City and, like, what
01:39:35.700these places are doing right or wrong, we sort of skip over why these places are so rich. So,
01:39:41.340Kara, why might New York City and San Francisco appear to be so productive according to the metrics that we use to measure productivity in the U.S.?
01:39:56.600At the risk of oversimplifying, New York is rich because of Wall Street.
01:40:00.560San Francisco is rich because of Silicon Valley.
01:40:03.080At one point, they explained that everyone used to flock to cities to build their fortunes and, like, take the escalator to the middle class.
01:40:11.320But now, only rich people can afford to live in these cities.
01:40:14.440And so, they're building toward the point that this divergence, you know, the people who used to go to cities to find upward mobility are now priced out, and now they have to live in Cleveland, and, like, that's sad for them.
01:40:58.280We made mobility, sorry, I'm going to read slowly here so I can try to understand what they're saying.
01:41:01.480We made mobility into an engine of inequality, and we did it on purpose, using policy levers that made life in dynamic cities too costly for the poor to afford.
01:41:14.040But the we here is hiding some uncomfortable culprits.
01:41:17.660It's liberals, and particularly a strain of liberalism that began to develop in the 60s and 70s, that bears much of the blame.
01:41:27.880I don't understand what they're saying.
01:41:29.400Yeah, this is a doozy of an argument. I tried to go bit by bit through this chapter and be like, okay, I really want to understand what it is you are claiming because it sounds like what you're saying is that—I have my face in my hands.
01:41:45.620I'm like, it sounds like what you're saying is we used to have a more equal society because, like, people could live in cities where it's super productive, but then we, like, changed policies and now people can't afford to live in cities and now they're moving elsewhere and that's making things more unequal.
01:42:03.260I don't know. It's just, to me, this argument is kind of a mess. And then it builds to this thing
01:42:07.560of like, and the reason why is because of this particular strain of liberalism that developed
01:42:13.240in the 60s and 70s. I feel like knowing what we know now about the consequences of deregulating
01:42:21.340the finance sector, of offshoring, of NAFTA, of tax cuts, like there are so many things that I
01:42:30.960think their explanation here is on just really shaky ground. Like you would almost have to know
01:42:36.680nothing else about American history in the 20th century to accept that the rising cost of living
01:42:43.000in cities, which they attribute to regulations put in place by liberal environmentalists and
01:42:49.460cultural norms of the new left, and like I am barely hyperbolizing, was the primary cause of
01:42:55.260diverging economic outcomes. It feels to me like they're trying to do too much. I know both of
01:43:01.580these men are smarter than to try to suggest that income inequality is the result of people not
01:43:09.160being able to afford living in Manhattan. But if I didn't know that and I were just reading this
01:43:15.720book, I'd be like, these people don't know what the fuck they're talking about. This doesn't make
01:43:18.920any sense. Do you know what each of them needs, Katie? Lemonade.
01:43:27.020Now I'm going to do another callback to another joke I've made. What they need is to each have
01:43:33.380another paternity leave so that they can read more. Because I feel like they need more free
01:43:39.540time. And I think that that's why they both deserve a hefty paternity leave. See, and that's
01:43:46.140why they should have supported Bernie Sanders because then they would have it. It all goes
01:43:52.820back to socialism. That's why we should be Denmark. You would get your paternity leave,
01:43:57.180Derek, would be fucking amazing if we tried to be more like that. Think of how many books you
01:44:03.120could read. Think of how many books. Oh, my God. OK, let's return to the text because I want you
01:44:09.720to see how this argument continues to build. So from here, they introduce zoning, which will end
01:44:14.340up being positioned as the causal factor for the rising cost of housing. The concept of zoning
01:44:23.080unheard of in 1900 covered 70 percent of the U.S. population by 1933. Okay, so I read this and I'm
01:44:30.180like, all right, well, we didn't have a housing crisis until like, you know, the last couple of
01:44:34.680years. So if zoning has been in the picture since 1933, like what happened? What changed? And the
01:44:42.800The argument that follows is, I would say, pretty cohesive, but again, it's pretty specific to the state of California.
01:44:48.520So here is how they describe the scale of the problem.
01:44:53.220In the 1950s and 1960s, California routinely built more than 200,000 homes each year.
01:44:59.420Since 2007, California has never once permitted more than 150,000 new homes.
01:45:05.360So you're like, all right, what happened in 2007?
01:45:07.760It's kind of like floating numbers, yeah.
01:45:09.120I'm like, yeah, well, something specific did happen around that time and that, like, probably should play a causal role here in, like, the explanation.
01:45:18.380But again, you're like, all right, well, why, right?
01:45:20.600So this is them quoting a 2015 investigation by the California Legislative Analyst's Office.
01:45:27.360First and foremost, far less housing has been built in California's coastal areas than people demand.
01:45:36.300After all, if you already own a home, scarcity makes the asset you own all the more valuable. Okay.
01:45:43.040Okay. Pause. So, constrained supply is what you get in a system that incentivizes constrained supply.
01:45:52.440Set the housing crisis aside. Set the great financial crisis and the financial meltdown.
01:45:57.200Put all of that aside. Like, at a very, very basic level, this line, if you already own a home,
01:46:04.020scarcity makes the asset you own all the more valuable, to me, kind of tells the whole story.
01:46:08.800Because it's like, yeah, we've created a system that incentivizes constrained supply. And what
01:46:13.980are you getting now? Constrained fucking supply. This is a system where it is profitable for demand
01:46:19.940to outpace supply. And so that is what happened. And what kind of shocked me, honestly, is they
01:46:26.200even provided this interesting history of how housing became an asset, if you will please read.
01:46:31.860Prior to 1970, housing wasn't a prime asset. You bought a home to live in it. But that changed in the 1970s. Inflation was part of the reason. One of the main aims of federal housing policy has been to make possible the 30-year fixed-rate mortgage, a peculiar financial device that wouldn't survive a day in the economic wild.
01:46:51.620Okay, so like the 30-year fixed rate mortgage is specific to the United States. This is not really a loan product that you can get elsewhere, mostly because there'd be no incentive for a lender to offer you a fixed interest rate for 30 years where inflation is just going to deflate the value of that money.
01:47:11.740So expand that argument further, right?
01:47:14.020It's also beneficial for the people who make housing for prices to say high.
01:47:19.280And this is the core contradiction of the idea that the market would produce abundant supply on its own.
01:47:26.040So Malcolm Harris wrote about this here.
01:47:30.720For example, capital is reluctant to enter industries that are easy to enter for fear competition will drive out the profit.
01:47:38.560The abundant solution to a lack of housing is to make it easier for developers to build for increased density.
01:47:44.480The more units that come onto the market, the less landlords will be able to charge.
01:47:48.960But the same supply mechanism that pushes down prices discourages capital from the sector.
01:47:53.560If what developers experience as an excess of supply stops them from projecting the same high rent levels,
01:48:00.060their lenders might just decide to put their dough in crypto instead.
01:48:03.920There's no reason to assume a market equilibrium point at which investors are satisfied with their projected returns and Americans of all income levels enjoy an abundance of high-quality housing.
01:48:13.760I think this goes for really all of the things we've talked about today.
01:48:17.940You build where something will make money.
01:48:30.080So places with cheaper inputs are going to be more profitable.
01:48:32.660And sure, regulations and permitting, again, that does cost time and money to be sure, but it's not at all clear to me the extent to which that factor in particular, like, it seems like pretty small lemons compared to these other—
01:48:47.120Very small lemons. Would you say Eureka lemons?
01:48:49.300Very small lemons. It's very small Meyer lemons about whether or not that's going to make or break, like, if a project is pursued in the first place or is seen through to completion.
01:48:59.160Really quickly on the zoning piece, I originally was just going to focus this episode on housing, but then I thought that was kind of cheap. So I was like, okay, we're not going to spend as much time on zoning. But I interviewed an economist from the University of Kansas who's been studying housing since the 1970s. And he told me that, you know, in general, the tricky thing about zoning is that it changes where housing gets built.
01:49:21.660It does not typically affect how much housing gets built, because what affects how much housing gets built is more of these profit-seeking, where can we make money, what can this market bear, basically.
01:49:36.640So this is a really good example of, I think, the slipperiness of some of this argument.
01:49:40.980And we're like, you could probably accuse some of this as being the narcissism of small differences, but it's not that I'm arguing against zoning reform.
01:49:48.480I'm just arguing that zoning reform is unlikely to pull the lever for the problem you are suggesting it will address in this book.
01:49:56.660For example, a comprehensive study from the Urban Institute of Land Use Reforms across 1,136 cities from 2000 to 2019 found that they increased housing supply by only 0.8% within three to nine years of passage of the zoning reforms.
01:50:19.120where you're like either not eliminating single-family zoning, that's more unusual,
01:50:23.740like Minneapolis eliminated single-family zoning in 2019. In the following several years after that,
01:50:29.600they added like 255 units. Los Angeles had 211 applications for multifamily construction in the
01:50:36.760year after the law getting rid of single-family zoning went into effect. And so the point is that
01:50:42.380zoning will determine where you are putting things, but it's not borne out in the data
01:50:50.900that it really impacts how much you're going to get. So I think what abundists would say
01:50:58.740is that they didn't eliminate enough regulations in these cases. Single-family zoning is only one
01:51:05.200piece of zoning reforms. There's also parking requirements and things of that nature. They'd
01:51:09.520probably say, well, you seem to go further. You have to eliminate more. And OK, like, fair enough.
01:51:13.660I'm honestly not opposed to that. I am just not convinced that these tweaks will produce
01:51:17.840three to seven million more homes that we are supposedly short. And I say supposedly because
01:51:24.000and this is where things come back to this regional inequality thing. The Kansas economist
01:51:28.380was like, well, technically, there is more than enough housing in this country. It's just in
01:51:33.260places where people don't want to live. I think that's kind of an interesting example of how
01:51:39.960inequality happens in real life. That it's not just about how much money you have, but that
01:51:46.080where you live in the United States makes a humongous difference into your experience of
01:51:51.580this country. Yeah, it seems like a real game of dominoes to be arguing that the way to solve
01:51:57.820really foundational problems of inequality in America
01:52:17.360that you are going to have a number of levers
01:52:20.760that get flicked if you suddenly just build, like,
01:52:23.92015 high-rises in San Francisco to accommodate all of these people. It just seems like
01:52:29.500a—it almost seems like a really non-functional band-aid. Are you really just arguing for more
01:52:36.420housing in San—like, to make housing more affordable in San Francisco? Because—
01:52:41.280Like, that literally is kind of what they're arguing.
01:52:43.180And I do think there isn't. I'm aware that there are affordability crises in these cities that we
01:52:48.120have to address. But is that really the end goal? Is that really what's going to, like,
01:52:52.780solve inequality or is that just that's the thing is like is that going to solve inequality they're
01:52:56.900not even like positioning these things as ways to quote unquote solve inequality really i guess
01:53:02.660there's that one explanation in the beginning of the chapter where they're like oh we've turned
01:53:06.840what used to be an engine for progress into an engine of inequality so i guess there there is
01:53:11.840a mention of it i guess when i was reading it to me the bigger flashing red light kind of appeared
01:53:17.160to be like, it's really odd to just focus on these two cities that are like, yes, unaffordable
01:53:22.980and yes, very popular. But I think it's clear that like what you need to improve affordable
01:53:29.480housing in Manhattan is really not an issue for 98% of the landmass in this country, where
01:53:37.200like housing is not going to be responsive to the same theories of the case.
01:53:44.860Yeah, that is interesting that it's like a book for, I don't want to say coastal elites because a lot of people living in these cities are struggling to get by, but it is a fundamentally coastal problem that you're talking about.
01:53:57.800Like you're not actually even pretending for this to be a problem that applies to a large number of cities.
01:54:02.920Yeah, it's like the vast majority of Americans, it just for me kind of inadvertently called attention to the fact that such a huge issue in this country.
01:54:12.300it's that like the vast majority of the country is now poorer because finance and tech have sucked
01:54:19.440all the resources and attention to the coasts and like vast swaths of the country in between
01:54:25.720are just kind of like left out to dry like why and that's where we see the venn diagram between
01:54:31.280hillbilly elegy literally i'm like yeah well why don't people want to live in cleveland why don't
01:54:37.060people want to live in detroit like these used to be bustling places is the idea that like we're
01:54:42.160just going to kind of keep marching down this path and we're going to try to fit everybody
01:54:45.480into these two places like surely that's not the answer here but right i think that like your point
01:54:51.960about transit is well taken that like a lot of the issues with housing is that there's nothing
01:54:56.980around like you have to build out so there's sprawl but they're not actually building there
01:55:02.100there isn't like thriving economies in these places i also want to say i think that we've
01:55:07.600really been shitting on Cleveland. And I just want to say, I think Cleveland is a metaphor for
01:55:13.760America. So if you live in Cleveland, we're not really talking about Cleveland. We're talking
01:55:18.860about America. This is like that time that I made a joke about how having to live in Tampa,
01:55:23.560Florida was punishment enough. And someone from Tampa was like, me listening to this,
01:55:30.640I'm listening to this in Tallahassee and I don't feel good right now. I'm like, oh, I'm so sorry.
01:55:34.980it was just a Florida poem. Yeah, it's just like a cancellation crisis I don't want to deal with.
01:55:39.760Yeah, you're like, okay, and in defense of Cleveland, when I say OH, you say IO. Okay,
01:55:44.600moving on. I think the proper scale and focus for zoning in this conversation should be about
01:55:52.780shifting the character of our communities in this country to focus on walkability,
01:55:58.980mixed-use developments, avoiding the single-family-only. These are things that they
01:56:04.220talk about, right? And I broadly agree with most of that. And obviously public transit infrastructure
01:56:11.100and shifting away from car reliance is a pretty unavoidable piece of all of that. And in that
01:56:19.320respect, zoning is very important. But from the evidence that I have seen and the experts that I
01:56:25.080have listened to, and I think cards on the table, just kind of my understanding of and perspective
01:56:31.200on the role of political economy, it does not seem to me like zoning is the right hammer
01:57:20.040They are looking not only for positive returns,
01:57:22.400but for higher returns than alternative options.
01:57:25.700Home builders, in particular, will not build
01:57:27.880unless they have reason to think they can achieve sufficiently high profits,
01:57:31.660those that outperform land banking, speculation, or other forms of investment.
01:57:35.740The much-touted housing boom in Austin is a case in point.
01:57:39.640After a few years of above-average building activity led to modest rent reductions,
01:57:45.280residential developers reduced construction substantially.
01:57:48.820The burst of construction made only a small dent in the dramatic increase in rents since 2010.
01:57:53.780The Austin example is extremely illustrative here.
01:57:57.060There really was a post-pandemic construction boom, but since its peak, construction has stalled. Why has it stalled? Because lenders who finance these projects want returns, developers want returns, and, like, this is the system we have created, that's how it works.
01:58:11.000Once they started to approach something like supply that could drive prices down, it was like, oh, okay, no more of that. Like, we're done with that.
01:58:18.920and i think that's that's what's odd about the housing section of this book because they more
01:58:24.880or less make the same argument like they acknowledge all these same paradoxes in their
01:58:29.620analysis of american housing policy and how we got here and the forces that created these conditions
01:58:34.960almost identical beat for beat what i would tell you and what i have told you before on this
01:58:40.900podcast that we created the policy conditions for these outcomes that is why it's so strange when
01:58:46.400they basically ignore those incentives and the interests that they have created entirely
01:59:07.240Yeah, I think that is my forever challenge with this book is that even, again, as someone
01:59:13.460who knows certifiably nothing and is relatively unqualified to talk about anything in relation
01:59:18.080to this conversation. It's just the entire argument has always been to me in the C-section
01:59:23.020episode. Yeah, exactly. As like a, as like a neutral third party observer with absolutely
01:59:28.660no relevant insight into the matter. My whole thing, even from the jump, even before people
01:59:34.700like you were like, actually, this doesn't really bear out. My whole thing was like,
01:59:37.860well, yeah. And this can't possibly be the most. And the other thing that I think is
01:59:42.960kind of funny is that it's also not sexy it's like not only is it not really you're like i'm
01:59:48.640bored as fuck right now no i'm like i just like i i can see when people diverge from the most
01:59:56.160important thing if they have like a sexier topic but it's like they're arguing to reorient the
02:00:01.980entire democratic party over something that seems number one to not be the solution for anything
02:00:08.580they're talking about. And also number two, something that will require them to do like
02:00:12.460six minutes of explaining on the Jon Stewart podcast. You know what I mean? It's just kind
02:00:16.660of like, it's, it's kind of amazing to me that this is the route. And I guess it really speaks
02:00:22.300to their savvy that they've been able to make it into something that it has become at least a brief
02:00:27.480impactful topic or idea or whatever you want to call it.
02:00:31.020I had like this whole section about the environmentalism piece in the housing chapter,
02:00:36.440but we've already been talking for like three hours. So I'm going to skip it. I'll put it in
02:00:39.700the show notes if you want to dig into that specifically. But to summarize, cities are
02:00:44.480where people want to live. We should make it easier for people to live in cities because
02:00:48.240there's economic productivity there. Part of the reason homes are so expensive is because the
02:00:52.560American tax law and financial incentive structure has turned them into an asset class used for
02:00:56.900investment purposes. But also environmental regulations are now used to block new development.
02:01:01.800It's like not the most airtight argument, but ultimately the most charitable explanation that I could offer you is that they're saying these regulations are basically wielded cynically to be obstructionary to protect home values.
02:01:13.660And this is another instance where the internal logic of this theory is not coherent to me because it seems like they're saying if you remove those barriers, right, people won't be able to use them to obstruct government action anymore.
02:01:24.860the government will be able to move quickly. But the entire focus is on private development and
02:01:32.040how these hindrances prevent private developers from building stuff. So my reading, they're not
02:01:38.760making the case that the government should be building housing. It's like the government should
02:01:42.720make it easier for other people to build. So are we trying to increase state capacity and build a
02:01:48.060stronger state? Or are we trying to make it easier for private businesses and publicly traded
02:01:51.980companies to do the things that they want to do. And like, we are just assuming that the things
02:01:56.320they do will be good for us. Cosign, cosign. To go back to our supply and demand conversation
02:02:03.360from seven hours ago, they basically apply the argument to the housing chapter like this.
02:02:09.640I'm going to have you read. Make sure, oh, I have to read. Okay, well then I'll do the
02:02:13.620lemonade stand conversion. Okay. Housing follows the laws of supply and demand. Okay, I'm with you
02:02:21.500so far. When supply is thick and demand is light, many lemons, low foot traffic, prices fall. The
02:02:28.520average lemonade stand, aka home in Cleveland, sells for about $115,000. When lemons are tight
02:02:35.880and foot traffic is hot, prices rise. That is the story of the pricey blue cities listed above.
02:02:42.940America used to be adept at building homes, aka lemonade stands. In 1950, the U.S. Census Bureau
02:02:49.460reported that America had added 8.5 million units in the previous decade, even with the
02:02:54.540interruption of a world war. That's a lot of lemons. Okay, so housing is cheap in Cleveland.
02:02:59.760The subtext is nobody wants to live in Cleveland. That's why it's cheap. You should want to live.
02:03:04.280That's what they said, not us. We are not saying that about Cleveland.
02:03:08.200I am not discriminating against Cleveland or Tallahassee, Florida.
02:03:12.040Let the record reflect. Equal opportunity shit talker about American cities. You should want
02:03:19.340to live in a superstar city, they say. They literally say housing costs are highest in the
02:03:24.360superstar cities that now drive the economy. So like... What a crazy phrase. Tech and finance.
02:03:30.860I know, this has Derek written all over it. Like the hot chick cities? The superstar cities.
02:03:36.440Okay, so like, yeah, it's true. The housing is most expensive there. And it is not clear at all
02:03:42.080that zoning is to blame for that fact. There was a National Bureau of Economic Research working
02:03:46.740paper, so this is not a peer-reviewed paper, but these findings are interesting, so we're going
02:03:50.440to talk about them, that actually came out the same month that Abundance was published,
02:03:54.900coincidentally, that essentially says you can map rising incomes to the rising cost of housing.
02:04:00.960Okay, so we obviously can't blame them for not including a paper that came out the same month
02:04:05.360that their book was published, but I think it's worth talking about it. The paper suggests that
02:04:10.280housing tracks income. So from 2000 to 2020, they say, we find that higher income growth
02:04:19.540predicts the same growth in housing prices, housing quality, and population, regardless of
02:04:26.800a city's estimated housing supply elasticity. They conclude that these results, quote,
02:04:32.900imply that estimated housing supply constraints are unimportant in explaining differences in
02:04:39.420rising house prices among U.S. cities. So to be very clear, they're not saying supply of housing
02:04:45.980doesn't matter, but that income growth is a better predictor, a more reliable predictor
02:04:51.280of the cost of housing than how relatively easy or difficult it is to build in a given place.
02:04:58.400They say regulatory constraints don't appear to matter. Quote, relaxing regulatory housing
02:05:05.620supply constraints may not materially affect housing affordability. This is a pretty cut and
02:05:12.100dry case for the idea that inequality itself is driving these outcomes. Areas that have a lot of
02:05:22.720inequality, that have like really, really high incomes, see the housing price growth driven by
02:05:28.500that upper bound of the income distribution. And then the more unequal incomes are through that
02:05:34.320distribution, the more you're going to find that median and below median earners are going to
02:05:38.400really struggle to keep pace. Again, it is a much less sexy story in some ways because this is a
02:05:44.060more uncomfortable problem. This is a problem that implies you actually do need a class politics
02:05:49.300in a way that the win-win solution of like, hey, good news, it's just like the rules about the
02:05:54.660parking and the sea turtles, and we don't actually have to confront any of this, does not.
02:05:59.900And then here's the thing. Housing affordability issues are also not unique to cities. So 30% of rural households and almost half of rural renters struggle to afford housing. So I'm going to have you read from the American Affairs Journal in its double review of Abundance and a similar book called Why Nothing Works by Mark Dunkelman.
02:06:25.240Perhaps both books neglect the politics of land use in rural America because they do not map neatly onto their market-first frameworks, which suppose that overregulation is the primary cause of housing unaffordability in the United States.
02:06:39.080Even if rural towns wanted to upzone, many lack the basic infrastructure, yeah, sewers, water, roads, broadband, to support new construction.
02:06:48.800Profit margins for developers, moreover, are slim to nonexistent.
02:06:52.840Capital is scarce, and where rural housing has been successfully delivered,
02:06:56.540it has only been because the state guaranteed it,
02:06:59.500through USDA's Section 502 and 515 programs, for instance.
02:07:46.360So at this point, Thompson points out that in the six to nine months since an abundance-informed housing reform bill was passed in California, housing starts or new building has not happened.
02:07:57.580And to his credit, he says, like, hey, we care about outcomes, like, and we still are not seeing movement here.
02:08:03.560And they get into some of the criticisms that they see as valid to the book.
02:08:09.680I definitely don't want to give the same answer to every question, but I hear the governor of California describing a legislative victory in terms that literally, quote our book, A Liberalism That Builds Abundance. He's being asked questions by a late night host that are basically like LLM summaries of our book.
02:08:28.880But then you look at the outcomes and California still hasn't actually increased housing starts in the, what is it now, six months since that bill was signed, nine months after the debate over that bill really began.
02:08:42.660That's not the fault of that legislation necessarily.
02:08:49.100You could think, one, that there's a set of problems that have accumulated in California over the last 50 years that have made it harder to build housing.
02:08:56.940And this is one important step to ungunk that process.
02:09:01.480Maybe that's an optimistic way to frame it.
02:09:04.120Another way to frame it is that legislation is not the only ingredient when it comes to housing construction.
02:09:10.300We're in an environment with an elevated interest rate where Trump is waging war against legal and undocumented immigration, which is complicating the fact that I think 40 percent of construction workers in California are foreign-born.
02:09:23.160So the labor supply of construction work in California is scarce and therefore very expensive, also raising the cost of housing.
02:09:29.800And you look around the country and there just aren't a lot of housing construction triumphs at all for a variety of macroeconomic reasons.
02:09:40.600And if California, Illinois, New York, if they're going to pass laws that hold up abundance as the inspiration or motivation or philosophy of those laws, and then three months, six months, two years later, we still don't have the fruits of abundance, whether it's building more housing, building more clean energy, I am worried that that speaks to a gap between what I call the legislation vibes and the outcomes.
02:10:06.440Well, here is, I think, also another way of thinking about this that I've become more sensitized to in the art of publishing the book that I'd like to hear your thoughts on.
02:10:15.200So whether a housing project gets built can depend on a series of things, but I think you can often break it into three things when there is demand for it.
02:10:23.300So one is just legally, can you get the damn thing built?
02:10:35.740I would say when I look around that there's been at least the intellectual victory where
02:10:40.780there is something getting closer to a broad consensus that you should be able to build.
02:10:46.760Legally, that should be possible in places where we need housing.
02:10:49.820But then there's a question of can you finance the build?
02:10:52.540And then there's a question of how much does the build cost?
02:10:56.040What is the cost of construction in terms of materials, in terms of labor, in terms
02:11:00.780of how much you're paying labor, in terms of what kind of thing you need to build?
02:11:04.480And I think a good critique of the book that I've heard is one, we don't talk very much about financing. And one thing that's been hard is that even as a lot of, yes, in my backyard, bills are passing, as you sort of mentioned quickly, the financing environment has gotten much worse because interest rates went way up after the inflationary period.
02:11:21.200And the second is that cost of construction in a place like California is a very fraught topic because nobody wants to see wages go down.
02:11:32.140There's a big deportation agenda happening under Donald Trump, which, as you mentioned, is making labor more expensive.
02:11:37.720But even as there's been a lot of victories on zoning and exempting things from environmental reviews, the financing side has gotten harder.
02:11:47.060I've definitely talked to mayors and others who say, look, I've got all these projects
02:11:51.000I want to see go forward, and we've made it possible for them to go forward.
02:11:54.620But the financing, the projects are not penciling out, and we don't have an answer to it.
02:12:00.360So there's an interesting admission happening here where it feels like there's an acknowledgement
02:12:04.780that money and who controls that resource is a huge piece of this that sort of goes
02:18:12.300why people are so terrified of the system changing.
02:18:15.100It's because they feel like all of their stability
02:18:17.720and security relies on them riding out
02:18:20.540the system that they bought into. And it just feels negligent to not acknowledge that.
02:18:25.340I think that that's a really good point. The other thing about the nimbyism that I think
02:18:28.520is worth pointing out is that all nimbyism is not created equal. Technically, if you are like
02:18:35.120in a neighborhood that you don't want to be gentrified and you're like, well, I don't want
02:18:39.320a fucking sweet green to replace my 50-year local restaurant, like also kind of nimbyism, right?
02:18:46.200Like, this argument of, like, yes, sometimes people don't want things built in their town, and there's, like, a legitimate reason for that.
02:18:56.140I appreciate that comment about needing to have empathy for the fact that people have essentially followed the rules of the system that is in place.
02:19:04.660And now we have recognized that that system is creating bad incentives, and, like, the answer can't just be, well, the NIMBYs have to get over it.
02:19:13.760There has to be a better solution than that.
02:19:16.200One thing that I would point to here is as a good example of where their argument is not actually for state capacity. In Sweden, for example, there are municipality-owned housing companies that develop, rent out, and manage the units for anybody who wants one, and this has the bonus effect of driving prices down in the private housing market.
02:20:03.220You have to decouple people's long-term security from the values of their homes.
02:20:07.760That is a piece of this puzzle that, like, we do have to think about.
02:20:10.880So I'm going to briefly bring back this section from the author's conclusion about what they believe abundance and other political orders need to succeed.
02:20:19.680Deep-pocketed donors and political action committees to invest in promising candidates over the long term.
02:20:25.820The establishment of think tanks and policy networks to turn political ideas into actionable programs.
02:20:31.040A rising political party able to consistently win over multiple electoral constituencies.
02:20:36.140a capacity to share political opinion both at the highest levels, the Supreme Court, and across popular print and broadcast media,
02:20:44.040and a moral perspective able to inspire voters with visions of the good life.
02:20:49.180Political orders, in other words, are complex projects that require advances across a broad front.
02:20:57.120Well, you need all of this because you are trying to persuade people that their interests are not what they think they are.
02:21:02.240they're not trying to change the underlying interests. They're trying to persuade you out
02:21:07.960of pursuing them. That goes for working class people and this scenario that goes for rich
02:21:12.880people. The NIMBY in question does not need to be persuaded of the broader public interest.
02:21:18.240She has correctly identified her class interest, a class interest that is produced by the political
02:21:23.320economy. It is a feature of our housing system as presently constructed that supply will be
02:21:29.500suppressed. And the NIMBY is merely acting in accordance with the interests that that system
02:21:34.920prescribes and the state is reinforcing for her. There is no amount of editorializing from the
02:21:41.640argument and other like abundance forward publications that is going to convince this
02:21:46.300person that what is in her class interest is not in fact in her interest. But that's that is what
02:21:52.120this project has to become when you're not really interested in dealing with people's material
02:21:58.640interests and the way that they conflict, as it becomes a project of persuasion. So the abundance
02:22:04.900theory is largely that, by removing choke points, simplifying regulations, that the powerful
02:22:11.380obstructionary forces that are currently abusing those choke points, knowingly or not, are just
02:22:16.600going to disappear. And as a result, their argument, that's ostensibly about building state
02:22:21.220capacity, focuses almost exclusively on those rules. And while it is true that too many rules
02:22:27.120may in fact slow down an undersized governing body. I think a true state capacity argument would
02:22:33.020be to add capacity to the state to navigate those rules, or at the very least, do both, right? Build
02:22:39.200your state expertise, build up your resourcing, and then use that resourcing to revise those rules
02:22:44.160and decide where maybe these things are self-defeating. But when your every anecdote serves
02:22:48.420only to highlight how considering multiple perspectives and points of view, or like how
02:22:53.180various groups is going to take too long. You're not actually making the state capacity argument.
02:22:59.060I really think the inclusion of Elon Musk in this book, in this respect, is instructive for both
02:23:04.460how they seem to envision this working as well as what can go wrong. So at one point in the book,
02:23:08.880I think it's Thompson, writes that Elon Musk and his companies are an example of what private
02:23:13.860genius and public subsidy can achieve together. I'm like, that's one way to put it. Here is
02:23:21.740another way to put it from Matt Brunig. Matt. Matt the Brunigs. We have now seen what it looks
02:23:30.700like when the government supports and subsidizes technological innovation and implementation
02:23:35.160without concerning itself with the inegalitarianism of the system. His name is Elon Musk.
02:23:41.240In its desire to promote electrical vehicles and rocketry innovations, the U.S. government made him
02:23:46.620the richest man in the world, and then he used his riches to take over a major political
02:23:50.520communications platform and then the government. Kill me. It's worth noting that if personal
02:23:56.740electric vehicles are truly our future, I'm not sure that subsidizing the private markets to
02:24:02.560produce them is really giving us what we want or doing that good of a job. If we're going to hail
02:24:07.080Musk as proof of concept for the success of publicly subsidizing, quote, private genius as
02:24:13.420an effective means of compelling the market to produce what we want it to, we kind of have to
02:24:18.520contend with the results of that approach. Around 2% of cars on the road today are EVs.
02:24:24.680Around 10% of new vehicles sold are EVs. For context, 97% of new car sales are electric in
02:24:33.440Norway. I know that the irony is like they're a huge oil exporter, but whatever. China is at 53%
02:24:39.120and they produce 65% of the vehicles sold elsewhere. That's crazy. The UK is at 33%.
02:24:45.580Like, not a socialist utopia. The U.S. is at 10%. So I'm like, I don't know. Would we consider 10% penetration, like, good for the amount of money that has been thrown at this problem? Is it possible, based on the results that other countries have gotten, that we maybe could have had this type of progress or better without creating a trillionaire along the way?
02:25:07.080And, like, I think this example just really illustrates where the abundance framework seems faultiest to me. Because if you push it to its logical extreme, if you make the argument that things will happen faster and more efficiently if you don't worry so much about actually building state capacity or, like, making this stuff publicly owned or concerning yourself with egalitarianism, and you're more comfortable just directing public money like a fire hose at a bunch of different private businesses, you run into this issue where, like, sure, you're getting innovation.
02:25:37.080of some kind, probably. But like what you're exchanging for it is worsening inequality
02:25:43.020because public funds become private wealth. And that is the world we already live in.
02:25:49.500Sometimes when I was reading Abundance, I felt like they were basically arguing that like this
02:25:52.980tradeoff is more or less fine because the resultant innovation will be expansive enough to
02:25:57.980supply that it just won't matter. And I'm like, I don't know, man. I don't really feel like
02:26:02.960Present reality bears that out in any sense.
02:26:07.120Yeah, you're really playing with fire.
02:26:08.620So abundance asks the question, what is scarce that should be abundant?
02:26:13.180What inventions do we need that we do not yet have?
02:26:16.920And when you ask what is scarce, I think the natural next question should be, why is it scarce?
02:26:23.340And the abundists largely believe that the reason these goods are scarce can be located in well-intentioned government proceduralism run amok.
02:26:32.520The tricky thing is that sometimes government proceduralism really is inefficient.
02:26:37.040Sometimes it really is an obstruction, but it's not the reason goods are scarce.
02:26:41.060They are scarce because someone's material interests are being served by the scarcity.