Against Ezra Klein Derangement Syndrome

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After Klein and Thompson released Abundance, arguing for the apparently controversial idea that scarcity is a choice, an inter-ideological fight broke out inside the left. The claim is that Klein and Thompson are secret supply-side conservative ideologues—working behind the scenes to disempower the egalitarian left and reanimate Ronald Reagan’s corpse to subjugate the working class to their capitalist overlords:

So, what do Klein and Thompson argue for in Abundance? Surely we would learn by at least page 7 if they actually do embrace much of Democratic policy? Anyway, here’s page 7:

Progressivism’s promises and policies, for decades, were built around giving people money, or money-like vouchers, to go out and buy something that the market was producing but that the poor could not afford. The Affordable Care Act subsidizes insurance that people can use to pay for health care. Food stamps give people money for food. Housing vouchers give them money for rent. Pell Grants give them money for college. Tax credits for child care give people money to buy child care. Social Security gives them money for retirement. The minimum wage and the earned-income tax credit give them more money for anything they want. These are important policies, and we support them. But while Democrats focused on giving consumers money to buy what they needed, they paid less attention to the supply of the goods and services they wanted everyone to have. Countless taxpayer dollars were spent on health insurance, housing vouchers, and infrastructure without an equally energetic focus—sometimes without any focus at all—on what all that money was actually buying and building.

The argument Klein and Thompson are making is obvious: to increase the success of demand-side policy such as welfare, you need to ensure that the restrictions placed on the supply-side are such that the supply can reach the newly elevated demand. If not, then the spending is completely moot and possibly harmful. Some examples from their book are the housing crisis commonly found in blue states, as well as the failure of California High Speed Rail. They elaborate on this concept further:

The problem is that if you subsidize demand for something that is scarce, you’ll raise prices or force rationing.4 Too much money chasing too few homes means windfall profits for homeowners and an affordability crisis for buyers. Too much money chasing too few doctors means long wait times or pricey appointments. This leads to the standard Republican riposte: Just don’t subsidize demand. Keep the government out of it. Let the market work its magic. That’s fine for goods where access is not a matter of justice. If virtual-reality headsets are expensive, well, so be it. It is not a public policy problem if most households cannot afford a VR headset. But that cannot be said for housing and education and medicine. Society cares about access to these goods and services, as well it should.

I do suspect that Abundance detractors have genuinely not read the book. These points are established well before the end of the first chapter. The reasons for left-on-left bashing are complex, but in part I think they are the result of an intellectual tradition that values intellectual debate. To an extent they are also a product of a tendency to value intellectual purity and coherence over diversity of point-of-view. This tendency to shrink the tent serves the left’s strong sense of justice, but nothing replaces clear-eyed policy discussion. In her book review, Zephyr Teachout says:

It can be jarring to read about zoning while Elon Musk chainsaws through the government, plundering public money for his own benefit, but Klein and Thompson argue that there is a direct connection: a failure to build represents a political stagnation that has led to political crises. Without cheap housing and energy, affordable health care, and basic infrastructure, public trust erodes and populist movements thrive. A government incapable of solving material problems creates a vacuum that demagogues fill.

But her arguments start to falter:

Which is to say, I still can’t tell after reading Abundance whether Klein and Thompson are seeking something fairly small-bore and correct (we need zoning reform) or nontrivial and deeply regressive (we need deregulation) or whether there is room within abundance for anti-monopoly politics and a more full-throated unleashing of American potential.

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It happens that I have a personal affinity for the language of abundance. My very first speech in my very first campaign for public office was about abundance and scarcity, and how we needed to reject Andrew Cuomo’s scarcity mind-set, which was holding back New York’s economy.

My view then, and now, is that to transform a bloated corporate feudal system into a dynamic one, we need to break up feudal power, unlock the brilliance that accompanies human freedom, and allow small and medium-sized businesses to prosper. We have to stop thinking of economic development as giving out big grants to big donors. Instead, we need to start thinking about it as building platforms for entrepreneurs and new ideas to flourish.

This position has a long lineage and is currently at the center of major public debates on industrial policy. After finishing Abundance, however, I’m unclear about where the authors stand on those debates. I know what they think about permitting reform, NEPA, and the NIH, and I know they think we need to be more solution oriented. But I don’t know what their agenda requires outside of that.

The claim being made is that because she and no one else on the left can understand the author’s basic points, that bad actors may take these arguments and run with them. But I want to zero in on this claim about corporate feudal power.

Recently in Washington State, a bill was passed 42-6 in the state senate. It was then sent to the house housing committee where it died after not being brought to a vote, failing a key deadline. The purpose of this bill was to amend elevator standards such that smaller elevators can be used as opposed to the current larger ones. Research suggests that apartments with smaller elevators or no elevators are at no greater safety risk than the status quo. This reform would have made it less costly to build apartments due to the less strict standards on elevator implementation.

So why did it die in the housing committee? After passing the landslide vote, the elevator constructors union placed some phone calls and killed it.

So my question to Teachout and other leftists is: what does combatting feudal power have to do with this situation? There are many examples on the state level of interest groups being a negative influence on building, whereas many corporations are pro-housing and lessening burdensome regulations.

Unions aside, at times there are weird situations where the government has to ask itself if it can build a project it wants to build. In this case, the DC school system has to wait for authorization from the Department of Buildings to extend working hours on school renovations. The holdup being that nearby residents have complained about the construction noise:

The construction plans for the site, and the impact it would have on nearby residents, have raised eyebrows, said neighbor Denise Issac. In addition to noise concerns from the extended hours, Issac emphasized that contractor parking on nearby residential streets could make egress from the neighborhood difficult, impacting elderly residents.

“They put a whole design together, reached out to the commission and never spoke to any resident in the neighborhood,” Issac stated.

Klein is not the problem

At the heart of the issue isn’t Klein and Thompson. One issue is that narrow interest groups such as neighbors of projects who complain about noise and elevator unions who complain that smaller elevator size means less elevator to build, get in the way of positive reform and corrupt the democratic process by killing popular projects with well-timed phone calls. Another issue is the obsession with inclusion that the Democratic party has—that whenever development is considered, they focus more on ensuring that all complaints are heard than carefully weighing the pros of building things in the first place. The deeper problem is the pathology of intra-left conflict. As Kenny Stancil of the ever-weird Revolving Door Project demonstrates:¹

More broadly, Klein underestimates the value of rulemaking and enforcement. The alternative to a society governed by laws (in which lawyers play an important role) is one ruled by fiat. Donald Trump is making it clear that arbitrary and authoritarian governance is a recipe for economic, social, and environmental disaster.

The so-called Abundance™ agenda—also known as “rebranded neoliberalism” thanks to my colleague Dylan Gyauch-Lewis’ early critique of the broader corporate-backed project last fall—is perfectly compatible with right-wing goals such as environmental deregulation and union-busting.

It’s no mystery why the Kochs and other libertarians support the ostensibly Democratic “abundance agenda”: It launders conservative ideas.

The criticism here is that the worst thing in the world is having ideas that appeal to conservatives. Newsflash: building things can be popular among a wide range of people. Conservatives liking something doesn’t automatically make it bad, dimwit.

The question remains: will the left ever get its head out of its ass and realize that a diversity of opinion and inclusion will help popularize their ideas? I hope that this pathology is a bug of the left and not a feature, but I can’t be so sure.

1. The RDP is host to a bunch of obsessive weirdos. For example, searching “Matthew Yglesias” on their site displays four pages of results.