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Unintended Consequences

Hosts: Paul Matzko and Peter Van Doren

Paul Matzko: Welcome to Unintended Consequences, a podcast about what can go wrong with government regulation. I’m your host, Paul Matzko, and with me as always is Peter Van Doren, the editor of Regulation magazine.

Now, if you’ve been paying attention to national politics in the last several years, you might have heard about something called the Abundance Movement, and the last issue of Regulation magazine published a review by Jonathan Adler of one of the core texts of the movement, the very appropriately titled and best-selling book Abundance by Ezra Klein and Derek Thompson. All right, let’s talk about abundance, Peter. Are you for it or are you against it?

Peter Van Doren: I’ll answer flippantly, but actually substantively: it depends. So Ezra Klein and his co-author have discovered that a lot of the laws that Dems have historically favored are getting in the way of things Dems want to do. And you and I’ve talked before, I think — again, I lose track of what we’ve done on the air and what we’ve just done casually — but we have debates at Cato, particularly with our legal people, and legal people are process-oriented. I’m pretty cynical, and I don’t think anyone actually strictly believes in process. If it gives them what they don’t want, I think behind the process veil is people like stuff they like for reasons that may or may not be good, but they know what they like. And so the Dems don’t want gas pipelines, and they do want windmills, and they want solar.

Okay, we could talk the meta discussion of are they misguided in those wants? They don’t care, nor do people on the other side care about why they want what they want. In the short run, politics, political people want whatever they want. If you’re legal-oriented, you then defend a set of legalistic things if they get you what they want, but when they don’t, you then start saying this stuff is in the way.

So the Klein-Thompson book is about how historically Democratic environmental statutes and concerns are now the problem, and they’re getting in the way of what they need to do, particularly about climate change, and these laws are being used by their opponents. If you believe that everyone should have solar — what was it, FDR, chicken in every pot? All right, we need a solar panel on every roof, right? That’s the current equivalent, or a windmill in every ocean, or whatever, a tram, a light rail on every street, right? To the extent that the National Environmental Policy Act of 1970, NEPA review, or anything else like that gets in the way, Dems need to own up and get rid of the stuff that’s getting in the way of what they want to do.

So abundance is a code word for stuff each side wants to do, because each side believes if you do what they believe in, you’ll have a better, more abundant future. So even though there’s an economic pretense to the word abundance, this is not a GDP simulation exercise, right? This is — the word abundance is being used in a different way. And as you said, how can anyone be against abundance? And the answer is, it depends on what the abundance bundle really is, what’s in that little — you know, on a game show on TV, do you want door number one, door number two, or do you want the guaranteed $5,000 check that’s behind door number three? Door number three is abundance. That’s $5,000 in cash, right? Doors one and two are a bundle of goods that allegedly, if you get them, you’ll be better off than if you have the cash, right? I’m extending this game show metaphor, but do you get that that’s what’s going on here?

Paul Matzko: Well, there’s something interesting here, which is, I think you’ve touched on this, which is that abundance is loaded. I mean, it’s a good coded word, but it’s actually value neutral. Like, abundance of what matters. After all, the same tools used to prevent new housing — I think we’re at the point where everyone agrees we don’t have enough housing, we want more housing, and there are tools being used to block new housing. Well, you take those tools away. They’re preventing new housing, and you fix that through upzoning properties and removing parking minimums and setback requirements, all that stuff — essentially deregulate. Well, yes, you will get more housing, but these same tools can mean getting more of other things.

So I’ll give you a practical example. It’s been in the news recently that Alligator Alcatraz, the prison for detained immigrants in the swamps of Florida — well, guess what, those same tools are being used to undermine Alligator Alcatraz: the environmental review, tribal considerations, zoning review, all of this stuff is being used to thwart the plans for a gulag. Which strident Democrats probably would like. So it’s true that it prevents abundance in housing, it also prevents abundance in federal prisons or federal gulags. Even though the term itself is kind of good coded, it’s a reminder that process considerations are value neutral.

Peter Van Doren: I’m a strong believer that procedural reform isn’t reform, and proceduralists aren’t really being honest. I think everyone has substantive goals behind the procedural veil of ignorance. So we pretend it’s just about fixing the procedure so it’s fair or whatever, but there’s actually a reason: if we tweak the procedure in this way, the thing I want to accomplish is more likely to happen. And if the procedural reform you favor has consequences substantively that you end up not liking, you’ll become less of a proceduralist, but only in that context, whatever it is.

As you said, I’m for multifamily housing, but I’m against ICE detention centers. And so I’m going to write a clause 2–4‑B-7–8‑9–6‑0 in the Federal Register, blah, blah, blah, which says, in language that no one can understand, the following procedure that I invented to make housing better shall not apply to anything 50,000 square feet or larger located in a wetlands south of the latitude. You know what I mean, right?

Paul Matzko: You know, the historian in me is reminded of this point you’re making, which is that proceduralism can be a legal fiction for people just wanting to accomplish what they want to accomplish. The example that immediately comes to mind is actually about slavery. So during the Civil War, the Confederate side was supposed to be standing for states’ rights, right? But the irony is that they were for states’ rights when it was convenient to be for states’ rights in 1861. They were very much pro-federal authority when it came to the Fugitive Slave Act in the 1830s — using federal power to force other states to respect the slave laws in southern states. So it was anti-states’ rights. They were anti-states’ rights when it was convenient, and they were pro-states’ rights when it was convenient. At the end of the day, they just wanted to maintain a system of slavery.

Peter Van Doren: There we go. That’s my point.

Paul Matzko: Yeah. I think that’s kind of human nature. But maybe we shouldn’t get overly wrapped up in the proceduralism versus non-proceduralism. We can share, in the sense of, like, there are things that we can’t do right now, things we can’t build very effectively or efficiently.

Peter Van Doren: Well, NEPA review, environmental reviews, they can take a while.

Although there’s a literature — there’s a guy at the University of Utah who writes review articles on is NEPA really the problem? And he goes, basically, no. I mean, it doesn’t hold up hardly anything. And even legally, a negative NEPA review does not kill a project. It’s just paper. It’s Dickens. This is just do it, do it, do it. Now, the doing it slows everything down, and the doing it can drag on and increase costs. But doing things quickly…

Paul Matzko: All right. They could go back. I mean, there was a time when liberalism meant knocking down lots of things and building highways and having an expressway through central Manhattan on 14th Street. And this was seen as the progressive thing to do, and it was until it wasn’t.

Peter Van Doren: And so the environmental laws and constraints of the ’70s are to some extent a reaction to Robert Moses, and taking an interstate highway system that Eisenhower intended to end at the exurbs, right there — Washington just wanted to move stuff around. Like you saw in Germany, the expressways didn’t go into central Munich. But all the Democratic mayors of large cities in the U.S. feared missing out on the boom that was going to come from the interstate highways. If they were cut off from what was seen as new and left with an old pedestrian, transit-based, non-modern system, mayors uniformly thought cities would die. And so Moses is the negative historical figurehead in all this, but behind it was all the mayors who said, we’ve got to push those things through, because otherwise we’re cut out of the auto-truck-based system that was replacing railroad. That seemed very obviously to be the future at the time. And yes, in the fifties, yes.

And so this book doesn’t — because the authors are not as old as I am, they don’t go back far enough to realize, isn’t this — we’ve come full circle, where it was Robert Moses and people like him that got stuff done that led to all the laws that said, don’t do so much stuff, that now we want to undo to do stuff.

Paul Matzko: I mean, it does feel like we should be able to find an equilibrium that’s somewhere in between. So you can make an argument that Robert Moses and his ilk were able to unilaterally do far too much to destroy and rebuild. They knocked down so much housing. I mean, it’s just amazing. And we stated to all the occupants, we’re going to rebuild, and you get first dibs at all the new housing we build for you. Oops. We didn’t do that. We didn’t do that. And now you have to live in some bad projects in an undesirable part of town.

Peter Van Doren: Exactly. So you could argue that there was too much unilateral authority, and then the understandable response to that was multi-stakeholder systems where you need many choke points. We overreacted to Moses. Now we have too many stakeholders, so that you can’t get anything done. Because if you have seven people who have to rule to make a decision, you need to get consensus among all seven. Any one of them has an effective veto. You don’t get anything done. So we were doing too much; now we’re doing too little. Can we have a Goldilocks situation that’s just right?

Again, there’s a literature, the urban economics — bad stuff, hedonic literature, I call it — which is, when you build something, how far away do the negative property value effects exist, right? So when there’s a windmill, when there’s a dam, when there’s a road, when there’s a fill-in-the-blank, how far away are people really affected? And I see the decay in all these articles across this big literature, across so many things — landfills, you name it — bad effects end about a half a mile away. It’s kind of stunning. So that’s why politics is local. That’s why resistance is local.

So there are data centers in Northern Virginia, but I don’t know, right? I don’t live there. Now, my electric rates are probably affected by that, because we share this grid in the area. But if you’re within, you know, half a mile of a data center, you hear the hum and you don’t want, you know, whatever. And then the market answer is, Bill Fischel, my hero at Dartmouth, says zoning should be a contractual sale of change, where if you want to do something and people don’t want you to do it, you see how much you have to pay to get them to accept whatever it is you want. And again, I would say within a half a mile, right? And go at it, see what you can. Now, for long-distance electric transmission corridors and all things like that — man, even, so do you want this thing to wiggle through the cheapest land that you can, I mean, or do we want straight lines that we call infrastructure corridors, where there’s eminent domain, and within the confines of that corridor, you’ve got your roads, your pipelines, your transmission, you’ve got everything that nobody wants, within the corridor? The corridor’s defined, blah, blah, blah.

Paul Matzko: We had this, so when I was living in Maine, they wanted to run high-powered electrical lines to bring Quebec hydropower, clean energy, down to the Boston market, which is mostly dependent on fossil fuels, mostly natural gas. So from an environmental standpoint, it’s a win, right? More clean energy. And from just an economic standpoint, they’re arbitraging the fact that electricity costs more in Boston than it does in Quebec, so it would bring cheaper electricity to Boston. But the benefits for Maine were perceived to be zero. Maine says, well, you’re going to run this — talking about zigzag, it basically just went through state forest, it was a thinly populated part of Maine, but there were folks saying, well, we don’t want you to chop down any trees. So there was kind of a conservation‑y kind of backlash, and it got defeated in a referendum, where, as you can imagine, the no side was backed heavily by Texas-based fossil fuel companies, like the Baptist coalition.

Peter Van Doren: Yeah, classic bootlegger and Baptist.

Paul Matzko: Except in this case, I guess, oil and Maine Greenpeace member coalition. And as you can imagine, the cost of electricity in Boston has only gone up since. And so, you know, clearly the abundance movement does have an interest in climate change. So it’s stuff like housing, stuff like energy provision, climate change — that’s very much in the abundance set of topics. And I think there is definitely a there there, and I have to admit I’m sympathetic.

The book review and the book itself open with the story of a big wind turbine project off the coast of Nantucket, with 130 wind turbines. And who lives on the shores of Nantucket? Rich people. Some of whom are named Kennedy.

Peter Van Doren: Some of whom are named Kennedy. I guess, well, in that case, they’re not white Anglo-Saxon Protestants.

Paul Matzko: No, sorry, that’s Hyannis. So that’s Nantucket. I don’t think the Kennedys own any land there, but I’m not sure. But anyway, these are not little people. Well-off folks. And so for 16 years it was fought, and eventually they gave up on the project.

Peter Van Doren: Just kaputied.

Paul Matzko: Kaputied. And now, of course, again, this is why they were like, oh, I guess we’re not getting the wind power. Well, we should get the Canadian, Quebecian hydropower. That’s not happening either. So we’re just going to keep burning gas.

But what’s interesting, I think, about the illustration — they don’t mention this in the article — is that opposition to wind power cuts across the typical ideological buckets and partisan groupings. So, you know, who else is a massive opponent? It’s not just, you know, lefty liberals in Connecticut and Massachusetts. It’s Donald J. Trump. He can’t stand wind power. In fact, he’s used his powers in the second term to essentially stop all new offshore wind where federal land is involved, which went back — I think someone traced it back to when the Scots were going to build a wind power project near his golf course in St. Andrews in Scotland, and he didn’t want the view disrupted. So ever since then, he’s been resolutely anti-offshore wind.

But again, interesting. This is not following the usual political categories. It’s not Republican versus Democrat. It’s, if anything, people who have a vested interest — they’re landowners, they’re locals, and they don’t want even marginal disruption, even if it’s for the greater societal good.

Peter Van Doren: Unless they’re paid sufficiently.

Paul Matzko: Yeah. And then, if you’re rich enough, see—

Peter Van Doren: You’d have to pay a rich person a lot, though. Well, that’s why, when I taught at Princeton, I used to take my urban class to Camden, New Jersey. Poor, poor, poor jurisdiction. At the time, it had a hundred thousand population. It had no supermarket within the city limits, but it had 13 scrap yards. And I’d ask my students on an essay or question, why? Why are 13 scrap yards there? And of course, what I was looking for was the willingness to pay versus the willingness to accept. In other words, for Camden, this was taxable property, and they didn’t have a supermarket. They couldn’t, right? There’s nothing except poor residential property. And they had a Campbell’s and an RCA factory that all died. So what do you do? They had scrap yards. You wish Camden wasn’t in that position, but having 13 scrap yards was better than having none, because that funded whatever limited set of public services they had.

And same thing with liberal Democrats: they are not working class, they’re very affluent people, increasingly over time. So you have this — right, George Meany, go back to when I was young, and Jimmy Hoffa and George Meany and the AFL-CIO were central to the Dems. You don’t have a book like this, because it makes no sense. But now this book is written to all the second- and third-home people who don’t want their views destroyed. You’re part of the problem, and blah, blah, blah. You need to wake up, and otherwise — not because it’s better for the country, but also unless we wake up, we’re going to lose elections. Don’t you think that’s lurking under the problem?

Paul Matzko: I mean, it’s definitely — I mean, the book itself, the Abundance book, is very much targeted. It’s an internal conversation within the Democratic coalition. It is not really targeted at independents, definitely not at Republicans. I mean, I think the implications of it have broader valence, but they have an intended audience that’s pretty targeted. And a lot of the folks on this kind of abundance progress — there’s different terminology for the movement — people like Matt Yglesias, they’re very much focused on what are the implications for internal squabbles between what Yglesias calls the groups, the interest groups that have so much power within the Democratic coalition. Environmental groups are part of it. Labor groups — one of the arguments for abundance is, hey, you have to build a lot of infrastructure, and guess who builds infrastructure? It could be union groups. You know, unions could build. Guys with hard hats and women with hard hats. You should be pro-abundance too, if you’re an electric line worker or whatever.

Peter Van Doren: And again, a fantasy that manufacturing jobs will come back if Dems start behaving, even though all the Democratic intellectual economists say manufacturing jobs are going down because productivity is rising so fast that you can’t bring manufacturing jobs back. Because productivity is rising, and it’s freeing up all the rest of us to just dispute all the time.

Paul Matzko: Well, we also — I mean, there’s a collision between the old and new Democratic coalitions, because, as you’ve referenced, we’ve seen a class-based resorting of the constituencies for Republicans and Democrats. It used to be, you know, Dems were hard hats, union members, working class, that kind of idea. Now it’s the professional managerial class. It’s the PMC. It’s people like you and I, just with slightly different politics. That’s the core of the Republican — I mean, of the Democratic base. Whereas the Republican party, well, they put on, you know, 80th birthday parties with people pummeling each other in a ring out in front of the White House. It’s a very different class profile than laptop users.

Peter Van Doren: If you had told me that would occur, I don’t know. Well, I mean, right, this is implausible, right?

Paul Matzko: It’s implausible, but it’s true.

Peter Van Doren: Off the air, he said there’s something called the first and second abundance movement. So we’re all ears. All right. Take it away, Paul.

Paul Matzko: Strap in, Peter, for a ride here. Well, so this was funny. So as we’ve been having this conversation — and to be fair to the current abundance movement folks, I think they think of what they’re doing as being very novel and new and different. But there’s quite a deep set of historical precedents that this moment, on the big-picture level, is reminiscent of: the late 1970s. But there’s a specific reference. The use of the word abundance is actually not novel either.

But first, to the general moment. You were coming of age in the 1970s, so you remember when things got real bad in terms of the economy and the environment, for that matter. Acid rain coming down. Stagflation is driving up the cost. Your wages are stagnant, but inflation’s—

Peter Van Doren: My grad school stipend was fixed, and inflation was, you know, 13% a year, and my rent… it was horrible. Couldn’t afford rent. I mean, I had to ride my bike to get groceries. Couldn’t afford the bus.

Paul Matzko: I mean, so things got real bad there because of mismanagement, you know, from LBJ and Richard Nixon. And there’s, you know, a decade or more of bad policy that led to bad economic circumstances. But that led to pressure, I think, on both party elites, both party establishments, to take prosperity and abundance seriously.

And in fact, so I found a reference to the word abundance. I was digging around in Ronald Reagan’s archives, and in 1978, he would write his own radio program longhand. And in there, he praised a guy named Ben Wattenberg, who had called for a right-left alliance united around a rejection of, quote, “the environmental mentality of anti-growth,” and then called for, quote, “abundance lovers of the world, unite.”

Peter Van Doren: Well, because there is that book, remember, The Limits to Growth, Dennis Meadows et al., the MIT. What year was that? ’70s? Oh, jeez, I should know off the top of my head. But my guess is Wattenberg was writing in response to that, right?

Paul Matzko: Probably. I would imagine. Yeah. I have to go try to track that down. But it’s interesting because it’s using the terminology in the same way we’re talking about now.

Peter Van Doren: I’d forgotten that. Yeah, I think you’re right. People dissatisfied with this sclerosis of bureaucracy, of bad economic regulation, of inflation. Turning down the thermostat, sitting in the dark. And they’re like, no, no, we need to change the rules, change policy so that we can have abundance.

Paul Matzko: Stuff. And what’s interesting to me is that they did it, right? There actually really was a bipartisan and moderately successful movement to enact pro-abundance policies. I mean, we’ve talked about the airline and transportation and all the traditional, quote, deregulations that happened in that moment.

Peter Van Doren: In that moment, yes.

Paul Matzko: With massive — I mean, we did this in our episode about Jimmy Carter, the true great deregulator, I think we called it. But, like, I’m trying to think what the corollary today would be to Alfred Kahn at the Civil Aeronautics Board, you know, a very laissez-faire, libertarian-coded economist working with Teddy Kennedy, the progressive lion of the Senate on—

Peter Van Doren: That’s a coalition that doesn’t happen much. What would that be?

Paul Matzko: That’d be like AOC working with the Cato Institute, you know?

Peter Van Doren: Bernie and AOC on something, yes. Working with libertarians to get something deregulatory reform done. Build housing, maybe.

Paul Matzko: Build housing, yes. Maybe the YIMBY action would be a good comparison today. So we’ve been here before, and I think it’s — I think we can actually take a little bit of hope from that, which is that you can get real stuff done, with a surprising coalition of fellow travelers, in a moment of, like, the need.

Peter Van Doren: Again, it’ll happen in the Senate. The House is so gerrymandered and demographically challenged, it may never change. Although, election surprises, right? I mean, this is a weird year. So we may see a big wipeout in November, or not, but there’s a vacuum in the middle. And I think when I give my median voter lecture to the interns, I’m optimistic about — you can’t have the left go further left and the right go further right forever. There is this vacuum, and it looks like no one wants to enter it now, because anyone who tries sort of is dust. But so the whole Susan Collins election in Maine is a biggie, right? No one wants her. And the same thing for Alaska, right? There’s a few — and then, well, in the remaining months of their terms, the scorned senators from Louisiana and Texas may be surprising, but that’s not a permanent solution. So some day we’ll look back and — so I won’t make any predictions, but I think the middle is wide open, and somebody might jump in to see what we can do on the abundance agenda.

Paul Matzko: But this book itself — our reviewer was somewhat pessimistic. He said it seems like this book is written by Democrats in search of why supply isn’t responding, and they found some answers, but they still, probably in their bones, believe in state-directed responses rather than just letting markets flourish. Libertarians, more broadly speaking, are annoyed when people who aren’t — no one listened to us when we had these ideas, and then they generate them on their own. Hey, hey, we’re still here. And, like, hey, we’ve been saying this for a year. But, you know, at the same time, the realist in me says, I don’t—

Peter Van Doren: Yeah, no. Who cares about credit?

Paul Matzko: Exactly. Like, if it’s a good idea, it’s a good idea. And even if the good idea doesn’t go far enough — like, to his point, okay, it would be great if they cross-applied their public choice-based insights on housing, about the failure, you know, about state failures, to other domains, and had a more fully robust libertarian appreciation for how this applies throughout the political economy. Yes, that would be ideal. But the way to get there is not to complain that they didn’t give you credit. I think libertarians should be happy with it, and then do the hard, careful, slow work of saying, yes, you’re right, that is true about housing, and that is true about, you know, energy production and carbon emissions. Have you thought about how it could also be true of — fill in the blank?

Peter Van Doren: Something else. Right. Because we serve our purpose, but we’re not going to be a dominant party, probably ever. And therefore, their job is to prod and poke and see if anybody pays attention.

Paul Matzko: Well, in a lot of ways, it’s a proof of concept for the model of what the Cato Institute tries to do, which is this little coalition of oddballs coming up with radical ideas on a consistent theme and vision for how the world ought to operate. And we hope people will discover that those ideas work and apply them in the real world. And the goal is not the glorification of the Cato Institute; it’s the edification of society by generating good ideas that other people borrow.

That’s our show. But I have a special request for you if you’re still listening. We would like to run a mailbag episode to tackle the questions about regulations that you may have. Have you ever wondered why your state or local or federal government has some rule, and what its — well, let’s be frank — often negative effects on your community are? Well, then send us an email at ucpodcast at cato dot org. Again, that’s ucpodcast at cato dot org. Thank you for listening, and please leave a review on your podcast platform of choice. It helps more people find us. And until next time, be well.