I have lost count of the number of times Noah has put out the incorrect claim that Texas is way ahead of California in renewable energy. And here it is again.
"Solar and wind now power 31% of the entire Texas electrical grid, and if you add nuclear, the proportion rises to 41%"
Good for Texas.
But:
"Renewable resources, including hydropower and small-scale (less than 1-megawatt) customer-sited solar photovoltaic (PV) systems, supplied 54% of California's total in-state electricity generation in 2023."
Last time I checked, 54% is a lot bigger than 41% (or 31%).
Noah includes a chart showing that Texas has more solar capacity than California. True! And the US has more solar capacity than Luxembourg. Size matters! Texas's electricity consumption is more than twice California's (you know, air conditioning). California is starting to approach maximum coverage of daytime demand via renewables so of course the pace of building renewable capacity will slow -- there isn't that much demand left to cover. And California is way ahead of Texas in putting in battery capacity when renewables aren't available. Last time I checked, batteries accounted for about 20% of much of California's evening demand (covered by CAISO, i.e., excluding Los Angeles), compared to 2% for Texas. (https://www.gridstatus.io/live).
Texas is rapidly closing the gap, and I cheer them on. But for intellectual honesty, Noah, please don't use this deeply flawed case to make the argument that pathetic blue states can never build. When it comes to renewables and California, that simply isn't true.
Housing? That's a completely different story, much to California's shame.
I'm sorry, Marc, but this doesn't make any sense. California is energy-constrained because it doesn't build more energy.
Saying "Well of course California builds less renewable energy than Texas, they also build less energy in general!" is not the good point you think it is.
I'm sorry, Noah, but this doesn't make any sense. If there is demand that outstrips local generation, the ISOs simply go out on the market and buy it from electricity exporters. What is the evidence that Californians are 'energy-constrained'? That they don't run their air conditioners as much as people in Texas?
More than half of Texas's power consumption is industrial; a quarter of the US's industrial power usage is in Texas. The evidence that Californians are energy-constrained is that industry goes to Texas instead to buy power. https://www.eia.gov/state/?sid=TX
California’s GDP is 50% greater than that of Texas. There may be other reasons that California doesn’t concentrate on energy-intensive industrial operations. It’s doing just fine with the electricity it has. It really doesn’t need oil and gas operations and petrochemical facilities when it has Silicon Valley, Hollywood, the gaming industry, etc etc.
Mind you, Texas is great and this is no knock on them!
The word "need" is doing a lot of work here. How much more productive could our high-tech industries be if they could be colocated with these knowledge economy clusters? I don't think it makes Tesla more productive to have to go to Nevada and Texas to build bigger factories, for example. Relativity Space is moving from Long Beach to Texas because everything else they do is in the southeast: https://arstechnica.com/space/2025/03/relativity-space-may-soon-move-a-majority-of-its-operations-to-texas/
I'm fine to consume the petrochemical products of Corpus Christi and keep production there.
In the meantime, for better or worse, data center capacity, with its huge demands for electricity, is growing quickly in California. Clearly, they don't believe that the state is constrained in its ability to grow electricity supply in the face of increasing demand, even if there may be some bumps in the road as these data centers are built.
Fair point here, but wouldn't you expect the most liberal state in the country to be more than 13% ahead of a state that is actively hostile to renewable energy? All that noise and all those subsidies from CA have gotten a lousy 13%?
Also, as you mentioned, a lot of CA solar capacity is rooftop solar which circumvents the bureaucratic nightmare that utility scale construction faces. They do deserve credit for promoting it, but it's not really relevant to the point that CA makes it very difficult to build.
I'm in the process of putting rooftop solar panels on my home here in Los Angeles and I can promise you that the bureaucratic nightmare is not that easy to circumvent even in this instance.
As to whether California should be even more ahead of Texas (which might be a more interesting argument for Noah to try to make), that's hard when you're at diminishing returns given current demand. I looked at CAISO supply curves for yesterday and note that between 9 am and 4 pm fossil fuels accounted for under 6% of electricity consumed.* Going from 6 to zero is hard! Evening demand (which tends to be big) is the larger target. Fossil fuels routinely account for a quarter of supply and batteries are only a bit above 20%. But this is ten times the capacity of a couple years ago and continues to climb rapidly.
* By contrast for the same time period ERCOT (i.e. Texas) showed fossil fuels accounting for 37 to 41% of supply.
California's still wide lead over TX in rooftop solar is also an act of political innovation that TX may never replicate, because of political aversion to piss off their power utilities--often among the most powerful constituencies in any state, Red or Blue. As you probably know, power *generation*, not distribution. is where the profit lies in that biz. It's why utilities across the country loathe rooftop solar, and resist net metering; despite rooftop's more efficient utilization of existing grid infrastructure. Even large-scale wind and solar rightly see rooftop solar as cousins' but also competitors.
To my knowledge, Sacramento under Newsom has made considerable progress--even since 2023--at the state level in suppressing NIMBY-ism for both housing and industrial renewable projects. But it's arguably all catch up.
That is in state generation. California imported 118 TWh of fossil electricity (gas, oil and even coal) from other states, and 26 TWh from the Palo Verde nuclear plant in Arizona of their total 281 TWh of usage, whereas Texas has a self contained grid that imports nothing.
Worth noting that your source counts biomass (but not nuclear??) as a renewable, and states that California is the second-largest producer of energy from biomass in the nation. I don't have the bandwidth to figure it out from the raw data right now, but the CA/TX gap might look different with a true apples-to-apples comparison.
Texas doesn’t import electricity because, under ERCOT, it has put a wall around the state to keep the pesky feds and FERC out of their business. California imports a lot of electricity (kind of like Texas imports movies from California — Adam Smith thought well of it) but of the sources we can identify, the imports are overwhelmingly from renewable sources.
Also, the percentage of electricity from imports to California has plunged about a third over the past three years, I suspect mainly because of the huge buildup in battery storage that obviates the need to import electricity in the high-demand evening period.
Batteries have picked up and helped during early evening
CA (and the rest of the Southwest) has always imported a lot of hydro power from Oregon (so imports have had a good renewables share for decades), but the surge in requirements in the evening is met by power from Arizona and the Rockies - mostly nat gas.
While AZ has excess solar, too, solar is generally exported east (to states facing sunset while AZ is still sunny). When CA needs power in the early evenings it has already been dark in AZ.
So even with zero contribution from solar (except earlier battery charging), fossil fuels accounted for only a bit more than 8% (with imported fossil fuel electricity probably bumping that up to ~10%)
Evening demand starts dwindling around 10 pm or so (or even earlier, for old people like me) so the batteries are starting to do a pretty good job of covering max evening demand. And this is about ten times what they were able to cover three years ago. California has put in a huge amount of battery capacity.
My point isn't exactly the same as this commenter's, but I am amused that I'm not surprised at the contrast: I would expect California to be more friendly toward homeowners installing solar systems, possibly with a price deal that actually subsidizes them. Conversely, I would expect Texas to make it far easier to build *utility-scale* solar installations. And I wouldn't be at all surprised to find that Texas utility-scale solar lowers the wholesale price of power to the point that residential systems are not cost-attractive.
What the consequences are for their economies isn't so clear, but I wouldn't be surprised if the freeing-up of utility generation capacity by California's residential systems doesn't do much to lower the price of power for industrial users. So the industrial users may well relocate themselves and their jobs to Texas.
I do know that the Texas power grid is not connected to the west coast power grid, and the west coast grid is dominated by California, so each state has essentially its own independent grid.
I’m very skeptical that the cost of electricity is a major determinative factor in companies setting up factories in Texas instead of California. Many Silicon Valley firms are moving aggressively toward putting data centers in California, and they are notorious electricity hogs.
When a blue state spends more, requires more bureaucracy, and takes more time to build the same thing as a red state, all that time and money doesn't go into a black hole. People are benefiting from it. The activist groups that file the lawsuits, and the lawyers that represent them and represent the government in those lawsuits. The consultants and contractors that need to be paid to perform all the analysis and write the environmental impact statements. The government employees that are required to run the whole convoluted process. And, of course, the public sector unions that represent these employees.
When it costs 10x more to build subway in NY than it does in Seoul, these are the people who are getting the extra 9x. These people are overwhelmingly Democrats and make up a major constituency in the party. As much as I agree with the "abundance agenda" (or at least most of it) I don't think it's going to be possible without a solution to this fundamental political problem within the Democratic party, and I haven't heard one yet.
Dude: It was rich people in South Pasadena and San Marino who stopped the 710 Freeway from meeting the 210 and a Santa Monica Boulevard freeway through Beverly Hills. It was rich people who stopped a Metro line stop in DC neighborhood of Georgetown. There’s no doubt waste and over runs, but don’t ignore and discount the wealthier set’s roll in this as well.
And it was the rich folk in Marin county that blocked BART from being extended there, and similar obstacles that kept there from being a mass transit connection of any kind to SFO until relatively recently).
Exactly! People need to make a choice, either support growth, progress and abundance or support the Democratic Party. One or the other. I wonder when Noah will eventually realize that he can no longer be true to his beliefs and belong to the party of Bernie and AOC.
Wait until Trump/GOP wipes out your 401k when they crash the equities market. After wiping out huge portions of our remaining manufacturing base with their crazy tariffs. And driving away $1trn of US Defense sales to the EU.
Their incompetence is also likely to reduce IRS tax revenue by a whopping $500bn this year alone. And if they follow through with their tax cuts for Elon and Jeff, we're looking at a $2.5 trillion deficit for this year alone.
Agreed. Noah Smith is my favorite writer but there seems to be a huge disconnect between his stated policy preferences and his strong loyalty to the Democratic Party.
The Progress/Abundance movement needs to be non-partisan and support whichever party or candidate prioritizes promoting long-term economic growth. Right now it is certainly not the Democrats.
As a Dem what's all the more galling to me is that the actual builders collecting a large portion of that 9x, due to cost overruns, etc. are predominantly Republican constituencies. Real Estate Developers are pretty solidly Red in Blue CA. They collectively see environmental lawyers as their enemy, and FOX News is happy to oblige, and paint any blue constituency--especially environmentalists--as evil.
To be fair, a more detailed analysis is required to determine exactly how much cream gets skimmed by each set of players. My understanding is that despite the glacial pace of permitting in CA, the big money gets spent after, once ground is broken on a project, on actual construction-related expenses.
While hardly a new observation, if the democrats or a center left party want to win, they needy to be effective at doing the basics of governance. The governance of Florida and Texas, once you get beyond the culture war stuff, is basically competent. If government was effective at the basics in New York and California - picking up trash, removing dangerous people - at reasonable cost, people would be more willing to trust them on other things. Many of those things are things I oppose, but that’s politics. I remember thinking that if the MTA was a well-run institution (which didn’t lose approaching $1 billion a year to fare jumping), and otherwise a good steward of tax dollars, and they came to the public to make a case that the congestion pricing money would be used for new trains, people would be more likely to trust them. Does anyone believe that money won’t end up at least partially diverted to operating expenses or pension contributions?
And I should add- while I would oppose ridiculous left wing social policies, the nature of politics is that you get a certain amount of goodwill from the public once you do the basics well. I don’t think NYC is going to solve *insert global social problem or flaw of the human condition,* but people will give them more leeway to try if the garbage is picked up, streets are safe, housing affordable, and people aren’t shooting up in the parks in broad daylight.
While I think some of this is fair, how does it explain Massachusetts? Certainly it has failed on housing but it is a much better educated and less violent place than Florida. Boston and Miami, for example, outclass Miami in terms of safety. I think there is obvious wisdom to more plentiful hosing and police enforcement. But it doesn't withstand scrutiny to say that Blue State Governance is worse than Red State Governance.
My point is more that for people who want government to do more, it has to do the basics of governance well first. To say the blue state governance model failed would be an overstatement, but i don’t think it’s a rousing success on its own terms. If you look at intra-country migration, it’s from the more expensive, and higher taxed places like New York and California to Texas and Florida. Those places provide fewer government services, but residents pay taxes in line with that. People who leave high tax places like New York don’t necessarily oppose high taxes for more serviced. The refrain is they pay a lot in taxes and the services aren’t there. And if blue-state policies are indeed aimed at helping the less fortunate, failing to allow more housing to be built, which is an artificial scarcity, is a pretty damning indictment.
For instance, I live in New York; I think congestion pricing is a good policy. However, I put about as much faith in the MTA using the funding for its intended purpose as I do in Donald Trump making a factually accurate statement, so I would be lying if I said I didn’t have a bit of schadenfreude at the Governor’s current spat with Trump.
I’m frustrated that we never talk about the obvious reasons it is easier to build in Texas and Florida vs NY. In general, there are plenty of huge pieces of farmland / wet lands just 20 miles from Florida and Texas cities. Developers buy these large tracts of land and develop inefficient single family home developments.
It’s incorrect to compare zoning in NYC (which is usually just referring to Manhattan, look at the growth in LIC, Gowanus, JC, etc) to Texas — the equivalent should be comparing to downtown Houston, downtown Jacksonville. Is the rate of growth really that different?
If this is the problem, the focus should be on developing any land in an hour drive from NYC, which means undeveloped land in Monmouth county, etc. Focus on those NIMBYs, not on how Manhattan needs to tear down 20 story buildings with significant complexity and costs and rebuild as 60 story buildings.
Much of this is a funding issue, and Blue states often spend money on foolish things instead of productive infrastructure. Here in California, we have not only the ridiculously over-budget “bullet train”, but Democrats are now also proposing a Bond initiative for 2026 which includes $3.5 billion dollars for “bicycle lanes and pedestrian-mobility improvements”. Now, since there are already as many sidewalks as pedestrians need for the taking, and “paint stripe” and sharrows bike lanes are ridiculously inexpensive to implement, this means that the vast majority of the $3.5 billion will likely be going for Isolated Bike Lanes, which function to give bicyclists (and now E-bikers and rental scooters) separate lanes of their own by reducing auto traffic from four lanes to two lanes - one lane in each direction. When implemented, such structures are usually widely hated by both motorists and merchants in affected areas - motorists sit in traffic jams while such bike lanes sit largely unused. For the record, I’m an avid biker and can’t stand the feeling of riding in narrow “exclusive bike lanes”, and here in Glendale we recently voted to get rid of the North Brand Boulevard isolated bike lanes project, which cost $1.5 million to implement and a further half-million dollars to remove. But this $3.5 billion is “snuck” into a larger, worthier general mass transit funding bond initiative, and voters will face the dilemma of whether to vote for an otherwise worthwhile initiative. Democrats are great at pissing off the general public with moves like this.
I generally love Noah's analysis, but want to add some salient points. Housing costs more in California and New York because there are fewer ideal places to build, and land costs more. Noah acknowledged the costs of sprawl--but not enough--and red states will be feeling the costs of providinng far-flung fire, police and sewer soon. I live in Sacramento, which has tons of homeless people, but I can tell you there are apartments going up everywhere, thousands of of them, massive projects, mostly infill and near transit. There are new housing developments sprouting along the highways; yes, the hard-core enviros hate that, but at least they are along highways, which could one day have rail or BRT. Another factor is that much of the land immediately outside of California cities is prime farmland. California is America's #1 ag state, and the top 10 agricultural counties are almost all in California. It's just plain foolish to pave over prime farmland. We have a lot of grazing land in the foothills, which is not as good for farming, and there is a new solar rush on, with "agrivoltaic" projects springing up seemingly everywhere. To back up a previous commenter, the solar farms in our high desert are truly massive. Yes, it takes too long to get things done. Yes, people abuse CEQA, and I would love to see reform. I think Gov. Newsom is on board with that. But no, we are not building nothing. Would love for CA to have more chip factories, but that takes a lot of water, something we (and AZ) do not have.
Wrong. There are plenty of places to build houses in every state. The fact that you wrote “ It's just plain foolish to pave over prime farmland” shows that you know that there is plenty of land to build houses on.
Land is expensive because state governments do not allow cities to build houses on the outskirts of metro areas where land is cheaper.
The prime agricultural land is all in the central valley (where the only major construction is the monument to state incompetence, CAHSR) and the Imperial Valley. The places most people want to live: Silicon Valley + SF Bay Area, Los Angeles + OC and South Bay, San Diego and Sacramento are not surrounded by prime agricultural lands. Silicon Valley used to be all apricot orchards, before Fairchild Semiconductor started building there in the 1960s.
I hate to be a Debbie downer, but I think Noah significantly understates the progressive argument “against” this abundance agenda. Part of it is personal (using Twitter/X as a source/reference is a pet peeve of mine). Noah, I think if you want to steelman the leftist arguments against the Abundance Agenda, you should review actual long form leftist critiques (Mike Konzcal and Matt Bruenig are my favorite) instead of perusing X (which has always been a slopfest imo, even before Musk took over).
The current status of red state in- migration will be turned on its head and undergo a metamorphosis without massive planetary changes. It will not be driven by housing costs but by climate change. Southern states will approach uninhabitablity as temps approach 110 degrees long term. We are physiologically unable to survive at these now often seen temps in the South. As to your main premise of blue cannot build, the road to homelessness hell is paved with good intentions. Time for the regulatory state to deeply refined its regulations so that people, not ideology, are served. Along with Heather Cox Richardson, Mike Ryan, you are required reading for me. Thank you.
Arizona and Texas are increasingly populated, and regularly have temperatures above 110°. There is something called air conditioning. People are not succumbing to global warming and won’t anytime soon, at least in developed countries. Temperatures are expected to rise a few degrees by 2100, and many more people die each year from cold than from heat.
In 2008, for the first time in recorded history, more people lived in metropolitan areas than the countryside. The majority of migrants — seeking jobs, water, security — moved to coastal cities. This, of course, put them in the crosshairs of rising seas, tsunamis, hurricanes, typhoons, etc. Eventually, many of these people will need to retreat inland. One in every 165 people on the planet is migrating. No wall in any country can mitigate this problem. Countries will need to provide jobs, water, security from civil wars and famines to mitigate migration numbers. There is no other way. Telling people they must die of thirst, hunger, violence of civil wars or gangs isn’t going to solve anything. The live or die is a clearly defined choice.
Noah I wanted to ask about Illinois in particular. It would not surprise me to hear that regulations in Illinois are blocking new renewables development and new factories, however its pretty cheap overall. The state has reasonably priced electricity (when I moved to NYC I thought there was a mistake on my bill going from $75 to $350 a month) and on housing its just not that expensive. My parents house that they bought in 1998 is probably worth a few hundred grand more than it was back then, meanwhile my uncles house in San Diego that they bought for $200k in the 90s just sold for over a million. What explains the population outflow? Chicago mayors have been very unpopular, but for all the complaining JD Pritzker has done a pretty decent job moving Illinois finances in a less negative direction.
The population outflow is complicated. In large part is is concentrated on the South Side of Chicago. Crime and tax increases are a factor, but more than that it's the lack of investment and development in many of the neighborhoods on that side of the city. Most of the new construction is happening on the North and West Sides, with a few exceptions. This construction is in response to high demand from new people moving to Chicago who are disproportionately college educated or have advanced degrees, and have above-average incomes.
The housing stock in many of the neglected neighborhoods has also aged and deteriorated. When you combine that with the heightened income and credit standards for getting mortgages after the housing crisis its easy for neighborhoods to get into this place where anyone who has the means to leave may want to because they can't buy property in their neighborhood (or financially it may not make sense to).
And for those people, they have very near alternatives of the collar county suburbs and then just over the border in Indiana. Indiana taxes are lower and the housing is cheaper. And if you work on the South Side or in downtown Chicago, the commute from the near-in suburbs or NW Indiana is very doable.
FWIW, unlike some pundits on substack who don't actually live in this city, I don't think this is a permanent state of affairs. Real investment in the South Side neighborhoods that have been neglected the most would definitely help, but the trajectory of much of the North Side is instructive... many areas that were in not great shape 30-40 years ago are now home to enormously expensive real estate. Gentrification and redevelopment will eventually touch the neighborhoods that are emptying out but it's going to take time.
As native Chicagoan could not agree more. Chicago is very much an aggressive split city, with the North half (North, West Sides) growing, developing, and attracting college educated people and the South Side hemorrhaging population to the Suburbs and the South. The North Side and North West side is so much nicer than when I was a kid, and the West of the loop to Garfield Park is completely night and day different.
The Chicago substack talk could really benefit from understanding the geography of city growth rather than looking at aggregate numbers.
Excellent and timely, Noah. I just finished "Abundance" and it is clearly *not* about simple deregulation. And degrowth is simply not a winning strategy for the reasons you have stated.
That’s good, because most of the Biden IRA money is targeted to Red States. Of course, Trump intends to claw back as much money as he can from that “terrible bill.”
Building in Blue or Red States is a moot point if Trump blocks IRA stimulus monies. At this point, I think it’s best to worry about Trump’s intentions.
I basically agree with this, but my question is if Florida and Texas are so great at managing their state economies, why are they net debtors to the federal government, while CA and NY are big net contributors. A lot of Americans are subsidized, to some extent, by taxpayers in the much maligned Blue states. But no one outside of Texas is subsidized by TX taxpayers.
Again, I’m all for the core message that progressives need to get better at building, but I’m a little wary of criticism from Red state moochers.
Hmm...Is it mooching off the federal government that allows Texas to build so much more green energy and housing? I don't think that's how they do it...
It is not about states but about people. The 1 percent pay a big chunk of the taxes and the bottom 50 percent or so are net takers. That’s the progressive tax system at work.
The northeast, SF etc have some concentrated pockets of rich people in suburbs and cities. Many more poor people, of course (CA is awash with social welfare recipients, as is NY), but there is so much wealth in these tiny enclaves and there are so few people who are net payers of the bulk of taxes that it doesn’t matter when you look at stats like this.
Anyone who thinks the development of the tech industry or the financial industry had anything to do with the current or recent governments of CA or NY is smoking some of that legal weed.
Arguably the development of the tech industry is thanks in large part to California's ban on non-competes decades ago. Though I suppose you could classify that as not a policy of a "recent" government.
The entire concept of states being net contributors or debtors to the federal government is economically illiterate nonsense because we are an economically integrated unit and you can't localize economic activity or federal spending by state. If a Wall St banker spends his whole career in NYC paying millions in taxes and then retires to FL and collects Social Security, that does not somehow accrue to the credit of NY and against FL even though on paper it is a "contribution" by NY and a "withdrawal" by FL. When a highway is built across Montana, that is done just as much to let trucks get from Chicago to Seattle as it is for people to drive from Billings to Bozeman. When China tries to bomb LA, fighters will take off from the Air Force base in NV to intercept them even though they weren't trying to bomb Las Vegas.
Sure, but my point is that there’s more to a successful national economy than building lots of houses and solar panels and modern factories- that’s all great, no argument here - but it’s worth asking why Red states which make it easier to build that stuff still tend be bigger moochers than Blue states. My thought is that maybe Red states can have looser economic rules and lower taxes because they’re subsidized, in part, by states like NY and CA. But that’s just speculation.
Sure, but why did Silicon Valley and Wall Street get super rich in Blue States over the past several decades? I get that American culture and economic geography is shifting, so maybe CA and NY will lose some of their luster going forward, but at the moment I think progressive culture has delivered bigger economic gains to America than conservative culture. The GDP data on voting shows this too; Democratic counties contribute more to GDP than Republican ones.
New York became the power house it is today before the red state/ blue state distinction was meaningful. It was already a major economic center during the civil war. Similarly silicon value basically squeaked in before California basically shut down development. And then during the 90s and the 2000s it was able to grew in part because it's growth was all digital. They didn't have to actually manufacture or BUILD anything, they just wrote code.
It's notable that despite Silicon value being such an economic powerhouse, no large metropolitan city has grown up around it. San Francisco was already a large city and has not really grown much. San Jose has a BIT but by and large, Silicon Valley is still extremely suburban. Imagine how much MORE wealthy we'd be as a state or a country if California had let the area build up. We'd might have a dense urban area to rival New York. Instead we have a couple of crumbling downtowns and engineers making 6 figures packed 2 to a room in the suburbs or commuting an hour and a half from Fresno.
Because William Shockley started Shockley Semiconductor in Mountainview to be close to his mother in Palo Alto. People will say its because Stanford is there, and they certainly played a role, but so did Grinnell University in Iowa. And a contributing factor is that Silicon Valley had cheap real estate back then. The early Silicon Valley facilities were started on land bought from farmers. It was hardly the liberal urban center that it is today.
However, if Silicon Valley had started in Mississippi, you would probably be saying the same thing about how it wasn't the bright "blue" state that it is today. It is the densification and the concentration of tech people and wealth that turned California so "blue."
Globalization, outsourcing, entrepreneurship, innovation, low inflation, slow growth (9/11 through COVID), QE and ZIRP all boosted the prospects of capital owners at the expense of salary owners and boosted IP (whether in tech or finance or pharma) at the expense of lower margin/higher cost manufacturing (which was outsourced or offshored).
Rich people own stocks. Stocks go up, boosted by profits and globalization but also high multiples (aided by QE and ZIRP). Rich people these days tend to vote Dem, yes. Is that all “progressive culture”? Bernie’s vision for how the world works?
One can argue that high real estate prices boosted by scarcity (progressive policies) have been a wealth creator, of course.
Still, I think you are focusing on state averages rather than people. California has lots of rich people but plenty more poor people and the most people on benefits (as a pct) in America. It also has high unemployment, high grocery prices, high housing costs, high electricity costs and high gasoline prices. What is the connection with progressive policies? It is not just about a handful of extremely rich people that bring averages up.
Isn’t some of this about geography? If you look at a map of Austin, it’s surrounded by open space. The same is not true of SF and LA on the west coast and pretty much anywhere in the NE.
"Another frustrating thing is that the progressive critics seem to assume that their preferred ideas — such as antitrust — are alternatives to abundance, when in fact they usually don’t conflict, and sometimes complement each other."
It sounds like building is a fundamental issue, if we do not get that right, nothing else matters.
I currently have no confidence that democrats will be able to fix the building sclerosis. The progress so far has been painfully slow. They do not have 20 years to get this right.
The only way I see this changing is if democratic leadership decides that building is life or death issue, and actually leads.
I am off to see Ezra speak tonight, have been yimby supporter since Sonja's early SF days, and read Abundance, and support Scott Weiner. I really want to see this happen, and the fact that I do not see a way forward is disheartening.
And dammit, if republicans were not such assholes about so many other things, I'd switch.
I think the development issue is usually housing density rather than just the availability of vacant land. Combined with high cost of infra-structure and length of time in the pipeline, development is deferred. As profitability returns, marginal and aging improvements can be demolished creating new vacant land even in the most urbanized areas.
I have lost count of the number of times Noah has put out the incorrect claim that Texas is way ahead of California in renewable energy. And here it is again.
"Solar and wind now power 31% of the entire Texas electrical grid, and if you add nuclear, the proportion rises to 41%"
Good for Texas.
But:
"Renewable resources, including hydropower and small-scale (less than 1-megawatt) customer-sited solar photovoltaic (PV) systems, supplied 54% of California's total in-state electricity generation in 2023."
https://www.eia.gov/state/analysis.php?sid=CA#:~:text=Renewable%20resources%2C%20including%20hydropower%20and,the%20state's%20total%20net%20generation.
Last time I checked, 54% is a lot bigger than 41% (or 31%).
Noah includes a chart showing that Texas has more solar capacity than California. True! And the US has more solar capacity than Luxembourg. Size matters! Texas's electricity consumption is more than twice California's (you know, air conditioning). California is starting to approach maximum coverage of daytime demand via renewables so of course the pace of building renewable capacity will slow -- there isn't that much demand left to cover. And California is way ahead of Texas in putting in battery capacity when renewables aren't available. Last time I checked, batteries accounted for about 20% of much of California's evening demand (covered by CAISO, i.e., excluding Los Angeles), compared to 2% for Texas. (https://www.gridstatus.io/live).
Texas is rapidly closing the gap, and I cheer them on. But for intellectual honesty, Noah, please don't use this deeply flawed case to make the argument that pathetic blue states can never build. When it comes to renewables and California, that simply isn't true.
Housing? That's a completely different story, much to California's shame.
I'm sorry, Marc, but this doesn't make any sense. California is energy-constrained because it doesn't build more energy.
Saying "Well of course California builds less renewable energy than Texas, they also build less energy in general!" is not the good point you think it is.
I'm sorry, Noah, but this doesn't make any sense. If there is demand that outstrips local generation, the ISOs simply go out on the market and buy it from electricity exporters. What is the evidence that Californians are 'energy-constrained'? That they don't run their air conditioners as much as people in Texas?
More than half of Texas's power consumption is industrial; a quarter of the US's industrial power usage is in Texas. The evidence that Californians are energy-constrained is that industry goes to Texas instead to buy power. https://www.eia.gov/state/?sid=TX
California’s GDP is 50% greater than that of Texas. There may be other reasons that California doesn’t concentrate on energy-intensive industrial operations. It’s doing just fine with the electricity it has. It really doesn’t need oil and gas operations and petrochemical facilities when it has Silicon Valley, Hollywood, the gaming industry, etc etc.
Mind you, Texas is great and this is no knock on them!
The word "need" is doing a lot of work here. How much more productive could our high-tech industries be if they could be colocated with these knowledge economy clusters? I don't think it makes Tesla more productive to have to go to Nevada and Texas to build bigger factories, for example. Relativity Space is moving from Long Beach to Texas because everything else they do is in the southeast: https://arstechnica.com/space/2025/03/relativity-space-may-soon-move-a-majority-of-its-operations-to-texas/
I'm fine to consume the petrochemical products of Corpus Christi and keep production there.
In the meantime, for better or worse, data center capacity, with its huge demands for electricity, is growing quickly in California. Clearly, they don't believe that the state is constrained in its ability to grow electricity supply in the face of increasing demand, even if there may be some bumps in the road as these data centers are built.
https://www.datacenterdynamics.com/en/news/pge-35gw-of-data-center-capacity-in-connection-pipeline-over-next-five-years/
Fair point here, but wouldn't you expect the most liberal state in the country to be more than 13% ahead of a state that is actively hostile to renewable energy? All that noise and all those subsidies from CA have gotten a lousy 13%?
Also, as you mentioned, a lot of CA solar capacity is rooftop solar which circumvents the bureaucratic nightmare that utility scale construction faces. They do deserve credit for promoting it, but it's not really relevant to the point that CA makes it very difficult to build.
I'm in the process of putting rooftop solar panels on my home here in Los Angeles and I can promise you that the bureaucratic nightmare is not that easy to circumvent even in this instance.
As to whether California should be even more ahead of Texas (which might be a more interesting argument for Noah to try to make), that's hard when you're at diminishing returns given current demand. I looked at CAISO supply curves for yesterday and note that between 9 am and 4 pm fossil fuels accounted for under 6% of electricity consumed.* Going from 6 to zero is hard! Evening demand (which tends to be big) is the larger target. Fossil fuels routinely account for a quarter of supply and batteries are only a bit above 20%. But this is ten times the capacity of a couple years ago and continues to climb rapidly.
* By contrast for the same time period ERCOT (i.e. Texas) showed fossil fuels accounting for 37 to 41% of supply.
https://www.gridstatus.io/live/ercot?date=2025-03-24
California's still wide lead over TX in rooftop solar is also an act of political innovation that TX may never replicate, because of political aversion to piss off their power utilities--often among the most powerful constituencies in any state, Red or Blue. As you probably know, power *generation*, not distribution. is where the profit lies in that biz. It's why utilities across the country loathe rooftop solar, and resist net metering; despite rooftop's more efficient utilization of existing grid infrastructure. Even large-scale wind and solar rightly see rooftop solar as cousins' but also competitors.
To my knowledge, Sacramento under Newsom has made considerable progress--even since 2023--at the state level in suppressing NIMBY-ism for both housing and industrial renewable projects. But it's arguably all catch up.
That is in state generation. California imported 118 TWh of fossil electricity (gas, oil and even coal) from other states, and 26 TWh from the Palo Verde nuclear plant in Arizona of their total 281 TWh of usage, whereas Texas has a self contained grid that imports nothing.
https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2023-total-system-electric-generation
Yes, imports from fossil fuel-generated electricity accounted for 4.7% of California's total consumption. That number is steadily declining over time and is pretty low right now; in 2017 it was 7%. (https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2021-total-system-electric-generation/2017#:~:text=In%202017%2C%20total%20system%20electric,56%20percent%20of%20total%20in%2D)
Imports of renewable-generated electricity accounted for 15% of total demand in 2023 by contrast.
2022 State figures were 30% imported.
https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2022-total-system-electric-generation#:~:text=Electricity%20imports%20account%20for%20approximately,system%20electric%20generation%20each%20year.&text=As%20part%20of%20the%20Western,western%20states%20and%20Canadian%20provinces.
Of which less than 17% (or 5% of total demand) was clearly fossil fuels.
Worth noting that your source counts biomass (but not nuclear??) as a renewable, and states that California is the second-largest producer of energy from biomass in the nation. I don't have the bandwidth to figure it out from the raw data right now, but the CA/TX gap might look different with a true apples-to-apples comparison.
Nuclear was 9.3% in 2021:
https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2021-total-system-electric-generation
Biomass accounts for less than 1% of California supply.
“Generation” is a meaningless denominator if you ignore power imports and exports. Texas, on a net basis, doesn’t import much power from other states.
California is a massive net importer of power, mostly fossil fuel-based.
https://www.eia.gov/todayinenergy/detail.php?id=64104
Texas doesn’t import electricity because, under ERCOT, it has put a wall around the state to keep the pesky feds and FERC out of their business. California imports a lot of electricity (kind of like Texas imports movies from California — Adam Smith thought well of it) but of the sources we can identify, the imports are overwhelmingly from renewable sources.
https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2023-total-system-electric-generation
Also, the percentage of electricity from imports to California has plunged about a third over the past three years, I suspect mainly because of the huge buildup in battery storage that obviates the need to import electricity in the high-demand evening period.
Batteries have picked up and helped during early evening
CA (and the rest of the Southwest) has always imported a lot of hydro power from Oregon (so imports have had a good renewables share for decades), but the surge in requirements in the evening is met by power from Arizona and the Rockies - mostly nat gas.
While AZ has excess solar, too, solar is generally exported east (to states facing sunset while AZ is still sunny). When CA needs power in the early evenings it has already been dark in AZ.
“the surge in requirements in the evening is met by power from Arizona and the Rockies - mostly nat gas.”
Maybe in the increasingly distant past, but that is not true now.
For example, look at the electricity demand for CAISO (all of CA except LA) at 8 pm, averaging the past two days. Here are the sources:
Batteries (24%)
Wind (19%)
Imports (mostly renewables) 19%
Large hydro (CA-sourced) 16%
Nuclear (9%)
Natural Gas (8%)
Geothermal (3%)
All others <2%
https://www.gridstatus.io/live/caiso?date=2025-03-27
So even with zero contribution from solar (except earlier battery charging), fossil fuels accounted for only a bit more than 8% (with imported fossil fuel electricity probably bumping that up to ~10%)
The batteries are run down before midnight, and the imports are mostly a combo of hydro and nat gas. Still, not bad
I agree.
Evening demand starts dwindling around 10 pm or so (or even earlier, for old people like me) so the batteries are starting to do a pretty good job of covering max evening demand. And this is about ten times what they were able to cover three years ago. California has put in a huge amount of battery capacity.
The Texas grid is separate from the rest of the country. I wonder how much work “in state” is doing for the CA argument.
My point isn't exactly the same as this commenter's, but I am amused that I'm not surprised at the contrast: I would expect California to be more friendly toward homeowners installing solar systems, possibly with a price deal that actually subsidizes them. Conversely, I would expect Texas to make it far easier to build *utility-scale* solar installations. And I wouldn't be at all surprised to find that Texas utility-scale solar lowers the wholesale price of power to the point that residential systems are not cost-attractive.
What the consequences are for their economies isn't so clear, but I wouldn't be surprised if the freeing-up of utility generation capacity by California's residential systems doesn't do much to lower the price of power for industrial users. So the industrial users may well relocate themselves and their jobs to Texas.
I do know that the Texas power grid is not connected to the west coast power grid, and the west coast grid is dominated by California, so each state has essentially its own independent grid.
California has become a lot stingier in subsidizing rooftop solar (https://www.cnet.com/home/energy-and-utilities/net-metering-changes-in-california-how-will-they-impact-you/)
I’m very skeptical that the cost of electricity is a major determinative factor in companies setting up factories in Texas instead of California. Many Silicon Valley firms are moving aggressively toward putting data centers in California, and they are notorious electricity hogs.
https://www.avisonyoung.us/w/data-center-inventory-growth-has-accelerated-across-northern-california-in-response-to-a-sharp-increase-in-demand
https://www.datacenterdynamics.com/en/news/pge-35gw-of-data-center-capacity-in-connection-pipeline-over-next-five-years/
When a blue state spends more, requires more bureaucracy, and takes more time to build the same thing as a red state, all that time and money doesn't go into a black hole. People are benefiting from it. The activist groups that file the lawsuits, and the lawyers that represent them and represent the government in those lawsuits. The consultants and contractors that need to be paid to perform all the analysis and write the environmental impact statements. The government employees that are required to run the whole convoluted process. And, of course, the public sector unions that represent these employees.
When it costs 10x more to build subway in NY than it does in Seoul, these are the people who are getting the extra 9x. These people are overwhelmingly Democrats and make up a major constituency in the party. As much as I agree with the "abundance agenda" (or at least most of it) I don't think it's going to be possible without a solution to this fundamental political problem within the Democratic party, and I haven't heard one yet.
Dude: It was rich people in South Pasadena and San Marino who stopped the 710 Freeway from meeting the 210 and a Santa Monica Boulevard freeway through Beverly Hills. It was rich people who stopped a Metro line stop in DC neighborhood of Georgetown. There’s no doubt waste and over runs, but don’t ignore and discount the wealthier set’s roll in this as well.
And it was the rich folk in Marin county that blocked BART from being extended there, and similar obstacles that kept there from being a mass transit connection of any kind to SFO until relatively recently).
Exactly! People need to make a choice, either support growth, progress and abundance or support the Democratic Party. One or the other. I wonder when Noah will eventually realize that he can no longer be true to his beliefs and belong to the party of Bernie and AOC.
Wait until Trump/GOP wipes out your 401k when they crash the equities market. After wiping out huge portions of our remaining manufacturing base with their crazy tariffs. And driving away $1trn of US Defense sales to the EU.
Their incompetence is also likely to reduce IRS tax revenue by a whopping $500bn this year alone. And if they follow through with their tax cuts for Elon and Jeff, we're looking at a $2.5 trillion deficit for this year alone.
Is this your idea of progress?
Agreed. Noah Smith is my favorite writer but there seems to be a huge disconnect between his stated policy preferences and his strong loyalty to the Democratic Party.
The Progress/Abundance movement needs to be non-partisan and support whichever party or candidate prioritizes promoting long-term economic growth. Right now it is certainly not the Democrats.
Unfortunately it's not the Republicans either right now, thanks to Trump.
As a Dem what's all the more galling to me is that the actual builders collecting a large portion of that 9x, due to cost overruns, etc. are predominantly Republican constituencies. Real Estate Developers are pretty solidly Red in Blue CA. They collectively see environmental lawyers as their enemy, and FOX News is happy to oblige, and paint any blue constituency--especially environmentalists--as evil.
To be fair, a more detailed analysis is required to determine exactly how much cream gets skimmed by each set of players. My understanding is that despite the glacial pace of permitting in CA, the big money gets spent after, once ground is broken on a project, on actual construction-related expenses.
There are builders in every state. If they were getting most of this inefficiency it would be a problem across the entire country, but it isn't.
That's really not much different than a black hole...
You are wasting a lot of people's time and paying a lot of peoples money, so they can argue back and forth
While hardly a new observation, if the democrats or a center left party want to win, they needy to be effective at doing the basics of governance. The governance of Florida and Texas, once you get beyond the culture war stuff, is basically competent. If government was effective at the basics in New York and California - picking up trash, removing dangerous people - at reasonable cost, people would be more willing to trust them on other things. Many of those things are things I oppose, but that’s politics. I remember thinking that if the MTA was a well-run institution (which didn’t lose approaching $1 billion a year to fare jumping), and otherwise a good steward of tax dollars, and they came to the public to make a case that the congestion pricing money would be used for new trains, people would be more likely to trust them. Does anyone believe that money won’t end up at least partially diverted to operating expenses or pension contributions?
And I should add- while I would oppose ridiculous left wing social policies, the nature of politics is that you get a certain amount of goodwill from the public once you do the basics well. I don’t think NYC is going to solve *insert global social problem or flaw of the human condition,* but people will give them more leeway to try if the garbage is picked up, streets are safe, housing affordable, and people aren’t shooting up in the parks in broad daylight.
While I think some of this is fair, how does it explain Massachusetts? Certainly it has failed on housing but it is a much better educated and less violent place than Florida. Boston and Miami, for example, outclass Miami in terms of safety. I think there is obvious wisdom to more plentiful hosing and police enforcement. But it doesn't withstand scrutiny to say that Blue State Governance is worse than Red State Governance.
My point is more that for people who want government to do more, it has to do the basics of governance well first. To say the blue state governance model failed would be an overstatement, but i don’t think it’s a rousing success on its own terms. If you look at intra-country migration, it’s from the more expensive, and higher taxed places like New York and California to Texas and Florida. Those places provide fewer government services, but residents pay taxes in line with that. People who leave high tax places like New York don’t necessarily oppose high taxes for more serviced. The refrain is they pay a lot in taxes and the services aren’t there. And if blue-state policies are indeed aimed at helping the less fortunate, failing to allow more housing to be built, which is an artificial scarcity, is a pretty damning indictment.
For instance, I live in New York; I think congestion pricing is a good policy. However, I put about as much faith in the MTA using the funding for its intended purpose as I do in Donald Trump making a factually accurate statement, so I would be lying if I said I didn’t have a bit of schadenfreude at the Governor’s current spat with Trump.
I’m frustrated that we never talk about the obvious reasons it is easier to build in Texas and Florida vs NY. In general, there are plenty of huge pieces of farmland / wet lands just 20 miles from Florida and Texas cities. Developers buy these large tracts of land and develop inefficient single family home developments.
It’s incorrect to compare zoning in NYC (which is usually just referring to Manhattan, look at the growth in LIC, Gowanus, JC, etc) to Texas — the equivalent should be comparing to downtown Houston, downtown Jacksonville. Is the rate of growth really that different?
If this is the problem, the focus should be on developing any land in an hour drive from NYC, which means undeveloped land in Monmouth county, etc. Focus on those NIMBYs, not on how Manhattan needs to tear down 20 story buildings with significant complexity and costs and rebuild as 60 story buildings.
I dare you to drive around the Bay Area and tell me the problem is there's no where left to build.
Texas is building a lot more multi-family housing than most blue states. It's not all just suburban sprawl by any means.
Interesting, do you have a source?
Much of this is a funding issue, and Blue states often spend money on foolish things instead of productive infrastructure. Here in California, we have not only the ridiculously over-budget “bullet train”, but Democrats are now also proposing a Bond initiative for 2026 which includes $3.5 billion dollars for “bicycle lanes and pedestrian-mobility improvements”. Now, since there are already as many sidewalks as pedestrians need for the taking, and “paint stripe” and sharrows bike lanes are ridiculously inexpensive to implement, this means that the vast majority of the $3.5 billion will likely be going for Isolated Bike Lanes, which function to give bicyclists (and now E-bikers and rental scooters) separate lanes of their own by reducing auto traffic from four lanes to two lanes - one lane in each direction. When implemented, such structures are usually widely hated by both motorists and merchants in affected areas - motorists sit in traffic jams while such bike lanes sit largely unused. For the record, I’m an avid biker and can’t stand the feeling of riding in narrow “exclusive bike lanes”, and here in Glendale we recently voted to get rid of the North Brand Boulevard isolated bike lanes project, which cost $1.5 million to implement and a further half-million dollars to remove. But this $3.5 billion is “snuck” into a larger, worthier general mass transit funding bond initiative, and voters will face the dilemma of whether to vote for an otherwise worthwhile initiative. Democrats are great at pissing off the general public with moves like this.
I generally love Noah's analysis, but want to add some salient points. Housing costs more in California and New York because there are fewer ideal places to build, and land costs more. Noah acknowledged the costs of sprawl--but not enough--and red states will be feeling the costs of providinng far-flung fire, police and sewer soon. I live in Sacramento, which has tons of homeless people, but I can tell you there are apartments going up everywhere, thousands of of them, massive projects, mostly infill and near transit. There are new housing developments sprouting along the highways; yes, the hard-core enviros hate that, but at least they are along highways, which could one day have rail or BRT. Another factor is that much of the land immediately outside of California cities is prime farmland. California is America's #1 ag state, and the top 10 agricultural counties are almost all in California. It's just plain foolish to pave over prime farmland. We have a lot of grazing land in the foothills, which is not as good for farming, and there is a new solar rush on, with "agrivoltaic" projects springing up seemingly everywhere. To back up a previous commenter, the solar farms in our high desert are truly massive. Yes, it takes too long to get things done. Yes, people abuse CEQA, and I would love to see reform. I think Gov. Newsom is on board with that. But no, we are not building nothing. Would love for CA to have more chip factories, but that takes a lot of water, something we (and AZ) do not have.
Wrong. There are plenty of places to build houses in every state. The fact that you wrote “ It's just plain foolish to pave over prime farmland” shows that you know that there is plenty of land to build houses on.
Land is expensive because state governments do not allow cities to build houses on the outskirts of metro areas where land is cheaper.
And there is simply no shortage of farm land.
https://frompovertytoprogress.substack.com/p/we-need-to-stop-fighting-sprawl
https://frompovertytoprogress.substack.com/p/how-to-make-housing-affordable-again-23f
The prime agricultural land is all in the central valley (where the only major construction is the monument to state incompetence, CAHSR) and the Imperial Valley. The places most people want to live: Silicon Valley + SF Bay Area, Los Angeles + OC and South Bay, San Diego and Sacramento are not surrounded by prime agricultural lands. Silicon Valley used to be all apricot orchards, before Fairchild Semiconductor started building there in the 1960s.
I hate to be a Debbie downer, but I think Noah significantly understates the progressive argument “against” this abundance agenda. Part of it is personal (using Twitter/X as a source/reference is a pet peeve of mine). Noah, I think if you want to steelman the leftist arguments against the Abundance Agenda, you should review actual long form leftist critiques (Mike Konzcal and Matt Bruenig are my favorite) instead of perusing X (which has always been a slopfest imo, even before Musk took over).
https://democracyjournal.org/magazine/76/the-abundance-doctrine/
https://jacobin.com/2025/03/abundance-klein-thompson-book-review
These both read more as tangential critiques rather than a critique of the central ideas of the book.
The current status of red state in- migration will be turned on its head and undergo a metamorphosis without massive planetary changes. It will not be driven by housing costs but by climate change. Southern states will approach uninhabitablity as temps approach 110 degrees long term. We are physiologically unable to survive at these now often seen temps in the South. As to your main premise of blue cannot build, the road to homelessness hell is paved with good intentions. Time for the regulatory state to deeply refined its regulations so that people, not ideology, are served. Along with Heather Cox Richardson, Mike Ryan, you are required reading for me. Thank you.
Arizona and Texas are increasingly populated, and regularly have temperatures above 110°. There is something called air conditioning. People are not succumbing to global warming and won’t anytime soon, at least in developed countries. Temperatures are expected to rise a few degrees by 2100, and many more people die each year from cold than from heat.
In 2008, for the first time in recorded history, more people lived in metropolitan areas than the countryside. The majority of migrants — seeking jobs, water, security — moved to coastal cities. This, of course, put them in the crosshairs of rising seas, tsunamis, hurricanes, typhoons, etc. Eventually, many of these people will need to retreat inland. One in every 165 people on the planet is migrating. No wall in any country can mitigate this problem. Countries will need to provide jobs, water, security from civil wars and famines to mitigate migration numbers. There is no other way. Telling people they must die of thirst, hunger, violence of civil wars or gangs isn’t going to solve anything. The live or die is a clearly defined choice.
Noah I wanted to ask about Illinois in particular. It would not surprise me to hear that regulations in Illinois are blocking new renewables development and new factories, however its pretty cheap overall. The state has reasonably priced electricity (when I moved to NYC I thought there was a mistake on my bill going from $75 to $350 a month) and on housing its just not that expensive. My parents house that they bought in 1998 is probably worth a few hundred grand more than it was back then, meanwhile my uncles house in San Diego that they bought for $200k in the 90s just sold for over a million. What explains the population outflow? Chicago mayors have been very unpopular, but for all the complaining JD Pritzker has done a pretty decent job moving Illinois finances in a less negative direction.
The population outflow is complicated. In large part is is concentrated on the South Side of Chicago. Crime and tax increases are a factor, but more than that it's the lack of investment and development in many of the neighborhoods on that side of the city. Most of the new construction is happening on the North and West Sides, with a few exceptions. This construction is in response to high demand from new people moving to Chicago who are disproportionately college educated or have advanced degrees, and have above-average incomes.
The housing stock in many of the neglected neighborhoods has also aged and deteriorated. When you combine that with the heightened income and credit standards for getting mortgages after the housing crisis its easy for neighborhoods to get into this place where anyone who has the means to leave may want to because they can't buy property in their neighborhood (or financially it may not make sense to).
And for those people, they have very near alternatives of the collar county suburbs and then just over the border in Indiana. Indiana taxes are lower and the housing is cheaper. And if you work on the South Side or in downtown Chicago, the commute from the near-in suburbs or NW Indiana is very doable.
FWIW, unlike some pundits on substack who don't actually live in this city, I don't think this is a permanent state of affairs. Real investment in the South Side neighborhoods that have been neglected the most would definitely help, but the trajectory of much of the North Side is instructive... many areas that were in not great shape 30-40 years ago are now home to enormously expensive real estate. Gentrification and redevelopment will eventually touch the neighborhoods that are emptying out but it's going to take time.
As native Chicagoan could not agree more. Chicago is very much an aggressive split city, with the North half (North, West Sides) growing, developing, and attracting college educated people and the South Side hemorrhaging population to the Suburbs and the South. The North Side and North West side is so much nicer than when I was a kid, and the West of the loop to Garfield Park is completely night and day different.
The Chicago substack talk could really benefit from understanding the geography of city growth rather than looking at aggregate numbers.
Excellent and timely, Noah. I just finished "Abundance" and it is clearly *not* about simple deregulation. And degrowth is simply not a winning strategy for the reasons you have stated.
That’s good, because most of the Biden IRA money is targeted to Red States. Of course, Trump intends to claw back as much money as he can from that “terrible bill.”
Building in Blue or Red States is a moot point if Trump blocks IRA stimulus monies. At this point, I think it’s best to worry about Trump’s intentions.
I basically agree with this, but my question is if Florida and Texas are so great at managing their state economies, why are they net debtors to the federal government, while CA and NY are big net contributors. A lot of Americans are subsidized, to some extent, by taxpayers in the much maligned Blue states. But no one outside of Texas is subsidized by TX taxpayers.
Again, I’m all for the core message that progressives need to get better at building, but I’m a little wary of criticism from Red state moochers.
Hmm...Is it mooching off the federal government that allows Texas to build so much more green energy and housing? I don't think that's how they do it...
It is not about states but about people. The 1 percent pay a big chunk of the taxes and the bottom 50 percent or so are net takers. That’s the progressive tax system at work.
The northeast, SF etc have some concentrated pockets of rich people in suburbs and cities. Many more poor people, of course (CA is awash with social welfare recipients, as is NY), but there is so much wealth in these tiny enclaves and there are so few people who are net payers of the bulk of taxes that it doesn’t matter when you look at stats like this.
Anyone who thinks the development of the tech industry or the financial industry had anything to do with the current or recent governments of CA or NY is smoking some of that legal weed.
Arguably the development of the tech industry is thanks in large part to California's ban on non-competes decades ago. Though I suppose you could classify that as not a policy of a "recent" government.
Might have had a little to do with it at the margins, sure
The entire concept of states being net contributors or debtors to the federal government is economically illiterate nonsense because we are an economically integrated unit and you can't localize economic activity or federal spending by state. If a Wall St banker spends his whole career in NYC paying millions in taxes and then retires to FL and collects Social Security, that does not somehow accrue to the credit of NY and against FL even though on paper it is a "contribution" by NY and a "withdrawal" by FL. When a highway is built across Montana, that is done just as much to let trucks get from Chicago to Seattle as it is for people to drive from Billings to Bozeman. When China tries to bomb LA, fighters will take off from the Air Force base in NV to intercept them even though they weren't trying to bomb Las Vegas.
Sure, but my point is that there’s more to a successful national economy than building lots of houses and solar panels and modern factories- that’s all great, no argument here - but it’s worth asking why Red states which make it easier to build that stuff still tend be bigger moochers than Blue states. My thought is that maybe Red states can have looser economic rules and lower taxes because they’re subsidized, in part, by states like NY and CA. But that’s just speculation.
Sure, but why did Silicon Valley and Wall Street get super rich in Blue States over the past several decades? I get that American culture and economic geography is shifting, so maybe CA and NY will lose some of their luster going forward, but at the moment I think progressive culture has delivered bigger economic gains to America than conservative culture. The GDP data on voting shows this too; Democratic counties contribute more to GDP than Republican ones.
New York became the power house it is today before the red state/ blue state distinction was meaningful. It was already a major economic center during the civil war. Similarly silicon value basically squeaked in before California basically shut down development. And then during the 90s and the 2000s it was able to grew in part because it's growth was all digital. They didn't have to actually manufacture or BUILD anything, they just wrote code.
It's notable that despite Silicon value being such an economic powerhouse, no large metropolitan city has grown up around it. San Francisco was already a large city and has not really grown much. San Jose has a BIT but by and large, Silicon Valley is still extremely suburban. Imagine how much MORE wealthy we'd be as a state or a country if California had let the area build up. We'd might have a dense urban area to rival New York. Instead we have a couple of crumbling downtowns and engineers making 6 figures packed 2 to a room in the suburbs or commuting an hour and a half from Fresno.
Because William Shockley started Shockley Semiconductor in Mountainview to be close to his mother in Palo Alto. People will say its because Stanford is there, and they certainly played a role, but so did Grinnell University in Iowa. And a contributing factor is that Silicon Valley had cheap real estate back then. The early Silicon Valley facilities were started on land bought from farmers. It was hardly the liberal urban center that it is today.
Indeed: remember that California was a red state as late as the 1980s.
Okay but the Republican party of the 1970s is an entirely different animal from that of today.
However, if Silicon Valley had started in Mississippi, you would probably be saying the same thing about how it wasn't the bright "blue" state that it is today. It is the densification and the concentration of tech people and wealth that turned California so "blue."
Globalization, outsourcing, entrepreneurship, innovation, low inflation, slow growth (9/11 through COVID), QE and ZIRP all boosted the prospects of capital owners at the expense of salary owners and boosted IP (whether in tech or finance or pharma) at the expense of lower margin/higher cost manufacturing (which was outsourced or offshored).
You’re saying the above is “progressive culture”?
Rich people own stocks. Stocks go up, boosted by profits and globalization but also high multiples (aided by QE and ZIRP). Rich people these days tend to vote Dem, yes. Is that all “progressive culture”? Bernie’s vision for how the world works?
One can argue that high real estate prices boosted by scarcity (progressive policies) have been a wealth creator, of course.
Still, I think you are focusing on state averages rather than people. California has lots of rich people but plenty more poor people and the most people on benefits (as a pct) in America. It also has high unemployment, high grocery prices, high housing costs, high electricity costs and high gasoline prices. What is the connection with progressive policies? It is not just about a handful of extremely rich people that bring averages up.
Isn’t some of this about geography? If you look at a map of Austin, it’s surrounded by open space. The same is not true of SF and LA on the west coast and pretty much anywhere in the NE.
"Another frustrating thing is that the progressive critics seem to assume that their preferred ideas — such as antitrust — are alternatives to abundance, when in fact they usually don’t conflict, and sometimes complement each other."
I agree. I think zoning deregulation for more housing is highly analogous to anti-trust, at least in spirit. I make that point in this article: https://www.tandfonline.com/doi/abs/10.1080/10511482.2021.1931933
It sounds like building is a fundamental issue, if we do not get that right, nothing else matters.
I currently have no confidence that democrats will be able to fix the building sclerosis. The progress so far has been painfully slow. They do not have 20 years to get this right.
The only way I see this changing is if democratic leadership decides that building is life or death issue, and actually leads.
I am off to see Ezra speak tonight, have been yimby supporter since Sonja's early SF days, and read Abundance, and support Scott Weiner. I really want to see this happen, and the fact that I do not see a way forward is disheartening.
And dammit, if republicans were not such assholes about so many other things, I'd switch.
Picking between democrats and republicans right now is like deciding whether I'd like to eat overcooked broccoli, or raw steak
I think the development issue is usually housing density rather than just the availability of vacant land. Combined with high cost of infra-structure and length of time in the pipeline, development is deferred. As profitability returns, marginal and aging improvements can be demolished creating new vacant land even in the most urbanized areas.