Three Visions of Where Democrats Went Wrong | The Ezra Klein Show

The Reconstruction Finance Corporation (RFC) during World War II was not merely a public investment bank but a project manager that proactively identified problems and bottlenecks, directly intervening to ensure things got built and pushing implementation forward across the economy.

“the largest that we've ever had is was one called the Reconstruction Finance Corporation. And the RFC was like it wasn't just a public investment bank. It was like a project manager. It would go out and find problems and find bottlenecks and push and actively make sure stuff got done”

In mission mode, the War Production Board and Don Nelson managed to remove paperwork that was unnecessary while keeping paperwork that was essential, showing that comprehensive planning and ambitious execution can coexist with some rules; it's not all-or-nothing deregulation.

“it wasn't like we threw out all the rules during World War II. There was tons of paperwork, you know, and the companies complained constantly about all the paperwork they had to do, but we had the War Production Board and, you know, Don Nelson would be going around trying to figure out which of this what paperwork is actually creating a bottleneck and what paperwork is necessary, right?”

America and Europe diverged in the 20th century because America went through the Robert Moses era of top-down urban development without public buy-in, demolished communities, and then faced 50+ years of inability to build due to backlash, whereas Europe took a more democratic approach to development and maintained capacity.

“My theory for why America and Europe kind of ended up differently is Europe actually did their post-war boom and all that development in a more democratic way than we did. You know, we we had this Robert Moses era which where we didn't get a lot of public buy in. We did, you know, demolish a bunch of communities. um and then we got the backlash and now we can't build for 50 years right whereas Europe I think took more of an approach of trying to bring society in through this development”

France's post-war high-speed rail network development was comprehensive and mission-driven: they pitched the entire network to the country, planned all surrounding industry (universities for engineers, rolling car manufacturers, steel industries, nuclear power), and framed it as a national mission under de Gaulle, whereas California's high-speed rail was pitched as a single line insufficient to justify political capital for necessary structural reforms.

“in in France for example um they built tj you know their national highspeed rail during their post-war boom... they pitched the country on the whole network, right? And so because it was this huge network, they planned for all the surrounding industry. They they built out universities to uh train the engineers... they even planned, you know, this is when they're deploying nuclear power all over France. They planned their nuclear power deployment uh in a way to make sure they would have the power to power the the trains... Charles de Gal even talked about as a mission for France actually”

European countries can build infrastructure (subways, housing) faster and cheaper than the U.S. despite having higher union density and higher labor costs, suggesting the bottleneck is not labor but government's approach to process, empowerment of agencies, and willingness to execute.

“you look at Europe you know Europe can build stuff way faster and way cheaper than us. They have a way more unionized labor force... I think the optimism here that I have is you look at Europe... they have more uh empowerment they have more power to actually make decisions right”

Europe empowers agencies to make decisions directly rather than requiring endless public process; Europe also has timelines on environmental reviews, while America has allowed open-ended lawsuits and a culture of indefinite delay to take over.

“in a lot of these uh process questions they empower their agencies to have more uh more uh uh empowerment they have more power to actually make decisions right... they have timelines on how long these environmental reviews can take, right? And in America, we I think the the bigger thing that's happened is we've let open-ended lawsuits and this general kind of culture of letting things languish forever take over”

Trump has demonstrated that many constraints on executive action are norms rather than formal rules, and that a president with sufficient political will can exceed traditional boundaries; whether this is positive or negative depends on values, but it shows that formal procedure is not the ultimate constraint on executive power.

“I feel like Donald Trump has come in and shown you can do it through will. I mean, I'm not happy about what he's doing or why he's doing it, but the boundaries that everybody else seem to respect seem to be have been norms, right?”

Congressional staff sizes have remained stagnant while member responsibilities have grown, and Congressional salaries are held artificially low, forcing members to outsource expertise to private sector consultants and lobbyists, and causing skilled people to leave government for higher-paying lobbying positions.

“members of Congress... how small the staff of a house member who represents like a highly populous district and maybe runs a important committee really is. And I'm not saying that's the only reason they outsource a huge amount of their thinking and their work to corporate interests to nonprofits, but there is this whole theory in political science called legislative subsidy, which is that the real power of lobbying um or one of its real sources of power is that it is the provider of expertise. And not only is it the provider of expertise, it is a provider of expertise from your former colleagues who you liked. they leave a congressional office because, you know, they've got three kids and maybe, you know, one of the kids is in private school or all of them are or, you know, whatever it might be. We've held on congressional salaries. We've held on congressional staff sizes.”

The hearing aid market is controlled by five companies that deliberately slowed government approval of over-the-counter hearing aids, blocking a major quality-of-life improvement for millions of Americans—an example of how concentrated oligopoly power directly prevents beneficial policy implementation.

“something good the Biden administration did, uh getting over-the-counter hearing aids, like a lifecher for millions of Americans. Um who blocked that? Well, it's a oligarchy in the hearing aid um market. There's basically five companies that control the hearing aids and they did everything they could to slow down the procedure”

France's post-war high-speed rail deployment was designed as part of a comprehensive national economic transformation—they planned the entire network, built universities to train engineers, invested in rolling stock industries, and coordinated nuclear power deployment to supply the trains—whereas California's high-speed rail was a single-line project too small to generate political capital for necessary structural reforms.

“in France for example um they built tj you know their national highspeed rail during their post-war boom...it was this comprehensive plan where they pitched the country on the whole network, right? And so because it was this huge network, they planned for all the surrounding industry. They built out universities to uh train the engineers...And even planned, you know, this is when they're deploying nuclear power all over France. They planned their nuclear power deployment uh in a way to make sure they would have the power to power the trains”

Golden Fleece Awards (highlighted by Senator William Proxmire) and contemporary political mockery of research spending (e.g., Trump's $8 million transgender mice claim) terrify agencies into avoiding anything that might sound embarrassing, which paralyzes innovation and causes agencies to hide or restrict research.

“you even hear it from from Democrats sometimes. This sort of picking out of the thing that sounds embarrassing. And then what you do is you terrify agencies because they don't want to be the ones blamed for an embarrassing sounding thing”

Transformer shortage is bottlenecking electric grid expansion because only a few companies make transformers and only one company makes the electric steel needed for them, and a mission-mode RFC would proactively push these companies to expand, fund startups if they refuse, or establish state-owned corporations.

“right now a big bottleneck to expanding electric grids is a transformer shortage because we only have a few companies that make transformers and we only have one company that makes electric steel that we need for transformers and no one's popping up to make new electric steel companies. So you know what I'm imagining is something like the RFC today would go out and try to push those companies to expand. If they don't expand the Reconstruction Finance Corporation would push them to expand production. If they don't do it, fund startups and if they don't do it, put up stateowned corporations”

Bill Knudsen (CEO of GM, rose from factory floor) was brought in to run major WWII production; FDR initially wanted to hire a banker who had run WWI mobilization, but that person said you need someone who understands the economy; this shows that mission-mode governance recruits from the best experts, whether corporate or otherwise.

“the guy who ran a big part of it was this guy Bill Nudson who was actually the CEO of GM, right? And but he had come up as an engineer, you know, through the factory floor. He understood how that whole economy worked... previously FDR almost hired like a banker, you know, who did the World War I mobilization, which wasn't as good. And that guy said, 'No, you got to get someone who actually knows this stuff'”

The United States had the largest such institution in history during World War II with the Reconstruction Finance Corporation, which functioned as a project manager to identify problems and bottlenecks and actively push to ensure things got built and done.

“America used to have a bunch of these all across our society. You know, during World War II, the largest that we've ever had is was one called the Reconstruction Finance Corporation. And the RFC was like it wasn't just a public investment bank. It was like a project manager. It would go out and find problems and find bottlenecks and push and actively make sure stuff got done.”

During crises like COVID, the government suspends normal rules and procedures (PPP loans, unemployment insurance expansion) and achieves rapid deployment despite fraud, waste, and failure—because government actors accept that large-scale action requires tolerating mistakes—whereas in normal times, fear of embarrassment or scrutiny paralyzes agencies.

“the paycheck protection program has gotten beaten up by so many different people by finding you know the the examples of fraud and there was a lot of fraud and there was fraud and it was worth it. It was absolutely worth it to support businesses around the country to keep them open during COVID...In order to do great things, you do actually have to do things wrong sometimes”

Congressional staff sizes have been frozen for decades while corporate lobbying has exploded, creating a dynamic where expertise has been outsourced to the private sector and former members now hired as lobbyists effectively whip votes on the House floor—state capacity has been systematically denuded.

“the real power of lobbying um or one of its real sources of power is that it is the provider of expertise. And not only is it the provider of expertise, it is a provider of expertise from your former colleagues who you liked...We've held on congressional salaries and We've held on congressional staff sizes. That's all like high polling populist policy and then uh people go into various forms of the private sector or the lobbying sector and sell back what they know to their former colleagues”

Democrats stopped intervening on the production side of the economy, trusting markets and only regulating them; this represented an ideological shift (neoliberalism) away from the view that government should create markets for things the market won't do or intervene to make things the market won't make.

“I believe, we write this in the book, is that Democrats stopped intervening on the production side of the economy. They more or less began to trust the market. You know, maybe you had to put some rules on the market. Maybe you had to put some curbs on the market. But the idea that you were going to intervene to do things the market wasn't going to do or create markets for things that needed to happen that weren't happening, it fell out of favor”

Countries historically escaped stagnation through 'mission mode'—a distinct three-part governance approach involving sweeping economic transformation, leadership that executes at scale while capturing national attention to build political capital, and comprehensive planning with dedicated financing institutions (like the Reconstruction Finance Corporation), rather than through iterative slow reforms.

“every modern developed nation, most of them liberal democracies, they went through these phases of rapidly transforming their economies... countries seem to do it by pitching the sort of sweeping transformation of the whole economy and then executing at breakneck speed... countries in mission mode, they have this whole other kind of leadership that pops up that doesn't just pitch a mission. They actually follow through and execute... they organize society actively to be a part of it... they make comprehensive plans... they create uh financing and executing institutions”

Countries escape stagnation through periods of rapid economic transformation where they pitch sweeping, mission-scale visions to their populations, execute at high speed, and create national institutions (like the RFC during WWII) that actively identify and eliminate bottlenecks—this pattern holds across 20th-century developed nations but is largely absent in modern America.

“if you look at the history of the 20th century, every modern developed nation, most of them liberal democracies, they went through these phases of rapidly transforming their economies and you know creating absurd levels of prosperity for pretty much everyone in their society...America and the mobilization for World War II, we did after years of stagnation and the Great Depression”

Austin streamlined its permitting process and saw construction increase and rents decrease, but this was not a 'silver bullet' because 50% of Austin's population is still cost-burdened by rent, and construction has since slowed due to net migration out of Austin when people left during that period.

“Austin, which is a city that people refer to a lot where they did a lot of streamlined permitting, construction went up, rents went down, really good. Um, but it wasn't actually enough, right? There's 50% of Austin's population still cost burdened by rent, right? And now construction slowed down because part of the reason costs went down was uh a lot of people left Austin at that time. It was it started having net migration out of Austin and and so now what happens right I think there's another example of just doing the permitting streamlining isn't going to be a silver bullet”

Hearing aid oligopoly in the U.S. market (dominated by five companies) blocked FDA deregulation of over-the-counter hearing aids for years, but when the Biden administration finally allowed OTC hearing aids, it became a life-changing product for millions of Americans, demonstrating how concentrated power prevents beneficial innovations.

“something good the Biden administration did, uh getting over-the-counter hearing aids, like a lifecher for millions of Americans. Um who blocked that? Well, it's a oligarchy in the hearing aid um market. There's basically five companies that control the hearing aids and they did everything they could to slow down the procedure”

Rick Caruso, a billionaire developer in LA, led NIMBY opposition to single-family housing reform and is currently using the California Environmental Quality Act to sue and block development next to one of his malls, illustrating how existing power can use regulations to protect incumbent interests.

“Rick Cruso is currently suing to stop the development of um he's using the California Environmental Quality Act to sue to stop the a development next to one of his malls, right?”

The Koch brothers in 2010 threatened every Republican willing to mention climate change in a primary, converting climate and green energy from a bipartisan issue (McCain era) into a culture war issue, with these actors subsequently using local opposition to block green energy projects at scale (400+ solar/wind projects slowed in NY alone).

“That came from 2010 when the Koch brothers decided to threaten every single Republican who dared use the word climate change in a primary and took something that in the McCain era had been Republicans and Democrats both thinking about green energy in the future and turned it into a culture war”

Natural gas pipeline construction was streamlined and accelerated (resulting in 3 million miles built quickly) because there was no significant organized opposition and projects were put under federal jurisdiction (FERC), showing that when government streamlines process and opposition is absent, infrastructure builds at scale.

“we streamlined all that, right? We put permitting under FK. We made it happen super fast. We did a huge We have three million miles of natural gas pipeline in this country right now. we build it super fast because there wasn't really an opposing uh a big enough opposing interest group”

Jonathan Kanter (AAG Antitrust under Biden) came from big law but directed the most successful antitrust enforcement in 30 years, including finding Google a monopolist three times and moving toward breakup, demonstrating that corporate background can align with anti-monopoly mission.

“Jonathan Caner came from big law and did an incredible job. Jonathan Caner was the AAG of antitrust. And you may be thinking, let's say what an AG is. Oh, the assistant attorney general... And even if you don't know his name, you are living in Jonathan Caner's world this uh these few weeks because we have the biggest antirust trials in 30 years happening with uh the Google being found a monopolist now three times looking towards a breakup”

Emergency declarations (I-95 bridge rebuild, port projects, disaster response) show that rules can be suspended and executed at speed when political will is present; the I-95 bridge rebuild took months instead of 12-24 months because declaration allowed direct contractor assignment and emergency procurement.

“I tell a story in the book about Josh Shaper's rebuild of the I95. This bridge um uh collapses after a fire beneath it when a truck overturns... They said, 'Well, just doing the contracting rules that we normally go through would have taken 12 to 24 months on the design proposals'... and when the emergency declaration was made, the transportation secretary basically pulled both of them off of their current projects and said, 'You're doing this now.' And they were on the project, as he said to me, like the moment the fire department released the scene”

Lobbyists recruit former members of Congress to work on the House floor to whip votes, a practice that is technically against the rules but widely tolerated, exemplifying how the revolving door allows private interests to directly control Congressional floor votes.

“One of the things I learned when I was in Congress was if you're a former member of Congress, you can be on the House floor. So, what do lobbyists do? They hire former members of Congress so they can whip votes on the House floor. They're not supposed to. It's technically against the rules, but you know, come on.”

Monopolistic middlemen (chokepoint businesses) reduce incentives for innovation: if you develop a new eco-friendly diaper technology, you will just get crushed by entrenched market powers, so the innovation never happens even if it would be better for consumers.

“The problem of choke points is they is they rate like why even bother make a new eco diaper if you're just going to get crushed.”

America had major public financing and executing institutions across sectors during WWII era, which America has largely abandoned in the post-1970s period, while China and Europe maintain versions of these institutions for industrial policy and infrastructure development.

“America used to have a bunch of these all across our society. You know, during World War II... And you know, other countries in Europe have versions of this. And it's key to note that it's not just, you know, it's not just like this one institution if we put it in, it's going to fix everything. You know, Germany has all kinds of financing mechanisms. They have agricultural co-op banks. they have um this whole range of financing for small and medium manufacturing in the country and that's held up a lot of their their uh economy and in China similar they have these big industrial banks that fund all kinds of projects”

China in the 1980s required American companies entering the market to train Chinese workers and do joint ventures with Chinese firms, imposing requirements that seemed burdensome, but maintained an overarching mindset of 'we actually have to get the stuff done' that enabled rapid development despite the procedural obstacles.

“China in the 1980s when it was going through massive amounts of development bringing in American companies made those companies jump through all kinds of hoops. You know, they had to train up Chinese workers. They had to do joint ventures with Chinese companies. But there's this overall mindset we actually have to get the stuff done that was different there.”

Finland achieved rapid economic transformation and prosperity after the fall of the Berlin Wall in the late 1980s/early 1990s by adopting a mission-driven political approach without war or emergency, suggesting this model is replicable in modern peace time.

“Finland did this after the fall of the of the Berlin Wall in like the 80s and 90s and um and that was pretty recent. So, it's possible for a politics to come in and say the mission is our society has been kind of declining.”

The oligarchy studies (starting ~10 years ago) show real responsiveness of government to wealthy interests and almost no responsiveness to public preferences; emergency situations break this because leaders forget donor responsiveness and reconnect with genuine public service.

“You probably are familiar with the oligarchy study. It's now, I think, 10 years old, and it's only gotten worse. That wealthy people, there is real responsiveness to their uh interests, and there's almost no responsiveness to what the public wants um in terms of the outcomes... what happens in those emergency situations, I believe, is that uh the leaders forget all their responsiveness to their donors”

A RAND report found that publicly subsidized affordable housing in California costs more than four times as much per square foot to produce as market-rate housing in Texas, indicating that process, regulations, and prevailing wage requirements in blue states drive higher construction costs than in red states.

“A new Rand report. It came out after my book was written. It found it costs four times as much, more than four times actually, per square foot to produce uh publicly subsidized affordable housing. So the public affordable housing that I think the left supports in California as it costs to produce a square foot of market rate housing in Texas”

Germany and other European countries use diverse financing mechanisms (agricultural co-op banks, sectoral small-and-medium manufacturing financing) and China uses industrial banks to fund projects, demonstrating that multiple institutional forms can support proactive development.

“Germany has all kinds of financing mechanisms. They have agricultural co-op banks. they have um this whole range of financing for small and medium manufacturing in the country and that's held up a lot of their their uh economy and in China similar they have these big industrial banks that fund all kinds of projects”

People have felt for decades that whatever the current political order is—whether Obama, Trump, or Biden—is not delivering on the post-WWII promise to provide opportunity and prosperity, and are searching for a new political order that will.

“there's just been this general sense that whatever the current political order is is not delivering the promise that people have had, you know, that America made to people in the post-war era. And so we're looking for something new that's going to start delivering that again”

FDR's first term relied on top-down vision without sufficient buy-in, and he corrected course by bringing an anti-monopoly agenda to the second term, generating necessary political support—this shows that even transformative leadership must eventually engage constituencies and power concerns.

“obviously we're going to look at FDR, and we we aren't going to spend all our time on the New Deal, but we see that for FDR in the first term, it was more of a top-down vision. Let's just get things done. And he found it didn't work. And the the buyin for that, he needed to bring an anti- monopoly agenda”

Pharmacists emerged as the biggest opponents of the Kroger-Albertsons merger because they saw it as a fundamental threat to their livelihoods—this was unexpected to most observers, but reveals that the anti-monopoly frame's focus on power uncovers problems (power concentrating against workers) that outputs-focused analysis would miss.

“in the Kroger Albertson's merger that pharmacists would be on fire about it and be the biggest opponents that they would see the the joining of two big grocery stores as a fundamental threat. But once you start asking the power question then pharmacists come out of the woodwork and say yeah this is killing us. we're we're getting starved by this”

Politicians often describe their experience as being unable to explain why they can't do the thing they want to do, because they're constrained by the real estate board, the planning board, fractured zones of authority—they experience themselves as lacking power, not as choosing to lack ambition.

“how many politicians I talked to and they would not all describe it to me as about corporate power, but they do describe it as there's a thing they want to do and all they can do is tell me all the reasons they can't do it. The real estate board, right? the planning board, the fractured zones of authority”

San Francisco uses a parcel-by-parcel approval method to decide which housing gets built, which is a significant part of the problem with the housing shortage in California.

“we have a huge housing shortage in California. I think the process that we use to build housing is crazy. Everyone knows it's not going to build enough housing. We'd have this process in San Francisco where you approve on a parcel by parcel uh method and a parcel by parcel method to decide which housing gets built. And so that process is a big part of the problem.”

There are public financing and executing institutions that governments can deploy proactively to identify and solve bottlenecks; DARPA operates in R&D, the IRA-funded DOE loan program for clean energy exists but is 'wait and see' rather than proactive.

“we have a little bit of this now. We have it with DARPA, you know, on sort of research and development projects and that's kind of public financing as well of those kinds of projects, but we've lost it for the entire sector of creating industries and creating infrastructure. And uh you know there was a loan program at the DOE that the IRA funded for uh clean energy projects that Shaw ran. It's a great program, but it's a wait and see approach, right?”

There is a difficult equilibrium problem: normal procurement rules prevent patronage and corruption but create slowness and veto points; emergency procedures enable speed but create opportunities for insider dealing and lack of competitive bidding; America has overcorrected toward the slow-but-cautious approach.

“I'd be curious as somebody who studied corruption a lot how you think about this because we we've created such slowness in our efforts to root out patronage and corruption. I'm not sure we have rooted out the patronage and corruption, but we've definitely created the slowness. Something seems wrong here in the equilibrium.”

Money in politics often lines up on multiple sides of a single issue; transmission lines are financed and desired by private companies but face opposition from both fossil fuel interests and local environmental groups, making 'money in politics' an insufficient monocausal explanation for why projects fail.

“money and politics often lines up on many different sides of an issue. So I was having a conversation recently with um uh very big money like not a group you would love me talking to Zephr uh that was part that had been trying to finance now for some decades major well not major in terms of the buildout but but major in terms of uh the significance pipelines that would bring clean energy from one place to another... these companies want this to happen. They end up facing a lot of other uh fights. Now, some of those fights on the other side are also money. some of them, you know, sometimes even fossil fuel interests. But it's not just one thing”

The left has developed an ambivalent relationship with business expertise: on one hand, people like Gary Gensler (with extensive finance industry background) bring essential sector knowledge to regulation; on the other hand, there is suspicion of hiring people from the corporate world, causing qualified experts to avoid government and creating a vicious cycle.

“The left has developed a very complicated relationship with expertise from the business world. So on the one hand some of the people who I think are the the heroes of of this era and and and this movement a Gary Gensler say who was a high up anchor before he became a regulator obviously come from the worlds that they now regulate or that they oversee and of course those worlds have people with incredible expertise. I mean there's a granularity to how every industry works that is very very hard to attain from the outside. And on the other hand, I will often see nominations attacked or try to be scalled because the person worked in the corporate world.”

Engaging oligarchs on particular issues (like climate or development) in the short term risks enhancing their long-term political power and degrading democratic processes, even if aligned on a specific goal; the Democratic Party should not embrace oligarch power as a tool.

“if you engage in enhancing the political power of oligarchs because you have a short-term alignment on an issue, it will end up actually degrading the um political process over time. I don't believe even if I would like to get money out of politics, we're going to get money out of politics in a full-on way and end oligarchy on the pace we need to decarbonize. We have to build things in the next couple years”

Democratic politics should ground itself in understanding the practical details of how business and markets work—how diapers got expensive, how fire trucks are sold through franchise systems, how farming is organized—rather than abstract principles, to develop relevant expertise and effective solutions.

“But the kind of expertise we want matters. It's not just expertise generally. It's I think where the Democratic Party really should go is understanding how did we allow the greatest geographic inequality in American history in the last 20 years where places like Udica, New York are totally left behind. like that's weird and strange and we should treat it like weird and strange. How did we allow um uh uh diapers to get so expensive when we should have, you know, like real innovations and eco diapers instead of just this kind of ex incredibly expensive um uh uh you know price gouging frankly during the the pandemic real expertise and expertise in the nature of business”

There are many kinds of power (corporate, governmental, union, homeowner, local) operating at every level of society, and breaking corporate power alone does not achieve democracy; other forms of minoritarian institutional power can exercise authority in destructive ways even with low corporate concentration.

“people in your movement are very focused on one kind of power but not many, many other kinds of power. That you can break corporate power and you have all kinds of other minoritarian institutions operating at every single level of government. There's a great law paper by David Schiker recently about the law of the gentry and the triumph of the law of the gentry and property law. Uh like local governments exercise power, unions exercise power. There's a million kinds of power exercised at every level of society.”

The biggest issue in virtually every American household's budget is housing (rent or mortgage), making housing the single largest economic problem, which both speakers prioritize in their analysis.

“the single biggest item in virtually every household's budget is a home they live in. It's the rent. It's the mortgage.”

The Golden Fleece Awards (by Senator William Proxmire and others) and similar efforts to mock government spending created a culture of fear in agencies about supporting innovative projects, as politicians use ridicule to destroy ambition; Trump's '8 million for making mice transgender' reflects the same dynamic.

“you highlight the uh problem with the Golden Fleece Awards... it was William Proxm... But also, you just saw Donald Trump doing it when he stood up and he says at the joint session of Congress speech. $8 million for making mice transgender, which we also was not what was being done... it's a common thing in politics... it it's a way in which I think we've got corruption all wrong. We're like really focused on this massive compliance regime instead of focused on the corruption”

When examining IRA funding allocation, the money for green energy infrastructure/advanced manufacturing goes predominantly to red states, while subsidies for end-product purchases (EVs) go more to blue states, showing that red states are actually building more green infrastructure despite culture war politics, contradicting the narrative that fossil fuel opposition is the binding constraint.

“If you look at where the IRA's money is going, if you are looking at deployment of green energy infrastructure or advanced manufacturing for green energy, that money is going majority to red states, they are building more of it. If you look at money, the subsidies to buy things to buy the end products, right, to buy an electric vehicle, that goes more to blue states”

Effective anti-corruption strategy requires focusing on structural and systemic protection against corruption (like having many competing suppliers and campaign finance limitations on inside deals) rather than microchecklist compliance, which doesn't prevent corruption but just creates slowness.

“we've thought we can root out corruption by doing microchecklist as opposed to looking at structures and systems and that we should look at structures and systems of power as the big defenses against uh a corrupt systems as opposed to uh the the checklist. Uh I mean we need some checklist by the way like those checklist right you can't have no rules. Um and I do think that there's some innovative things happening with procurement but as I understand um there is a real issue with only a few suppliers. Like there is a and that that is one of the the the big uh real that's one of the big corruption risks that we don't deal with through checklist compliance. You deal with through making sure there's more suppliers.”

The Democratic Party's culture has become one of consensus-seeking where leadership is unwilling to offend any member of a vast coalition, from Reed Hoffman to environmental justice groups, resulting in a loss of leadership and authority—this is distinct from and more damaging than corporate capture, because it represents an abdication of the responsibility to choose and decide.

“the leadership of the Democratic party became less and less willing to offend almost anybody who it considered in its coalition...as I sort of like watched the procession from like the Obama era to the sort of Hillary Clinton campaign to the to the Biden Harris era...the leadership became less and less tolerant of anybody being upset”

The problem is not primarily monopoly power but rather the fact that America has created a 'process vetocracy' where regulatory procedures and notice-and-comment requirements are intentionally complex and opaque, creating entry points for all kinds of incumbent players (corporations, unions, local homeowners, environmental groups) to delay projects, with power exercised in the shadows by those who know how the system works.

“one of the reasons I'm very focused on the way we have created process vetocracy is it it creates entry points for all kinds of incumbent players. Sometimes that's corporations, sometimes it's unions, sometimes it's local homeowners, sometimes it's people I am allied with, sometimes people I'm not allied with. But what it isn't is visible”

Solyndra became a political symbol used against government intervention, while Tesla's huge success was downplayed, demonstrating how Republicans and then Democrats became afraid of failure in government, creating cautious governance culture.

“innovation you're talking about. Yes. How many politicians I talked to and they would not all describe it to me as about corporate power, but they do describe it as there's a thing they want to do and all they can do is tell me all the reasons they can't do it. The real estate board, right? the planning board, the fractured zones of authority between um different councils in LA and the way that the LA municipal, you know, structure actually works. I talked during the the fight for congestion pricing in New York City, the head of the MTA and he was so frustrated by how much time he was spending working on environmental assessment with the Biden administration at that point. Right? It's always a different story. But but what you often see is we just don't give the people we've imbued with Democratic authority, a mayor, a governor, honestly even a president, as much power as you sort of think from the outside. It's innovating to them. Um but it's also, I think, confusing to the public. Obama promised a public option. Why couldn't he deliver it? You know, Joe Biden said I'd get this. Why didn't I get it? And does it lead you Zephr towards because I think there's a there's a tension here that I find difficult to resolve between wanting things to be very small D democratic and then also recognizing that small D democratic processes can get very captured thinking that maybe we need more executive power but also recognizing that then you can get a bad executive like we have nationally at the moment then you have a different problem. How do you think about the level at which power should be exercised and the ability of some central voice to say thank you for your concerns, we're doing it this way? Yeah. So, um I love the question and I think it is sort of just telling the truth about the nature of how power is organized in society today. And I don't think it's just a few instances. I mean this may be an area of difference. I think that the uh that the major intervating power is actually centralized corporate power and I think you'll find it in area after area after area. So let's talk about green energy. Um, you're probably, I think, familiar with the New York Sabin School. Um, and they come out with this report fairly regularly on where are their like checks on, you know, local rules against green energy building. Um, and so I took a look at it the other day and it's majority red districts in New York and it looks like around the country that that there's these new rules that come in that say you can't build solar. You know, green energy has become a culture war, right? Green energy has become a culture war. And so I look at that and I say I have a very clear story of where that came from. That came from 2010 when the Koch brothers decided to threaten every single Republican who dared use the word climate change in a primary and took something that in the McCain era had been Republicans and Democrats both thinking about green energy in the future and turned it into a culture war and then are going to local communities and saying here I've got a way to block your green energy project. And the difference between you and me I think probably is that um if I were to go to say western New York or places where these and the by the way these are very significant blocks you know there's 400 different blocks 400 different projects that are being slowed in terms of solar development or wind development. uh there's Kathy Hokll uh you know vetoing offshore wind and I think to to to give some meat to the the question you might say well we've just got to stop local communities from doing things because we need to push through this um uh green energy development and the populist story is to like actually just tell the truth about where this came from is say like big oil has been crushing innovation in electric vehicles for 40 years now and we know that right you don't Ezra you don't actually I I actually I'm curious about this you don't think that left nimism has been a bigger deal in crushing green energy than big oil do you not at the climate change level but I wouldn't call it left nimiism either okay look here here's the question I would ask if I was complicating the story because of course I agree that there has been a huge multi-billion dollar now multi-deade effort effort by fossil fuel industry to destroy any action or any real action on climate change. Right. That's just fact. Yeah. I think where your story begins to demand complication is why is it easier to build green energy in Texas than California?”

Public subsidized affordable housing in California costs more than four times per square foot to produce than market-rate housing in Texas, revealing that regulatory, permitting, and compliance burdens in blue states have made the cost of public construction prohibitively high—a pattern that extends to unions, prevailing wage laws, and environmental review requirements.

“there's a new Rand report. It came out after my book was written. It found it costs four times as much, more than four times actually, per square foot to produce uh publicly subsidized affordable housing...as it costs to produce a square foot of market rate housing in Texas”

Even if money were removed from politics, the fundamental problem would remain: politicians lack a shared sense of mission or urgency, and without leadership willing to say 'we must do this, period,' process and interest-group negotiation will inevitably dominate—mission-driven moments override process because they override the normal political calculus.

“even if we got rid of money and politics and all the other forces that kind of get in the way I don't think our politicians on their own would do things at the scale you know even looking at Texas versus California yeah people are building in Texas because in a completely you know nothing else going on sort of scenario there's fewer rules in Texas it's cheaper to build in Texas...I think one of the the really uh bad parts of money in politics is that politicians spend all their time calling big donors for money and they think that's their job and they're really confused by the job of actually trying to build stuff”

Democrats stopped intervening on the production side of the economy and began trusting markets, viewing government industrial policy as inherently failing—this ideological shift happened over 40 years (detailed in Kim Phillips-Fein's Invisible Hands) and has blinded the party to possibilities now that China has demonstrated industrial policy can work.

“one thing I believe, we write this in the book, is that Democrats stopped intervening on the production side of the economy. They more or less began to trust the market...The idea that you were going to intervene to do things the market wasn't going to do or create markets for things that needed to happen that weren't happening, it fell out of favor...The view is that the government will fail, right? If it tries to do this, industrial policy fails when you try it”

American corruption-fighting has focused on micro-level compliance checklists and audit procedures rather than structural solutions like ensuring there are many contractors and competitive bidding—the checklist approach hasn't rooted out corruption but has created slowness, making bureaucrats risk-averse.

“we focused on the wrong kind of corruption, right? So that what you want is systems where uh there are lots of contractors and there is competitive bidding...we've thought we can root out corruption by doing microchecklist as opposed to looking at structures and systems”

Most historical examples of countries escaping stagnation happened in peacetime, not under war or emergency—France, Finland, South Korea pursued 'mission mode' politics to deliberately modernize their economies, showing that mission-driven politics is a choice available to any democratically-elected leadership.

“for most of the cases in the 20th century, it wasn't under a war or some kind of emergency like that. you know, there was usually some political power party that came into power, you know, in Western Europe or in South Korea that really just pitched the mission of let's get rich, you know, let's make the make society rich...Finland did this after the fall of the of the Berlin Wall in like the 80s and 90s”

Real estate board of New York has outsized power in state politics due to unlimited campaign spending and Citizens United, leading to giveaways and expensive-per-square-foot housing, while New York state government starved the subway system and outsourced everything to consultants, draining state capacity.

“the real estate board of New York has this outsized power in state politics and gets just a lot of giveaways that most people think didn't make that big a difference and led to really expensive per square footage housing. So that sort of occupied the space on housing. And then it led to uh New York state government under Andrew Cuomo first starving the subway. So then it had to spend all its money doing fixes that would have been much cheaper to fix earlier. So um and something that I do think you point out in the book which is they also starve state capacity. You know they really said let's consult everything out and pay big consultants.”

European governments handle small veto points differently than America; they have processes and laws that allow them to move storage facilities and other obstacles, implying difference is in governmental structure and authority, not in veto points themselves existing.

“in Europe they they move the storage facility right they just have different laws around that kind of thing”

The key difference between Klein and Teachout/Chakrabati on corporate power: Klein believes expertise from business world is valuable and should be tapped (e.g., Gary Gensler from finance regulation), but left has developed complicated relationship with business expertise due to fear of capture.

“I feel like the left has developed a very complicated relationship with expertise from the business world. So on the one hand some of the people who I think are the the heroes of of this era and and and this movement a Gary Gensler say who was a high up anchor before he became a regulator obviously come from the worlds that they now regulate or that they oversee and of course those worlds have people with incredible expertise. I mean there's a granularity to how every industry works that is very very hard to attain from the outside.”

Klein has skepticism that anti-monopoly can solve significant problems like racism in America or toxins in water, though anti-monopoly components exist in these areas.

“Um, I I don't think that anti- monopoly can solve significant problems of uh racism in this country. I don't think anti- monopoly can solve toxins in our water. Although I think there's an anti- monopoly. I immediately I'm like, yeah, but there's an anti- monopoly component right there.”

Frederick Douglass and W.E.B. Du Bois were concerned about monopoly power as a route to understanding racism, suggesting anti-monopoly has historical grounding in civil rights analysis.

“there's a reason that Fre Frederick Douglas and Dubo were so concerned about monopoly power. like there is a stay for a minute try try to try to live in that world right”

In emergency situations, leaders forget responsiveness to donors for combination of reasons: they care about people dealing with immediate crisis and are out of campaign mode when big donors aren't prominent in their mind.

“What happens in those emergency situations, I believe, is that uh the leaders forget all their responsiveness to their donors. And they do for a combination of reasons. One is they really care about people who are dealing with the flood. And they really care. I mean, I don't I don't think everybody's awful, right? They really care about serving those people. But also, they are out of the the campaign mode. And in the campaign mode when half of the money is coming from people with uh who are making $100,000 donations in the post Citizens United world”

Private transmission line projects have been stalled for decades trying to bring clean energy from generation sites to consumption centers, blocked by a combination of environmental litigants, local opposition, and in some cases fossil fuel interests—showing that money-in-politics is fractious and not monolithic, with moneyed interests on both sides of building conflicts.

“I was having a conversation recently with um uh very big money like not a group you would love me talking to Zephr uh that was part that had been trying to finance now for some decades major well not major in terms of the buildout but but major in terms of uh the significance pipelines that would bring clean energy from one place to another...and that's a very common story on transmission lines...these companies want this to happen. They end up facing a lot of other uh fights. Now, some of those fights on the other side are also money. some of them, you know, sometimes even fossil fuel interests”