- Tariffs impact businesses in Rye Canyon differently
- Supreme Court may rule on Trump’s emergency tariffs soon
- Some businesses adapt, others struggle with tariff costs
California
How California’s excesses inspired the ‘abundance’ craze
SAN FRANCISCO — A high-speed rail project that goes nowhere with a price tag that has ballooned by around $80 billion. A worst-in-the-nation housing crisis in America’s wealthiest metropolis. A public toilet infamous for its $1.7 million estimated cost.
The so-called Abundance movement has become all the rage on the left as a means to diagnose the ways in which ineffectual liberal governance and overregulation has wrought political disaster for the Democrats — a conversation thrust into the national spotlight as journalists Ezra Klein and Derek Thompson tour the country to promote their best-selling book of the same title.
But as much as Klein and Thompson have popularized the Abundance argument nationwide, especially in Washington, its origin story is one rooted in California’s distinctive political culture and policy experiences.
Now some of the state’s most ambitious emerging politicians are hoping to use the book’s success to push California’s Democratic leadership to heed its lessons. Klein will privately gather in San Francisco on Thursday with a select group of lawmakers, including the leaders of the state’s Democratic legislative supermajorities, in a kind of revival meeting called by those hoping he can help spread the gospel to Sacramento.
Abundance is California’s latest ideological export, part of the state’s long tradition of incubating modern political movements before releasing them nationwide. Local political conditions in the Bay Area, on the Central Coast and across Orange County birthed the gay-rights, environmental and anti-tax movements that went on to shape national politics in the late twentieth century.
Abundance reflects a uniquely 21st century California zeitgeist. Today the state’s political dynamics are shaped by deep frustration over Democratic leaders’ inability to build enough housing, provide clean streets, lower the cost of living and instill a sense of safety amid a drug addiction epidemic. Efforts to address those problems haven’t met voters’ demand for results.
“There’s nothing progressive about deep blue cities, the way they’re governed,” said Zack Rosen, who founded Abundant SF, the movement’s first chapter that was started during the depths of the pandemic. “For San Francisco and blue cities to succeed, they have to grow. If a city isn’t growing, it’s dying.”
It is, like much in California, a debate that plays out among Democrats, who have had unrivaled control of state government for the past decade and a half, and now control all of its major cities. Part of that intraparty soul-searching is the Abundance movement’s push to redefine what constitutes liberal values — and sell it to the persuadable center without too deeply alienating the Democrats’ progressive base.
The broader success of the Abundance movement could hinge on its momentum in California, as Democratic officeholders who share its vision of “supply-side progressivism” find their ideas tested in practice.
“This is one of the most important books Democrats can read — wake up,” Gov. Gavin Newsom told Klein during an interview on the governor’s podcast this week. “I mean, we’re being judged here at a different level.’”
It came from California
Klein, an Orange County native, moved back to his home state from Washington shortly before coronavirus hit. It was a contrarian trajectory: at the time, California was bleeding population, as hundreds of thousands of residents loaded moving trucks in search of cheaper housing in Texas, Florida and Idaho.
From his new home in Oakland, and then San Francisco, Klein quickly noticed the ways in which the Bay Area’s cities sputtered despite being home to tremendous wealth. The local press was filled with examples of them, like the time San Francisco set out to build a public toilet in a small park that would cost taxpayers $1.7 million. (The final cost was reduced to around $300,000 after a public uproar.) At the same time, it was unable to provide enough housing for the people who needed to work, live and study there.
“I looked around and it just wasn’t doing well,” Klein told Newsom on his podcast. “People were unhappy, people were leaving … We could see the housing crisis had metastasized into something that was genuinely now a crisis.”
Klein was hardly the first to draw a direct line between the state’s most pressing problems and its failure to build housing. Those concerns had already emerged in San Francisco as activists with the decade-old YIMBY (or Yes in My Back Yard) movement pushed to challenge local barriers to housing construction. At first they were political outliers, but the pro-housing movement has notched win after win in recent years, electing dozens of its candidates to the Legislature and local offices and passing bills that force cities to approve new housing construction.
As a columnist and podcaster for the New York Times, Klein began exploring these ideas, and the ways in which his fellow liberals were responsible. Castigating the failures of what he called “everything bagel liberalism,” he focused on the idea that well-meaning progressives pile on too many good things — environmental reviews, labor standards, community engagement, preferences for minority contractors — that ultimately undermine their noble ambitions.
“We have not made enough of the things that we need,” Klein said in a recent interview on MSNBC. “And that’s because we have run government badly in the places where we actually can’t blame it on Republicans.”
A writer-podcaster friend, Thompson, was playing with similar ideas in The Atlantic, where he is often credited with coining the popular use of the term “abundance” in a 2022 essay about the inability of American government and liberal institutions to do big things quickly. Together, he and Klein began to cohere around a common argument: that Democrats need to approach problems by planning for an “abundance” of the things people need, rather than regulating from a “scarcity” mindset.
Abundant SF launched the same year, joining forces with the YIMBYs and other factions of the “moderate” coalition in San Francisco. The groups convinced voters to close off a major thoroughfare in Golden Gate Park for pedestrian use; helped elect a new moderate majority to the city’s Board of Supervisors; and took control of the county Democratic Party last year, sweeping 18 out of 24 seats.
Klein came to know a small group of left-leaning elected officials in the Bay Area who are the most vocal champions of that style of politics, including state Sen. Scott Wiener of San Francisco, Assemblymember Buffy Wicks of Oakland and Congressman Ro Khanna from Silicon Valley.
“It all just made so much sense to me, thinking about it in a way that’s much broader than housing,” Wiener recalled of his first meeting with Klein, in 2022. The two shared coffee at Progressive Grounds, a funky cafe in the Bernal Heights neighborhood, one of the city’s most progressive enclaves known for its hilly streets lined with Craftsman bungalows and Victorians that are home to more dog owners than parents with children.
“San Francisco,” said Wiener, a former city supervisor, “is like the poster child for things taking longer than they need to take.”
Movement building power
Klein and Thompson’s book Abundance was published on March 18. Since then, it has become a focal point of attention across the American left, driving podcast, op-ed and television conversations. Democratic elected officials have rush to associate themselves with the book’s argument, helping to further boost its profile. “A liberalism that builds,” Khanna recently wrote in an endorsement. “Reimagining government instead of slashing it.”
Abundance arrived at a moment when many Democrats are eager to rethink their approach to governance, as they search for ways to rebuild after a disastrous loss to President Donald Trump in 2024.
Klein’s San Francisco homecoming this week has become far more than another occasion to sell books. California leaders aligned with the Abundance effort are hoping to use his presence to make their pro-growth brand of liberalism a stronger force at the state Capitol in Sacramento.
On Thursday, Wiener and Wicks will host a private roundtable with Klein and at least a dozen of their lawmaking colleagues, including some currently carrying legislation designed to cut local and state regulations they argue make it overly difficult to build housing. Among those expected to participate are Assembly Speaker Robert Rivas, already an ally of the movement, and Senate President Pro Tem Mike McGuire, who’s more wary of easing environmental rules.
“I sent it to the two leaders of my California Assembly and Senate,” Newsom said of Abundance in his interview of Klein. “I said, ‘Guys this is it.’”
But the movement faces strong critics. On the left, the Abundance effort has been pilloried as coastal-effete liberal thinking that may address the concerns of young professionals in big cities but won’t help Democrats regain support among working-class voters elsewhere. On the right, Republicans are skeptical that Democrats can deliver on the movement’s promises when two powerful constituencies — labor unions and environmentalists — are reluctant to peel back hard-fought regulations.
Steve Hilton, the former Fox News host and a potential Republican contender for California governor in 2026, said many of the movement’s ideas align with his own, though he doubts Democrats can make the hard choices when it comes to alienating powerful interests within their party. Hilton released his own book this week: Califailure: Reversing the Ruin of America’s Worst-Run State, a rival argument of sorts from the right.
“I think it’s difficult to imagine the Democratic Party, as it’s currently oriented, actually delivering the Abundance agenda,” he said. “They’re so tied to many of the structural and ideological factors that have created scarcity.”
In California, the biggest resistance to enacting an Abundance agenda comes from pillars of the progressive coalition that keeps Democrats in power.
Wiener has proposed legislation this year that would overhaul parts of California’s Environmental Quality Act, or CEQA, the landmark protection enacted in the 1970s that is often blamed for stymieing the construction of housing by opening developers up to endless threats of litigation from neighbors, environmentalists and labor unions.
Unions are gearing up to fight the bill, which would exempt many types of urban infill housing projects from CEQA review. The debate is expected to be a slugfest and a crucial test of the Abundance mantra’s resonance.
Rudy Gonzalez, head of the San Francisco Building and Construction Trades Council, which represents 7,500 unionized workers in the Bay Area, called the movement an effort to scapegoat labor and environmental protections for a housing shortage that’s strongly shaped by factors like high interest rates and soaring construction material costs. He called it the latest effort to rebrand “neoliberalism” that will alienate blue-collar workers.
“They’re perpetuating their insular, circular firing squad of Dem-on-Dem violence when they should be leading the resistance,” to Trump’s policies, Gonzalez said.
Even some players aligned with the Abundance movement in San Francisco have been uncertain how to quantify what it means beyond an expansion of changes to land-use and transportation policy. Klein and Thompson outline, in their book, how overregulation has undermined progressive goals in other areas, such as scientific research and climate change and clean energy.
“It gets very complicated very quickly when you add multiple issues. But I don’t know, it could work,” said Laura Foote, executive director of YIMBY Action, a national advocacy group, and an early organizer of the city’s pro-housing activists.
On Wednesday night, at their first sold-out appearance in San Francisco, Klein and Thompson were hosted by Manny Yekutiel, a local Democratic organizer who owns a popular political watering hole in the Mission District. He said their message is landing well with those who live face to face with the city’s contemporary paradox: an ultra-progressive beacon of inclusiveness and innovation where working-class people can’t afford to live.
“There’s a national conversation happening right now. The left is lost,” Yekutiel said. “Maybe this is one way through this, painting a completely different vision.”
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California
Gavin Newsom proposes $350B California budget — kicks the can on debt
California Gov. Gavin Newsom unveiled a record-high $350 billion state budget Friday that makes “historic” investments in areas like education — but kicks the can on paying down federal debt, foisting costs onto struggling employers.
Newsom’s budget incorporates a $43 billion windfall tied to the stock market that he touted in his State of the State speech Thursday, bringing his office’s estimated deficit down to $3 billion — the state’s fourth deficit in a row. The budget plows billions into maintaining education, health care, and other programs but ignores a $20 billion federal loan for Covid unemployment payments — a situation one legislator called “alarming.”
Ignoring the loan means small businesses are on the hook for the state’s debt, said state Sen. Roger Niello of Fair Oaks.
“We already have the highest unemployment in the nation and we’re putting this additional burden on our employers. It makes absolutely no sense,” Niello said.
The budget includes $662.2 million in mandatory interest payments, but there is no money going towards the principal.
Since July, the total balance has ballooned to $21.3 billion, and private employers in California pick up the tab under federal rules. Employers pay an $42 extra per employee this year and growing, per KCRA
Every state expect California has paid off the Covid-era loans.
“That is an alarming thing because [Newsom is] basically saying that businesses and employment are not a priority to him and that’s troubling,” Niello added.
At 5.5%, California’s unemployment rate was the highest in the country as of November.
Newsom’s $350 billion budget proposal is about $30 billion higher than this year’s budget, thanks largely to federal healthcare cuts that forced costs onto the state and mandatory set-asides in areas like education.
At a budget briefing Friday, Newsom’s finance director Joe Stephenshaw highlighted record spending on education— amounting to a record $27,418 per K-12 student, $5.3 billion for the University of California system, $15.4 billion to community colleges, and $1 billion to needy schools — along with $500 million towards local homelessness prevention, $195 million in new public safety spending, $3 billion for the state’s rainy day fund and $4 billion for school reserve funds.
The budget includes some cuts to climate-related spending and housing and homelessness, per Calmatters. And it does not include any direct funding for Prop. 36, the anti-crime measure supported by nearly 70% of voters in 2024 — a move Republicans blasted.
But even with Newsom’s unexpected windfall, analysts expect deficits to grow to as high as $35 billion in the coming years as expenditures outpace even optimistic revenue projections.
Newsom and the state Legislative Analyst create separate budget projections, and the governor’s has historically been far rosier on the revenue side. The legislative analyst projected a $18 billion deficit in the coming fiscal year, while the governor calculated $3 billion.
Under Newsom, the state’s general fund spending has increased by 77% partly owing to new programs spun up when the state was flush with cash, according to Republican legislators.
Newsom’s $350 billion budget — the last before he leaves office next year — does little to confront ballooning expenses, dumping the problem on the future governor and Legislature, according to Senate Minority Leader Brian Jones.
“This is more of the same from a lame-duck governor content on leaving the rest of us to pick up the financial pieces when he leaves office,” Jones said in a statement.
Democrats in the legislature were more measured in their responses.
“During these times of uncertainty, we must craft a responsible budget that prioritizes the safety and fiscal stability of California families,” said State Senate Leader Monique Limón in a statement.
Newsom and legislators will refine the budget in the coming months towards a final proposal in May.
One major unknown is how California will handle a loss of about $1.4 billion in funding due toTrump administration changes to low-income health care and food programs.
Last year, Newsom was force to scale back a controversial plan to provide Medicaid coverage for illegal immigrants after costs spiked, forcing California was forced to borrow $3.4 billion, Politico reported.
Newsom’s budget didn’t fully explain what would happen to immigrant health care under federal cuts, and Stephenshaw struggled to answer detailed questions from reporters — saying Newsom’s office was still awaiting guidance from the feds.
“As we work through the May revision, this is something we’ll be well aware of and we’ll make those decision at that time,” he said.
California
How Trump’s tariffs ricochet through a Southern California business park
VALENCIA, California, Jan 9 (Reuters) – America’s trade wars forced Robert Luna to hike prices on the rustic wooden Mexican furniture he sells from a crowded warehouse here, while down the street, Eddie Cole scrambled to design new products to make up for lost sales on his Chinese-made motorcycle accessories.
Farther down the block, Luis Ruiz curbed plans to add two imported molding machines to his small plastics factory.
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“I voted for him,” said Ruiz, CEO of Valencia Plastics, referring to President Donald Trump. “But I didn’t vote for this.”
All three businesses are nestled in the epitome of a globalized American economy: A lushly landscaped California business park called Rye Canyon. Tariffs are a hot topic here – but experiences vary as much as the businesses that fill the 3.1 million square feet of offices, warehouses, and factories.
Tenants include a company that provides specially equipped cars to film crews for movies and commercials, a dance school, and a company that sells Chinese-made LED lights. There’s even a Walmart Supercenter. Some have lost business while others have flourished under the tariff regime.
Rye Canyon is roughly an hour-and-a-half drive from the sprawling Ports of Los Angeles and Long Beach. And until now, it was a prime locale for globally connected businesses like these. But these days, sitting on the frontlines of global trade is precarious.
The average effective tariff rate on imports to the U.S. now stands at almost 17%–up from 2.5% before Trump took office and the highest level since 1935. Few countries have been spared from the onslaught, such as Cuba, but mainly because existing barriers make meaningful trade with them unlikely.
White House spokesman Kush Desai said President Trump was leveling the playing field for large and small businesses by addressing unfair trading practices through tariffs and reducing cumbersome regulations.
‘WE HAD TO GET CREATIVE’ TO OFFSET TRUMP’S TARIFFS
Rye Canyon’s tenants may receive some clarity soon. The U.S. Supreme Court could rule as early as Friday on the constitutionality of President Trump’s emergency tariffs. The U.S. has so far taken in nearly $150 billion under the International Emergency Economic Powers Act. If struck down, the administration may be forced to refund all or part of that to importers.
For some, the impact of tariffs was painful – but mercifully short. Harlan Kirschner, who imports about 30% of the beauty products he distributes to salons and retailers from an office here, said prices spiked during the first months of the Trump administration’s push to levy the taxes.
“It’s now baked into the cake,” he said. “The price increases went through when the tariffs were being done.” No one talks about those price increases any more, he said.
For Ruiz, the plastics manufacturer, the impact of tariffs is more drawn out. Valencia makes large-mouth containers for protein powders sold at health food stores across the U.S. and Canada. Before Trump’s trade war, Ruiz planned to add two machines costing over half a million dollars to allow him to churn out more containers and new sizes.
But the machines are made in China and tariffs suddenly made them unaffordable. He’s spent the last few months negotiating with the Chinese machine maker—settling on a plan that offsets the added tariff cost by substituting smaller machines and a discount based on his willingness to let the Chinese producer use his factory as an occasional showcase for their products.
“We had to get creative,” he said. “We can’t wait for (Trump) to leave. I’m not going to let the guy decide how we’re going to grow.”
‘I’M MAD AT HIM NOW’
To be sure, there are winners in these trade battles. Ruiz’s former next-door neighbor, Greg Waugh, said tariffs are helping his small padlock factory. He was already planning to move before the trade war erupted, as Rye Canyon wanted his space for the expansion of another larger tenant, a backlot repair shop for Universal Studios. But he’s now glad he moved into a much larger space about two miles away outside the park, because as his competitors announced price increases on imported locks, he’s started getting more inquiries from U.S. buyers looking to buy domestic.
“I think tariffs give us a cushion we need to finally grow and compete,” said Waugh, president and CEO of Pacific Lock.
For Cole, a former pro motorcycle racer turned entrepreneur, there have only been downsides to the new taxes.
He started his motorcycle accessories company in his garage in 1976 and built a factory in the area in the early 1980s. He later sold that business and – as many industries shifted to cheaper production from Asia – reestablished himself later as an importer of motorcycle gear with Chinese business partners, with an office and warehouse in Rye Canyon.
“Ninety-five percent of our products come from China,” he said. Cole estimates he’s paid “hundreds of thousands” in tariffs so far. He declined to disclose his sales.
Cole said he voted for Trump three times in a row, “but I’m mad at him now.”
Cole even wrote to the White House, asking for more consideration of how tariffs disrupt small businesses. He included a photo of a motorcycle stand the company had made for Eric Trump’s family, which has an interest in motorcycles.
“I said, ‘Look Donald, I’m sure there’s a lot of reasons you think tariffs are good for America,” but as a small business owner he doesn’t have the ability to suddenly shift production around the world to contain costs like big corporations. He’s created new products, such as branded tents, to make up for some of the business he’s lost in his traditional lines as prices spiked.
He pulls out his phone to show the response he got back from the White House, via email. “It’s a form letter,” he said, noting that it talks about how the taxes make sense.
Meanwhile, Robert Luna isn’t waiting to see if tariffs will go away or be refunded. His company, DeMejico, started by his Mexican immigrant parents, makes traditional-style furniture including hefty dining tables that sell for up to $8,000. He’s paying 25% tariffs on wooden furniture and 50% on steel accents like hinges, made in his own plant in Mexico. He’s raised prices on some items by 20%.
Fearing further price hikes from tariffs and other rising costs will continue to curb demand, he’s working with a Vietnamese producer on a new line of inexpensive furniture he can sell under a different brand name. Vietnam has tariffs, he said, but also a much lower cost base.
“My thing is mere survival,” he said, “that’s the goal.”
Reporting by Timothy Aeppel; additional reporting by David Lawder
Editing by Anna Driver and Dan Burns
Our Standards: The Thomson Reuters Trust Principles.
California
Up to 20 billionaires may leave California over tax threat | Fox Business Video
California Congressman Darrell Issa discusses reports that as many as 20 billionaires could leave the state amid concerns over a proposed new wealth tax which critics say is driving high-net-worth taxpayers out of California on ‘The Evening Edit.’
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