A New Political Power: Mod Squad & Business

Luke Phillips
Research Associate for the Center for Opportunity Urbanism and Senior Correspondent at Glimpse From the Globe

Another day, another story in the quixotic Green crusade to kneecap California’s lower and middle classes by jacking up the price of fossil fuel energy. The California Air Resources Board voted 9-0 two weeks ago to carry out the low-carbon fuel standard, a regulation requiring “a 10% cut in the carbon content of transportation fuels sold in the state by 2020.” As usual, California is leading the way over the cliff again- no other state in the country does this. Experts in the oil industry, of course, have been the first to protest- such a regulation will inevitably eat into their profits. But Big Oil isn’t the only player who will suffer. The millions of lower and middle class Californians who depend on moderate energy prices will ultimately pay for this new regulation in their gas receipts and utilities bills. The cost of living will rise, and social mobility will stall.

And for what? A 10% reduction in vehicular carbon emissions in a couple of years? It takes a certain kind of insanity to believe that such a reduction will have any effect at all on global climate change, or worse, that such mandated self-sacrifice will inspire other states and nations to follow suit. The sheer fixation of California’s political class on fighting climate change as a state goal would be fodder for Shakespearean comedy, if it didn’t so harmfully affect so many lower-income Californians from the Central Valley farms to the streets of South Central L.A.

But all hope is not lost. A few weeks ago, a raft of anti-climate change bills failed to pass through the state legislature- including the notorious SB-350, which would have mandated 50% cuts in petroleum usage statewide within a few decades- in part due to the opposition of a handful of moderate Democratic legislators known around Sacramento as the “Mod Squad.” This informal caucus, which includes such names as Assemblyman Henry Perea, Assemblyman Adam Gray, and Senator Steve Glazer, has ascended over the last few years in the wake of a series of electoral reforms aimed at encouraging political moderates to win and retain state office, like nonpartisan redistricting, longer term limits, and the top two primary system.

These moderate Democrats, mostly to the right of Governor Jerry Brown, present a starkly different agenda from that of their bluer colleagues. They are staunchly for pension and budget reform, often finding themselves butting heads with public-sector union-backed candidates and officeholders. They generally favor a simpler tax and regulatory code, earning them the support of traditional businesses like energy and manufacturing. And their economic ideology is in no way guided by the climate-crusading of Governor Brown and the progressives. In short, many businesses are finding that Mod Squad Democrats are a better conduit for advancing their policy interests than the currently-floundering California GOP. Follow the money- they’re taking advantage of this opportunity.

An article at the San Jose Mercury News reporting on the rise of the Mod Squad and its impact on climate politics explores the idea that big business’s renewed political relevance in the Golden State, abetted by the Mod Squad’s ascendency, is expanding the power of “special interests” over Californian policymaking. This is undoubtedly true, at least in part- a look at where corporate donations have gone since the 2012 electoral reforms went through is proof enough, perhaps validating the Hoover Institution scholar Bruce E. Cain’s assertion that well-intentioned populist reforms generally lead to greater plutocratic influence over the policymaking process. None other than President Pro Tem Kevin De Leon, whose climate agenda is suffering as the Mod Squad ascends, laments the rising influence of big business:

“The idea that this so-called good-government reform would help special interests further game the system by doubling down on candidates of their choice- I didn’t see it coming. No one saw it coming.”

In a Madisonian perspective, though, the rise of business is a positive development- a revived business constituency can be a political force countering the current hegemony of public-sector unions, state regulators, and coastal gentry liberals from the tech and entertainment industries. Political competition forces compromise on policy and keeps parties- or in this case, factions of parties- on their toes, which would be a blessing in our deep-blue one-party state. Brookings’s Jonathan Rauch wrote up an excellent report earlier this year on why factionalism and special-interest politics helps the democratic process along, and if anything, the California of the last two decades- dominated as it has been by the aforementioned blue triumvirate- has proved that competing political interests are necessary if a polity is to remain dynamic, and not stagnate.

Moreover, the interests of traditional industries like energy, aerospace, manufacturing, warehousing, and white-collar services are more or less aligned with the interests of California’s lower and middle classes, who are currently being squeezed out of the state by an economic climate that is not conducive to entrepreneurship and job creation, and which features a steadily rising cost of living.The rise of the business constituency can only help these currently underrepresented segments of California’s population.

Ultimately, should the Mod Squad- and perhaps the business wing of the California GOP, once it gets its act together- ascend to more significant power in the coming legislative elections, and maybe in the 2018 gubernatorial elections, there will be a major political force in California aligned against the green-and-blue coalition of Governor Brown and President Pro Tem De Leon.

And those countervailing forces will be positioned to fight a titanic battle over the state’s future- whether the decadent elite’s vision of densified, no-growth, eco-friendly California “life within limits” will come to be, or whether the golden dreams of upward mobility, technological advancement, and individual opportunity will continue to define California and all those who look to it for inspiration. The current battles over emissions regulations are early skirmishes in a war between those who worship at the altar of “sustainable growth” and those who seek to sustain growth.

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