In the 1780s, America’s founding generation devised a constitutional system that quickly became incapable of governing an extended republic. The story is familiar to students of American history: the Articles of Confederation rendered the national government unable to establish a national currency, required a supermajority for legislation, and was unable to form a military. The ensuing dysfunction eventually led to the creation of a new Constitution, which still stands as the world’s oldest living Constitution.

Today, many American cities and states are facing a new paralysis that echoes back to the early American republic. Instead of an inert constitutional design, America’s once-dynamic regions are now crippled by overregulation and regulatory handcuffs. The resulting stagnation has created crisis-level shortages of housing and stifled innovation on the environment, transportation, and other sectors. Two new books have drawn attention to these phenomena, Why Nothing Works by Marc Dunkleman and Abundance by Ezra Klein and Derek Thompson. Both books have generated considerable publicity and debate, especially in light of the GOP sweeps of 2024 and the increasing Republican vote share in America’s bluest cities, such as New York and Los Angeles.

Both books tell the story of how well-intentioned regulatory structures have metastasized into regulatory “vetocracies” that strangle progress. Dunkleman’s book traces the growth of regulatory apparatuses in America’s cities and states, which arose to combat corporate abuses and environmental degradation. Many of the reforms were well-intentioned, like consumer protection lawsuits pioneered by Ralph Nader and state environmental laws. To hold big corporations accountable, “Nader’s Raiders” pioneered a system of “democracy by litigation,” often to considerable effect. Likewise, environmental laws proliferated in state legislatures (including the California Environmental Quality Act, signed in 1970 by Governor Ronald Reagan) and culminated in Richard Nixon’s creation of the EPA.

The victories of progressives in the 1970s have morphed into overgrown regulatory bureaucracies that have now stifled innovation across a number of fields, including environmental policy. Klein and Thompson trace the arc of environmental policy from the 1970s, which created regulatory and procedural review for developers, and has now been used to thwart the construction of desperately needed housing. Most ironic is how the environmental reforms of the 1970s, which were devised to prevent environmentally harmful development, have now made it more difficult to develop clean energy projects and infrastructure. Dunkleman’s book concludes by arguing comparing the regulatory morass in America’s progressive jurisdictions echoes the failures of the Articles of Confederation, which required supermajorities to pass legislation and contained no executive power.

There is no better example than the failure to build a high-speed rail connecting San Francisco and Los Angeles, a project originally proposed in the 1980s by Governor Pat Brown, which has floundered under many abortive efforts to begin construction. Klein and Thompson’s book Abundance chronicles how the project has collapsed under the weight of endless bureaucratic review, environmental impact statements, and stakeholder objections. Even when American infrastructure projects get off the ground, the regulatory price is staggering: in the United States, one kilometer of railway costs $609 million, compared to $295 million in Canada and $267 million in Japan. As they argue, the regulatory structure that allows any conceivable stakeholder to block action does not guarantee mutually agreeable outcomes, but more often protects an ossified status quo. France and Japan developed high-speed rails six decades ago; modern-day California, home to our era’s most important technological innovations, has yet to produce a single mile of high-speed railway between its two largest cities. The well-intentioned process that allows various stakeholders to weigh in on public projects has morphed into a vetocracy that renders it impossible to develop big-picture projects.

The most prominent failure of the regulatory overgrowth is the crisis-level housing shortage in America’s coastal enclaves. The causes are familiar: restrictive zoning laws (which have origins in racist land covenants), land-use restrictions, building codes, and endless environmental review. The California Environmental Quality Act (CEQA) gives standing to nearly anyone to sue developers to prevent development. Within a few years of its passage in 1970, state regulators began creating thousands of environmental review statements annually. Since then, California has issued fewer housing permits in each successive decade. What has this left Californians with? A state where the median household income is $96,000 and the median home price is over $900,000.

Beyond putting homeownership permanently out of reach for working and middle-class families, it creates crisis-levels of homelessness on the streets of Los Angeles and San Francisco. Jurisdictions warrant aggressively curbing regulatory overreach. In the Golden State, these hopelessly unaffordable prices are a direct result of a sprawling regulatory state: environmental laws that necessitate expensive reviews and enable NIMBYs to sue developers, local zoning laws preventing dense housing construction, and union requirements that increase the cost of construction. These are not merely conservative complaints: none other than The New York Times published a piece entitled “California Needs More Housing. Unions might be the problem.” Of course, the problem isn’t merely unions; it’s the government laws that impose requirements for building and hiring of construction labor.

For all the hand-wringing about the complexity of modern governance, the authors’ own evidence indicates a simple path to restoring growth and innovation: getting rid of the regulation that stagnates progress. Edmund Burke’s famous exhortation applies: “In vain you tell me that Artificial Government is good, but that I fall out only with the Abuse. The Thing! The Thing itself is the Abuse!” In times of emergency, executives have the political will to simply bypass the regulations. Examples from the authors abound: in 2024, President Biden passed a law exempting chip factories from environmental review. In 2023, Pennsylvania Governor Josh Shapiro signed an executive order to remove administrative review for the rebuilding of a bridge on Interstate95. More recently, California Governor Gavin Newsom has lifted the yearslong permitting process for homes destroyed in the January, 2025 wildfires. Moreover, other states have shown the blueprint for addressing the problems that plague progressive states. Klein and Thompson point to Houston as a model of affordable housing, and the reason is unsurprisingly simple: Houston has no zoning rules. In a single year, Houston typically issues about ten times more housing permits than San Francisco, and the median home price in Houston is $300,000 compared to $1.7 million in San Francisco.

Perhaps the area ripe for deregulatory reform receives no mention from the authors of the two abundance books: eliminating licensure requirements. Although occupational licensure has well-intentioned public safety implications in many professions, licensure has exploded into many professions with little relevance to public safety. In her aptly titled book The Licensing Racket, legal scholar Rebecca Haw Allensworth demonstrates the perverse effects of state licensing boards: they “lock out” prospective entrants to many professions and “lock in” many professionals with well-documented histories of misbehavior. Unsurprisingly, the regulatory barriers created by licensing are inequitably distributed: people from disadvantaged backgrounds (the poor, immigrants, and people with criminal backgrounds) are the most often shut out of productive careers. As a result, the supply of providers in many professions is artificially restricted, thereby raising the prices of their services to populations that need them most.

Milton Friedman said that “Only a crisis – actual or perceived – produces real change.” and the conditions in America’s progressive areas could be classified as such. The sprawling homeless populations resembling a third-world country coexist in some of America’s wealthiest and most progressive cities. The decades-long fiasco of California’s “No Speed Rail,” as Klein and Thompson call it, embodies this failure. The problem for progressives has political implications: the population decline in California and other blue states could change the Electoral College math in future elections, not to mention the budget shortfalls that result from people and businesses leaving prohibitively expensive states like California. For progressives with presidential aspirations — and Newsom certainly has his eyes on a White House run — they will have to answer for the inability of their governments to innovate. “People are losing trust and confidence in our ability to build things” says the governor. Until governments in America’s progressive areas restore that trust, their leaders and residents will pay the price.