Defense Secretary Pete Hegseth is taking questions today in Congress about the cost of deploying troops against protesters in Los Angeles. Businessweek Editor Brad Stone writes that there's also a political price to be paid, especially for California Democrats who have been moving toward the middle. Plus: Grab a waffle and read about Hampton Inn's rise, and a surprisingly juicy battle between two multibillion-dollar software vendors. Help us improve Bloomberg newsletters: Take a quick survey to share your thoughts on your signup experience and what you'd like to see in the future. If this email was forwarded to you, click here to sign up. California today is a tinderbox. Over the past five days, demonstrations have gripped downtown Los Angeles as protesters object to a sweep of Immigration and Customs Enforcement (ICE) raids on local immigrant communities and worksites. Over the weekend, President Donald Trump directed 2,000 National Guard troops to the city; then, on Tuesday, 700 members of the 2nd Battalion, 7th Marines arrived. Amid the fog of tear gas, rubber bullets and flash-bang grenades, some protesters have engaged in violence and vandalism, and scores have been arrested. In another era, this would've felt epochal, the kind of moment that's destined for history books and breathless pop hymns. In the fifth month of Trump's chaotic second term, it kind of feels like just another Tuesday. Members of the Trump administration have used social media to propagate a searing image from the unrest: a shirtless, masked demonstrator, standing on a battered car and waving a Mexican flag, flames of chaos in the background. It's a useful image for Trump, suggesting a California captured by immigrants and the extreme left and descending into lawlessness. Protesters on Sunday in Los Angeles. Photographer: Kyle Grillot/Bloomberg The irony—and there's always rich irony these days—is that it's not an accurate reflection of California's current politics, which if anything have moved toward the center. The shift is visible everywhere. Governor Gavin Newsom—who announced plans on Monday to sue the federal government after a barrage of threats from Trump and his border czar, Tom Homan, to have Newsom arrested—has over the past few months vowed to cut health care for undocumented immigrants, spoken out against trans athletes in girls' sports and signaled the arrival of fiscal austerity in dealing with the state's $12 billion budget deficit. In LA, approval ratings for left-leaning Mayor Karen Bass have sunk since January's wildfires, while her more moderate onetime and potentially future rival, billionaire developer Rick Caruso, polls considerably better. Nowhere is the California Democratic Party's move to moderation more evident than in my hometown, San Francisco. Mayor Daniel Lurie, an heir to the Levi Strauss & Co. fortune who took office in January, has presided over the first measurable increase of optimism since the city's dismal run during the Covid-19 pandemic. "We have a long way to go, but I'm telling you, it's going to happen. San Francisco, we are on our way back," Lurie told me last Thursday in an onstage interview at the Bloomberg Technology Summit. Lurie on Thursday at the Tech Summit. Photographer: David Paul Morris/Bloomberg San Francisco has been spared from the worst of the unrest—so far. On Sunday, protesters gathered near an ICE building downtown and marched peacefully through the streets. But by the end of the night, about 150 people had been arrested and two police officers injured. In a news conference Monday morning, Lurie said he had no tolerance for violence, then tried to lay the blame at the feet of the Trump administration without naming the president at all. "The tactics being used across the country to target immigrant communities are meant to instill fear," he said. "They make people afraid to go to work and send their kids to school. That all makes our city less safe." In our interview at the Tech Summit, Lurie exemplified the state's new center-left politics. He said he wants to see construction cranes "all over the place" and plans to clean up city streets, address profligate public drug use and engage the tech and business communities in rebuilding. "I tell everybody we are open for business," he said, almost audibly ripping a page from the Democrats' so-called abundance agenda. He also touted some upcoming public entertainment—a Zach Bryan concert in Golden Gate Park and a three-day Grateful Dead reunion. California's protests over ICE, which seem almost fatefully destined to grow in size and severity, could end up interfering with that summer of fun. It's probably no accident: By deploying the US military to patrol city streets, Trump aims to provoke a blue state that has consistently opposed him and to paint moderate Democrats like Lurie and Newsom into a dangerous political corner. |