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All right, everybody. Welcome back to the All-In Interview Show. We're very lucky today to have a candidate for the
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governor of California who is extremely unique in a number of ways. First of all, he's a Republican. And second, he's
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a Brit. Welcome to the program, Steve Hilton. You've decided to increase the
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degree of difficulty in two ways, but you're polling fantastic. You've got five or six people
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in the polls. So, >> he's leading the field. >> You're uh leading the field. Obviously,
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it's going to get narrowed a bit when the Democrats shiv a couple more people
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and get them out of the race and then pick their eventual winner in their cobble um whenever that happens when
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Nancy Pelosi picks who's running. But, uh Steve, maybe you could start by Sorry guys, I got jokes. But, Steve,
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maybe you could introduce yourself a bit and tell us why you're running. >> Well, hang on. Can I just say just after
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that great intro where you just tried to kill my chances in just a couple of words. Thanks a lot, Jason. Really
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appreciate it. >> Let me actually tee this up. I've known Steve since 2012 2013 when he and his
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wife Rachel Wetstone moved to Silicon Valley. Rachel worked at Facebook initially and then she worked with you
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Jason at Uber and then has had a great run and then Steve similarly. And you said it in a funny way, but ultimately
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this is an incredible land of immigrants and Steve has a really compelling story.
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So before we jump into the questions, I know your background, Steve, but I do think it's important go back to your
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parents, your mom, how you grew up, >> and just set the stage for how you made
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it out from the way you started because I think that's important and then how
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you got to the United States and why. >> Thank you. Thank you. I appreciate that.
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And you're right. We've known each other a long time now. And it's a great joy to
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be here. By the way, just want to say it's a great joy to be on a show where I
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don't have to wear the the suit and shirt. And you know, that's one of the
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one of the things about running for governor that um I'm I'm loving most of
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it, but dressing up is not the favorite part for me. So, it's great to be with
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you. I thought for this show, you know, we got to get it right. I think that the
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back the more I think about my background, the more I think it is really important um in in terms of how I
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see things and what I want to get done. Um my parents are Hungarian. They were refugees from communism and I grew up in
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in England in a town called Brighton on the south coast and you know we just had
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a regular workingass um immigrant aspirational family story I guess. You know it was my my parents
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actually split up when I was young. My stepfather's also a Hungarian. He had an
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amazing story. He was um a refugee as well, but literally ran across the border. He grew up in a small village on
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the west side of Hungary. And in 1956 when you had the Soviet invasion, he tells this amazing story. They heard on
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the radio, "The Russians are coming." And he and his brother and some friends
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from his school, he was 14 years old, like one year younger than my youngest son right now. Um and they just ran.
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They literally ran for they said, "Right, the we want our freedom." and
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they ran to the border, barbed wire fences, minefields got shot at by the guards. All that half of them were
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killed and he ended up in a refugee camp in Austria and from then to England. So
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all of that I guess just gives you that sense of real appreciation for actual for freedom for freedom and opportunity.
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And I grew up in England, worked very hard, ended up at Oxford University, but my first job was project manager for a
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construction company. I just wanted to earn money. I just wanted to, you know, get out. I think that's exactly the
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right phrase that you used and um that's been the story. You know, after Oxford,
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I went to work for a little bit of the Conservative Party in England. Then I worked all I worked for an big ad
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agency, worked all around the world, started my own business, couple of um offshoots of that, including a couple of
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restaurants. then went back into politics when my friend David Cameron, who I'd met many years before, um had
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gone into politics, got elected to parliament. I helped run his campaign for the leadership of the British
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Conservative Party, won that election and then wor with him to get the Conservatives elected when he became
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prime minister in 2010. Uh joined him in 10 Downing Street. I was senior adviser
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to the prime minister. Most of my job was really focused on trying to implement our uh reform program. And
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then in 2012, that's when we met. We moved here because Rachel, actually before Facebook, she was at Google. Um,
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and she had this big global job at Google. She was running um comms and public policy for Google worldwide. I
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had my job in number 10. It was actually when our second son was born. Um, it just there was a lot, you know, the
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travel for her and the time difference. So that's why we moved here. And I don't
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know, should I stop there or do you want me to keep >> Well, you're also notably you became
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naturalized. You're a citizen of the United States now. So you have dual citizenship. less people are confused by
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the accent. You're running for governor and you're a citizen of >> Let's talk about your political setup.
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So, being a child of Hungarian immigrants raising communism, you're going to hear a certain version of what
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the role of the state is versus what the role of the family or the individual is.
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Then, growing up in the UK, I'm sure your attitudes either get cemented or change.
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>> Give us the setup. What is the political evolution of Steve Hilton? what did he
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believe and then what does he believe now and what has shaped these beliefs. >> It's really I think it goes back to just
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around the when I first really started thinking about it all it was just as Margaret Thatcher was coming to power
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and you'd had the 70s in England were a disaster and a decade that was just the
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the economy was completely stagnant and slurotic unions ran everything. Um there
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was this period called the winter of discontent in 1979 when you had massive strikes um famously you know the dead
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went unburied and trash was piled up in the street just real collapse of everything and that's what thatcher came
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in to fix and I really did identify with that as well as with the very clear stand against communism and so really
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she was funny enough when I was thinking about the the video that I made to to launch my campaign about a year ago now.
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We ended up putting that in there and I thought, well, actually that was the thing that got me going. I was totally
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inspired by her, but also the focus that she had on business and enterprise and hard work. And remember my stepfather, I
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mean, they weren't at all political, by the way. It wasn't like some household
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where we talked about politics. It really wasn't. But he had this thing that stuck in my mind when he talked
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about the like in in England you've got the Conservative Party equivalent of the
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Republicans and for the Democrats it's the Labor Party and I remember he just
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used to say Mrs. Thatcher's for the workers and labor are for the layabouts and I just this phrase stuck in my mind
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about the importance of work and hustle and I think about that all the time. >> Where do you think California is if you
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contrast? Well, this is the this is the point I was just about to get to is we really are there. There are so many
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things I see in California today that are exactly like the UK in the 70s. You've got the massive dominance of the
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unions in policym. You've got a slurotic economy. You've got massively high
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taxation. I mean it was higher then the at one point I think the top rate when you add in the wealth taxes in the UK
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was literally 98%. Um but you had that confiscatory taxation and top rate of 60% and so on. So very very similar and
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actually funny enough um someone Mike Moritz actually sent me a report that um someone had done about the UK today and
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and again there's just these eerie parallels with just how how impossible it is to do anything in the UK to build
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anything. the overregulation. When I read this report, it just is exactly like California today. By the way, one
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thing, Jason, just to be clear, I am a proud American now, but I'm not I actually renounced my UK citizenship. I
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did that because >> I just wanted to be clear that I'm just to borrow the title of the show,
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>> you be all in. All in. Literally, I re I think it's really important everyone
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knows that and I am. >> And you have some to get into some maybe some policy. Thanks for the background
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there. You have some unique uh policy positions. Taxes, I think, is the most unique and dare I say pretty populist.
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You want to have no state tax in California for people with under $100,000 in income and then a flat tax
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for everybody over 100K of but 7.5%. >> How is that possible? And is that something you've studied? And where did
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this come from? the tax plan that um that I put out there, that was the first day of my campaign. I think of it as
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proworker and prog growth. And I think we need both of those things because if you look at what's going on in
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California today, just big picture. Obviously, you can look at the data that's a real economic disaster. I'm not
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sure people appreciate just how bad things are because hiding behind that data point of having the fourth largest
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economy in the world, which is true, and obviously I'm proud of that. I want
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California to be big and successful and growing. But that fourth biggest economy
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data point underneath that you've got this with the state with the highest unemployment rate in the country and the
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highest poverty rate in the country tied with Louisiana. There's a United Way
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report just the other about about a year ago. They do it every two years. sort of
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an assessment of of of of living conditions in California. And they found that over a third of Californians cannot
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afford to meet basic needs. And so the starting point for my tax plan is what can we do quickly to help people who are
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really struggling. Um if you think about it, the working poor who aren't particularly um being taken care of by
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the welfare system. They're working incredibly hard, but they're they're
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being squeezed by all these costs. We have the highest gas prices in the country as you know the highest electric
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bills everywhere except for Hawaii. Um housing costs the highest in the country insurance all these costs are so high.
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So what can you do to help working people quickly and so the starting point was and what's affordable the $100,000
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mark. I remember when when we I I was just playing around with numbers actually I did it with um some
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economists from the Hoover Institution where I was a fellow the first couple of years that we moved to I taught at
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Stanford um including in the public policy department also the D school at Stanford but I was also a fellow at the
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at Hoover and so we did the math on the tax plan there just just about a year ago and so the that first part first 100
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grand taxfree actually in many counties in California today the def the official
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definition for low income is 100,000. Um, which so that number may sound very high to people in other parts of the
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country. It's actually the definition in in a lot of counties of low income. So
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you've got people earning 70 grand, 80 grand, 90 grand in California. They are
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paying 9.3% state income tax. That rate is higher than the top rate in most states in America. So to me that's
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ridiculous when you've also got all these other taxes that those exact people are paying sales tax, property
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tax, gas tax, all of those are the highest in the country. >> So cutting taxes this significantly
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means you have to then also cut spending. >> Yes. But can I just do the other part of
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it? >> I just did the other part which is the 7.5% flat tax. I just thought, you know,
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when you look at the the the the facts about economic performance, the fact that, you know, for example, Chief
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Executive Magazine ranks us and has done for the last 10 years or so the 50th out
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of 50 for business climate. A big driver of that is tax. And I'm sure we'll get
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into the the insane proposed billionaires tax and you know, all these things that are driving wealth creation
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out of our state and business investment out of our state. So it's not enough
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just to take care of or give some relief to people who are on the lower end of the scale. You've got to actually have a
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pro-investment, progrowth tax framework. And so apart from anything else, the complexity is ridiculous of our tax
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system. These endless different rates is ridiculously complicated. Um and that itself is a cost. The bureaucracy and
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hassle associated with that. That's why I think a flat tax makes sense. Remember
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this is in you know in the context of federal taxes, all these other taxes. It's not the only component, but the
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cost is the to get to that cost, you've got to reduce spending exactly as you
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say. And basically the the the cost of that in total is about an 18.5% reduction in revenue, which takes us
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back it takes us down about 60 billion, something like that, which is not even going back to what the budget was just
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before the pandemic. They've actually d if you look at the budget of the state
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of California, it's nearly doubled in the last 10 years. is in the last 5 years it's gone up something like 75%.
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And so this is just bringing the budget back to achieve that entire tax cut would bring the budget back just to
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where it was roughly before the pandemic. >> Let me just summarize. So if you make
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between 0 and $100,000 a year as a California resident under your plan, no tax, >> no state income tax.
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>> No state income tax. If you make $100,000 in a dollar and above, you pay
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7.5% flat tax. >> Yes, that's the concept. >> Okay. How many Californians
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does that impact? So, what percentage of the population now get that affordance if you were to
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>> million the tax numbers usually only households and so it's about 7 million
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households would benefit from from the under 100,000. Do you know how many that is as a
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percentage? >> Well, working house, we got 40 million people. I think that's about um probably
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just over a third, something like that. >> Okay. So, a third of homes now essentially go to zero tax.
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>> State income tax. Yeah, there's all these other taxes that >> now the push back would be if we then
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take it dollar for dollar from the operating budget, programs will suffer. >> And to to your point, your comment is
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I'm putting words in your mouth, but you filled them in. Well, not really because
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we're just going to go back to 2019 2020 budgets and the difference was we spent
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a dollar in 2020, we now spend $2 and nothing has changed. So, yeah, go from $2 back to $150 and everything should be
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fine is your point. >> Yes. And I'd actually go further than that. So, first of all, what we've seen
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happen to the budget is basically the expansion that we saw in in the in the pandemic and afterwards is gone baked
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into the baseline, which is totally unsustainable. And so we got to get back to even even without tax cuts, I would
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argue you've got to get back to a more reasonable growth in spending because we
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go bankrupt. Um, as we're seeing with these deficits that that we're getting
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even when in times when we're not in recession and taking money out of the reserves, out of the rainy day fund to
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plug the gaps, which is what they're doing, totally irresponsible fiscally. But actually, it's more than that. Even
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if you just if if you don't change anything in the composition of the spending and just get back to where we
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were, that gives you scope for a major reduction in tax. But the other part of it is what we're discovering in terms of
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where the money is actually going. And so obviously the whole fraud story has exploded as a national political and
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economic story um ever since Nick Shirley's first investigation in Minnesota just around the time of
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Thanksgiving last year. Well, we've been making our own um contribution to that.
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So, a few months ago, I set up our I literally called it Cal Do California Department of Government Efficiency. I
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know that's a controversial brand, but you know, then the idea of it efficient
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government is something I think everyone would support. So, I thought why not use
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that because everyone knows what it is. So we've been just looking at the published data on spending to find
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examples and to make an estimate of the total amount of of fraud, waste and abuse in the system. And we've now
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published four separate fraud reports out of Cal Doge. When I say we, by the way, it's I mean this is a longer story
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we can get into, but one of the ways I think I'm running this campaign differently is that I'm actually putting
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together a team uh before the election of the of in terms of others who will run with me for statewide office because
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you've got some very important positions alongside the governor that are going to
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be crucial in putting us back on track. In this instance, the state controller is very important because the state
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controller is an elected position has the legal power to audit any organization receiving state money and
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to stop the flow of money if there's any um suspicion of improper spending. So,
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there's a guy running with me called Herb Morgan and we've been doing this
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work together and we've published four reports now, three of them on individual
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examples of fraud. We can get into that in a second if you want to know some of the examples are really shocking. And
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then the fourth one was an estimate of the total and we just went through published data from the state auditor
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from Medicaid error rates and so on to make an estimate of the total amount of fraud.
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>> What did you find? >> Give us a couple of examples. >> Here's some specific examples. The
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second fraud report um with it's a classic $1 billion over the last 10 years 100 million every year since 2015.
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This is from the climate change mitigation fund which is part of the cap and trade system. This is actually gas
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taxes and search charges on electric bills and so on. 100 million a year was allocated to be spent on climate change
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mitigation. In this case, it was solar panels for lowincome apartment buildings. So, we actually tracked that
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money and um with an AI partner that can get all the reports and of that 1 billion total in 10 years, the actual
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amount spent on the purported benefit here solar panel installation was 72 million. 928 million actually went to
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nonprofits doing all all the usual Democrat associated [ __ ] frankly, voter registration,
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um environmental justice campaigns, all that kind of stuff. The actual thing was
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mostly spent on that. That's $1 billion. The the first one was the cannabis tax,
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Proposition 64, legalizing cannabis. There's a tax associated with that supposed to be spent on um substance
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abuse prevention. We found $350 million that was supposed to be spent on substance abuse prevention. Again, going
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to this network of nonprofits, over 500 of them and small individual grants. When you look at what each of those
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organizations does, it's all the usual stuff, voter registration, activism. So
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the the third one was project home key that we we looked into which was the homelessness thing that they set up
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after the pandemic which was buying up property for homeless people um and sometimes can building new property for
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homeless people or converting hotels 3.8 8 billion that was on that one that we found. I mean there others have found
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other amounts um most of which went into the pockets of developers without any um
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real >> the California budget if I'm not mistaken 350 odd billion >> 350 billion 349 this year. Yeah.
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>> What percentage of it in your best estimation with you and your team do you
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think is inefficient fraudulent wasted? Well, our number over the last five years total our estimate was 425
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billion. So averaged over the years it's about 80 billion a year. So that's so
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it's around, you know, 20% or so. That's unbelievable. >> Yeah. And now just to bring some reality
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to the situation, you would have to get through the legislature, which is both controlled by Democrats. You can't
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unilaterally as the governor just say, "Hey, we're cutting these services." And
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we had a governor Schwarzenegger who tried this very thing. He had to move to the center. You of course I believe in
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California have a line item veto. So you have some balance there. >> But this is fantastic for people to
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maybe get a reprieve from taxes. You're going to get a major fight with Democrats to cut any spending. What's
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your plan there if you were to win? >> So Jason, I a couple of things. You're
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right about that. Um, and I'm very thoughtful about the realities of these things and I always make clear that I
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think certainly on the tax plan that taxes definitely you can't do that without the legislature. I think that
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actually we'll get a we there's a possibility of a consensus around some
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of these items where we can actually work together with the legislature to make it happen. One indicator of that is
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actually one of my Democrat opponents in the governor's race, Katie Porter. Um,
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actually, you know, we were doing a debate the other week in Fresno and she just said, we were talking about
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affordability or whatever it was and she said, "Well, I'm I'm I've decided I'm
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stealing Steve Hilton's tax plan. I agree with him. First 100 grand tax-free, and I think we should take
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good ideas where we find them." So, this is an interesting example that I think
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that part of it I think we may be able to actually persuade the legislature to do.
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>> And then I noticed she yelled at you and said, "Get the hell out of her shot."
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her video >> except a stronger word than eight. Exactly. Than hell. Um so the the
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attitude that I've got on that whole question of the legislature is that when
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I'm elected that's and I'm sure your eyebrows are raised and saying what are
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you talking about? It's impossible for Republicans to win and we'll get into
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that. But I'm I'm doing this on the basis that I will and I'm preparing to
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actually start implementing the big changes we need to make um in a thoughtful manner on day one because
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otherwise what's the point of doing this? Steve, do you think that there's
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legislative agreement or momentum to give you the win? Even though to your point, I think it's quite significant
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that the Democrats would signal that it's a legitimate policy proposal, but do you think that if you win, people
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would see the forest from the trees and realize how important it would be to take salaries under 100,000 to no state
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income tax? Look, the we have I've seen the, you know, the Democrat arguments
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now up front many many times. We've done a lot of events together, some of the
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televised debates, many more that aren't televised. We're literally all saying the same
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thing in all the in terms of the diagnosis of the problem. >> It's incredibly expensive to live here.
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People can't, you know, people are really struggling. The business climate is a disaster. We're massively
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overregulated. We can't build anything. everything takes too long, everything's
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too complicated. You know, there's a there's a real consensus about diagnosing the problem among all the
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candidates. And so I think that that doesn't mean that we agree, of course, on the solutions. I would argue that the
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Democrats all, you know, in some version of more of the same actually, despite what they say about the problems, but I
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think that um there are certain things where we will be able to get agreement. I also think that when you have a
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situation where you have the first Republican governor elected for 20 years, that really will change the
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dynamic in Sacramento, I think it'll it actually may, >> you know, loosen things loosen things up
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a little bit because I think that there are people there in the legislature who really understand that things have gone
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too far. Some of them have said it to me personally, Democrats there, but they feel constrained by the current
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political situation, the machine being in control. They can't really move and
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and I think that'll shake things up a little bit. That's one point. Secondly,
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you know, I really do have experience working across party lines like this. I think that I'll be able to bring some of
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that into play. I mentioned earlier I worked in in 10 Downing Street, senior adviser to the prime minister. He was a
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conservative prime minister, but it was a coalition government. Um, and I literally shared an office in 10 Downing
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Street with my opposite number from another party and we would, you know, hash things out and argue and, you know,
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we were part of the team that negotiated a coalition agreement and then tried to
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implement it. And I think that those skills of actually putting something together where you don't agree about
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everything, but you can make some things happen. I think it'll be useful in this
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situation. And I think we can I mean, look, everyone agrees. we call going like this in California.
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>> And it's not farical to think a Republican can't win here. Pete Wilson
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did two terms. Schwarzenegger did two terms. That's 16, I guess, of the last
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36 years. It is completely conceivable that a Republican could win. And you and Katie Porter have the same plan. I think
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Chad Biano has the same plan, which is under 100,000. All of you agree no taxes. That you're all attacking
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affordability. They don't believe in cutting services though. They want to increase taxes on businesses, if I'm
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correct. And so, why is that plan not as good as yours, I guess, is the question.
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Which one do you think would be more more appealing to the voters? Would the voters I think they'll all agree. Paying
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less taxes, fantastic. Makes you more competitive with Florida and Texas. But if they had their brothers, they're
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probably going to want to see Google and Apple pay more in taxes and not lose their services.
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>> Yeah. But we're losing jobs. And I think that that's the consequence of of of
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squeezing um businesses and high earners more and more. And you're seeing it right now.
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You're seeing the business exodus. Um if the billionaire tax proposal goes through, I mean that absolutely puts,
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you know, I think that's a just complete disaster for for the tech ecosystem and
00:26:25
what we've built in Silicon Valley over the years and all the job creation and
00:26:29
and wealth creation that comes with that. um you're seeing I mean I just it's not just everywhere you go in the
00:26:36
state there are so many conversations you sit down with business people you know we we are we are on the brink of
00:26:40
leaving I don't think people realize quite quite how near the cliff edge we are um and if and it's I give you
00:26:48
another example we are I was just in Pomona the other day down in Southern California fantastic company sheet metal
00:26:55
um it's an HVAC duct manufacturing it's exactly the kind of thing you'd want
00:26:58
here they're union jobs actually it's a great um you know manufacturing facility
00:27:04
they are making the these HVAC systems the air conditioning incredibly important as as you know for uh TSMC and
00:27:12
these semiconductor factories and all these the high-end manufacturing that's
00:27:16
happening in other states in and these these facilities now massive amounts of investment in the AI economy and and
00:27:24
tech more broadly but none of it's happening in California I mean we just published our policy report on that
00:27:29
today how we can get some of that that full stack of those jobs in California. But that company l they said to me since
00:27:35
the the facilities are all now being built in other pl in other states. We're
00:27:41
on the brink of moving our facility to be closer because what's the point of
00:27:45
making this stuff in California. It's not going to be used because nothing's
00:27:48
happening nothing's going to be happening in California. So you have to stop this squeeze on business. You
00:27:54
really do. >> Let me ask about the broader cost of living for a second. Probably the most
00:28:00
impactful cost to people's lived experience is the cost of housing. >> Yeah.
00:28:07
>> Double click into that for a second. For the 40 million residents of California,
00:28:13
what is going on? Why are rents so high? Why are homes so expensive? And what can
00:28:21
actually be done to make the cost of living and rent cheaper? So the thing this particular issue I think almost
00:28:32
captures better than anything else the underlying structural reasons why everything is so difficult in California
00:28:39
and so expensive because you got these three structural forces that I think underpin the problem and show why a
00:28:49
Democrat can't fix it. And the three things are union power, litigation and climate dogma. and they all come
00:28:58
together in the housing story. The first part of the story is that we're just not
00:29:04
building enough homes for the number of jobs that we're creating and the size of
00:29:08
our population. It's a classic supply and demand situation. Now, within that,
00:29:13
there are certain, you know, wrinkles. You could point out that because of rent control, which has got completely out of
00:29:20
control, there are a lot of empty properties in California that could be used to house people, but they're not
00:29:27
because landlords don't want to don't want to do it because the the rights
00:29:31
have gone have swung so far in favor of tenants. But I don't think that's the
00:29:36
major driver. The major driver is the fact that we just haven't built enough
00:29:39
housing of different kinds. And if you go through the reasons for that and why it's so expensive, it brings into play
00:29:47
these three factors. First of all, it just costs more to build anything in California. The same exact floor plan,
00:29:54
house, apartment building, industrial building, whatever it is, cost cost two or three times more to build in other in
00:30:00
in California than in neighboring states. The first reason is the building codes, the actual requirements for
00:30:06
construction which is way more ownorous driven by climate dogma that actually doesn't really provide much specific.
00:30:12
What does that mean climate dogma? >> Well, you have to install here we are
00:30:16
>> because like Nevada's hot and droughtridden and Arizona has issues. So
00:30:20
what is it that we say that those states don't say? So when you build apartments
00:30:26
or when you when you build parking you have to put in EV charging um and the scale of what's required for
00:30:36
the EV charging just makes it more expensive. You have to you know like you do a parking structure they have to
00:30:42
reinforce the floors. The bays have to be wider just it adds you can have you you have fewer bays per structure. Um
00:30:49
there's the specific cost associated with that. um solar panels, we talked about that earlier in terms of
00:30:56
low-inccome apartments that the that taxes are paying for. Um developers have to pay for that as well. Um insulation,
00:31:03
um energy efficiency, all these things are good. And I think that's pretty much
00:31:07
the story of California, which is things that start with good intentions actually
00:31:11
end up being taken to an extreme where it just makes it too expensive to build at a rate that people can afford to buy
00:31:19
the properties. And the other two are really that SQA where anybody can sue on behalf
00:31:24
>> exactly the private right of action under SQA. So that and and but let's
00:31:27
unpack that because that brings together the three things climate um litigation and unions because see the California
00:31:34
environmental quality act itself is is a nightmare in terms of this the amount of
00:31:39
regulation you have to comply with the private right of action means anyone can sue 70% of SQA lawsuits are used to
00:31:47
block housing most of those lawsuits are filed by unions they're used as leverage
00:31:53
to negotiate pro what they call project labor agreement ments where you have an agreement for the site and usually they
00:31:59
have one or one of both one or two of these components both of which sound great skilled and trained workforce
00:32:07
which means union only so it's a closed shop and prevailing wage again sounds
00:32:12
very good but it's two or three times market rate wages so both of those things inflate the cost often I've
00:32:18
spoken to many developers there aren't enough union workers in in the area to
00:32:24
actually do the job so They have to sometimes fly them in from other states to do the job and the cost of travel and
00:32:30
accommodation. It's just >> this is the key. There's no equivalent
00:32:34
to SQA in Texas uh where I now reside uh after 20 years in California. The other
00:32:39
thing is the fees. It's 30,000 per door in fees to the government. Exactly. Yeah. To to build a door in California.
00:32:46
It's under a thousand in Texas. And in California has three times the new units
00:32:52
per capita than California. So every year we produce three times as many new homes per capita.
00:32:57
>> Just a simple question though guys, put this into chat GPT or whatever.
00:33:02
>> California's mandate with SQA is to protect the air, protect the water,
00:33:08
protect the land by some measures. Texas doesn't have it. Is it the case that Texas's air is worse, the water is
00:33:16
worse, and the land is worse? >> No, definitely not. >> Yeah. >> So is is it roughly the same? meaning
00:33:23
the particulate count, the pollen count, is the air quality the same because if it is then what is SQA doing other than
00:33:31
just slowing down and retarding the progress of housing? Why hasn't that study? Because I think again all of this
00:33:38
guys comes back to when the data is presented in a way that's factual, there's very little room for people on
00:33:47
both sides to argue it because they're all relatively smart. It's when it's
00:33:51
presented either in a partisan way or by somebody who reeks of partisanship that
00:33:57
I think people attack the messenger versus the message. So I'm just trying to understand why hasn't the California
00:34:03
government confronted this? It has the highest rents in America. It has the highest poverty rate in America and it
00:34:10
also has the highest regulation that has the lowest and the slowest unit housing
00:34:15
growth. Steve, I guess what I'm asking you is how does that not get to the legislators more?
00:34:21
>> Okay. Well, I'll tell you it's I'm afraid the answer is the corruption
00:34:26
within the system and the interest groups that have taken over the system. I'll tell you a story which is my first
00:34:32
I I know a lot about housing policy because the first area of policy I studied when I decided that I wanted to
00:34:39
get into the whole world of policy and politics in California. I actually tried to get a ballot initiative qualified for
00:34:45
the ballot that would have two elements to it. One is what Jason just mentioned capping impact fees which are now up to
00:34:53
about 20% of the cost of housing. Um I wanted to do a statewide cap of 3% um of construction cost and the second
00:35:02
component was eliminating the private right of action under secret. I didn't
00:35:06
succeed in getting it on the ballot. Didn't raise enough money in time. So then I tried to pursue it through the
00:35:12
legislature said well let's see if we can make some something happen in the legislature. So I went to Sacramento I
00:35:17
took meetings with legislators started to engage with Sacramento. There was one meeting I had with the legislator who
00:35:23
was described to him is good on housing. This is a person you need to talk to and
00:35:28
we had a great meeting. They said this would be transformational. I said great let's work on it together
00:35:35
bipartisan. You're Democrat. I'm a Republican. That'd be great. People like
00:35:37
that. Oh, I couldn't support you publicly. Why not? Well, the unions would hate it. Why? Because if you take
00:35:44
away the private right of action, you take away the union's leverage. And I said, "Yeah, but you just told me it
00:35:51
would be transformational." We were sitting in an office. You could see the
00:35:54
state capital down below, high up. They just waved their arm around like this and said, "Yeah, the unions run this
00:35:59
place." And that's the real reason. If you look at for example Newsome touted
00:36:04
these two bills last year AB130 AB131 that were going to solve the housing crisis. He said this is the moment where
00:36:12
we are embracing abundance and all the rest of it big squa exemptions for certain types of housing. But if you
00:36:19
look at the fine print tucked away in it, you only get the exemptions if you have these project labor agreements and
00:36:26
union union closed shop and prevailing wage. So you're just writing back in exactly the things that Sequ is causing
00:36:34
the cost increases from. So because the UN and what let's follow all the way
00:36:38
through. If you look at Gavin Newsome's political donations over the 16 years
00:36:44
he's been running statewide just as a proxy for Democrat politicians by category. The number one category
00:36:50
government unions, number two trial lawyers, number three non-government unions. So these are the that's why
00:36:57
nothing changes because the the interests that benefit from this system are funding the politicians that make
00:37:04
the decisions. >> Yeah. And Chamat to your other question of like is the environment better since
00:37:08
1970 when this regulation came into pass. >> California still has the worst air
00:37:14
quality in the country largely because of the addiction to cars and traffic. And then Texas as a comparison just has
00:37:22
industrial waste problems because we have a lot of chemicals here or chemical processing done here.
00:37:28
>> So we have a car loving culture in California to your point Jason. It's
00:37:32
part of our cultural fabric driving down Highway 1. It's just a very iconic thing
00:37:36
that's embedded in this state. Steve, I have two questions. What has all of the
00:37:40
incremental regulations done with respect to climate quality, whether it's EV mandates or the ice
00:37:50
engine requirements? And then separately, just as a more general way to explain it,
00:37:54
>> why is gas in California 7 8 gallon and why is it $3 everywhere else? Why is
00:38:00
ours more than 2x that it costs everywhere else, including other states that are also quite expensive to live
00:38:07
in? Well, also that they don't that we we have the highest gas in the country,
00:38:12
including Hawaii in the middle of the Pacific Ocean, even though we have abundant oil reserves here. So, we have
00:38:16
way higher gas prices than states that don't have oil reserves. We actually have very significant oil reserves in
00:38:22
California. Um the the fundamental reason that gas prices are so high is because again in the name of climate,
00:38:29
but without actually in this case, it's counterproductive to climate. um instead
00:38:35
of using the production that we have here in California, I've been to the oil
00:38:39
fields in Kern County mainly near Bakersfield. Um we are now importing nearly 80% of the oil that we use over
00:38:47
the period of the since really this all started in 2006 with the passage of the global warming solutions act. That was
00:38:54
the sort of foundational climate legislation in California. Over that period, our use of fossil fuels has
00:38:59
declined by not that much. And the proportion of our energy that's coming from fossil fuels is is about 80% still.
00:39:07
The rest of the country it's about 81%. So it's barely any different. But the
00:39:11
difference is we used to produce most of what we use in state. Now we are importing nearly 80%. And that has
00:39:19
driven up course you have to ship it from halfway around the world. Our number one provider is Iraq right now.
00:39:25
That's the number one source of oil. >> Sorry, sorry. The state of California
00:39:32
itself, we are the wholly dependent on Iraqi oil to sustain our economy. >> Not wholly, it's it's the number one
00:39:42
provider. Yes. So if you look at the sources of oil, number one, Iraq, number two, I think it's Ecuador and Brazil.
00:39:50
But the the the broader point on that is because the we used to have a let's just
00:39:57
go back a few steps. We had a really strong energy industry and infrastructure in California where we
00:40:03
produced most of the oil and gas that we use and we had refineries about 40 of them um around the state mostly in the
00:40:10
Bay Area down near LA that refined and turned it into products that we use gasoline and so on. Um now we're down to
00:40:16
seven refineries. One of the main reasons for that is that we're not producing what we what we what we could
00:40:23
be refining. we're shipping it in instead because there are no pipelines of of there are no oil pipelines into
00:40:30
California. Whatever we don't if we don't use our own, we have to bring it
00:40:34
in by tanker. Um because of this and because of the the the fact that the refineries were built to to refine
00:40:43
California crude, which is known as heavy crude. Um there different types around the world. You got to have a good
00:40:49
match. Iraq provides Iraqi oil is a good match. The other place whose oil is a good match for our refineries is South
00:40:58
America. And so as a result of Democrat climate policy, we are now expanding oil
00:41:05
drilling in the Amazon rainforest in order to provide the right kind of oil for California's refineries. I mean,
00:41:12
it's just so utterly insane and incoherent. And of course in the process we're spewing out carbon emissions
00:41:18
because the tankers run on what's called bunker fuel which is the most polluting
00:41:23
form of transportation there is. And just to make the whole insane scheme work carb the California Air Resources
00:41:29
Board which is obsessed with having all other businesses account for their carbon emissions right down the supply
00:41:36
chain. Miraculously the carbon emissions for the oil imports are only counted from when they're 12 miles off the coast
00:41:43
of California. It's just so crazy. >> Yeah. Change the finish line. Yeah.
00:41:47
>> The taxes add like a dollar a gallon and then there's this carb standard.
00:41:52
>> It's about 60. Yeah. It's just It's more like 61 I thought or 65. I can't
00:41:56
remember exactly. It's just going up again. Yeah. Yeah. >> Most of the most of the in most of the
00:42:00
$2 premium as it were for California is regulatory, not taxes. >> Yes. And most of the oil that's been
00:42:07
pulled out of the ground in California, we got the easy stuff out. what's left
00:42:10
is generally dirtier or thicker >> process. No, it's not right. I've had a
00:42:15
lots of conversation with the industry on this and the the the problem is that you've got fields that could be
00:42:23
producing but and actually it's a good example of what you can do as governor
00:42:26
without the legislature because the way that they've been shutting down production is not legislatively is
00:42:33
through an agency of the state government called Calgen the California Department of Geologic and Energy
00:42:37
Management and it's simply a question of refusing to issue permits for the various stages of production including
00:42:44
including maintaining existing wells or expanding. There's a process called sidetracking where you can take a well
00:42:49
that's doing five barrels a day and increase it to 100 whatever um and then drilling new wells in existing fields
00:42:57
and they're denying permits for all of that. Actually, you can pretty much turn
00:43:01
that around overnight by appointing people who are pro- energy who will issue permits because I think there's a
00:43:08
simple common sense rule here, which is as long as we're using oil and gas in
00:43:11
California, let's use our oil and gas rather than importing it. But the my conversations with the industry is that
00:43:17
I said, "Look, what could what could we do if we had a kind of green light from
00:43:22
a governor that and and a regulatory framework that just says, "Let's do what
00:43:28
we can. Let's produce what we can." The estimate that I've got from them is that
00:43:32
we can double production every two years in California. If we're already one of
00:43:37
the big gas burning states with the worst air or previously my state, you know, then you're gonna get into the
00:43:43
circular conversation with the public of do we want the air quality to decrease?
00:43:48
And most people would say the EV credits were actually a good thing because we had 20 years of smog going down. Even
00:43:55
though we're still worse, it's gotten a lot better. So that smog is not to do
00:43:59
with carbon, but that there's a real mis mis misunderstand. So the completely
00:44:03
agree on air quality and and one of the major advances that has been made is on picking the LA basin is on smog.
00:44:10
Obviously I wasn't here then but people say you know it's really bad and now
00:44:14
it's not. You have clean skies and you can see Mount Baldi or whatever. You know it's like a really different world
00:44:20
but that's nothing to do with carbon emissions. Um and so and that that's to
00:44:24
do with actually the the main driver of this of the air quality improvements in California actually car technology. Um
00:44:34
and if you look at EVs I mean EV penetration even with all the subsidies and so on. It's incredibly low in
00:44:39
California. So you can't you can't um point it's about four or 5% something
00:44:43
like that tiny. So actually the improvements in air quality, dramatic improvements that you saw in LA were
00:44:52
nothing to do with EVs. >> Steve, I want to switch topics to education. This is a thing that
00:44:57
we on the pod talk about a lot. We're all the byproduct of a pretty fantastic
00:45:02
education system, affordable education, frankly, at every level. We had options to pay for it.
00:45:08
>> We all had access to things like AP to really distinguish ourselves. >> Even Jason.
00:45:13
>> Yeah. Um, >> that's true. >> What's happening in the California
00:45:18
education system? Why are we stripping away things like AP? And how do we tie compensation to outcomes? Because I
00:45:26
think, >> yeah, >> a lot of us would want to pay teachers triple, but we'd want to tie it to
00:45:32
something that says, "Wow, the test scores are going up. Our kids can read.
00:45:35
Our kids can write. Our kids can compete on the global stage." And it just feels
00:45:39
like we are moving backwards. >> We really are. And it's just I mean the
00:45:43
numbers are horrific. I mean, you've got we first of all, we we spend nearly the
00:45:47
most of any state per student right now in this year. It's about 27,000 just
00:45:52
it's more than just over 27,000 per student per year in California. If you take the average out the money and we
00:45:59
get some of the worst results in the country le I think the number for you know 40 it's 47% that meet basic
00:46:05
standards in English and reading so less than half meet basic standards for math
00:46:11
it's 35%. So twothirds do not meet the standards. It's just an insane level of failure
00:46:18
considering we spend nearly the most. And I think again you've got to look at
00:46:22
this in a practical way. There's a long-term structural reform that I think we need because the the driver of this
00:46:29
is really the grip on the government school monopoly of the teacher unions who increasingly have been driven by
00:46:36
ideological factors. You saw that for example in the pandemic when you saw the you know the longest and most
00:46:43
destructive school closures in the country and I was always struck by LA the teacher union in LA when they put
00:46:51
out their demands for reopening schools it was just a list of polit was a wealth
00:46:57
tax Medicare for all something about Palestine you know it's just they've
00:47:01
completely become an organized political interest group that's about their members and broader political goals
00:47:09
rather than anything to do with the interests of students and kids in school. So I think that the fact that
00:47:15
you got this monopoly is of of the public tool system controlled by the unions. They of course in turn control
00:47:22
the politicians as I mentioned earlier the number one donor to democrat politicians of these government unions
00:47:28
including the teacher unions. And so you got to break that grip. So I think that
00:47:32
long-term the answer is to move in the direction of school choice which I've
00:47:36
always been a strong advocate of. You're seeing that school choice revolution
00:47:39
across the country now. many states moving very rapidly in the direction with really good results. It's not a
00:47:45
panacea. Um but I think that that is the long-term structural change you need, but that takes a long time and it's
00:47:52
going to be very very hard to get that moving in California given the fact that the teacher unions basically control the
00:47:58
legislature through the Democrat politicians they put there. So there are some practical things that we've got to
00:48:03
do immediately to improve these basic standards. And here we got to look at what works elsewhere. And you see a lot
00:48:12
of lot of attention now on Mississippi. Rightly so, because for onethird of their spend per student than California,
00:48:19
their results are spectacularly better. And it's really happened in the last 10
00:48:23
years. And there's some simple practical things that they do. Number one is how
00:48:28
you teach kids to read. There's a technique of to of reading instruction. I mean, this was a debate I remember
00:48:35
having back in the day in England in the '9s, and it's pretty much settled then,
00:48:39
which is there's a technique called phonics. It's a way to teach kids to
00:48:43
read, and it's totally clearly established as the most effective. It's barely used in California schools at
00:48:49
all. It's like in a very small proportion of schools of public schools. So, that's something that the governor
00:48:54
can drive forward through the state board of education where you appoint all the members. Secondly, in Mississippi,
00:49:01
they introduce something very common sense, which is, as everyone in education says, up to about third grade,
00:49:07
you're learning to read. And then from fourth grade, you're reading to learn.
00:49:11
And if you can't read, you can't learn. And so there's widespread consensus that
00:49:16
reading by third grade, by the end of third grade, is incredibly important benchmark. In Mississippi, if you don't
00:49:22
read by, you not don't pass the basic reading test by end of third grade. They
00:49:26
give you a bit of help over the summer and if you still don't make it, you repeat the year. They don't let you go
00:49:31
forward. That single change has transformed their results. And then your point about accountability also happens
00:49:38
there where they give and and this is something else that we could implement here which is taking the publicly
00:49:44
available test scores and data but really assigning it in a very visible way to individual teachers and
00:49:51
individual schools. And that's one of the proposals I've got in my campaign,
00:49:55
which is a grade for every school and a grade for every teacher so we can reward
00:50:00
the good ones and remove the bad ones. >> Two more topics that Californians are
00:50:05
very passionate about and have a lot of opinions about. I think one is pretty challenging and the other one seems
00:50:12
pretty easy and other states have handled it where it's easier. Crime and then homelessness. uh crime obviously as
00:50:20
a society we've seen violent crime go down over the long arc of our lifetimes
00:50:24
in the last 40 or 50 years but California still 30% more violent than the rest of the country so we definitely
00:50:31
have a violence problem specific to California and if you live in the major cities San Francisco Los Angeles they
00:50:37
let people out for petty crimes under $850 there seems to and we see going to a drugstore everything's locked up so
00:50:45
there is a feeling and a lot of debates over the numbers that there's a lot more
00:50:49
property crime. Some people claim people don't report it anymore. That was my
00:50:54
lived experience in California. What is your take on crime and then we'll go to homelessness?
00:51:00
>> Yeah, I mean it's just it's this classic thing in California where they seem to
00:51:05
be brilliant at passing laws, right? Every year more and more laws, more and more bloat and bureaucracy, more on
00:51:12
nanny state nonsense. Last session, for example, they passed, this is one session, 1,118
00:51:20
bills. One that that's the number of bills that the legislature passed. I we
00:51:25
did an thing outside the state capital. I mean, I'm not very tall. We printed
00:51:29
them all out. It's like double my height. I mean, just ridiculous. The point I'm making is really good at
00:51:36
passing laws, but not very good at enforcing them. there's just something missing in terms of the app of the
00:51:43
willingness to just enforce the law. That's going to be one of the main points I make in terms of homelessness.
00:51:48
But when you get to crime, there's just this attitude. I mean, there's something
00:51:53
off about how the left has has has seen this issue. And just when you think it's, you know, the worst excesses of
00:52:01
defund the police and all that have receded, you've now got them popping up.
00:52:06
What is it this new thing? microl looting, right? Oh, microl looting. Isn't the New York Times and Slack
00:52:12
podcast are going on about, oh, it's fine cuz it's just social justice and we
00:52:16
we're allowed to kind of basically steal things cuz it's okay. It's just
00:52:19
unbelievable subversion of basic >> um values and morality. Just unbelievable on crime. It's very
00:52:26
decentralized in terms I mean there's some state things that need to be d remember the law that you're talking
00:52:31
about that legalized theft up to $950 a day that has that part has been overturned that was Prop 47 which was a
00:52:40
few years ago has been overturned by Prop 36 which was overwhelmingly passed in 2024 by about 70% but of course it's
00:52:47
not being properly implemented. Gavin Newsome was against it and so were most Democrats in the state. the people
00:52:53
passed it anyway, but now there's real resistance to enforcing it, which is ridiculous in terms of the overall
00:53:00
picture though, it is very localized. You know, you've got local police forces
00:53:05
and sheriff's department and so on. So, my focus has been well, what can you do
00:53:10
as governor? And the one of the biggest drivers I think that's that's caused the
00:53:14
problem is is really started with Jerry Brown before Gavin Newsome. Gavin Newsome's accelerated it, which is the
00:53:20
prison closure program. They've they've they've they've basically al also this
00:53:25
is classic California. They've reduced the number of prison places by half. Guess what happened to the budget? It
00:53:32
doubled. >> Not quite not quite that bad, but like it's a classic. They double they cut the
00:53:38
numbers in half. Double the budget. But the point, the serious point is that you've had tens of thousands of really
00:53:43
dangerous violent criminals either released directly into the community or more or or more, you know, um
00:53:50
destructively for this for the system transferred to county jails which are now completely overcrowded. Um and
00:53:57
therefore at the local level, the whole system is aware that you've had all these transfers from state prison. the
00:54:06
system is full and so there's no capacity and that really undermines the kind of accountability that judges and
00:54:13
prosecutors would want to seek at the local level because they know the jails are full and so that in turns undermines
00:54:18
law enforcement because they say what's the point I mean I hear this term all
00:54:23
the time from law enforcement around the state I'm traveling the state the whole
00:54:26
time they talk about catch and release as the basic operating rule for local for the kinds of crimes you're talking
00:54:33
about you catch them they just release nothing happens And so that that undermines law
00:54:38
enforcement. They think, why bother if we're just going to bring these people
00:54:41
in and nothing's going to happen to them. And that in turn undermines public
00:54:44
confidence because everyone sees that and then they, as you just said, don't
00:54:48
bother reporting it. So a simple thing we can do that is completely within the governor's control is stop and reverse
00:54:54
the prison closure program, which is what I've committed to doing is to increase prison capacity in California.
00:55:01
That means that you can relieve the pressure on county jails, but also that means that you can use the prisons for
00:55:06
what they should be doing. Not just bringing accountability. You commit a crime, you should be punished, but also
00:55:11
rehabilitation. We've got one with not the worst, but one of the worst recidivism rates in the whole country.
00:55:18
And if you had if you if we did one of the best one of the best states is Virginia, they're they're less than half
00:55:24
what we have. that would massively reduce crime if you could just get, you know, there's that, you got to take
00:55:29
seriously the rehabilitation part. I mean, a huge proportion of prisoners in these jails, they can't read properly.
00:55:34
Many have dyslexia. You know, you you've got to have a really serious view on it.
00:55:38
And they just don't. They have an ideological view. I think that is the problem with so many of these issues.
00:55:44
It's ideology. In this case, it's decarceration. Can't have people in
00:55:48
prison. Prison is racist. Criminal justice reform. All this ideology instead of just practical things to keep
00:55:54
people safe. >> Newsome shut down four or five of the California state prisons. You're
00:55:58
absolutely correct. Uh, according to my notes, and then it peaked in 2006. California had 165,000 people in state
00:56:05
prisons. Now 93,000 people. So, it is definitely a trend. Uh, and I think a lot of folks who are living here or who
00:56:12
were living in California where I used to live are not in favor of that. Uh, looking at homelessness, is it
00:56:19
intractable in California? >> One thing I'll just point out if people are interested in digging in further to
00:56:25
some of the things I've been saying. There's a couple of places you can go
00:56:28
for real depth on this, which is the last three years, um, I've been traveling the state and kind of learning
00:56:34
about this stuff and developing solutions. And I had a policy organization for that called Golden Toto
00:56:39
together. goldento together.com and you can find policy reports on many of these
00:56:44
areas we've discussed and more including one on homelessness called ending homelessness. And actually my real
00:56:50
partner in developing that was someone called Michelle Ste who's done a lot of
00:56:54
work on this. She actually run um homeless shelters and and really at the at the kind of street level of this for
00:57:02
many many years. also someone called Tom Wolf who's given me a lot of great advice. He's in San Francisco, a
00:57:06
recovering addict um a recovered addict who's who's just fantastic. >> He's very vocal on Twitter and uh very
00:57:13
common sense approach. Yeah. >> Yeah. Exactly. Okay. So, it's very simply I'll try and sort of capture it
00:57:18
simply. It's a it's three points. Number one, it actually already is illegal to
00:57:22
live on and the homeless encampments already are illegal. They've always been
00:57:26
illegal. Um it's another example of where we just got to enforce the law. Um
00:57:30
for years local politicians in California hid behind a court ruling that is called the Boise ruling from
00:57:38
many years ago which stated it's the ninth circuit ruling applies to the western states which is that the the
00:57:44
statement there was you can you can't remove people from the street unless you
00:57:48
have sufficient shelter available locally. And they used this to say we can't remove people because we don't
00:57:55
have enough shelter. It didn't define what shelter was. They defined it as these permanent supportive housing units
00:58:01
costing $900,000 a door, but it could have been, you know, a camp with CS. You know, there's
00:58:08
no reason. But even that excuse has been lifted because there's a Supreme Court
00:58:13
case called Grants Pass versus Oregon in 2024 overturned that. So there's no
00:58:19
excuse. you you these people running local governments what they they they have the power and the legal authority
00:58:26
to remove every single homeless encounter and they should and my argument is I'll give that once I'm
00:58:31
elected I'll give them a certain amount of time and if they haven't done it then
00:58:34
I'll use state law enforcement resources to take people off the streets and then
00:58:38
you get to point two and three of the plan which is what do you you got to give people help in a compassionate way
00:58:43
help them get their lives back on track so over 80% of people who are homeless have drug or alcohol problems s
00:58:50
addiction or me severe mental health problems. So you got to deal with that. So the second part is drug and alcohol
00:58:56
recovery. Got to you got to get people into recovery. That used to be the rule in California, rehab or jail. And we got
00:59:02
to get back to that. It can't be an option. You got plenty of service providers who can do it. You got to
00:59:07
require it. I mean last year even the de going back to our point about the legislature even the democrat
00:59:13
legislature passed a bill called the sober housing act which would have taken a certain proportion of homeless
00:59:19
spending and allocated it to uh shelter where you had a requirement was sobbriety vetoed that bill. It's
00:59:27
unbelievable. So we got to have it 100% um sober requirement for any kind of state services on homelessness. The
00:59:35
third part is mental health where honestly going back to the jails conversation, you talk to sheriffs
00:59:40
around the state, they the number varies, but they say 50 I've heard as high as 70% of the people in their jails
00:59:49
have severe mental health problems. That's where we are actually treating people with mental health problems.
00:59:54
Either they're on the street or they're in jail is totally barbaric. And one of
00:59:58
the reasons is that we when you're talking about the homeless population, obviously low-income people. So it's
01:00:04
very much entwined when you talk about mental health care with Medicaid, with the federal system. And there's a rule
01:00:10
in Medicaid that was set up right at the beginning when it was founded in the mid60s called the IMD rule, institutions
01:00:17
of mental disease. And this was a time when they didn't want large mental asylums and whatever. The idea was you
01:00:23
have small facilities in the community. So the rule is there is no Medicaid reimbursement to the states for any
01:00:30
mental health care provided in a facility with more than 16 beds. It's a 16 bed rule. Of course, that makes the
01:00:37
whole thing incredibly uneconomic and inefficient. Imagine if hospitals could only be 16 beds. How inefficient that
01:00:44
would be. The first Trump administration created a waiver, the IMD waiver that states could apply for so you could get,
01:00:51
you know, get around the rule. California. A lot of other states have have taken that up. California hasn't.
01:00:57
There's plenty of money in the system. Like we've been saying, the budgets have
01:01:00
are there. They've just been diverted into the wrong places. So, the third part of the plan is to take the money
01:01:06
that's currently going into the homeless industrial complex, these ridiculous
01:01:09
apartment units for people who should be either getting mental health care or recovery treatment. Take that money and
01:01:16
put it into modern largescale mental health facilities. And then we can treat people.
01:01:21
>> That's broad work. That's a great place for you to put a big magnifying glass
01:01:24
because that's where there's massive amounts of corruption. People cannot
01:01:28
believe how much we spend in this >> or we spend in California on >> homeless and if you pay for something
01:01:35
you will get more of it and they're getting a lot more of it. Yeah. >> Steve, as we wrap up, give us the
01:01:40
quarterback view of your path to victory. Walk us through the sequence of events, the key moments leading up to
01:01:46
the primary vote and then from primary to election day. what has to happen for you to get to Sacramento?
01:01:52
>> So, we have the top two system. Um, for those who I mean, another crazy
01:01:58
California thing where you end up with two candidates going through to the general election regardless of party.
01:02:04
The idea of this was to have more moderate politics. Ever ever since it was introduced, the state's gone further
01:02:10
and further to the left. Um, and so you've got various scenarios that are possible. Right now, I'm leading in all
01:02:17
of the polls. Um, on the Republican side, there's one other candidate. I I think with the president with President
01:02:23
Trump's endorsement of my campaign, I think we can expect um I'm pretty confident that we can make it into the
01:02:30
top two. It's not certain. We we're we've got to, you know, fight very hard
01:02:34
over the next month or so. The ballots go out next week, early May. Um, but I think that we're going to have a a top
01:02:41
two with myself and one other Democrat. And right now it looks as if it's going
01:02:46
to be one of Tommy Styer, Katie Porter, or Javier Basera. And all of those three
01:02:54
represent either no change from what we have now or a move even further to the left in the wrong direction. So I think
01:03:02
broadly the argument is going to be very straightforward, which is are you happy
01:03:07
with the way things are going in California? Do you want more of it? And if you do, you vote Democrat or do you
01:03:12
think we need a change? So that's it's a classic, you know, change versus more of
01:03:17
the same election. Getting into the the numbers, it's I know a lot of people
01:03:22
look at California and say it's impossible for a Republican to win. And Jason was pointing out we've had
01:03:27
Republicans in the past, but that was, you know, a long time ago. And you could say special circumstances cuz Arnold
01:03:33
Schwarzenegger was elected in a recall election and so on. >> And he was a celebrity who was highly
01:03:39
and loved in Los Angeles, half the state. >> Exactly. All of those things are true.
01:03:43
But and so I've always said from the beginning of this that it's not going to
01:03:46
be easy to win. It's going to be very difficult because of the structural factors in California. But it's not
01:03:51
impossible. And given the seriousness of our predicament and how much I think the
01:03:57
whole country depends on a a successful growing thriving leading California, then we should go for it because getting
01:04:04
things back in a common sense direction is just a really important thing. I always say California means to America
01:04:10
what America means to the world. And so this matters. If you look at the numbers
01:04:16
on the on the some people look at the voter registration numbers and they say Democrats outnumber Republicans 2 to1
01:04:23
and that is true, but when you look at actual voting, the gap is a little bit closer. Over the last 20 years where you
01:04:29
haven't had Republicans elected, the the the pretty much the average Republican
01:04:34
vote has been just over 40%. So it's been like a 6040 split. Obviously, that's not close, but the gap is perhaps
01:04:41
not as wide as some people might think. But then you look at a couple of factors
01:04:45
that I really think are different this year. First of all, there's a dissatisfaction
01:04:51
with the way things are going that wasn't there before. If you look at that basic number, is the state on the right
01:04:56
track, wrong track? In the even four years ago in the last governor's race, the wrong track number was kind of mid
01:05:03
to high 40s. Now it's mid to high 50s. So there's a majority for change in
01:05:09
California, just put it that way, which is a good environment to be going into as a candidate representing change. The
01:05:16
second point is if you look at the actual votes you're going to need to win, this is a midterm election 2026. If
01:05:25
you try and get some kind of sense of how many votes will be cast in the midterm election this year, take the
01:05:32
average of the last two, 2018 2022, you get a total of 11.7 million total votes as an estimate. So to win, you're going
01:05:40
to need just over half of that. Call it 5.9 million. Now, when people say there aren't enough Republicans in California
01:05:46
to win, in the in 2024 in the presidential race, President Trump in California, without even campaigning
01:05:52
here or spending money on ads or anything, wasn't a targeted state, got 6.1 million votes. In other words,
01:06:00
there's more than enough people who just voted Republican for President Trump.
01:06:04
Now, of course, you're not going to get 100% of a presidential year turnout in a
01:06:10
midterm election, but the reason I make that point is that the votes are there actually, even with just Republicans.
01:06:17
Now, I don't think we're going to get there just with Republican votes, but
01:06:21
that's the starting point is a strong campaign to turn out Republican votes.
01:06:26
And a big driver for that this year that again is a unique feature this year is the fact that in November we're going to
01:06:32
have voter ID on the ballot. that just qualified for the ballot. Um, and Republicans particularly are
01:06:38
enthusiastic about voter ID. I'm going to help us get a big turnout. And then
01:06:43
in terms of the coalition for victory, I think that you've got a real opportunity
01:06:47
to put together the kind of multi-racial workingclass coalition that President Trump put together because it's as going
01:06:56
right back to where we started. It's workingclass people who are really really struggling and being hammered the
01:07:02
most by these policies. They get to vote directly for no taxes. No state income taxes.
01:07:07
>> Exactly. Because that's my tax plan. I I just put this out there just the other
01:07:10
day, which is no and and no tax on tips. That's the other part. I mean, which has
01:07:14
been implemented at the federal level, but California won't do it at the state
01:07:18
level. Just my whole plan is geared toward $3 gas. I call it Californable. $3 gas. Cut your electric bills in half.
01:07:26
Your first 100 grand taxfree. A home you can afford to buy. really simple, practical, common sense things that
01:07:33
particularly help the people who've been hurt the most over the last few years.
01:07:39
And I think that's how we pull this off. >> Steve, on behalf of all, I just want to
01:07:42
say thank you for being so incredibly candid and open with us. We're wishing
01:07:47
you the best of luck. >> Thank you for joining us. And just from my seat, if if you want
01:07:54
>> moving back. >> No, I mean if you want it just I left for a reason and part of it was the
01:07:59
dysfunction of the state and if you want things to continue I think you know having an unbalanced government that's
01:08:06
all in one party is a way to do that. You got to try to find some balance here and I think why not give it a shot? If
01:08:12
you're in California, you have nothing to lose. The state is in a massively dysfunctional
01:08:18
situation. So, I wish you great luck, Steve Hilton. >> Thank you, guys. Great to be with you.
01:08:23
>> All right. Cheers. Now, >> I'm going all in.