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Matt Nahm, welcome to Allin. >> Thanks, David. I have no idea who you are. Who are you? I mean, you're a guy
00:00:06
who kind of popped up running for governor of California last minute. How'd that come about? And who is Matt
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Mayan? >> Well, David, like everybody, I'm frustrated with a state that keeps
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spending more and seemingly getting less, which is why I jumped in. But to back up, I grew up in a little farming
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town here in California, a town called Watsonville, where your strawberries come from. Home
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>> I do work in Watsonville. >> Frisco berries. You know it well. >> I got green houses. Yeah.
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>> Yeah. Exactly. working-class family. Mom was a teacher, dad was a letter carrier.
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My lucky break in life was getting into a great college prep high school on a work study scholarship. I took buses
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about two hours each way. Worked my way through high school and college and uh came back as a public school teacher
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through the Teach for America program. Always was very community oriented, was interested in politics, wanted to know
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how to make our city, our world a better place. ended up in the tech sector and spent about a decade building civic tech
00:00:57
tools to help people navigate their democracy. >> What did you build? >> I was involved with an early Facebook
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application called Causes and then went on to start a platform called Brigade that was sort of like LinkedIn for
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voters. And the whole premise was to build grassroots bottomup power by connecting voters around issues they're
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passionate about, outcomes they want to see, and help them organize to hold their elected officials accountable.
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After about a decade in the civic tech space, our company was acquired. I decided to run for city council, and I
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went out and knocked on 10,000 doors, got yelled at for a lot of things that I wasn't necessarily responsible for, but
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I got a real feel for the common sense of the residents of California who would ask questions like, "If I'm paying
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$20,000 a year in property taxes, why haven't my local roads been paved in the
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last 15 years?" And I thought that made a lot of sense. So, I went to city hall
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to try to find out >> how dysfunctional is California and how did it get this way.
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>> Pretty bad. I'm really worried, which is why I jumped in. I think the state is
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heading toward an inflection point past which there there may be no return. We have increased spending in state
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government by 75%. To put that in perspective, that's $150 billion more this year than six years ago. And as far
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as I can tell, none of the outcomes have gotten better. Never mind 75% better. Many of them are flat or down over the
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same time period. So there is a real lack of accountability in government. We don't have a money problem in
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Sacramento. We have an incentives problem. We have a structure that allows us to keep shoveling more money into
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things that aren't working. Just take highspeed rail. If a startup took 20 years, spent $14 billion, and didn't
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deliver a product, people would have been fired a long time ago. And we're just not seeing that level of
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accountability in our state government. >> Is this theft? Where does the money go?
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$14 billion. Who has that $14 billion today? It's contractors. It's lawyers.
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Some of it has gone into actually building the project. But belatedly, what happens in California and the
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reason we can't build, we can't do big things anymore, is that we've got
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endless process, years of environmental review, the most latigious environment imaginable. Anybody can sue under SQA.
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You don't even have to be a resident of California to sue under SQUA. And so,
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you just get years of litigation, bureaucracy, when it comes to housing. Just to
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slightly switch topics, the fees that cities can assess, one-time fees can add 20% to the cost of a project. So, we've
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just we've bureaucratized the state to the point where it's total paralysis. We
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can keep spending more and more and not getting anything for it. It's like I'm
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trying to understand as a citizen and a taxpayer, I pay a 53% tax rate living in
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California. I pay my federal tax and my temporary California tax, which I've
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been temporarily paying for 11 years, and I'm paying 53 cents of every dollar
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I earn to the state and to the federal government. I'm like, where'd my money
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go? It's such a mind-boggling number. Pick the highspeed rail project alone.
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$14 billion >> spent. >> Spent. We don't have a rail. We don't
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have anything. Is it lawyers that made $14 billion? You mentioned contractors. like is this just like there's a whole
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bunch of people that are all making 20 30 grand and it all adds up to 14 billion like just help me understand
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where my money went. So on that project specifically and I haven't done the line
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item by line item analysis to be totally clear but you have years of consultants
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doing environmental reviews and and doing all of these studies and reports of of the impacts it might have. So tons
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of consultants you have the cost of litigation. You have an entire cottage industry of people doing design and
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studies and reports and managing litigation and buying right ofway and managing community engagement processes
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and we just we take years to do to do anything and so it just gets vacuumed up into this sea of little groups of
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things. So there isn't like one big thief like the grandmaster thief of California that's taking all the money
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and then it's just like the dysfunction is just like everyone's getting a little
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piece of >> my sense I mean let's be clear there is fraud there has been fraud very well
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documented in California and other areas during the last 5 years or so roughly during the pandemic unemployment claims
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in California that were fraudulent totaled over $30 billion that is well documented there's emerging
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research right Now that shows that there are hundreds if not thousands of hospice
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providers who may or may not exist. I mean we're just getting this information
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now. This is very real time investigative journalism. So there's fraud I think by an order of magnitude.
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There's even something bigger here which is which is waste and inefficiency is a
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system where you just keep incrementally growing headcount, growing the size of programs, growing the grants that we
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give out to nonprofits. And we're funding and managing around process, not outcomes. And I've tried to approach it
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very differently in San Jose. I think it's why without raising taxes, in fact,
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our revenue has actually slowed a bit the last couple of years just because the economy is cyclical, real estate is
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struggling. We're very dependent on local property taxes. But without raising taxes, we have dramatically
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changed the outcomes we're getting. We have led the state in reducing crime and
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become the safest big city in the country. We've reduced unsheltered homelessness, meaning people living
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outside in tents and vehicles, by about a third in the last few years. We've
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unblocked housing uh production. We're seeing thousands of new homes under construction. In all of those cases, we
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had to change existing process that was in the way, reduce fees, and cut funding
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for programs that weren't delivering so that we could fund other solutions that
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were more efficient. >> Well, let me also ask about legislation. If you look at Washington DC, we have
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our nation's Congress, the House and the Senate, and there's a Republicans and
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there's Democrats, and they fight. And they fight so much they don't get
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anything done, which by the way may be a good thing because in California, the legislature passes hundreds and hundreds
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of bills a year, and they all um come from one party, the Democrat party. Gavin Newsome on average vetos 15 to 20%
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of these bills every year which says something but maybe you can just explain a little bit your view on how are all
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these laws getting passed in California how are these how does the legislature in Sacramento where you're vying for a
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seat to have the right to veto and the right to push back how are they making decisions and what's motivating the
00:07:49
California state legislature >> yeah and I I would just to be clear as governor veto even more of these bills
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because there's a a total lack of accountability. And I think too many of our legislators think that their measure
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of success is how many bills they can write, get to the governor, and ultimately get signed. What you see is
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you actually read what these bills do. They generally just add more cost and more process. And what the legislature
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needs to be told by our next governor is that we're not going to fund failure.
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We're going to publicly set goals. We're going to measure the performance of
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every dollar we spend. We're going to audit the heck out of existing programs.
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Right now, 75% of the audit recommendations from the state auditor never get implemented. So, there's just
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there isn't a feedback loop with the public or or an accountability for the outcome. There is a lot of performative
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politics, a lot of discussion of how much good we're trying to do, how we're
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trying to be responsive to everyone. We have a tendency, particularly in the Democratic party, to want to be
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empathetic and tell everyone that we're working on everything. We try to be everything to everyone all at once
00:09:00
rather than very strategically saying some things matter more than others. The high cost of housing, the high cost of
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energy, the quality of our public schools, the safety in our neighborhoods. These are the things
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people care about and think that they should be getting when they pay taxes. But despite increasing spending in the
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state by 75%, none of those outcomes have actually gotten better. Some have gotten worse.
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>> The irony is that sometimes it may be the case, and I think it's very often
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the case that less government solves the problem better than more government. Trying to do more to create housing may
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make housing more expensive. Sounds ironic. Trying to do more to make education accessible makes education
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more expensive. The more government gets involved, the more prices seem to skyrocket. How do you get over that with
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all the interested groups that are getting themselves elected in the California state legislature by saying,
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"I'm going to do more. I'm going to do more. I'm going to do more." Because
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that's how you get elected. How are you possibly going to come in and say, "We
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should do less, and that's how we're going to fix some of this stuff."
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>> Yeah. Well, certainly, if you're if you're in a hole, don't keep digging.
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And sadly, one of my opponents in this race, Eric Swallwell, just in a debate, he said it a couple times now in
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debates. When asked what his top three, we were all asked what are our top three
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priorities for the state, said revenue, revenue, revenue. And to me, that is just that is a mindset that doesn't get
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what has broken down in the state. You're absolutely right. As Democrats, we have to own the outcomes we're
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getting in this state. And for too long, our reflexive answer has been, we need more revenue. if we just have more
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money, we'll solve this problem. I I just don't believe that. And and I say
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that as the only current executive in this race. I'm the mayor of the largest
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city in Northern California, San Jose. And because of a quirk of history, we were built as a bedroom community for
00:10:45
the job centers just north of us. We actually have significantly lower revenue per capita than many other
00:10:53
cities. We're not a job center. And so with Prop 13, our tax revenue goes up
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more slowly and it is smaller. Our revenue is about a third less than some of our neighboring cities. And we're
00:11:03
delivering huge increases in sheltering people, getting housing built, reducing crime by thinking differently. But it
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all starts with being willing to set a goal publicly and allow the public to hold you accountable for spending
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dollars in a way that actually achieves outcomes. And that sounds so simple. I know most of your audience, I've been
00:11:25
listening for years, are in the private sector and it almost seems so obvious that why would you even need to say it?
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But the truth is, as elected officials, we almost never set public goals where we can actually be held accountable.
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Heaven forbid in your next election you might get called out for not actually reducing homelessness or reducing crime
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or getting housing built. And instead, to your point, we pass bill after bill showing that we're doing something. And
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half the time, with the the law of unintended consequences, we make it slower and more expensive to do the very
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thing that we want. >> Right. Well, let's talk about maybe some of the competing interests that want to
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get capital, that want to pull capital through the government for their base, and that would be labor unions. They're
00:12:06
a very powerful lobbying coordination set of groups in California. They have significant influence over who gets
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elected in the legislature, who gets elected in city mayor's races, and who gets elected in the governor's seat.
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Tell me your view on the role that labor unions play in California politics today
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and some of this dysfunction in government and unaccountability in spending because I know that this might
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be a very controversial topic to talk about because you don't want to piss off
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the labor unions, but I'd love to hear your your candid views on their role.
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Yeah, let me start by saying I am not afraid to take on any organized interest. And it is not just labor
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though. Let's talk about the role of public sector unions. It's not just
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labor that is highly organized. You have trade associations. You have the doctors
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and the dentists. You have the public sector unions. You have the oil and gas industry. You fi tech has actually been
00:13:02
late to the party. Tech is starting to organize. So the the way that I look at the landscape in Sacramento, and I think
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it's largely true in Washington as well, is you have wellresourced, highly organized, professional advocacy,
00:13:16
lobbying, and political operations that essentially defend the status quo. And you are absolutely right that the single
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biggest spender in Sacramento when it comes to advocacy, lobbying, and elections is organized labor and
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particularly public sector unions. Now, I don't think it's a monolith. I have a
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great relationship with our public sector unions. Our building trades want to see the economy grow. So, u many
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unions are very pragmatic and all of them are doing what they're supposed to
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be doing. It's spineless politicians who cave to their aggressive demands who are
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the the root cause of the problem here. So, when the teachers union organizes and says, "We don't want more
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accountability. We don't want to be told to use evidence-based curriculum. We
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don't want more technology in the classroom." whatever it is they may advocate for uh presumably on behalf of
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or at least what they perceive to be the interests of their members. It's our
00:14:09
elected officials who need to step up and say, "Well, for the good of the community, we're going to push you on
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that. We're not just going to give you a pass. We're not just going to veto that
00:14:18
legislation or stay quiet when we know that for what we're spending, we aren't
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getting what we should be." We've gotten to the point where Mississippi and
00:14:26
Louisiana are doing a better job of helping low-income kids get on grade level for reading than we are in the
00:14:34
very well-resourced, very progressive state of California. That is a function of a system that is more responsive to
00:14:42
the highly organized interests than the people we're elected to serve. >> Right? That's the fundamental
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dysfunction. U some see it as corruption, and I don't think that's too strong of a word. I don't mean it in the
00:14:54
narrow sense of anyone breaking the law or or um you know stealing money but but
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the system has become again back to the core point here that the incentives are all wrong. The incentive for an elected
00:15:08
official is to cater to highly organized interests who disproportionately spend money in elections. Follow what's
00:15:15
happening up in the legislature. Draft the bill language. Draft the friendly amendments. get legislators to do their
00:15:22
bidding. And I just I'm running against the system because it doesn't matter if
00:15:28
you're a Democrat, a Republican, an independent. We need a high functioning government that delivers
00:15:36
lower housing costs, lower energy costs, better schools, safer neighborhoods, an
00:15:40
end to street homelessness. We have the resources to do it. What we haven't had
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is the political will and accountability to do it. And I don't think that's a
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partisan point. And frankly, if the Democratic Party doesn't start to wake up and be more responsive to the needs
00:15:55
of our constituents and deliver with the resources we've got, we're going to see
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the pendulum swing all the way the other way and you're going to see a MAGA-like
00:16:03
movement happen here in California. >> If I look at California, I can understand we're not solving certain
00:16:09
problems, but what I'm trying to grock is how did some of these problems become
00:16:13
the worst in the nation? So there are statistics and you can debate per capita statistics versus absolute number of
00:16:20
people but number one in poverty, number one in unemployment, nearly half the nation's homeless live in California.
00:16:27
Yeah. >> How did California go from being bad and not solving these problems to making
00:16:33
them worse? >> Well, I think you my my grandmother used to always say that the road to hell is
00:16:38
paved with good intentions. And I do think generally speaking, people have had good intentions but have been
00:16:45
unwilling to look at data and react when the things that they're championing
00:16:48
aren't working. On homelessness, we've well, first of all, we've broken the
00:16:52
housing market, which we should talk about as its own issue. We've also been
00:16:56
incredibly lax when it comes to dealing with cycles of addiction and mental illness. We've sort of diluted ourselves
00:17:04
into thinking that leaving someone to choose to live however they'd like, even
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if that means suffering in misery on the streets and ultimately dying of an overdose is somehow more important than
00:17:16
intervening and saving their life. And that's how we've ended up in this
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horrific situation that frankly has been under reportported over the last decade.
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We've had 50,000 people die on our streets in California, about half from overdose and suicide. These are people
00:17:30
with deep behavioral health issues where we're kind of just watching them deteriorate and die because we're so
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precious about protecting civil liberties may also be an excuse for not spending money in new ways. In San Jose,
00:17:45
we had to move away from spending a million dollars a door to build a brand new apartment to get someone off the
00:17:50
streets and pivot to buying sleeping cabins that can be deployed in small communities on publicly owned land
00:17:57
hooked up to utilities. all-in cost of $85,000 a unit. We've added over 2,000
00:18:03
shelter beds in my first three years as mayor and led the state in reducing unsheltered homelessness. But we had to
00:18:10
overcome an incredible amount of opposition from advocates, affordable housing developers, and and you know,
00:18:16
much of it well intended, maybe some of it self-interested, but we either are going to be committed to solving the
00:18:23
problem or we're going to cave to highly organized interests or a progressive
00:18:28
ideology that needs to be willing to revise itself when when its ideas and practice aren't working.
00:18:34
>> Yeah. I mean, it just feels some of the policies are just crazy. I always
00:18:38
commented on the managed alcohol program for homeless in San Francisco. They give
00:18:42
away free alcohol to alcohol addicted unhoused people. And I can't imagine that that disincentivizes people to
00:18:51
>> No. >> Right. It's it's like you go to you go to San Francisco, you get needles, you
00:18:55
get free alcohol. I mean, you get these things. So, it incentivizes people to to
00:19:00
go to go to San Francisco. The whole thing just seemed absolutely nuts to me. Let's get into the housing question. I
00:19:05
mean, what is the core of the housing affordability problem in California? Is it that we don't have enough houses?
00:19:11
Because I see a lot of homes for lease, a lot of houses for sale, a lot of houses for rent, or is it that we have
00:19:17
regulation that makes it hard to maintain a house and it's expensive? Or is there something else going on that's
00:19:24
making housing unaffordable in California? Like, what's the the core here? >> Look, I I think it's fundamentally a
00:19:31
supply problem. We've seen most recently in Austin. We saw in Seattle, we've seen
00:19:35
dozens of markets around the country that when we remove barriers to the market investing in housing to meet
00:19:41
growing demand, you slow down cost increases. It's economics 101. Part of our challenge is that we've also made it
00:19:50
impossible to build affordably. So, part of the challenge was zoning, high fees,
00:19:55
all of the things government imposes that block housing from getting built. But we also have a building code that's
00:20:02
incredibly cumbersome. We I mentioned litigation earlier when it came to highspeed rail. Same thing is true for
00:20:08
housing. We're not building condos in California, partly because construction
00:20:12
defect liability allows a trial lawyer to come in in year nine of a project and if they see that the paint is starting
00:20:20
to bubble, they'll file a suit and they they care about the fees. Their incentive is to generate fees. And we've
00:20:28
created a legal framework that allows them to do that. And if you try to change it, the another highly organized
00:20:36
interest in Sacramento, the trial lawyers will push back on that. >> I think this is so important. People
00:20:40
don't understand how expensive. Someone told me it was like a sizable percentage
00:20:45
of GDP in the United States is spent on litigation and trial lawyers and that they are the largest donor in certain uh
00:20:54
state elections all over the country to try and create a legal framework that allows them to pursue litigation and
00:21:00
earn significant fees. I mean, it's a multi multi multi-billion dollar industry.
00:21:04
>> That's right. And California is very much at one end of the spectrum. I I
00:21:07
mean, I've talked to municipal leaders in cities that are settling at such a
00:21:12
high amount for a trip and fall that now they can't afford to maintain the rest
00:21:17
of the sidewalks in the city for the next few years. So, they're going to have more trip and fall cases. We are
00:21:21
going to or at risk of allowing travelers to sue the state into oblivion. So, that is a it is a major
00:21:27
issue. And on condos, it may seem like a peripheral issue, but traditionally that
00:21:32
has been how young people get some equity in society, become a homeowner for the first time and build that nest
00:21:39
egg to eventually perhaps trade up into a town home or a single family home. We've essentially taken that rung of the
00:21:46
ladder away by making it cost prohibitive to build. You good luck getting financing or insurance to build
00:21:52
a new condo building in California right now? >> Right. Is it fair to say we have a
00:21:56
regulation crisis, not a housing crisis in California? I mean, is there a way to
00:22:00
kind of reframe this? I >> I think that's fair. I think regulation, bureaucracy, a a set of codes and laws
00:22:07
that don't work for people and work for the special interests in Sacramento.
00:22:11
>> I interviewed this guy, Adam Corolla. You know him? The >> I know of him. I know.
00:22:15
>> Yeah. Dr. Drew, what was the term he Oh, very inappropriate. He called it
00:22:19
gynofascism. He said that all of the regulatory is a safety thing and it's like a very feminine safety protective
00:22:26
kind of origin in a lot of the regulations that have been passed that make it impossible. Everything's about
00:22:31
safety and more regulation, more regulation, more regulation and as a result you can't get anything done and
00:22:36
the lawyers show up and everything gets sued. What's the right way to think about the origin? Cuz his argument is
00:22:41
that there's a mindset of safety and protectionism that's driven this. Is it
00:22:46
just the trial lawyers or like why does someone keep passing? Why do the legislators keep passing laws over and
00:22:52
over and layers and layers and layers and layers that make it impossible to build and make it super expensive to
00:22:58
maintain because otherwise you'll get sued. >> Yeah. Look, I I would take the the
00:23:01
gender content out of it. But I think the the deeper point that we suffer from safety, it's actually easier to add one
00:23:10
more rule, one more process. I see this play out every day with our city council
00:23:14
at the local level and I think it's even a greater temptation at the state level
00:23:19
where you're not able to point to a concrete service that you're delivering.
00:23:22
So much of the implementation happens at the local level. Every time there is a negative story about something bad
00:23:30
happening in the world, there is an impulse for a legislator to say, "Let's
00:23:36
create a new rule. We could always be a little bit safer. let's let's add
00:23:40
another check, another balance, another process, another rule, another fee, whatever it is. And the reason for that
00:23:48
in my view is that we have not created an incentive structure in government to reward actual performance and outcomes.
00:23:59
And so we are by default rewarding the performiveness of showing that we're doing a lot of activity without a lot of
00:24:06
impact. And I just I think that we have to help voters be smarter about analyzing what their elected officials
00:24:15
are doing and whether or not it's working. That's why I want to be held accountable. I came into office running
00:24:20
on dashboards. I mean, I put up public-f facing dashboards and said, "Here's our
00:24:24
baseline. Here's how we compare to others. Here's the goal we're setting.
00:24:28
We're going to reduce homelessness by 10% year-over-year. We're going to
00:24:31
reduce crime. We're going to remove barriers and get housing built. We're
00:24:34
going to speed up permit reviews. I want to be held publicly accountable because
00:24:38
I would rather, frankly, have a feedback loop with the people whose doors I knocked on than whichever group doesn't
00:24:45
like that we're trying to change something. >> What's your metric for being governor of
00:24:48
California as it relates to housing? What's the dashboard you're going to put
00:24:51
up and what's your goal? >> So, I think that the the ultimate outcome has to be that we're building
00:24:56
more housing, but that we're building it more affordably. We have to pull the
00:25:00
cost out of building because as long as the state of Colorado can build the exact same home at half the cost of what
00:25:06
it what it is in the Bay Area, we're never going to be able to compete. So, I
00:25:10
want to see more housing in absolute terms get built. We need to start moving in a better direction. We've gone from
00:25:16
about 100,000 units a year to about 80,000 a year. You go farther back, it was 150,000 a year.
00:25:21
>> What do you want what do you want to get to in your term? >> I think we need to get we need to get
00:25:24
well over a h 100,000. I think the right way to think about it though is it's
00:25:28
really a ratio with jobs. For every two jobs an economy creates, you need at least one home. Part of the reason the
00:25:34
Bay Area and particularly Silicon Valley is so unaffordable for working people and we're seeing displacement of working
00:25:40
families is that over the last 20 years, this incredible economy here, the engine
00:25:46
of of innovation for our country and really the world has created about eight jobs for every one new home we've built.
00:25:53
That is a completely unsustainable ratio. So, I'm a little hesitant to come out and say we're going to build 10
00:25:58
million homes. I think it's a ratio thing. It's a it's a rate of change. We
00:26:02
need to be building more year-over-year. But importantly, we need to pull back the fees, the long timelines, the overly
00:26:09
complicated building codes. >> So, each of those get a metric. >> Yeah, each of those get a metric because
00:26:14
ultimately the per square foot cost of building needs to go down. >> What does that need to get to? Where is
00:26:18
it today? Where does it need to get to? >> Oh, it varies dramatically by product
00:26:22
type and market. So I don't I mean it's a good question. I think I think we
00:26:25
should we should lay that out. But I just visited a modular construction f factory factory built housing. They can
00:26:32
bring down the cost per unit by 20% speed up overall project timelines by up to 50% by just industrializing the
00:26:40
production of housing. So we need to pull the cost down. We should be able to drop the cost on a per square foot basis
00:26:47
by at least a third with actions that are within our control as regulators. If you become governor, you're going to be
00:26:54
fighting against a legislature that's got all of the various vested interests
00:26:58
tied up in keeping this from happening. How do you take action without partnership with the legislature? Cuz
00:27:04
what I think might be very hard is again to wind things back that all these incentive systems have been created to
00:27:10
to deliver. >> Yeah. >> Are there emergency powers or action you can take as governor that can just say,
00:27:16
you know what, I'm going to fix this in a year or do you have to work with the
00:27:19
legislature to solve these problems? a bit of both. I mean, the the governor has certain levers that are very
00:27:24
powerful driving the budget process. There's the veto, the bully pulpit, just
00:27:27
kind of naming and shaming is really powerful. Executive orders, the the appointments. I mean, the governor
00:27:34
appoints 3,000 people who run all of these commissions that have incredible discretion over how to implement
00:27:41
regulations. But there's no doubt that ultimately you need the legislative branch to to change. And I think that a
00:27:48
lot of Democratic legislators, many of whom I know personally in private, will admit that things are broken, that
00:27:54
things aren't working. There just hasn't been that willingness publicly to name
00:27:59
what is going on, say that the system's broken, the incentives are are completely backwards. I think, you know,
00:28:05
as governor, I'd be in a position to change the conversation, help um either
00:28:10
persuade existing legislators to think differently or elect different legislators. Do you think it's also
00:28:15
because if they're public about it, they'll lose their donors and they'll
00:28:20
lose their donor class that's supporting them? >> Well, it's hard to step out on a limb
00:28:24
without knowing if you're going to have support for it. It is difficult to just
00:28:28
go direct to voters in an environment where money talks. It's a very large state. Uh it's expensive to deliver a
00:28:36
message. Social media has lowered barriers. That's part of my bet is that we can go straight to the voters with
00:28:41
this message and get traction around around the truth around what it takes to actually solve our problems. Uh but it's
00:28:48
it's you know I understand why people go with the sure the sure thing and it's
00:28:53
it's not fun to be labeled. They will call you everything when you fight for
00:28:57
change. You're a corporate sellout. You're um you're racist. You're
00:29:01
whatever. I mean there's always some label that people will ascribe when you
00:29:05
try to fight for change. But I try to stay laser focused on the real world outcomes. Housing costs, energy costs,
00:29:13
quality of schools, public safety, the things that people care about in neighborhoods like the one I grew up in.
00:29:18
That has to be the north star. >> Yeah. What causes homelessness? >> It's a big question. There a few things.
00:29:23
I mean, one, you can't ignore our broken housing market because in places where
00:29:27
housing is cheap and widely available, you can have high rates of addiction and mental illness and most people can
00:29:34
remain indoors even um even with those challenges. You know, typically what happens if you if you actually look at
00:29:41
it as a life cycle issue is someone who's already vulnerable for some reason. could be of their own choosing,
00:29:47
could be circumstances, but job loss, health issues, addiction, mental illness, you know, domestic violence.
00:29:54
There's a range of really awful things that happen to people and that people
00:29:58
sometimes do to themselves. And in these circumstances, if the rent is $3,000 a month, you are just one medical bill,
00:30:08
you know, layoff away from really having, you know, ending up in your car very quickly. and and people working
00:30:15
people in California especially don't have a lot of savings. They don't have
00:30:18
something they can fall back on. So the macro cost structure of California the highest housing costs second highest
00:30:25
energy cost with the highest gas prices which dis disproportionately hurts working people. Um an educational system
00:30:32
that is preparing far too few of our children for the jobs of the future. We can go through that list, but that is
00:30:39
creating these conditions of of sort of vulnerability or fragility that means that people living on the edge are much
00:30:44
more likely to end up in their car. But I would add that we have a massive public policy failure. Not only did we
00:30:51
break the housing production market, which is the macro challenge, but we haven't built shelter and treatment
00:30:56
beds. So for folks for whom an addiction or mental health issue is the the thing
00:31:01
that has them on the edge, we have far fewer beds than other states. And then when people do become homeless, it ought
00:31:07
to be brief and it should not be outdoors. And yet we we lead the nation in unsheltered homelessness. Over 40% of
00:31:15
the people living outside in tents in the entire country live in California, which is only about 12% of the country's
00:31:21
population. We haven't built shelter. We haven't built treatment. We're not doing
00:31:26
what we need to do to rapidly rehouse people, connect them to a case manager, give them tools to turn their lives
00:31:32
around, and hold them accountable for turning their lives around. >> If there's mental illness, should they
00:31:37
be committed to some facility to help them recover from their mental illness? >> Yes. In short, I I think you have to be
00:31:44
able to involuntarily hold people for addiction treatment, mental health care. if they're repeat if someone is
00:31:51
repeatedly refusing help, if they are harming the broader community, which is often the
00:31:57
case, whether that's vandalism, retail theft. It's been a battle here in our
00:32:01
downtown where windows are constantly being broken by people who clearly are suffering from serious addiction and
00:32:07
mental health issues. I think we should give people opportunities to accept help. It needs to be dignified. They
00:32:15
need to be alternatives to the streets. We've stood up over 2,000 indoor placements, interim housing
00:32:21
placements, almost all individual rooms with doors that lock, giving people privacy. These are low barrier
00:32:26
alternatives to the streets. Bring your partner, your pets, your possessions. We're really trying to meet people where
00:32:31
they are. The good news, twothirds of people say yes. The bad news, the other third is so deep in the throws of
00:32:40
addiction to substances like meth and fentanyl that they can't make a rational
00:32:45
decision about their own self-care. I believe that that is that it is not compassionate or progressive to leave
00:32:51
them to endlessly cycle between streets, emergency rooms, jails, and ultimately die of an overdose. I think we have a
00:32:58
moral duty to intervene, help them detox and get connected to a counselor and give them a chance to turn their lives
00:33:05
around. Drugs are coming from somewhere fueling this crisis. Can the governor address the drug crisis? Can the
00:33:12
governor get drugs off the street, arrest drug dealers? Is that a federal issue? How do we resolve the fueling of
00:33:18
fentinyl, methamphetamines, prescription painkillers, etc. that have made their way onto the street?
00:33:23
>> It has to be all levels of government, all hands on deck. So much law enforcement is done at the local level.
00:33:28
We have a police department with about a thousand officers out on the street enforcing local laws. They're on the
00:33:34
front lines of this crisis as are our firefighters, social workers. Certainly having federal federal tools and um and
00:33:42
and state u we have the National Guard, we have CHP, we have a variety of of tools here. What I do know though is
00:33:50
that we can reduce demand by intervening in public drug use and getting people into treatment and holding them
00:33:58
accountable for turning their lives around. If we get people into recovery, that's one more customer not available
00:34:05
out on the streets to buy these dangerous products. >> And how many times do they cycle through
00:34:09
before they have to be held more permanently? >> Well, I think it has to scale up over
00:34:13
time. And with Prop 36, I was the first Democratic mayor in the state to come out in support of Prop 36. The rule of
00:34:19
thumb there is on your third public drug offense, you can be given a choice between treatment and incarceration. And
00:34:26
that's bringing a consequence to a decision that doesn't just affect you.
00:34:30
We can talk about civil liberties, but when you are actively choosing not to engage in treatment, you are more often
00:34:37
than not creating imposing real costs, real harm on the broader community. We've seen businesses shutter in our
00:34:43
downtowns, parks where families can't play. So we >> It's direct and indirect.
00:34:47
>> That's right. >> And I think a lot of people don't account for that, which is critical. I
00:34:50
want to shift topics to energy costs. There's an Iran war going on. So there's
00:34:55
an acute spike in energy gas prices in the state, but over the last number of years, California Governor Nuomo and the
00:35:01
state legislature have pursued an effort to drive green energy policy in the state. California has a 70 cents per
00:35:09
gallon roughly tax rate. The California price for gasoline this week is $5.50 compared to 350 in the rest of the
00:35:18
country. Did we get it wrong? Should we have taken a different path in the state
00:35:22
versus fighting for green, chasing Chevron out of the state. Chevron's now relocated to Houston. They're shutting
00:35:26
down the largest refinery on the West Coast because of the policies and the the bureaucracy. And you know, how do we
00:35:33
balance this climate change green interest? with the real hard cost for everyone on the price of living in the
00:35:39
state. >> Yeah, I do think we've gotten our regulatory solution here approach wrong.
00:35:45
I would reject the notion that it's either or. I don't think it has to be. I
00:35:48
think innovation is the is the middle path, the way to do both. Look, Texas is providing dramatically cheaper power
00:35:56
that is cleaner than California. You see places like China leaning heavily into solar, wind, storage, EVs. the the path
00:36:05
is investment in innovation in infrastructure, a smarter grid. What we've done in California is is another
00:36:13
classic case of well-intended regulations leading to massive unintended consequences. Let's just take
00:36:19
the example of our refineries. The state has lost most of its refineries over the
00:36:25
last decade because we have intentionally regulated them out of out of existence. And so what's actually
00:36:33
happened is we still import oil and gas. We've just pushed refineries. We have
00:36:39
the cleanest, best regulated refineries with some of the highest paying jobs in the sector. We pushed that out of state.
00:36:46
Now we're importing the same amount of gas from thousands of miles away. It is
00:36:51
dirtier. It has a bigger carbon footprint. We lost those good, high-paying jobs. We lost the tax base
00:36:57
of those companies paying local taxes. It has been a hit on every level. And actually because climate and climate
00:37:03
change is a global phenomenon, we we have not actually made the we've actually made the problem worse while
00:37:08
hurting ourselves economically. So that's the opposite of what we need. We need win wins. We should be paying EV
00:37:14
owners today in the middle of the day, strongly incentivizing them to charge their vehicles in the middle of the day
00:37:20
when power is so cheap and abundant in California that we sometimes pay Arizona to take our excess solar and then have
00:37:27
them plug in at night to power the grid and get through that roughly 5:00 p.m. to 900 p.m. evening peak where we've got
00:37:34
to start firing up gas power plants because there just isn't enough power on
00:37:38
the grid. So, we need to be smarter. We need to invest in innovation and infrastructure, not regulate energy
00:37:45
sources out of state that we still rely upon. >> But it's hard. So now we've got the 70
00:37:49
cents a gallon tax in California. The legislators passed a series of bills to to make that tax go up and up and up.
00:37:56
Now they're talking about increasing it even further. >> It's the most regressive tax imaginable
00:38:00
because it's even worse than a sales tax, which is already fairly regressive.
00:38:04
But as you know, higher income, wealthier people have already adopted EVs. They're they're not paying this
00:38:11
tax. It's working folks, particularly in towns like Watsonville where I grew up.
00:38:15
I mean, when I was in high school, I had to go 50 miles one way for high school.
00:38:19
My parents went 50 miles the other way for their jobs. And so, it disproportionately hurts working people.
00:38:24
My proposal is that we to start temporarily suspend our gas tax to provide immediate relief to working
00:38:31
families who are paying the price for a war that they didn't ask for and they're
00:38:35
disproportionately paying the price. I would temporarily suspend it, but we have to be intellectually honest about
00:38:41
this. It is our primary source of revenue for paving and maintaining roads and our transportation infrastructure.
00:38:50
We will need to shift how we do this rather than being a gas tax. First of all, the general fund is up 75% in the
00:38:59
last 6 years. So, I'm pretty confident that in a state that's spending $350
00:39:03
billion, we can afford to pave our roads without punishing working families. But
00:39:08
I also think over time, as EV adoption increases, we'll have to find a smarter
00:39:12
way of charging a basic user fee so that people who use the roads pay to maintain
00:39:17
them. One of the other big costs in California related to housing and related to this climate change question
00:39:23
is the cost of insurance for your home. We had this massive wildfire that spread
00:39:29
destroyed a large part of areas in Los Angeles last year and as a result many of the home insurance companies have
00:39:36
left the state. I just lost coverage on my home because I live near a bunch of trees. So my house is deemed too risky
00:39:42
to have coverage. And I'm fortunate in that I don't have a mortgage that I've
00:39:47
got to deal with the loss of of insurance coverage. But this is becoming an increasing burden for the state of
00:39:53
California because the states had to step in >> and create a bigger and bigger insurance
00:39:57
pool that financially and accounting wise the state can't really afford. How
00:40:01
do we solve this problem of the cost of homeowners insurance? What's the right
00:40:05
structural solution here for either incentivizing the return of insurance companies creating an insurance pool
00:40:10
that's well capitalized and can actually afford to make the payouts instead of
00:40:14
needing to go to the federal government when there's a crisis and ask for a bailout? How do we fix this problem in
00:40:18
California? I think there are a few components to the strategy going forward here. Uh number one, we have to rebuild
00:40:25
the private marketplace. 90% of homeowners, maybe more, can be covered by private insurance affordably,
00:40:33
and we have to rebuild that part of the market by bringing them back, allowing them to appropriately price risk, and
00:40:39
creating more granularity. If you're willing, and you may not be, but if you're willing to remove those trees
00:40:44
within 100 ft of your home, you should pay a lower premium. If you prefer to have the trees there, you should pay the
00:40:50
higher premium. So more granular pricing, allowing appropriate pricing of risk is is just really important. Now,
00:40:57
for the 5 to 10% of homes that are up in heav, you know, in the in the in the hills, heavily wooded areas where
00:41:05
there's lots of vegetation, we'll have to have higher, first of all, when you build, there's a question of
00:41:11
how much more we should be able to build out there. Probably not a lot. what materials you use, they need to be fire
00:41:16
resistant and you'll have to pay much higher insurance just to cover the true
00:41:21
cost of of the likelihood of a fire and the cost of replacement. The other piece
00:41:25
of this though is the state has to take more ownership for vegetation management. We spend $8 in fire response
00:41:35
and recovery for every $1 we spend on prevention. And there are plenty of urbanized areas that are at risk because
00:41:42
they're proximate to dense vegetation that the state has not taken ownership
00:41:46
for clearing. And yes, it should be in partnership with the federal government. If they're federal lands, we should hold
00:41:51
the federal government accountable for doing it. But I just toured Altadena and Palisades, met with the homeowners there
00:41:56
who are incredibly frustrated about the lack of rebuilding. No one is quarterbacking this. And if you go walk
00:42:04
the palisades today, you will see once again vegetation that's 5t tall that hasn't been managed in an area where
00:42:10
people are trying to rebuild their homes. So the state has to step up. As governor, I would create a a task force
00:42:18
that just focuses on fixing the insurance market. And if the state will invest in vegetation management to
00:42:24
reduce the risk of catastrophic loss, you're going to see premiums go down over the long term. I mean, I I think
00:42:29
it's insane that the state sets rates and then tells the insurance companies
00:42:33
how much to charge and assumes they're going to stick around and keep charging
00:42:35
it. If they can't make money doing it, why not let the market decide? There's
00:42:38
hundreds of insurance companies that if they were able to set their own rates and not have to have the state dictate
00:42:43
the rate, they would compete for and price would come down. This idea that the state should be determining what
00:42:49
companies should charge for anything is a problem. But fundamentally in the insurance markets, it's literally chased
00:42:55
every insurer out of the state. I just don't understand like how this >> Yeah, these kinds of obvious don't work
00:43:01
in practice as we've seen. And when I that's what I mean by saying we have to
00:43:05
be able to appropriately price risk. Insurance companies need to be able to charge rates that reflect the true risk
00:43:11
and cost. I think they should be strongly incentivized if not held accountable for allowing homeowners to
00:43:17
adopt best practices and thereby reduce their premiums. And I think there's a
00:43:23
subset of folks who may need to be on and pay into a public option of some kind because they just won't be covered
00:43:29
by the market or perhaps they have to choose that based on where they live they won't have insurance. I I don't
00:43:34
know. But I don't think you can force everybody else to pay exorbitant rates
00:43:39
to ensure that we cover the last riskiest home that's going to be the most expensive to cover.
00:43:44
>> Yeah. >> It's just it's an illogical setup. >> Well, look, let's shift to one of the
00:43:48
other big liability questions in the state. It's the one I care not I wouldn't say the most, but it's one that
00:43:54
I've observed may end up being a big driver for what's ahead for us. California's public employee retirement
00:43:59
system. So, Kalpers and Calsters, they provide the retirement benefits to roughly 3 million California public
00:44:06
workers. And there's roughly a trillion dollars of capital in those two investment funds that are meant to
00:44:12
support those retirees. They've been making about 7% a year compared to the S&P making 11% a year. And the current
00:44:19
accounting estimates that they're going to be short by some estimates 250 to30
00:44:23
billion by other estimates as high as a trillion dollars in the years ahead in paying out the benefits that they're
00:44:29
legally obligated to pay to public employees as they retire. And you can't just change those benefits. There's a
00:44:35
state supreme court case that's made that known that you can't go in and
00:44:40
rescend benefits that you've promised someone. So you are stuck with that liability. And because they're public
00:44:45
entities, California's state taxpayer is ultimately going to be stuck with a
00:44:50
trillion dollar liability if that's what it comes to. How do we fix this frigin
00:44:54
problem? >> Yeah, I'm worried about it as well and I'm intimately uh familiar with it
00:44:58
because we've had to tackle pension reform in San Jose. We were sort of the canary in the coal mine quite a few
00:45:04
years ago as our unfunded pension liabilities began eating up our general fund. Even today after pension reform,
00:45:13
19% of our general fund in San Jose this year goes to paying an unfunded pension
00:45:20
liability. That just comes off the top. That is one out of every $5 goes first to our obligation to retirees. And
00:45:27
again, I don't blame the retirees or those who advocated. politicians who didn't do the math, didn't recognize
00:45:33
when the math wasn't working out, and swept it under the rug because they knew
00:45:37
they'd be long gone by the time uh the the bill came due. And so, look, there's
00:45:43
there's really only two options here. One is to move toward a defined contribution model as we have in the
00:45:51
private sector. You see all over the world, the employer and the employee pay in. It's put in the market. It needs to
00:45:59
grow over time. people need to calculate their savings and their >> you see your account you track it
00:46:04
>> you track it you can up your contribution level if we were to move to that uh the private sector I'm sorry the
00:46:11
public sector would need to be a a strong match and I I think the challenge is this I don't think politically that's
00:46:18
likely to happen what we've done in San Jose which could be a roadmap for the
00:46:22
state is we negotiated well we had to go to the ballot we went to there were lawsuits it was a very messy process I
00:46:29
think it needs to be better handled. But effectively, we created a a different pension system for new employees that
00:46:36
said, "As you come in, this is what a right-sized pension system needs to look
00:46:39
like. We're going to have the employee and the employer pay in more upfront.
00:46:44
We will be more realistic about the returns we're expecting. We'll adjust
00:46:49
over time faster if the returns are underperforming. We've brought in better
00:46:54
fund managers who get who are heavily incentivized to make smart investments and grow the the the investment. And
00:47:01
then most importantly, if our if the returns fall short, the the delta, the gap is covered 5050 by the city, meaning
00:47:12
the taxpayers and the employee in terms of loss benefits. So there's shared pain
00:47:18
on the backside if we miss our targets. And what do we do for what we have now? >> Well, well, what that has allowed us to
00:47:23
do because of the legal limitations that you've mentioned is, and I'm not saying
00:47:27
it's perfect, but this is just legally and politically what we were able to get
00:47:32
to was the best outcome we were able to get, is that we're on a long glide path
00:47:36
of paying off all of the the the unfunded liabilities for the tier one employees, all of those older employees.
00:47:43
It's a 20 year process. By the early 2040s, San Jose will have cleared the debt. our general funds going to be
00:47:50
flushed. We're going to be increasing staffing and service levels and and you'll start to feel that here much
00:47:56
sooner. We are actually roughly at peak cost for unfunded liabilities today because we took the medicine and now
00:48:02
we'll start that slow glide path where each year there'll be a little more room
00:48:06
in our general fund because we actually bit the bullet and took this on. Well, I
00:48:09
think that's like how do you fund that glide path? It may be the case that our
00:48:14
budget has some margin for error, let's say, because of how much we're spending.
00:48:19
Let's just do the statistics. California Governor Nuome has proposed a $349 billion budget this year in the state.
00:48:26
That's up from 209 billion. So almost 2x 60% 70% 80% more 75% more than the year
00:48:34
before co. And that's up from 110 billion 10 years prior. So we went from 110 to 350. 3 and a halfx is how much
00:48:42
we're spending since, you know, feels like yesterday, like just a couple years
00:48:47
ago. Yeah. Despite having the nation's highest tax rates, the largest revenue
00:48:51
base, we're still looking this year at a $35 billion deficit California state
00:48:57
budget. What happened? Like, how did this get so bad? And how much of this do you think is this term of fraud, waste,
00:49:06
you know, abuse? Like, where is this money going? Well, part of what we've done is something we talked about
00:49:13
earlier, which is we have increased our our pay for public sector employees and our our pension obligations and and post
00:49:22
retirement health benefits at a faster rate than we could actually afford. And we haven't been honest with ourselves
00:49:29
about that. Part of where the money's gone though is is is really just a sprawling
00:49:35
bureaucracy that when we in good years have more money, we create new programs. We add headcount. The state's population
00:49:42
has stayed flat over the last six years. Spending is up 75% as you point out, and
00:49:49
headcount in state employees is up, I believe, over 20%. So, we're we're
00:49:54
adding more state workers. We're pouring more money into public programs that
00:49:59
aren't starting from the premise of what is the outcome we need and how do we
00:50:02
most efficiently get there. I mean, it's time for California to go through an
00:50:07
exercise of zerobased budgeting and say what are the outcomes we need and are we
00:50:11
actually spending dollars to achieve those outcomes or are we just funding a sprawling bloated bureaucracy where it's
00:50:17
just easier to add 2% 3% headcount every year, give everybody a 4% raise and call
00:50:23
it a day. And I think it's it's that's generally been the approach is whenever
00:50:26
revenue is up, we just kind of give everybody a raise, hire more people, initiate a few new programs. We never go
00:50:31
back to basics and say, well, this is if these are the resources we have and these are the outcomes we need, are we
00:50:37
really optimizing our spend for those outcomes? And the answer is no, we're not. Can you do that riff restructuring
00:50:44
zerobased budgeting as governor or do you need to do this in partnership with the legislature that all has their
00:50:49
special programs that they fired up where money's flowing to their local county, money's flowing to their
00:50:54
friends, money's flowing to their donors? How do you actually execute this? I think yeah, as I said before, I I
00:51:01
think electing a pragmatic, independent-minded governor who's willing to who understands this problem
00:51:08
and is willing to tackle it is step one and is necessary but insufficient. Ultimately, we have to build a more
00:51:16
moderate coalition of legislators who understand how broken the system is, who are willing to do to do hard things. I
00:51:24
don't I don't think that this just happens overnight, but the governor has
00:51:26
a lot of tools that he or she can choose to use that, you know, you do drive the
00:51:32
budget process. Ultimately, you need legislative support for it. You have the bully pulpit. You have the ability to
00:51:38
manage state agencies in a very different way. The governor appoints 3,000 people to run state bureaucracies
00:51:43
that can either come in with the mindset of business as usual. I'm going to sit
00:51:47
behind a desk. We're processoriented. Or can be held accountable and maybe it
00:51:52
should be 3,000 employees. Maybe we should slim how many people it is, but can be told here are the outcomes we
00:51:57
need. Tell us, you know, go ground truth these. Go down to the local level, spend
00:52:03
time with the school boards, the cities, and the counties where all the money actually meets the constituent where the
00:52:07
rubber hits the road and come back with answers on how to reform these systems to get more for what we're spending. And
00:52:15
if you can't hit more aggressive goals, we'll bring in someone else who can. We
00:52:19
need a different mindset for how we operate our government agencies. >> What you're saying is starkly different
00:52:24
from what others are saying. And one of the biggest points that others are making right now is that they want to
00:52:28
increase programs and increase spending particularly in healthcare. So what's
00:52:33
your view on government provided health care? Should all healthcare in California be free? There's a big
00:52:39
movement, a big legislative effort to try and make this the case. Does this make economic sense? Can we afford it?
00:52:44
How do we actually do it? or do you think that this should remain a private market effort?
00:52:48
>> I don't think it's realistic for California to create a um a single
00:52:55
staterun free healthc care for all system. I just I I don't understand. I I know my uh many of my opponents in my
00:53:04
party, Democratic party, are proposing this. I think we have a pretty good sense of how to reduce cost. We just
00:53:12
have to be willing to do it. price transparency and competition could bring down costs in health care by 5 to 10%.
00:53:21
Preventative care, we should be incentivizing insurers and and um health providers for
00:53:30
helping someone get healthier and reducing their overall demand on the system over the course of their
00:53:35
lifetimes. things that may seem small, but getting a hundred thousand plus people off of our streets and into
00:53:42
shelter dramatically reduces the burden on our health care system. I I just I I think that prevention take another one.
00:53:52
Nurse practitioners can do so much more than we often allow them to do, which again is a function of this
00:53:58
behind-the-scenes negotiation in Sacramento over what are doctors allowed to do, what can nurses do. nurse
00:54:03
practitioners providing preventative upstream care in clinics in communities can be far more effective at preventing
00:54:10
long-term chronic illness than what we do today, which is end up with everybody in the emergency room needing care after
00:54:16
they're already really sick. So, we need to restructure our health care system.
00:54:20
California should be demanding and investing in innovation and better ways of doing things and bend the cost curve,
00:54:27
not fall back on this lazy answer that we're just going to find a way to raise
00:54:31
taxes more to fund free services that will ultimately break just break the bank.
00:54:38
>> You've been criticized by many for being against the billionaire tax. I think
00:54:41
you're the only candidate running for governor right now that has spoken out
00:54:45
against it. I've heard your comments on it obviously. I think I was probably the
00:54:49
first to identify it and bring it up on my show when it first came out the day it was filed. For me, it's fundamental
00:54:55
to private property rights. If you can take people's assets after they've paid
00:54:59
taxes on it, there's no stopping that train. I mean, why not take everyone's
00:55:03
assets at some point? Like that, you know, you pay your income tax, that's your private property, you get to keep
00:55:08
it. Shouldn't be that the legislature can later say, "I'll take 10% of what
00:55:12
you own." That just seems wrong to me. Do you think we need to have a continued
00:55:16
increase? Like do you think we need to maintain the temporary high income taxes in California? What's your general view
00:55:22
on revenue? We've talked a lot about you think hey, you know, we don't need to
00:55:25
rely on growing revenue, but based on the current tax system in California, what else do you think needs to change
00:55:31
or do you think it's just like let's leave it as is, no billionaire tax, no
00:55:35
new taxes, but let's just not go back. >> Yeah, let me say a couple things. one, I
00:55:38
I think where this push is coming from is a deep concern about economic inequality and declining social
00:55:47
mobility. And I think these are >> real issues. I am worried about economic
00:55:53
inequality. I think in the long run it's a threat to democracy. I think there are
00:55:58
a number of better solutions to this than the proposed wealth tax which is as you point out say aside even the
00:56:05
philosophic arguments it simply won't work certainly not at the state level half the people I know have already left
00:56:11
the state >> right we've seen over a trillion dollars of capital flight our ongoing revenue
00:56:16
going forward is now going to be lower that the dirty secret of this proposal is that it won't be the billionaires who
00:56:22
pay higher taxes it'll be middle class and working families who are left holding the bag. So that mean that's why
00:56:28
I just immediately felt that I had to say something because it's working people who are going to be hurt by this.
00:56:35
It's not going to be billionaires. They're the most mobile people in society. Um so look, I I think first of
00:56:41
all there are things we can do to make the tax code uh fair. I think there's a
00:56:45
legitimate debate about what should the absolute rate of capital gains tax be. There's the phenomenon of very wealthy
00:56:50
individuals borrowing against uh appreciated assets where you're not you're sort of you're effectively
00:56:56
avoiding paying capital gains. I think that's a loophole we can close. There's
00:57:01
the step up in basis upon death. I'm not sure that um it's very fair for
00:57:06
somebody. Well, let me just use an example. I'll just say this. I don't think Elon Musk should be able to pass
00:57:10
on $500 billion of appreciated but untaxed stock wealth to his children. And the moment that they inherit it,
00:57:19
it's rebased at current market value and no one ever pays the capital gains on
00:57:22
it. I mean, there there are a lot of things we can do to capture billions in revenue to close loopholes in the tax
00:57:28
code. This is of all the proposals, the the worst, the least likely to work, the
00:57:32
most likely to hurt working people. But I also think we have to acknowledge in a
00:57:36
state that keeps asking for more before we do better, we we've got to acknowledge that social mobility is down
00:57:44
because of po public policy failures first and foremost, public schools that aren't performing, housing that isn't
00:57:50
affordable, energy that isn't affordable. We when half of people sorry when most Californians are spending over
00:57:57
a third of their income on housing many spending over half of their income on housing that hit social mobility a lot
00:58:05
more than the fact that the tech sector has had a bunch of growth. It's just
00:58:11
these are fundamental public policy failures and the sooner we own them and think differently about our regulatory
00:58:18
environment and our policies so we start fixing them the the better for California, the better for the
00:58:24
Democratic party. Uh most importantly, the better for the people we serve. But what you're saying makes a lot of sense,
00:58:30
but I think people hate other people's success. I think there's a lot that's
00:58:34
been going on, this fueling that's going on with the lack of social mobility, but
00:58:38
seeing a small segment of the population accelerate. Technology's really had that
00:58:42
driven that. I'll be the first to admit there's a small population in California
00:58:45
that's done extremely well while most of Californians have been left behind. Do
00:58:50
you think you're electable in a sense? I mean, you're not fueling the populist
00:58:54
sentiment that I think every one of your candidates has found they can tap into and uh that may put you at a big
00:58:59
disadvantage in this race. Look, I I do think we we need to take economic inequality and social mobility much more
00:59:07
seriously than we have. I think we need to ask and ultimately demand our um our wealthiest individuals, our tech sector,
00:59:17
industries that do well to be structured in a way that works for people. Um I I'm
00:59:23
curious what you think. Maybe I'll turn the tables for a moment. I think that we
00:59:27
need a shared prosperity that includes people having some sort of equity from or more direct benefit in the incredible
00:59:39
gains that tech has produced. AI is scaring a lot of people because it could lead to the elimination of jobs, further
00:59:47
concentration of wealth. What do you think is the appropriate role for the tech sector and those who have profited
00:59:54
immensely from it to ensuring a level playing field or at least you know some some notion some semblance of of
01:00:00
equality of opportunity? >> That's a longer conversation but I do think giving more people more ownership
01:00:06
is important but I'm not sure people are going to want to or need to work at big
01:00:11
companies anymore with AI. the longer conversation. But in the same way that Instagram,
01:00:18
Shopify, Etsy created a Tik Tok created new jobs almost like new roles, new ways
01:00:25
that people could earn. >> Yeah. >> I think AI is going to create a thousand
01:00:28
times more new ways for people to earn than they do today. And they're not going to have to have the job that they
01:00:34
feel like they're stuck with today. And AI is actually going to accelerate more
01:00:37
people up the ladder faster than anyone's really realizing. And I can give you countless examples of this that
01:00:43
I've seen recently, but I think we're all going to wake up pretty happy with
01:00:46
the next advance in in economic mobility that's going to be unleashed because of
01:00:49
AI, not in spite of it. I hope that's true. It's a very optimistic read. I do
01:00:54
think my read of history is that technological change while ultimately producing greater abundance, if you
01:00:59
will, often is really hard on people. And that's why in in San Jose at least,
01:01:05
we've done we've created AI upskilling courses for our workers. We've gotten AI
01:01:10
companies to come into our libraries and provide tools and training. We're really
01:01:15
trying to figure out how we lower barriers to learning how to use these tools, apply them in people's lives,
01:01:20
start those new businesses, create the new jobs of the future. >> The cool thing is AI can teach people
01:01:25
how to use AI. >> That's true. >> Which is where where I I'm starting to
01:01:28
see a lot of people learn how to use these tools on their own by asking the AI and engaging. And then there's almost
01:01:35
like you watching people get knocked down like bowling pins in terms of wo that wo
01:01:46
moment that I've I've been vis like visibly seeing people just in the last
01:01:49
couple months >> is making me very optimistic. >> That's good. It does though get back to
01:01:54
this basic point that we need our public education system to teach people to think critically. When half of our kids
01:02:00
aren't on grade level for reading or math proficiency, it's going to be very
01:02:04
hard for them to be lifelong learners. >> I mean, curiosity and asking questions
01:02:09
and learning how to think, not teaching them knowledge is a massive problem that
01:02:13
we're dealing with in education in the United States, in my opinion, on its own. Kids are not being taught how to
01:02:18
question, how to build. They're being taught facts. Those facts are irrelevant
01:02:22
because they all exist in AI. Now you don't need to know all those facts. You
01:02:26
It's good to have basis. But what are you really trying to get? A curious mind, an engineering mind, a creative
01:02:31
mind, a thoughtful mind, and teach individuals agency in a world where they have infinite capacity. That's what AI
01:02:37
gives all of us. >> But what do you think of Donald Trump? >> I'm not a fan.
01:02:41
Um, my concern with Donald Trump, even if he may get certain issues right, I think he's channeled the
01:02:51
frustration of working Americans who feel that they've been left behind, is that I don't believe he really
01:02:57
understands what makes our country great. I think that he has created a lot of fear and division around immigration.
01:03:06
doesn't recognize how many people we have had in this country in part because
01:03:10
both Democrats and Republicans wanted access to cheap labor in places like Watsonville where I grew up who have
01:03:15
been here 20 30 years working hard paying their taxes otherwise playing by the rules raising children who are US
01:03:21
citizens who are now living in in terror because they're worried their families
01:03:25
going to get ripped apart. Um, I I don't understand and don't support this war in
01:03:30
Iran that I think is a huge uh huge blunder and it's going to drive up energy costs and it's it's not clear to
01:03:36
me why we're losing American lives over there. Um, I just, you know, I think
01:03:41
tariffs, yes, I do believe China, this is something I think he's gotten right,
01:03:45
has been competing unfairly with the US. I think a targeted approach to tariffs,
01:03:51
focusing on that issue would have made a lot more sense than the general inflation we've seen. So, I mean, I
01:03:57
could go issue by issue, but I just I worry mostly about the health of our democracy. I think it requires a um a
01:04:05
real honest dialogue, a respect for rule of law and the independent judiciary. Um I just yeah I have deep concerns that
01:04:14
this not just populist but um reactionary quasi authoritarian rhetoric and mindset is the outcome of
01:04:26
declining trust in government when we don't hold ourselves accountable for delivering for working people. I think
01:04:33
it's predictable and I think you're seeing an equal and even um I'd say
01:04:38
equally risky rise in populism on the left in reaction and these two are playing off one of one another. And part
01:04:43
of the reason I jumped into this race was to offer a third way, a pragmatic alternative. I'm a I'm a Democrat, but I
01:04:51
also recognize that something's broken in California. The incentives are all
01:04:57
wrong. The highly organized interests in Sacramento are being taken care of. Sacramento is working great for highly
01:05:04
organized interests. It is not working great for regular people. And I think the best antidote to that is to get back
01:05:11
to basics, be competent, be data driven, deliver results for people because I'm
01:05:16
worried that if we don't, we're going to see this epic populist battle on the
01:05:21
right and the left where people are offering really easy answers, not the honest answers that we need. rate
01:05:27
Governor Nuome and the job he's done as governor of California. >> I think Governor Nuomoe has been a bull
01:05:32
work against some of the worst ideas coming out of the legislature. You mentioned that he's vetoed 10 to 15% of
01:05:39
the bills coming out of the legislature. Uh many of those vetos I agree with and
01:05:45
I think have averted um real harm. I my my critique has been around not doing enough to take on the
01:05:54
entrenched interests in Sacramento and uh and we've we've disagreed very
01:06:01
publicly on certain policy issues, Prop 36, recovery housing, um some energy policy points, but it's
01:06:10
it's always I mean I try to attack problems, not people. I'm not really interested in, you know, evaluating
01:06:17
somebody's intentions or or or their ideology so much as the results of their
01:06:22
actions. And I think he's done some really good things. Uh I also think he he could do even more. And that's been
01:06:29
my appeal to him is let's work together to drive even more change faster. But
01:06:35
some of the things he's brought forward like care court, right idea. Now we need
01:06:39
to execute it. We need to actually make sure that care court's actually getting
01:06:42
people with addiction and mental illness into care. I think he's got the right
01:06:45
right idea, right intention, but we've got to follow through and as governor, I
01:06:49
would make sure that Prop 36, Prop 1, Care Court, uh number of things he's put
01:06:54
in place are actually used to deliver the intended outcome. >> Governor Newim's put out a lot of these
01:06:58
memes kind of making fun of Donald Trump by doing tweets sort of like the way Trump does truth social posts and yeah
01:07:06
and so on. It's very antagonistic to the president, at least publicly antagonistic. At the same time,
01:07:11
California relies on federal funding and requires a lot of federal cooperation, a
01:07:14
lot of federal land in the state. How would you interact with President Trump and talk a little bit about how the the
01:07:20
governor has interacted with President Trump publicly? >> Look, I understand what the governor's
01:07:25
doing. He's, you know, been holding a mirror up to Donald Trump and um both fighting for California's values,
01:07:34
which I appreciate. I think there's also just back to incentives. I mean, he's
01:07:38
he's running for president and and that's where I think this approach is
01:07:43
coming from. I would take a different approach in the sense that as governor focused on
01:07:50
delivering for Californians, I will fight the Trump administration through through the courts, through the bully
01:07:57
pulpit whenever necessary to protect our values, to protect our people, to protect state funding. I also think
01:08:04
though that we need to find places where we can achieve a win-win with the federal administration. I'll give you
01:08:12
the example that's top of mind for me. I just spent time walking through Altadena, the Palisades where people
01:08:18
have lost everything, over 10,000 homes lost between the two. People are desperate to rebuild. They're not
01:08:26
getting the help that they need. And part of the reason they're not getting the help that they need is this
01:08:30
hyperartisanship in which uh California and Washington are fighting rhetorically and
01:08:38
politically and the people who are being hurt are the families who have lost their homes who are waiting on the $40
01:08:44
billion of federal aid that's been promised and that if it weren't for this
01:08:49
political battle would have already flowed to help those neighborhoods rebuild. And I just as governor, yeah, I
01:08:57
I will absolutely fight for our values, but I'm committed to fixing our problems, which means finding a way to
01:09:04
make it a win for this president and this administration to rebuild Los Angeles. That we have to put the people
01:09:10
before our politics. And as it relates to ICE and immigration enforcement, do you consider undocumented immigrants in
01:09:19
the state of California individuals that you would represent as governor? Is it part of your job to protect undocumented
01:09:26
immigrants who came here illegally that ICE would like to remove? >> Yes, unless they're committing serious
01:09:32
and violent crime. Look, if you're here, you're not documented, you're committing
01:09:37
violent felonies, I think you should be deported. But like many of the people I grew up with, if you were
01:09:45
essentially if ta maybe tacitly welcomed here because we had an a industry or a construction industry that needed
01:09:52
lowcost labor and you came, started a family, started working, paid taxes, raising kids here who were born here who
01:10:01
were US citizens. The only practical and ethical solution is for parties to put the hyperartisanship aside, come
01:10:09
together, and come to a grand bargain in which we secure the border. We deport those committing violent crime who are
01:10:15
undocumented, and we create a pathway to a legal to some sort of legal status. If
01:10:20
citizenship is a bridge too far for that older generation that came earlier, so be it. But their kids are US citizens
01:10:27
and they deserve to still live with their parents. And I think we've got to find that the the approach that respects
01:10:34
people's humanity and is practical and ethical. And I'm incredibly disappointed, frankly, with both parties
01:10:41
for years of kicking the can down the road. And I will absolutely stand up to protect undocumented residents who are
01:10:49
playing by the rules, who are doing the most American thing. And I get all the I
01:10:53
get all the arguments around lawful immigration. Let's secure the border and
01:10:57
set up a proper system of lawful immigration going forward. and not create a bad incentive. So, let's do
01:11:03
that and then create this pathway to legal status. But what we've seen play out in in Minneapolis is horrible for
01:11:11
the country. We're seeing citizens arrested, even killed. This is this is not this is not working and I don't
01:11:17
think it's ethical. >> Let me give you the push back that the Republican party leadership would would
01:11:21
give, which is that many of these individuals will end up voting for Democrats. Vast majority of them will
01:11:27
vote for Democrats and that the border was opened. They were allowed in here and now this inevitable due to
01:11:32
humanitarian conditions path forward to citizenship will ultimately increase the
01:11:36
Democratic party's voting base and lock them into power in DC, lock them into
01:11:40
power in these states, turn more states blue, etc. How do you respond to that concern and push back? Put the
01:11:46
humanitarian piece aside, but that the reason the border and every Democrat I ask about this cannot answer the
01:11:51
question, why was the border opened? Was it to lower labor costs? Was there some
01:11:56
other reason that we did it? Was it to increase the voting base? I mean, what was the motivation and how do we address
01:12:01
the response that's going to come for the many years ahead from a Republican
01:12:05
party that's going to have issue with this? >> So, my sense growing up in an in an a
01:12:09
town that historically has probably been about a third undocumented is that the primary incentive for the
01:12:17
parties to not solve this problem is that a lot of people became very wealthy. A lot of industries did very
01:12:23
well by having access to lowcost abundant labor and plenty of the business interests that did really well
01:12:31
in a construction and other otherwise I mean historically this would have been say meat the meat packing industry right
01:12:38
um they're donors to the Republican party. So I think both sides have been complicit. I think the back to
01:12:44
incentives, I think Democrats and Republicans have played to their base and actually been politically
01:12:49
incentivized to not solve the problem. And as a pragmatic moderate, my approach is to say you're both wrong, but there's
01:12:58
something true in what you're both saying. Republicans are right that we should be able we should know who and
01:13:04
what comes in and out of the country. We should have a secure border and we should take away any incentive for
01:13:09
people to come here illegally, especially in a moment where uh we've got a fentanyl crisis. We've got
01:13:16
international terrorism. We've got nukes that are getting smaller and smaller. We
01:13:21
should have border security. Absolutely. If you're not here lawfully and you're
01:13:25
committing serious and violent crime, deportation is the is the minimum expectation of what should happen. So,
01:13:32
let's do that. But I just I think both parties have been complicit. We can sit
01:13:36
around and say who wins electorally or economically. We can play that game and continue to have this incredibly
01:13:44
divisive and unproductive situation where millions of people are living in fear, living in the shadows, or we can
01:13:49
fix it. And when I say legal status, maybe that legal status doesn't come with a with a right to vote. Maybe it's
01:13:57
a green card. I mean, I'm I'm for compromise and problem solving and moving the country forward. Both sides
01:14:03
are going to have to give if we're going to solve this problem. >> I think that's the best idea possible
01:14:07
for how to solve this, which is a path to residents without a path to voting. And that that could solve everyone's
01:14:14
concerns. And and lastly, I just want you to compare and contrast your Democrat opponents, Swallwell, Styer,
01:14:20
Porter. Let's just do those three. Give me a sense on your view on each of the
01:14:24
three of them. Well, look, I I've I've been in enough debates with them now to
01:14:30
understand that those three other leading Democratic candidates are vying for the same lane. It is the more of the
01:14:40
same lane. It's a platform that says that the answer to our problems is more
01:14:46
revenue. It's revenue, revenue, revenue as Representative Swall's top three
01:14:51
goals. And uh look, we need to think differently. What I'm offering is an approach that's been working in Northern
01:15:00
California's largest city. I call it getting back to basics. It's focusing on
01:15:04
fewer things, the things that are most foundational to opportunity and quality of life for everyone. It's being humble
01:15:13
about what government can actually do, not thinking that the answer to every problem is more revenue and another
01:15:18
government program. It's being radically more transparent and accountable about
01:15:22
how we spend dollars and rooting everything in results or or measurable outcomes and just bringing a a new uh
01:15:31
politics of pragmatism as an antidote to this incredibly destructive populism we're seeing on the right and the left
01:15:37
that really risks the the democratic lowercase d democratic project of this country. And I just I think that
01:15:45
California has throughout its history been the the innovative state that has led the way and changed the world. And I
01:15:53
am hopeful that Californians are ready for a different kind of politics that focuses on problem solving. I jumped in
01:16:01
this race because all of the other candidates across the spectrum had already been in for a year and uh I
01:16:08
didn't hear anyone talking speaking honestly about our problems and how to solve them. And I thought that I had a
01:16:13
unique voice in this race and we're seeing that. I It's a short runway, but
01:16:19
as I travel around the state, go to, you know, see the sewage crisis in the in the Tijuana River on the border that
01:16:24
shut down all the beaches down there, walk Altadena or go through the Tenderloin in San Francisco, people are
01:16:30
are responding because all they really want is for their tax dollars to be used responsibly. They want their government
01:16:37
to work. They want their life to get better when they send so much of their money to their government. And that's my
01:16:43
that's my commitment. >> Mayor Matt Mayan, thank you for being here with me today on Allin. Really
01:16:48
appreciate the time and good luck in the in the governor's race. >> Thanks, David. I enjoyed it.
01:17:06
>> N I'm going all in.