RETURN TO CHANNEL

Search Captions & Ask AI

CA Governor Candidate Steve Hilton on Why California is Destroying Itself & How a Republican Can Win

April 29, 2026 / 01:08:45

Video

00:00:00

All right, everybody. Welcome back to

00:00:02

the All-In Interview Show. We're very

00:00:03

lucky today to have a candidate for the

00:00:07

governor of California who is extremely

00:00:10

unique in a number of ways. First of

00:00:12

all, he's a Republican. And second, he's

00:00:14

a Brit. Welcome to the program, Steve

00:00:18

Hilton. You've decided to increase the

00:00:20

degree of difficulty

00:00:22

in two ways, but you're polling

00:00:25

fantastic. You've got five or six people

00:00:28

in the polls. So,

00:00:28

>> he's leading the field.

00:00:30

>> You're uh leading the field. Obviously,

00:00:32

it's going to get narrowed a bit when

00:00:33

the Democrats shiv a couple more people

00:00:36

and get them out of the race and then

00:00:37

pick their eventual winner in their

00:00:39

cobble um whenever that happens when

00:00:42

Nancy Pelosi picks who's running. But,

00:00:44

uh Steve, maybe you could start by

00:00:47

Sorry guys, I got jokes. But, Steve,

00:00:49

maybe you could introduce yourself a bit

00:00:51

and tell us why you're running.

00:00:53

>> Well, hang on. Can I just say just after

00:00:54

that great intro where you just tried to

00:00:56

kill my chances in just a couple of

00:00:58

words. Thanks a lot, Jason. Really

00:01:00

appreciate it.

00:01:01

>> Let me actually tee this up. I've known

00:01:02

Steve since 2012 2013 when he and his

00:01:06

wife Rachel Wetstone moved to Silicon

00:01:08

Valley. Rachel worked at Facebook

00:01:10

initially and then she worked with you

00:01:11

Jason at Uber and then has had a great

00:01:13

run and then Steve similarly. And you

00:01:16

said it in a funny way, but ultimately

00:01:19

this is an incredible land of immigrants

00:01:21

and Steve has a really compelling story.

00:01:23

So before we jump into the questions, I

00:01:26

know your background, Steve, but I do

00:01:27

think it's important go back to your

00:01:31

parents, your mom, how you grew up,

00:01:34

>> and just set the stage for how you made

00:01:38

it out from the way you started because

00:01:40

I think that's important and then how

00:01:42

you got to the United States and why.

00:01:44

>> Thank you. Thank you. I appreciate that.

00:01:46

And you're right. We've known each other

00:01:47

a long time now. And it's a great joy to

00:01:50

be here. By the way, just want to say

00:01:51

it's a great joy to be on a show where I

00:01:53

don't have to wear the the suit and

00:01:55

shirt. And you know, that's one of the

00:01:57

one of the things about running for

00:01:58

governor that um I'm I'm loving most of

00:02:00

it, but dressing up is not the favorite

00:02:03

part for me. So, it's great to be with

00:02:05

you. I thought for this show, you know,

00:02:06

we got to get it right. I think that the

00:02:09

back the more I think about my

00:02:11

background, the more I think it is

00:02:13

really important um in in terms of how I

00:02:15

see things and what I want to get done.

00:02:17

Um my parents are Hungarian. They were

00:02:20

refugees from communism and I grew up in

00:02:22

in England in a town called Brighton on

00:02:24

the south coast and you know we just had

00:02:26

a regular workingass

00:02:29

um immigrant aspirational family story I

00:02:33

guess. You know it was my my parents

00:02:34

actually split up when I was young. My

00:02:36

stepfather's also a Hungarian. He had an

00:02:38

amazing story. He was um a refugee as

00:02:41

well, but literally ran across the

00:02:42

border. He grew up in a small village on

00:02:45

the west side of Hungary. And in 1956

00:02:47

when you had the Soviet invasion, he

00:02:49

tells this amazing story. They heard on

00:02:51

the radio, "The Russians are coming."

00:02:53

And he and his brother and some friends

00:02:54

from his school, he was 14 years old,

00:02:56

like one year younger than my youngest

00:02:58

son right now. Um and they just ran.

00:03:01

They literally ran for they said,

00:03:03

"Right, the we want our freedom." and

00:03:05

they ran to the border, barbed wire

00:03:07

fences, minefields got shot at by the

00:03:09

guards. All that half of them were

00:03:11

killed and he ended up in a refugee camp

00:03:13

in Austria and from then to England. So

00:03:16

all of that I guess just gives you that

00:03:18

sense of real appreciation for actual

00:03:21

for freedom for freedom and opportunity.

00:03:23

And I grew up in England, worked very

00:03:26

hard, ended up at Oxford University, but

00:03:28

my first job was project manager for a

00:03:31

construction company. I just wanted to

00:03:33

earn money. I just wanted to, you know,

00:03:35

get out. I think that's exactly the

00:03:37

right phrase that you used and um that's

00:03:41

been the story. You know, after Oxford,

00:03:43

I went to work for a little bit of the

00:03:44

Conservative Party in England. Then I

00:03:47

worked all I worked for an big ad

00:03:49

agency, worked all around the world,

00:03:51

started my own business, couple of um

00:03:54

offshoots of that, including a couple of

00:03:55

restaurants. then went back into

00:03:57

politics when my friend David Cameron,

00:03:59

who I'd met many years before, um had

00:04:02

gone into politics, got elected to

00:04:04

parliament. I helped run his campaign

00:04:06

for the leadership of the British

00:04:08

Conservative Party, won that election

00:04:11

and then wor with him to get the

00:04:12

Conservatives elected when he became

00:04:14

prime minister in 2010. Uh joined him in

00:04:17

10 Downing Street. I was senior adviser

00:04:19

to the prime minister. Most of my job

00:04:20

was really focused on trying to

00:04:22

implement our uh reform program. And

00:04:25

then in 2012, that's when we met. We

00:04:27

moved here because Rachel, actually

00:04:28

before Facebook, she was at Google. Um,

00:04:31

and she had this big global job at

00:04:32

Google. She was running um comms and

00:04:34

public policy for Google worldwide. I

00:04:36

had my job in number 10. It was actually

00:04:38

when our second son was born. Um, it

00:04:40

just there was a lot, you know, the

00:04:42

travel for her and the time difference.

00:04:44

So that's why we moved here. And I don't

00:04:47

know, should I stop there or do you want

00:04:48

me to keep

00:04:49

>> Well, you're also notably you became

00:04:51

naturalized. You're a citizen of the

00:04:52

United States now. So you have dual

00:04:53

citizenship. less people are confused by

00:04:55

the accent. You're running for governor

00:04:58

and you're a citizen of

00:04:59

>> Let's talk about your political setup.

00:05:02

So, being a child of Hungarian

00:05:05

immigrants raising communism, you're

00:05:06

going to hear a certain version of what

00:05:10

the role of the state is versus what the

00:05:12

role of the family or the individual is.

00:05:14

Then, growing up in the UK, I'm sure

00:05:16

your attitudes either get cemented or

00:05:19

change.

00:05:21

>> Give us the setup. What is the political

00:05:22

evolution of Steve Hilton? what did he

00:05:25

believe and then what does he believe

00:05:27

now and what has shaped these beliefs.

00:05:29

>> It's really I think it goes back to just

00:05:33

around the when I first really started

00:05:35

thinking about it all it was just as

00:05:38

Margaret Thatcher was coming to power

00:05:40

and you'd had the 70s in England were a

00:05:42

disaster and a decade that was just the

00:05:46

the economy was completely stagnant and

00:05:49

slurotic unions ran everything. Um there

00:05:53

was this period called the winter of

00:05:54

discontent in 1979 when you had massive

00:05:59

strikes um famously you know the dead

00:06:02

went unburied and trash was piled up in

00:06:05

the street just real collapse of

00:06:07

everything and that's what thatcher came

00:06:09

in to fix and I really did identify with

00:06:13

that as well as with the very clear

00:06:16

stand against communism and so really

00:06:18

she was funny enough when I was thinking

00:06:20

about the the video that I made to to

00:06:23

launch my campaign about a year ago now.

00:06:26

We ended up putting that in there and I

00:06:28

thought, well, actually that was the

00:06:29

thing that got me going. I was totally

00:06:31

inspired by her, but also the focus that

00:06:33

she had on business and enterprise and

00:06:37

hard work. And remember my stepfather, I

00:06:40

mean, they weren't at all political, by

00:06:42

the way. It wasn't like some household

00:06:43

where we talked about politics. It

00:06:44

really wasn't. But he had this thing

00:06:46

that stuck in my mind when he talked

00:06:49

about the like in in England you've got

00:06:51

the Conservative Party equivalent of the

00:06:52

Republicans and for the Democrats it's

00:06:54

the Labor Party and I remember he just

00:06:58

used to say Mrs. Thatcher's for the

00:07:00

workers and labor are for the layabouts

00:07:04

and I just this phrase stuck in my mind

00:07:06

about the importance of work and hustle

00:07:10

and I think about that all the time.

00:07:11

>> Where do you think California is if you

00:07:14

contrast? Well, this is the this is the

00:07:15

point I was just about to get to is we

00:07:17

really are there. There are so many

00:07:19

things I see in California today that

00:07:22

are exactly like the UK in the 70s.

00:07:26

You've got the massive dominance of the

00:07:28

unions in policym. You've got a slurotic

00:07:32

economy. You've got massively high

00:07:35

taxation. I mean it was higher then the

00:07:37

at one point I think the top rate when

00:07:39

you add in the wealth taxes in the UK

00:07:41

was literally 98%. Um but you had that

00:07:44

confiscatory taxation and top rate of

00:07:47

60% and so on. So very very similar and

00:07:50

actually funny enough um someone Mike

00:07:53

Moritz actually sent me a report that um

00:07:56

someone had done about the UK today and

00:07:59

and again there's just these eerie

00:08:01

parallels with just how how impossible

00:08:05

it is to do anything in the UK to build

00:08:08

anything. the overregulation. When I

00:08:10

read this report, it just is exactly

00:08:12

like California today. By the way, one

00:08:14

thing, Jason, just to be clear, I am a

00:08:17

proud American now, but I'm not I

00:08:19

actually renounced my UK citizenship. I

00:08:22

did that because

00:08:23

>> I just wanted to be clear that I'm just

00:08:25

to borrow the title of the show,

00:08:26

>> you be all in. All in. Literally, I re I

00:08:29

think it's really important everyone

00:08:30

knows that and I am.

00:08:32

>> And you have some to get into some maybe

00:08:34

some policy. Thanks for the background

00:08:35

there. You have some unique uh policy

00:08:38

positions. Taxes, I think, is the most

00:08:41

unique and dare I say pretty populist.

00:08:44

You want to have no state tax in

00:08:47

California for people with under

00:08:49

$100,000 in income and then a flat tax

00:08:52

for everybody over 100K of but 7.5%.

00:08:57

>> How is that possible? And is that

00:09:00

something you've studied? And where did

00:09:03

this come from? the tax plan that um

00:09:06

that I put out there, that was the first

00:09:07

day of my campaign. I think of it as

00:09:09

proworker and prog growth. And I think

00:09:11

we need both of those things because if

00:09:13

you look at what's going on in

00:09:14

California today, just big picture.

00:09:17

Obviously, you can look at the data

00:09:19

that's a real economic disaster. I'm not

00:09:21

sure people appreciate just how bad

00:09:23

things are because hiding behind that

00:09:25

data point of having the fourth largest

00:09:27

economy in the world, which is true, and

00:09:29

obviously I'm proud of that. I want

00:09:31

California to be big and successful and

00:09:33

growing. But that fourth biggest economy

00:09:36

data point underneath that you've got

00:09:39

this with the state with the highest

00:09:40

unemployment rate in the country and the

00:09:42

highest poverty rate in the country tied

00:09:45

with Louisiana. There's a United Way

00:09:47

report just the other about about a year

00:09:50

ago. They do it every two years. sort of

00:09:52

an assessment of of of of living

00:09:55

conditions in California. And they found

00:09:57

that over a third of Californians cannot

00:09:59

afford to meet basic needs. And so the

00:10:02

starting point for my tax plan is what

00:10:04

can we do quickly to help people who are

00:10:07

really struggling. Um if you think about

00:10:09

it, the working poor who aren't

00:10:11

particularly um being taken care of by

00:10:14

the welfare system. They're working

00:10:15

incredibly hard, but they're they're

00:10:18

being squeezed by all these costs. We

00:10:20

have the highest gas prices in the

00:10:22

country as you know the highest electric

00:10:25

bills everywhere except for Hawaii. Um

00:10:28

housing costs the highest in the country

00:10:31

insurance all these costs are so high.

00:10:32

So what can you do to help working

00:10:35

people quickly and so the starting point

00:10:38

was and what's affordable the $100,000

00:10:41

mark. I remember when when we I I was

00:10:43

just playing around with numbers

00:10:44

actually I did it with um some

00:10:46

economists from the Hoover Institution

00:10:48

where I was a fellow the first couple of

00:10:49

years that we moved to I taught at

00:10:51

Stanford um including in the public

00:10:54

policy department also the D school at

00:10:55

Stanford but I was also a fellow at the

00:10:57

at Hoover and so we did the math on the

00:10:59

tax plan there just just about a year

00:11:01

ago and so the that first part first 100

00:11:05

grand taxfree actually in many counties

00:11:07

in California today the def the official

00:11:11

definition for low income is 100,000.

00:11:14

Um, which so that number may sound very

00:11:16

high to people in other parts of the

00:11:18

country. It's actually the definition in

00:11:19

in a lot of counties of low income. So

00:11:22

you've got people earning 70 grand, 80

00:11:24

grand, 90 grand in California. They are

00:11:26

paying 9.3% state income tax. That rate

00:11:30

is higher than the top rate in most

00:11:33

states in America. So to me that's

00:11:35

ridiculous when you've also got all

00:11:37

these other taxes that those exact

00:11:39

people are paying sales tax, property

00:11:41

tax, gas tax, all of those are the

00:11:44

highest in the country.

00:11:45

>> So cutting taxes this significantly

00:11:48

means you have to then also cut

00:11:51

spending.

00:11:52

>> Yes. But can I just do the other part of

00:11:54

it?

00:11:54

>> I just did the other part which is the

00:11:56

7.5% flat tax. I just thought, you know,

00:11:59

when you look at the the the the facts

00:12:02

about economic performance, the fact

00:12:04

that, you know, for example, Chief

00:12:05

Executive Magazine ranks us and has done

00:12:07

for the last 10 years or so the 50th out

00:12:10

of 50 for business climate. A big driver

00:12:12

of that is tax. And I'm sure we'll get

00:12:14

into the the insane proposed

00:12:16

billionaires tax and you know, all these

00:12:18

things that are driving wealth creation

00:12:20

out of our state and business investment

00:12:22

out of our state. So it's not enough

00:12:24

just to take care of or give some relief

00:12:26

to people who are on the lower end of

00:12:29

the scale. You've got to actually have a

00:12:31

pro-investment, progrowth tax framework.

00:12:33

And so apart from anything else, the

00:12:35

complexity is ridiculous of our tax

00:12:37

system. These endless different rates is

00:12:39

ridiculously complicated. Um and that

00:12:42

itself is a cost. The bureaucracy and

00:12:44

hassle associated with that. That's why

00:12:46

I think a flat tax makes sense. Remember

00:12:48

this is in you know in the context of

00:12:50

federal taxes, all these other taxes.

00:12:52

It's not the only component, but the

00:12:54

cost is the to get to that cost, you've

00:12:57

got to reduce spending exactly as you

00:12:59

say. And basically the the the cost of

00:13:03

that in total is about an 18.5%

00:13:05

reduction in revenue, which takes us

00:13:07

back it takes us down about 60 billion,

00:13:10

something like that, which is not even

00:13:12

going back to what the budget was just

00:13:14

before the pandemic. They've actually d

00:13:16

if you look at the budget of the state

00:13:18

of California, it's nearly doubled in

00:13:20

the last 10 years. is in the last 5

00:13:22

years it's gone up something like 75%.

00:13:24

And so this is just bringing the budget

00:13:27

back to achieve that entire tax cut

00:13:30

would bring the budget back just to

00:13:32

where it was roughly before the

00:13:33

pandemic.

00:13:33

>> Let me just summarize. So if you make

00:13:35

between 0 and $100,000 a year as a

00:13:38

California resident under your plan, no

00:13:41

tax,

00:13:42

>> no state income tax.

00:13:43

>> No state income tax. If you make

00:13:46

$100,000 in a dollar and above, you pay

00:13:50

7.5% flat tax.

00:13:52

>> Yes, that's the concept.

00:13:54

>> Okay. How many Californians

00:13:58

does that impact? So, what percentage of

00:14:00

the population now get that affordance

00:14:01

if you were to

00:14:03

>> million the tax numbers usually only

00:14:06

households and so it's about 7 million

00:14:08

households would benefit from from the

00:14:11

under 100,000.

00:14:13

Do you know how many that is as a

00:14:14

percentage?

00:14:14

>> Well, working house, we got 40 million

00:14:16

people. I think that's about um probably

00:14:18

just over a third, something like that.

00:14:20

>> Okay. So, a third of homes now

00:14:22

essentially go to zero tax.

00:14:24

>> State income tax. Yeah, there's all

00:14:26

these other taxes that

00:14:28

>> now the push back would be if we then

00:14:30

take it dollar for dollar from the

00:14:32

operating budget, programs will suffer.

00:14:35

>> And to to your point, your comment is

00:14:38

I'm putting words in your mouth, but you

00:14:40

filled them in. Well, not really because

00:14:42

we're just going to go back to 2019 2020

00:14:44

budgets and the difference was we spent

00:14:47

a dollar in 2020, we now spend $2 and

00:14:49

nothing has changed. So, yeah, go from

00:14:52

$2 back to $150 and everything should be

00:14:54

fine is your point.

00:14:55

>> Yes. And I'd actually go further than

00:14:56

that. So, first of all, what we've seen

00:14:58

happen to the budget is basically the

00:15:01

expansion that we saw in in the in the

00:15:04

pandemic and afterwards is gone baked

00:15:06

into the baseline, which is totally

00:15:08

unsustainable. And so we got to get back

00:15:10

to even even without tax cuts, I would

00:15:12

argue you've got to get back to a more

00:15:14

reasonable growth in spending because we

00:15:15

go bankrupt. Um, as we're seeing with

00:15:18

these deficits that that we're getting

00:15:19

even when in times when we're not in

00:15:21

recession and taking money out of the

00:15:23

reserves, out of the rainy day fund to

00:15:25

plug the gaps, which is what they're

00:15:26

doing, totally irresponsible fiscally.

00:15:28

But actually, it's more than that. Even

00:15:30

if you just if if you don't change

00:15:32

anything in the composition of the

00:15:34

spending and just get back to where we

00:15:36

were, that gives you scope for a major

00:15:39

reduction in tax. But the other part of

00:15:41

it is what we're discovering in terms of

00:15:44

where the money is actually going. And

00:15:47

so obviously the whole fraud story has

00:15:50

exploded as a national political and

00:15:52

economic story um ever since Nick

00:15:54

Shirley's first investigation in

00:15:56

Minnesota just around the time of

00:15:57

Thanksgiving last year. Well, we've been

00:16:00

making our own um contribution to that.

00:16:02

So, a few months ago, I set up our I

00:16:05

literally called it Cal Do California

00:16:07

Department of Government Efficiency. I

00:16:09

know that's a controversial brand, but

00:16:11

you know, then the idea of it efficient

00:16:14

government is something I think everyone

00:16:16

would support. So, I thought why not use

00:16:18

that because everyone knows what it is.

00:16:20

So we've been just looking at the

00:16:23

published data on spending to find

00:16:25

examples and to make an estimate of the

00:16:28

total amount of of fraud, waste and

00:16:31

abuse in the system. And we've now

00:16:33

published four separate fraud reports

00:16:36

out of Cal Doge. When I say we, by the

00:16:38

way, it's I mean this is a longer story

00:16:40

we can get into, but one of the ways I

00:16:42

think I'm running this campaign

00:16:43

differently is that I'm actually putting

00:16:45

together a team uh before the election

00:16:48

of the of in terms of others who will

00:16:50

run with me for statewide office because

00:16:52

you've got some very important positions

00:16:54

alongside the governor that are going to

00:16:56

be crucial in putting us back on track.

00:16:58

In this instance, the state controller

00:17:01

is very important because the state

00:17:03

controller is an elected position has

00:17:05

the legal power to audit any

00:17:07

organization receiving state money and

00:17:10

to stop the flow of money if there's any

00:17:12

um suspicion of improper spending. So,

00:17:14

there's a guy running with me called

00:17:17

Herb Morgan and we've been doing this

00:17:18

work together and we've published four

00:17:21

reports now, three of them on individual

00:17:25

examples of fraud. We can get into that

00:17:26

in a second if you want to know some of

00:17:28

the examples are really shocking. And

00:17:30

then the fourth one was an estimate of

00:17:32

the total and we just went through

00:17:34

published data from the state auditor

00:17:37

from Medicaid error rates and so on to

00:17:40

make an estimate of the total amount of

00:17:42

fraud.

00:17:42

>> What did you find?

00:17:44

>> Give us a couple of examples.

00:17:46

>> Here's some specific examples. The

00:17:47

second fraud report um with it's a

00:17:50

classic $1 billion over the last 10

00:17:54

years 100 million every year since 2015.

00:17:58

This is from the climate change

00:18:00

mitigation fund which is part of the cap

00:18:03

and trade system. This is actually gas

00:18:05

taxes and search charges on electric

00:18:08

bills and so on. 100 million a year was

00:18:12

allocated to be spent on climate change

00:18:15

mitigation. In this case, it was solar

00:18:18

panels for lowincome apartment

00:18:20

buildings. So, we actually tracked that

00:18:22

money and um with an AI partner that can

00:18:25

get all the reports and of that 1

00:18:28

billion total in 10 years, the actual

00:18:30

amount spent on the purported benefit

00:18:34

here solar panel installation was 72

00:18:37

million. 928 million actually went to

00:18:41

nonprofits doing all all the usual

00:18:44

Democrat associated

00:18:47

[ __ ] frankly, voter registration,

00:18:50

um environmental justice campaigns, all

00:18:53

that kind of stuff. The actual thing was

00:18:55

mostly spent on that. That's $1 billion.

00:18:58

The the first one was the cannabis tax,

00:19:00

Proposition 64, legalizing cannabis.

00:19:02

There's a tax associated with that

00:19:05

supposed to be spent on um substance

00:19:07

abuse prevention. We found $350 million

00:19:11

that was supposed to be spent on

00:19:12

substance abuse prevention. Again, going

00:19:14

to this network of nonprofits, over 500

00:19:16

of them and small individual grants.

00:19:18

When you look at what each of those

00:19:20

organizations does, it's all the usual

00:19:22

stuff, voter registration, activism. So

00:19:26

the the third one was project home key

00:19:28

that we we looked into which was the

00:19:30

homelessness thing that they set up

00:19:32

after the pandemic which was buying up

00:19:34

property for homeless people um and

00:19:37

sometimes can building new property for

00:19:39

homeless people or converting hotels 3.8

00:19:42

8 billion that was on that one that we

00:19:44

found. I mean there others have found

00:19:46

other amounts um most of which went into

00:19:49

the pockets of developers without any um

00:19:53

real

00:19:53

>> the California budget if I'm not

00:19:55

mistaken 350 odd billion

00:19:58

>> 350 billion 349 this year. Yeah.

00:20:01

>> What percentage of it in your best

00:20:02

estimation with you and your team do you

00:20:04

think is inefficient fraudulent wasted?

00:20:07

Well, our number over the last five

00:20:09

years total our estimate was 425

00:20:12

billion. So averaged over the years it's

00:20:14

about 80 billion a year. So that's so

00:20:16

it's around, you know, 20% or so. That's

00:20:19

unbelievable.

00:20:20

>> Yeah. And now just to bring some reality

00:20:23

to the situation, you would have to get

00:20:26

through the legislature, which is both

00:20:29

controlled by Democrats. You can't

00:20:30

unilaterally as the governor just say,

00:20:33

"Hey, we're cutting these services." And

00:20:36

we had a governor Schwarzenegger who

00:20:38

tried this very thing. He had to move to

00:20:40

the center. You of course I believe in

00:20:43

California have a line item veto. So you

00:20:46

have some balance there.

00:20:47

>> But this is fantastic for people to

00:20:51

maybe get a reprieve from taxes. You're

00:20:54

going to get a major fight with

00:20:56

Democrats to cut any spending. What's

00:20:59

your plan there if you were to win?

00:21:02

>> So Jason, I a couple of things. You're

00:21:04

right about that. Um, and I'm very

00:21:06

thoughtful about the realities of these

00:21:09

things and I always make clear that I

00:21:11

think certainly on the tax plan that

00:21:14

taxes definitely you can't do that

00:21:16

without the legislature. I think that

00:21:18

actually we'll get a we there's a

00:21:21

possibility of a consensus around some

00:21:22

of these items where we can actually

00:21:24

work together with the legislature to

00:21:26

make it happen. One indicator of that is

00:21:29

actually one of my Democrat opponents in

00:21:31

the governor's race, Katie Porter. Um,

00:21:33

actually, you know, we were doing a

00:21:35

debate the other week in Fresno and she

00:21:38

just said, we were talking about

00:21:39

affordability or whatever it was and she

00:21:41

said, "Well, I'm I'm I've decided I'm

00:21:42

stealing Steve Hilton's tax plan. I

00:21:44

agree with him. First 100 grand

00:21:46

tax-free, and I think we should take

00:21:47

good ideas where we find them." So, this

00:21:49

is an interesting example that I think

00:21:51

that part of it I think we may be able

00:21:54

to actually persuade the legislature to

00:21:56

do.

00:21:57

>> And then I noticed she yelled at you and

00:21:58

said, "Get the hell out of her shot."

00:22:01

her video

00:22:02

>> except a stronger word than eight.

00:22:03

Exactly. Than hell. Um so the the

00:22:07

attitude that I've got on that whole

00:22:09

question of the legislature is that when

00:22:12

I'm elected that's and I'm sure your

00:22:15

eyebrows are raised and saying what are

00:22:17

you talking about? It's impossible for

00:22:18

Republicans to win and we'll get into

00:22:19

that. But I'm I'm doing this on the

00:22:21

basis that I will and I'm preparing to

00:22:24

actually start implementing the big

00:22:26

changes we need to make um in a

00:22:28

thoughtful manner on day one because

00:22:30

otherwise what's the point of doing

00:22:32

this? Steve, do you think that there's

00:22:33

legislative agreement or momentum to

00:22:37

give you the win? Even though to your

00:22:40

point, I think it's quite significant

00:22:41

that the Democrats would signal that

00:22:43

it's a legitimate policy proposal, but

00:22:45

do you think that if you win, people

00:22:48

would see the forest from the trees and

00:22:50

realize how important it would be to

00:22:51

take salaries under 100,000 to no state

00:22:54

income tax? Look, the we have I've seen

00:22:58

the, you know, the Democrat arguments

00:23:00

now up front many many times. We've done

00:23:03

a lot of events together, some of the

00:23:04

televised debates, many more that aren't

00:23:06

televised.

00:23:07

We're literally all saying the same

00:23:09

thing in all the in terms of the

00:23:12

diagnosis of the problem.

00:23:13

>> It's incredibly expensive to live here.

00:23:16

People can't, you know, people are

00:23:17

really struggling. The business climate

00:23:19

is a disaster. We're massively

00:23:21

overregulated. We can't build anything.

00:23:23

everything takes too long, everything's

00:23:25

too complicated. You know, there's a

00:23:27

there's a real consensus about

00:23:29

diagnosing the problem among all the

00:23:31

candidates. And so I think that that

00:23:35

doesn't mean that we agree, of course,

00:23:36

on the solutions. I would argue that the

00:23:38

Democrats all, you know, in some version

00:23:41

of more of the same actually, despite

00:23:43

what they say about the problems, but I

00:23:45

think that um there are certain things

00:23:48

where we will be able to get agreement.

00:23:50

I also think that when you have a

00:23:53

situation where you have the first

00:23:54

Republican governor elected for 20

00:23:56

years, that really will change the

00:23:58

dynamic in Sacramento, I think it'll it

00:24:01

actually may,

00:24:02

>> you know, loosen things loosen things up

00:24:05

a little bit because I think that there

00:24:07

are people there in the legislature who

00:24:10

really understand that things have gone

00:24:12

too far. Some of them have said it to me

00:24:13

personally, Democrats there, but they

00:24:15

feel constrained by the current

00:24:17

political situation, the machine being

00:24:19

in control. They can't really move and

00:24:21

and I think that'll shake things up a

00:24:23

little bit. That's one point. Secondly,

00:24:26

you know, I really do have experience

00:24:28

working across party lines like this. I

00:24:30

think that I'll be able to bring some of

00:24:32

that into play. I mentioned earlier I

00:24:34

worked in in 10 Downing Street, senior

00:24:36

adviser to the prime minister. He was a

00:24:37

conservative prime minister, but it was

00:24:39

a coalition government. Um, and I

00:24:42

literally shared an office in 10 Downing

00:24:43

Street with my opposite number from

00:24:45

another party and we would, you know,

00:24:47

hash things out and argue and, you know,

00:24:49

we were part of the team that negotiated

00:24:51

a coalition agreement and then tried to

00:24:54

implement it. And I think that those

00:24:57

skills of actually putting something

00:25:00

together where you don't agree about

00:25:02

everything, but you can make some things

00:25:04

happen. I think it'll be useful in this

00:25:05

situation. And I think we can I mean,

00:25:08

look, everyone agrees. we call going

00:25:10

like this in California.

00:25:11

>> And it's not farical to think a

00:25:13

Republican can't win here. Pete Wilson

00:25:15

did two terms. Schwarzenegger did two

00:25:17

terms. That's 16, I guess, of the last

00:25:19

36 years. It is completely conceivable

00:25:22

that a Republican could win. And you and

00:25:24

Katie Porter have the same plan. I think

00:25:27

Chad Biano has the same plan, which is

00:25:29

under 100,000. All of you agree no

00:25:31

taxes. That you're all attacking

00:25:32

affordability. They don't believe in

00:25:35

cutting services though. They want to

00:25:37

increase taxes on businesses, if I'm

00:25:39

correct. And so, why is that plan not as

00:25:43

good as yours, I guess, is the question.

00:25:45

Which one do you think would be more

00:25:46

more appealing to the voters? Would the

00:25:49

voters I think they'll all agree. Paying

00:25:51

less taxes, fantastic. Makes you more

00:25:53

competitive with Florida and Texas. But

00:25:56

if they had their brothers, they're

00:25:58

probably going to want to see Google and

00:25:59

Apple pay more in taxes and not lose

00:26:01

their services.

00:26:02

>> Yeah. But we're losing jobs. And I think

00:26:04

that that's the consequence of of of

00:26:07

squeezing

00:26:09

um businesses and high earners more and

00:26:11

more. And you're seeing it right now.

00:26:13

You're seeing the business exodus. Um if

00:26:16

the billionaire tax proposal goes

00:26:17

through, I mean that absolutely puts,

00:26:20

you know, I think that's a just complete

00:26:22

disaster for for the tech ecosystem and

00:26:25

what we've built in Silicon Valley over

00:26:27

the years and all the job creation and

00:26:29

and wealth creation that comes with

00:26:31

that. um you're seeing I mean I just

00:26:33

it's not just everywhere you go in the

00:26:36

state there are so many conversations

00:26:37

you sit down with business people you

00:26:39

know we we are we are on the brink of

00:26:40

leaving I don't think people realize

00:26:42

quite quite how near the cliff edge we

00:26:44

are um and if and it's I give you

00:26:48

another example we are I was just in

00:26:50

Pomona the other day down in Southern

00:26:52

California fantastic company sheet metal

00:26:55

um it's an HVAC duct manufacturing it's

00:26:57

exactly the kind of thing you'd want

00:26:58

here they're union jobs actually it's a

00:27:00

great um you know manufacturing facility

00:27:04

they are making the these HVAC systems

00:27:08

the air conditioning incredibly

00:27:09

important as as you know for uh TSMC and

00:27:12

these semiconductor factories and all

00:27:14

these the high-end manufacturing that's

00:27:16

happening in other states in and these

00:27:19

these facilities now massive amounts of

00:27:21

investment in the AI economy and and

00:27:24

tech more broadly but none of it's

00:27:26

happening in California I mean we just

00:27:27

published our policy report on that

00:27:29

today how we can get some of that that

00:27:31

full stack of those jobs in California.

00:27:33

But that company l they said to me since

00:27:35

the the facilities are all now being

00:27:38

built in other pl in other states. We're

00:27:41

on the brink of moving our facility to

00:27:43

be closer because what's the point of

00:27:45

making this stuff in California. It's

00:27:46

not going to be used because nothing's

00:27:48

happening nothing's going to be

00:27:50

happening in California. So you have to

00:27:52

stop this squeeze on business. You

00:27:54

really do.

00:27:54

>> Let me ask about the broader cost of

00:27:57

living for a second. Probably the most

00:28:00

impactful cost to people's lived

00:28:03

experience is the cost of housing.

00:28:06

>> Yeah.

00:28:07

>> Double click into that for a second. For

00:28:10

the 40 million residents of California,

00:28:13

what is going on? Why are rents so high?

00:28:16

Why are homes so expensive? And what can

00:28:21

actually be done to make the cost of

00:28:25

living and rent cheaper? So the thing

00:28:30

this particular issue I think almost

00:28:32

captures better than anything else the

00:28:34

underlying structural reasons why

00:28:37

everything is so difficult in California

00:28:39

and so expensive because you got these

00:28:41

three structural forces that I think

00:28:46

underpin the problem and show why a

00:28:49

Democrat can't fix it. And the three

00:28:52

things are union power, litigation and

00:28:56

climate dogma. and they all come

00:28:58

together in the housing story. The first

00:29:02

part of the story is that we're just not

00:29:04

building enough homes for the number of

00:29:06

jobs that we're creating and the size of

00:29:08

our population. It's a classic supply

00:29:10

and demand situation. Now, within that,

00:29:13

there are certain, you know, wrinkles.

00:29:15

You could point out that because of rent

00:29:17

control, which has got completely out of

00:29:20

control, there are a lot of empty

00:29:22

properties in California that could be

00:29:25

used to house people, but they're not

00:29:27

because landlords don't want to don't

00:29:30

want to do it because the the rights

00:29:31

have gone have swung so far in favor of

00:29:33

tenants. But I don't think that's the

00:29:36

major driver. The major driver is the

00:29:38

fact that we just haven't built enough

00:29:39

housing of different kinds. And if you

00:29:43

go through the reasons for that and why

00:29:44

it's so expensive, it brings into play

00:29:47

these three factors. First of all, it

00:29:49

just costs more to build anything in

00:29:51

California. The same exact floor plan,

00:29:54

house, apartment building, industrial

00:29:55

building, whatever it is, cost cost two

00:29:57

or three times more to build in other in

00:30:00

in California than in neighboring

00:30:02

states. The first reason is the building

00:30:04

codes, the actual requirements for

00:30:06

construction which is way more ownorous

00:30:08

driven by climate dogma that actually

00:30:10

doesn't really provide much specific.

00:30:12

What does that mean climate dogma?

00:30:14

>> Well, you have to install here we are

00:30:16

>> because like Nevada's hot and

00:30:18

droughtridden and Arizona has issues. So

00:30:20

what is it that we say that those states

00:30:23

don't say? So when you build apartments

00:30:26

or when you when you build parking you

00:30:29

have to put in EV charging

00:30:32

um and the scale of what's required for

00:30:36

the EV charging just makes it more

00:30:38

expensive. You have to you know like you

00:30:40

do a parking structure they have to

00:30:42

reinforce the floors. The bays have to

00:30:44

be wider just it adds you can have you

00:30:46

you have fewer bays per structure. Um

00:30:49

there's the specific cost associated

00:30:52

with that. um solar panels, we talked

00:30:54

about that earlier in terms of

00:30:56

low-inccome apartments that the that

00:30:58

taxes are paying for. Um developers have

00:31:00

to pay for that as well. Um insulation,

00:31:03

um energy efficiency, all these things

00:31:06

are good. And I think that's pretty much

00:31:07

the story of California, which is things

00:31:09

that start with good intentions actually

00:31:11

end up being taken to an extreme where

00:31:14

it just makes it too expensive to build

00:31:17

at a rate that people can afford to buy

00:31:19

the properties. And the other two are

00:31:21

really that SQA where anybody can sue on

00:31:23

behalf

00:31:24

>> exactly the private right of action

00:31:25

under SQA. So that and and but let's

00:31:27

unpack that because that brings together

00:31:29

the three things climate um litigation

00:31:32

and unions because see the California

00:31:34

environmental quality act itself is is a

00:31:37

nightmare in terms of this the amount of

00:31:39

regulation you have to comply with the

00:31:41

private right of action means anyone can

00:31:42

sue 70% of SQA lawsuits are used to

00:31:47

block housing most of those lawsuits are

00:31:50

filed by unions they're used as leverage

00:31:53

to negotiate pro what they call project

00:31:55

labor agreement ments where you have an

00:31:57

agreement for the site and usually they

00:31:59

have one or one of both one or two of

00:32:01

these components both of which sound

00:32:04

great skilled and trained workforce

00:32:07

which means union only so it's a closed

00:32:09

shop and prevailing wage again sounds

00:32:12

very good but it's two or three times

00:32:14

market rate wages so both of those

00:32:16

things inflate the cost often I've

00:32:18

spoken to many developers there aren't

00:32:20

enough union workers in in the area to

00:32:24

actually do the job so They have to

00:32:26

sometimes fly them in from other states

00:32:28

to do the job and the cost of travel and

00:32:30

accommodation. It's just

00:32:32

>> this is the key. There's no equivalent

00:32:34

to SQA in Texas uh where I now reside uh

00:32:37

after 20 years in California. The other

00:32:39

thing is the fees. It's 30,000 per door

00:32:42

in fees to the government. Exactly.

00:32:44

Yeah. To to build a door in California.

00:32:46

It's under a thousand in Texas. And in

00:32:48

California has three times the new units

00:32:52

per capita than California. So every

00:32:54

year we produce three times as many new

00:32:56

homes per capita.

00:32:57

>> Just a simple question though guys, put

00:32:59

this into chat GPT or whatever.

00:33:02

>> California's mandate with SQA is to

00:33:05

protect the air, protect the water,

00:33:08

protect the land by some measures.

00:33:12

Texas doesn't have it. Is it the case

00:33:14

that Texas's air is worse, the water is

00:33:16

worse, and the land is worse?

00:33:18

>> No, definitely not.

00:33:21

>> Yeah.

00:33:21

>> So is is it roughly the same? meaning

00:33:23

the particulate count, the pollen count,

00:33:26

is the air quality the same because if

00:33:28

it is then what is SQA doing other than

00:33:31

just slowing down and retarding the

00:33:34

progress of housing? Why hasn't that

00:33:36

study? Because I think again all of this

00:33:38

guys comes back to when the data is

00:33:40

presented in a way that's factual,

00:33:43

there's very little room for people on

00:33:47

both sides to argue it because they're

00:33:49

all relatively smart. It's when it's

00:33:51

presented either in a partisan way or by

00:33:54

somebody who reeks of partisanship that

00:33:57

I think people attack the messenger

00:33:59

versus the message. So I'm just trying

00:34:00

to understand why hasn't the California

00:34:03

government confronted this? It has the

00:34:05

highest rents in America. It has the

00:34:07

highest poverty rate in America and it

00:34:10

also has the highest regulation that has

00:34:12

the lowest and the slowest unit housing

00:34:15

growth. Steve, I guess what I'm asking

00:34:18

you is how does that not get to the

00:34:19

legislators more?

00:34:21

>> Okay. Well, I'll tell you it's I'm

00:34:23

afraid the answer is the corruption

00:34:26

within the system and the interest

00:34:28

groups that have taken over the system.

00:34:30

I'll tell you a story which is my first

00:34:32

I I know a lot about housing policy

00:34:34

because the first area of policy I

00:34:36

studied when I decided that I wanted to

00:34:39

get into the whole world of policy and

00:34:41

politics in California. I actually tried

00:34:42

to get a ballot initiative qualified for

00:34:45

the ballot that would have two elements

00:34:47

to it. One is what Jason just mentioned

00:34:50

capping impact fees which are now up to

00:34:53

about 20% of the cost of housing. Um I

00:34:56

wanted to do a statewide cap of 3% um of

00:35:00

construction cost and the second

00:35:02

component was eliminating the private

00:35:03

right of action under secret. I didn't

00:35:06

succeed in getting it on the ballot.

00:35:07

Didn't raise enough money in time. So

00:35:10

then I tried to pursue it through the

00:35:12

legislature said well let's see if we

00:35:13

can make some something happen in the

00:35:15

legislature. So I went to Sacramento I

00:35:17

took meetings with legislators started

00:35:19

to engage with Sacramento. There was one

00:35:22

meeting I had with the legislator who

00:35:23

was described to him is good on housing.

00:35:26

This is a person you need to talk to and

00:35:28

we had a great meeting. They said this

00:35:31

would be transformational.

00:35:33

I said great let's work on it together

00:35:35

bipartisan. You're Democrat. I'm a

00:35:36

Republican. That'd be great. People like

00:35:37

that. Oh, I couldn't support you

00:35:39

publicly. Why not? Well, the unions

00:35:42

would hate it. Why? Because if you take

00:35:44

away the private right of action, you

00:35:46

take away the union's leverage. And I

00:35:49

said, "Yeah, but you just told me it

00:35:51

would be transformational." We were

00:35:52

sitting in an office. You could see the

00:35:54

state capital down below, high up. They

00:35:56

just waved their arm around like this

00:35:58

and said, "Yeah, the unions run this

00:35:59

place." And that's the real reason. If

00:36:02

you look at for example Newsome touted

00:36:04

these two bills last year AB130 AB131

00:36:08

that were going to solve the housing

00:36:09

crisis. He said this is the moment where

00:36:12

we are embracing abundance and all the

00:36:14

rest of it big squa exemptions for

00:36:17

certain types of housing. But if you

00:36:19

look at the fine print tucked away in

00:36:21

it, you only get the exemptions if you

00:36:24

have these project labor agreements and

00:36:26

union union closed shop and prevailing

00:36:29

wage. So you're just writing back in

00:36:31

exactly the things that Sequ is causing

00:36:34

the cost increases from. So because the

00:36:36

UN and what let's follow all the way

00:36:38

through. If you look at Gavin Newsome's

00:36:41

political donations over the 16 years

00:36:44

he's been running statewide just as a

00:36:45

proxy for Democrat politicians by

00:36:48

category. The number one category

00:36:50

government unions, number two trial

00:36:52

lawyers, number three non-government

00:36:55

unions. So these are the that's why

00:36:57

nothing changes because the the

00:36:59

interests that benefit from this system

00:37:02

are funding the politicians that make

00:37:04

the decisions.

00:37:05

>> Yeah. And Chamat to your other question

00:37:06

of like is the environment better since

00:37:08

1970 when this regulation came into

00:37:11

pass.

00:37:12

>> California still has the worst air

00:37:14

quality in the country largely because

00:37:16

of the addiction to cars and traffic.

00:37:20

And then Texas as a comparison just has

00:37:22

industrial waste problems because we

00:37:24

have a lot of chemicals here or chemical

00:37:27

processing done here.

00:37:28

>> So we have a car loving culture in

00:37:30

California to your point Jason. It's

00:37:32

part of our cultural fabric driving down

00:37:34

Highway 1. It's just a very iconic thing

00:37:36

that's embedded in this state. Steve, I

00:37:38

have two questions. What has all of the

00:37:40

incremental regulations

00:37:43

done with respect to climate quality,

00:37:47

whether it's EV mandates or the ice

00:37:50

engine requirements? And then

00:37:52

separately, just as a more general way

00:37:53

to explain it,

00:37:54

>> why is gas in California 7 8 gallon and

00:37:58

why is it $3 everywhere else? Why is

00:38:00

ours more than 2x that it costs

00:38:03

everywhere else, including other states

00:38:05

that are also quite expensive to live

00:38:07

in? Well, also that they don't that we

00:38:09

we have the highest gas in the country,

00:38:12

including Hawaii in the middle of the

00:38:13

Pacific Ocean, even though we have

00:38:15

abundant oil reserves here. So, we have

00:38:16

way higher gas prices than states that

00:38:18

don't have oil reserves. We actually

00:38:20

have very significant oil reserves in

00:38:22

California. Um the the fundamental

00:38:24

reason that gas prices are so high is

00:38:27

because again in the name of climate,

00:38:29

but without actually in this case, it's

00:38:32

counterproductive to climate. um instead

00:38:35

of using the production that we have

00:38:37

here in California, I've been to the oil

00:38:39

fields in Kern County mainly near

00:38:41

Bakersfield. Um we are now importing

00:38:44

nearly 80% of the oil that we use over

00:38:47

the period of the since really this all

00:38:50

started in 2006 with the passage of the

00:38:52

global warming solutions act. That was

00:38:54

the sort of foundational climate

00:38:55

legislation in California. Over that

00:38:57

period, our use of fossil fuels has

00:38:59

declined by not that much. And the

00:39:02

proportion of our energy that's coming

00:39:03

from fossil fuels is is about 80% still.

00:39:07

The rest of the country it's about 81%.

00:39:09

So it's barely any different. But the

00:39:11

difference is we used to produce most of

00:39:13

what we use in state. Now we are

00:39:16

importing nearly 80%. And that has

00:39:19

driven up course you have to ship it

00:39:21

from halfway around the world. Our

00:39:23

number one provider is Iraq right now.

00:39:25

That's the number one source of oil.

00:39:28

>> Sorry, sorry.

00:39:30

The state of California

00:39:32

itself, we

00:39:34

are the wholly dependent on Iraqi oil to

00:39:38

sustain our economy.

00:39:39

>> Not wholly, it's it's the number one

00:39:42

provider. Yes. So if you look at the

00:39:44

sources of oil, number one, Iraq, number

00:39:48

two, I think it's Ecuador and Brazil.

00:39:50

But the the the broader point on that is

00:39:54

because the we used to have a let's just

00:39:57

go back a few steps. We had a really

00:40:00

strong energy industry and

00:40:02

infrastructure in California where we

00:40:03

produced most of the oil and gas that we

00:40:05

use and we had refineries about 40 of

00:40:08

them um around the state mostly in the

00:40:10

Bay Area down near LA that refined and

00:40:13

turned it into products that we use

00:40:14

gasoline and so on. Um now we're down to

00:40:16

seven refineries. One of the main

00:40:18

reasons for that is that we're not

00:40:20

producing what we what we what we could

00:40:23

be refining. we're shipping it in

00:40:25

instead because there are no pipelines

00:40:28

of of there are no oil pipelines into

00:40:30

California. Whatever we don't if we

00:40:32

don't use our own, we have to bring it

00:40:34

in by tanker. Um because of this and

00:40:38

because of the the the fact that the

00:40:40

refineries were built to to refine

00:40:43

California crude, which is known as

00:40:45

heavy crude. Um there different types

00:40:47

around the world. You got to have a good

00:40:49

match. Iraq provides Iraqi oil is a good

00:40:52

match. The other place whose oil is a

00:40:55

good match for our refineries is South

00:40:58

America. And so as a result of Democrat

00:41:01

climate policy, we are now expanding oil

00:41:05

drilling in the Amazon rainforest in

00:41:07

order to provide the right kind of oil

00:41:10

for California's refineries. I mean,

00:41:12

it's just so utterly insane and

00:41:14

incoherent. And of course in the process

00:41:16

we're spewing out carbon emissions

00:41:18

because the tankers run on what's called

00:41:21

bunker fuel which is the most polluting

00:41:23

form of transportation there is. And

00:41:25

just to make the whole insane scheme

00:41:27

work carb the California Air Resources

00:41:29

Board which is obsessed with having all

00:41:32

other businesses account for their

00:41:34

carbon emissions right down the supply

00:41:36

chain. Miraculously the carbon emissions

00:41:38

for the oil imports are only counted

00:41:40

from when they're 12 miles off the coast

00:41:43

of California. It's just so crazy.

00:41:45

>> Yeah. Change the finish line. Yeah.

00:41:47

>> The taxes add like a dollar a gallon and

00:41:50

then there's this carb standard.

00:41:52

>> It's about 60. Yeah. It's just It's more

00:41:54

like 61 I thought or 65. I can't

00:41:56

remember exactly. It's just going up

00:41:57

again. Yeah. Yeah.

00:41:58

>> Most of the most of the in most of the

00:42:00

$2 premium as it were for California is

00:42:03

regulatory, not taxes.

00:42:04

>> Yes. And most of the oil that's been

00:42:07

pulled out of the ground in California,

00:42:08

we got the easy stuff out. what's left

00:42:10

is generally dirtier or thicker

00:42:13

>> process. No, it's not right. I've had a

00:42:15

lots of conversation with the industry

00:42:16

on this and the the the problem is that

00:42:20

you've got fields that could be

00:42:23

producing but and actually it's a good

00:42:25

example of what you can do as governor

00:42:26

without the legislature because the way

00:42:29

that they've been shutting down

00:42:31

production is not legislatively is

00:42:33

through an agency of the state

00:42:34

government called Calgen the California

00:42:36

Department of Geologic and Energy

00:42:37

Management and it's simply a question of

00:42:40

refusing to issue permits for the

00:42:42

various stages of production including

00:42:44

including maintaining existing wells or

00:42:46

expanding. There's a process called

00:42:47

sidetracking where you can take a well

00:42:49

that's doing five barrels a day and

00:42:51

increase it to 100 whatever um and then

00:42:54

drilling new wells in existing fields

00:42:57

and they're denying permits for all of

00:42:58

that. Actually, you can pretty much turn

00:43:01

that around overnight by appointing

00:43:03

people who are pro- energy who will

00:43:06

issue permits because I think there's a

00:43:08

simple common sense rule here, which is

00:43:10

as long as we're using oil and gas in

00:43:11

California, let's use our oil and gas

00:43:14

rather than importing it. But the my

00:43:16

conversations with the industry is that

00:43:17

I said, "Look, what could what could we

00:43:19

do if we had a kind of green light from

00:43:22

a governor that and and a regulatory

00:43:25

framework that just says, "Let's do what

00:43:28

we can. Let's produce what we can." The

00:43:30

estimate that I've got from them is that

00:43:32

we can double production every two years

00:43:35

in California. If we're already one of

00:43:37

the big gas burning states with the

00:43:39

worst air or previously my state, you

00:43:42

know, then you're gonna get into the

00:43:43

circular conversation with the public of

00:43:46

do we want the air quality to decrease?

00:43:48

And most people would say the EV credits

00:43:50

were actually a good thing because we

00:43:51

had 20 years of smog going down. Even

00:43:55

though we're still worse, it's gotten a

00:43:57

lot better. So that smog is not to do

00:43:59

with carbon, but that there's a real mis

00:44:01

mis misunderstand. So the completely

00:44:03

agree on air quality and and one of the

00:44:06

major advances that has been made is on

00:44:08

picking the LA basin is on smog.

00:44:10

Obviously I wasn't here then but people

00:44:12

say you know it's really bad and now

00:44:14

it's not. You have clean skies and you

00:44:16

can see Mount Baldi or whatever. You

00:44:17

know it's like a really different world

00:44:20

but that's nothing to do with carbon

00:44:21

emissions. Um and so and that that's to

00:44:24

do with actually the the main driver of

00:44:27

this of the air quality improvements in

00:44:30

California actually car technology. Um

00:44:34

and if you look at EVs I mean EV

00:44:35

penetration even with all the subsidies

00:44:37

and so on. It's incredibly low in

00:44:39

California. So you can't you can't um

00:44:42

point it's about four or 5% something

00:44:43

like that tiny. So actually the

00:44:48

improvements in air quality, dramatic

00:44:50

improvements that you saw in LA were

00:44:52

nothing to do with EVs.

00:44:53

>> Steve, I want to switch topics to

00:44:55

education. This is a thing that

00:44:57

we on the pod talk about a lot. We're

00:44:59

all the byproduct of a pretty fantastic

00:45:02

education system, affordable education,

00:45:04

frankly, at every level. We had options

00:45:06

to pay for it.

00:45:08

>> We all had access to things like AP to

00:45:10

really distinguish ourselves.

00:45:12

>> Even Jason.

00:45:13

>> Yeah. Um,

00:45:14

>> that's true.

00:45:16

>> What's happening in the California

00:45:18

education system? Why are we stripping

00:45:19

away things like AP? And how do we tie

00:45:25

compensation to outcomes? Because I

00:45:26

think,

00:45:27

>> yeah,

00:45:28

>> a lot of us would want to pay teachers

00:45:29

triple, but we'd want to tie it to

00:45:32

something that says, "Wow, the test

00:45:33

scores are going up. Our kids can read.

00:45:35

Our kids can write. Our kids can compete

00:45:36

on the global stage." And it just feels

00:45:39

like we are moving backwards.

00:45:41

>> We really are. And it's just I mean the

00:45:43

numbers are horrific. I mean, you've got

00:45:45

we first of all, we we spend nearly the

00:45:47

most of any state per student right now

00:45:50

in this year. It's about 27,000 just

00:45:52

it's more than just over 27,000 per

00:45:54

student per year in California. If you

00:45:57

take the average out the money and we

00:45:59

get some of the worst results in the

00:46:01

country le I think the number for you

00:46:03

know 40 it's 47% that meet basic

00:46:05

standards in English and reading so less

00:46:08

than half meet basic standards for math

00:46:11

it's 35%.

00:46:13

So twothirds do not meet the standards.

00:46:15

It's just an insane level of failure

00:46:18

considering we spend nearly the most.

00:46:20

And I think again you've got to look at

00:46:22

this in a practical way. There's a

00:46:25

long-term structural reform that I think

00:46:27

we need because the the driver of this

00:46:29

is really the grip on the government

00:46:32

school monopoly of the teacher unions

00:46:34

who increasingly have been driven by

00:46:36

ideological factors. You saw that for

00:46:39

example in the pandemic when you saw the

00:46:42

you know the longest and most

00:46:43

destructive school closures in the

00:46:45

country and I was always struck by LA

00:46:49

the teacher union in LA when they put

00:46:51

out their demands for reopening schools

00:46:55

it was just a list of polit was a wealth

00:46:57

tax Medicare for all something about

00:46:59

Palestine you know it's just they've

00:47:01

completely become an organized political

00:47:05

interest group that's about their

00:47:07

members and broader political goals

00:47:09

rather than anything to do with the

00:47:12

interests of students and kids in

00:47:13

school. So I think that the fact that

00:47:15

you got this monopoly is of of the

00:47:18

public tool system controlled by the

00:47:20

unions. They of course in turn control

00:47:22

the politicians as I mentioned earlier

00:47:25

the number one donor to democrat

00:47:27

politicians of these government unions

00:47:28

including the teacher unions. And so you

00:47:30

got to break that grip. So I think that

00:47:32

long-term the answer is to move in the

00:47:34

direction of school choice which I've

00:47:36

always been a strong advocate of. You're

00:47:37

seeing that school choice revolution

00:47:39

across the country now. many states

00:47:41

moving very rapidly in the direction

00:47:43

with really good results. It's not a

00:47:45

panacea. Um but I think that that is the

00:47:48

long-term structural change you need,

00:47:50

but that takes a long time and it's

00:47:52

going to be very very hard to get that

00:47:54

moving in California given the fact that

00:47:56

the teacher unions basically control the

00:47:58

legislature through the Democrat

00:48:00

politicians they put there. So there are

00:48:02

some practical things that we've got to

00:48:03

do immediately to improve these basic

00:48:06

standards. And here we got to look at

00:48:08

what works elsewhere. And you see a lot

00:48:12

of lot of attention now on Mississippi.

00:48:14

Rightly so, because for onethird of

00:48:16

their spend per student than California,

00:48:19

their results are spectacularly better.

00:48:22

And it's really happened in the last 10

00:48:23

years. And there's some simple practical

00:48:25

things that they do. Number one is how

00:48:28

you teach kids to read. There's a

00:48:30

technique of to of reading instruction.

00:48:33

I mean, this was a debate I remember

00:48:35

having back in the day in England in the

00:48:37

'9s, and it's pretty much settled then,

00:48:39

which is there's a technique called

00:48:41

phonics. It's a way to teach kids to

00:48:43

read, and it's totally clearly

00:48:45

established as the most effective. It's

00:48:47

barely used in California schools at

00:48:49

all. It's like in a very small

00:48:50

proportion of schools of public schools.

00:48:52

So, that's something that the governor

00:48:54

can drive forward through the state

00:48:56

board of education where you appoint all

00:48:58

the members. Secondly, in Mississippi,

00:49:01

they introduce something very common

00:49:03

sense, which is, as everyone in

00:49:05

education says, up to about third grade,

00:49:07

you're learning to read. And then from

00:49:10

fourth grade, you're reading to learn.

00:49:11

And if you can't read, you can't learn.

00:49:14

And so there's widespread consensus that

00:49:16

reading by third grade, by the end of

00:49:18

third grade, is incredibly important

00:49:20

benchmark. In Mississippi, if you don't

00:49:22

read by, you not don't pass the basic

00:49:24

reading test by end of third grade. They

00:49:26

give you a bit of help over the summer

00:49:28

and if you still don't make it, you

00:49:29

repeat the year. They don't let you go

00:49:31

forward. That single change has

00:49:34

transformed their results. And then your

00:49:36

point about accountability also happens

00:49:38

there where they give and and this is

00:49:40

something else that we could implement

00:49:42

here which is taking the publicly

00:49:44

available test scores and data but

00:49:46

really assigning it in a very visible

00:49:49

way to individual teachers and

00:49:51

individual schools. And that's one of

00:49:53

the proposals I've got in my campaign,

00:49:55

which is a grade for every school and a

00:49:58

grade for every teacher so we can reward

00:50:00

the good ones and remove the bad ones.

00:50:02

>> Two more topics that Californians are

00:50:05

very passionate about and have a lot of

00:50:07

opinions about. I think one is pretty

00:50:10

challenging and the other one seems

00:50:12

pretty easy and other states have

00:50:14

handled it where it's easier. Crime and

00:50:16

then homelessness. uh crime obviously as

00:50:20

a society we've seen violent crime go

00:50:22

down over the long arc of our lifetimes

00:50:24

in the last 40 or 50 years but

00:50:26

California still 30% more violent than

00:50:30

the rest of the country so we definitely

00:50:31

have a violence problem specific to

00:50:33

California and if you live in the major

00:50:35

cities San Francisco Los Angeles they

00:50:37

let people out for petty crimes under

00:50:39

$850 there seems to and we see going to

00:50:43

a drugstore everything's locked up so

00:50:45

there is a feeling and a lot of debates

00:50:47

over the numbers that there's a lot more

00:50:49

property crime. Some people claim people

00:50:52

don't report it anymore. That was my

00:50:54

lived experience in California.

00:50:57

What is your take on crime and then

00:50:59

we'll go to homelessness?

00:51:00

>> Yeah, I mean it's just it's this classic

00:51:03

thing in California where they seem to

00:51:05

be brilliant at passing laws, right?

00:51:08

Every year more and more laws, more and

00:51:09

more bloat and bureaucracy, more on

00:51:12

nanny state nonsense. Last session, for

00:51:14

example, they passed, this is one

00:51:17

session, 1,118

00:51:20

bills. One that that's the number of

00:51:23

bills that the legislature passed. I we

00:51:25

did an thing outside the state capital.

00:51:27

I mean, I'm not very tall. We printed

00:51:29

them all out. It's like double my

00:51:31

height. I mean, just ridiculous. The

00:51:34

point I'm making is really good at

00:51:36

passing laws, but not very good at

00:51:38

enforcing them. there's just something

00:51:41

missing in terms of the app of the

00:51:43

willingness to just enforce the law.

00:51:45

That's going to be one of the main

00:51:46

points I make in terms of homelessness.

00:51:48

But when you get to crime, there's just

00:51:50

this attitude. I mean, there's something

00:51:53

off about how the left has has has seen

00:51:57

this issue. And just when you think

00:51:58

it's, you know, the worst excesses of

00:52:01

defund the police and all that have

00:52:03

receded, you've now got them popping up.

00:52:06

What is it this new thing? microl

00:52:08

looting, right? Oh, microl looting.

00:52:10

Isn't the New York Times and Slack

00:52:12

podcast are going on about, oh, it's

00:52:14

fine cuz it's just social justice and we

00:52:16

we're allowed to kind of basically steal

00:52:18

things cuz it's okay. It's just

00:52:19

unbelievable subversion of basic

00:52:22

>> um values and morality. Just

00:52:24

unbelievable on crime. It's very

00:52:26

decentralized in terms I mean there's

00:52:28

some state things that need to be d

00:52:30

remember the law that you're talking

00:52:31

about that legalized theft up to $950 a

00:52:35

day that has that part has been

00:52:37

overturned that was Prop 47 which was a

00:52:40

few years ago has been overturned by

00:52:42

Prop 36 which was overwhelmingly passed

00:52:44

in 2024 by about 70% but of course it's

00:52:47

not being properly implemented. Gavin

00:52:48

Newsome was against it and so were most

00:52:51

Democrats in the state. the people

00:52:53

passed it anyway, but now there's real

00:52:55

resistance to enforcing it, which is

00:52:57

ridiculous in terms of the overall

00:53:00

picture though, it is very localized.

00:53:03

You know, you've got local police forces

00:53:05

and sheriff's department and so on. So,

00:53:08

my focus has been well, what can you do

00:53:10

as governor? And the one of the biggest

00:53:12

drivers I think that's that's caused the

00:53:14

problem is is really started with Jerry

00:53:17

Brown before Gavin Newsome. Gavin

00:53:18

Newsome's accelerated it, which is the

00:53:20

prison closure program. They've they've

00:53:22

they've they've basically al also this

00:53:25

is classic California. They've reduced

00:53:27

the number of prison places by half.

00:53:30

Guess what happened to the budget? It

00:53:32

doubled.

00:53:34

>> Not quite not quite that bad, but like

00:53:35

it's a classic. They double they cut the

00:53:38

numbers in half. Double the budget. But

00:53:40

the point, the serious point is that

00:53:41

you've had tens of thousands of really

00:53:43

dangerous violent criminals either

00:53:45

released directly into the community or

00:53:47

more or or more, you know, um

00:53:50

destructively for this for the system

00:53:52

transferred to county jails which are

00:53:54

now completely overcrowded. Um and

00:53:57

therefore at the local level, the whole

00:54:00

system is aware that you've had all

00:54:02

these transfers from state prison. the

00:54:06

system is full and so there's no

00:54:08

capacity and that really undermines the

00:54:11

kind of accountability that judges and

00:54:13

prosecutors would want to seek at the

00:54:15

local level because they know the jails

00:54:16

are full and so that in turns undermines

00:54:18

law enforcement because they say what's

00:54:21

the point I mean I hear this term all

00:54:23

the time from law enforcement around the

00:54:24

state I'm traveling the state the whole

00:54:26

time they talk about catch and release

00:54:28

as the basic operating rule for local

00:54:31

for the kinds of crimes you're talking

00:54:33

about you catch them they just release

00:54:34

nothing happens

00:54:35

And so that that undermines law

00:54:38

enforcement. They think, why bother if

00:54:40

we're just going to bring these people

00:54:41

in and nothing's going to happen to

00:54:42

them. And that in turn undermines public

00:54:44

confidence because everyone sees that

00:54:46

and then they, as you just said, don't

00:54:48

bother reporting it. So a simple thing

00:54:50

we can do that is completely within the

00:54:52

governor's control is stop and reverse

00:54:54

the prison closure program, which is

00:54:56

what I've committed to doing is to

00:54:58

increase prison capacity in California.

00:55:01

That means that you can relieve the

00:55:02

pressure on county jails, but also that

00:55:04

means that you can use the prisons for

00:55:06

what they should be doing. Not just

00:55:07

bringing accountability. You commit a

00:55:09

crime, you should be punished, but also

00:55:11

rehabilitation. We've got one with not

00:55:14

the worst, but one of the worst

00:55:15

recidivism rates in the whole country.

00:55:18

And if you had if you if we did one of

00:55:20

the best one of the best states is

00:55:22

Virginia, they're they're less than half

00:55:24

what we have. that would massively

00:55:26

reduce crime if you could just get, you

00:55:27

know, there's that, you got to take

00:55:29

seriously the rehabilitation part. I

00:55:31

mean, a huge proportion of prisoners in

00:55:33

these jails, they can't read properly.

00:55:34

Many have dyslexia. You know, you you've

00:55:36

got to have a really serious view on it.

00:55:38

And they just don't. They have an

00:55:40

ideological view. I think that is the

00:55:42

problem with so many of these issues.

00:55:44

It's ideology. In this case, it's

00:55:46

decarceration. Can't have people in

00:55:48

prison. Prison is racist. Criminal

00:55:50

justice reform. All this ideology

00:55:52

instead of just practical things to keep

00:55:54

people safe.

00:55:54

>> Newsome shut down four or five of the

00:55:56

California state prisons. You're

00:55:58

absolutely correct. Uh, according to my

00:56:00

notes, and then it peaked in 2006.

00:56:03

California had 165,000 people in state

00:56:05

prisons. Now 93,000 people. So, it is

00:56:08

definitely a trend. Uh, and I think a

00:56:10

lot of folks who are living here or who

00:56:12

were living in California where I used

00:56:14

to live are not in favor of that. Uh,

00:56:17

looking at homelessness, is it

00:56:19

intractable in California?

00:56:21

>> One thing I'll just point out if people

00:56:22

are interested in digging in further to

00:56:25

some of the things I've been saying.

00:56:26

There's a couple of places you can go

00:56:28

for real depth on this, which is the

00:56:31

last three years, um, I've been

00:56:32

traveling the state and kind of learning

00:56:34

about this stuff and developing

00:56:35

solutions. And I had a policy

00:56:37

organization for that called Golden Toto

00:56:39

together. goldento together.com and you

00:56:42

can find policy reports on many of these

00:56:44

areas we've discussed and more including

00:56:47

one on homelessness called ending

00:56:48

homelessness. And actually my real

00:56:50

partner in developing that was someone

00:56:51

called Michelle Ste who's done a lot of

00:56:54

work on this. She actually run um

00:56:56

homeless shelters and and really at the

00:56:59

at the kind of street level of this for

00:57:02

many many years. also someone called Tom

00:57:03

Wolf who's given me a lot of great

00:57:05

advice. He's in San Francisco, a

00:57:06

recovering addict um a recovered addict

00:57:09

who's who's just fantastic.

00:57:10

>> He's very vocal on Twitter and uh very

00:57:13

common sense approach. Yeah.

00:57:15

>> Yeah. Exactly. Okay. So, it's very

00:57:16

simply I'll try and sort of capture it

00:57:18

simply. It's a it's three points. Number

00:57:20

one, it actually already is illegal to

00:57:22

live on and the homeless encampments

00:57:24

already are illegal. They've always been

00:57:26

illegal. Um it's another example of

00:57:28

where we just got to enforce the law. Um

00:57:30

for years local politicians in

00:57:33

California hid behind a court ruling

00:57:36

that is called the Boise ruling from

00:57:38

many years ago which stated it's the

00:57:39

ninth circuit ruling applies to the

00:57:41

western states which is that the the

00:57:44

statement there was you can you can't

00:57:46

remove people from the street unless you

00:57:48

have sufficient shelter available

00:57:51

locally. And they used this to say we

00:57:53

can't remove people because we don't

00:57:55

have enough shelter. It didn't define

00:57:56

what shelter was. They defined it as

00:57:59

these permanent supportive housing units

00:58:01

costing $900,000

00:58:04

a door, but it could have been, you

00:58:06

know, a camp with CS. You know, there's

00:58:08

no reason. But even that excuse has been

00:58:12

lifted because there's a Supreme Court

00:58:13

case called Grants Pass versus Oregon in

00:58:16

2024 overturned that. So there's no

00:58:19

excuse. you you these people running

00:58:22

local governments what they they they

00:58:24

have the power and the legal authority

00:58:26

to remove every single homeless

00:58:27

encounter and they should and my

00:58:30

argument is I'll give that once I'm

00:58:31

elected I'll give them a certain amount

00:58:33

of time and if they haven't done it then

00:58:34

I'll use state law enforcement resources

00:58:37

to take people off the streets and then

00:58:38

you get to point two and three of the

00:58:40

plan which is what do you you got to

00:58:42

give people help in a compassionate way

00:58:43

help them get their lives back on track

00:58:45

so over 80% of people who are homeless

00:58:48

have drug or alcohol problems s

00:58:50

addiction or me severe mental health

00:58:52

problems. So you got to deal with that.

00:58:53

So the second part is drug and alcohol

00:58:56

recovery. Got to you got to get people

00:58:57

into recovery. That used to be the rule

00:58:59

in California, rehab or jail. And we got

00:59:02

to get back to that. It can't be an

00:59:03

option. You got plenty of service

00:59:05

providers who can do it. You got to

00:59:07

require it. I mean last year even the de

00:59:10

going back to our point about the

00:59:11

legislature even the democrat

00:59:13

legislature passed a bill called the

00:59:15

sober housing act which would have taken

00:59:17

a certain proportion of homeless

00:59:19

spending and allocated it to uh shelter

00:59:22

where you had a requirement was

00:59:24

sobbriety vetoed that bill. It's

00:59:27

unbelievable. So we got to have it 100%

00:59:30

um sober requirement for any kind of

00:59:33

state services on homelessness. The

00:59:35

third part is mental health where

00:59:37

honestly going back to the jails

00:59:38

conversation, you talk to sheriffs

00:59:40

around the state, they the number

00:59:43

varies, but they say 50 I've heard as

00:59:46

high as 70% of the people in their jails

00:59:49

have severe mental health problems.

00:59:51

That's where we are actually treating

00:59:53

people with mental health problems.

00:59:54

Either they're on the street or they're

00:59:56

in jail is totally barbaric. And one of

00:59:58

the reasons is that we when you're

01:00:00

talking about the homeless population,

01:00:03

obviously low-income people. So it's

01:00:04

very much entwined when you talk about

01:00:06

mental health care with Medicaid, with

01:00:08

the federal system. And there's a rule

01:00:10

in Medicaid that was set up right at the

01:00:12

beginning when it was founded in the

01:00:14

mid60s called the IMD rule, institutions

01:00:17

of mental disease. And this was a time

01:00:19

when they didn't want large mental

01:00:21

asylums and whatever. The idea was you

01:00:23

have small facilities in the community.

01:00:25

So the rule is there is no Medicaid

01:00:27

reimbursement to the states for any

01:00:30

mental health care provided in a

01:00:32

facility with more than 16 beds. It's a

01:00:34

16 bed rule. Of course, that makes the

01:00:37

whole thing incredibly uneconomic and

01:00:40

inefficient. Imagine if hospitals could

01:00:42

only be 16 beds. How inefficient that

01:00:44

would be. The first Trump administration

01:00:46

created a waiver, the IMD waiver that

01:00:49

states could apply for so you could get,

01:00:51

you know, get around the rule.

01:00:52

California. A lot of other states have

01:00:54

have taken that up. California hasn't.

01:00:57

There's plenty of money in the system.

01:00:58

Like we've been saying, the budgets have

01:01:00

are there. They've just been diverted

01:01:02

into the wrong places. So, the third

01:01:03

part of the plan is to take the money

01:01:06

that's currently going into the homeless

01:01:07

industrial complex, these ridiculous

01:01:09

apartment units for people who should be

01:01:12

either getting mental health care or

01:01:14

recovery treatment. Take that money and

01:01:16

put it into modern largescale mental

01:01:18

health facilities. And then we can treat

01:01:20

people.

01:01:21

>> That's broad work. That's a great place

01:01:22

for you to put a big magnifying glass

01:01:24

because that's where there's massive

01:01:26

amounts of corruption. People cannot

01:01:28

believe how much we spend in this

01:01:30

>> or we spend in California on

01:01:33

>> homeless and if you pay for something

01:01:35

you will get more of it and they're

01:01:36

getting a lot more of it. Yeah.

01:01:38

>> Steve, as we wrap up, give us the

01:01:40

quarterback view of your path to

01:01:41

victory. Walk us through the sequence of

01:01:44

events, the key moments leading up to

01:01:46

the primary vote and then from primary

01:01:48

to election day. what has to happen for

01:01:50

you to get to Sacramento?

01:01:52

>> So, we have the top two system. Um, for

01:01:55

those who I mean, another crazy

01:01:58

California thing where you end up with

01:02:00

two candidates going through to the

01:02:02

general election regardless of party.

01:02:04

The idea of this was to have more

01:02:06

moderate politics. Ever ever since it

01:02:08

was introduced, the state's gone further

01:02:10

and further to the left. Um, and so

01:02:13

you've got various scenarios that are

01:02:15

possible. Right now, I'm leading in all

01:02:17

of the polls. Um, on the Republican

01:02:20

side, there's one other candidate. I I

01:02:22

think with the president with President

01:02:23

Trump's endorsement of my campaign, I

01:02:25

think we can expect um I'm pretty

01:02:27

confident that we can make it into the

01:02:30

top two. It's not certain. We we're

01:02:32

we've got to, you know, fight very hard

01:02:34

over the next month or so. The ballots

01:02:35

go out next week, early May. Um, but I

01:02:39

think that we're going to have a a top

01:02:41

two with myself and one other Democrat.

01:02:44

And right now it looks as if it's going

01:02:46

to be one of Tommy Styer, Katie Porter,

01:02:50

or Javier Basera. And all of those three

01:02:54

represent either no change from what we

01:02:56

have now or a move even further to the

01:02:59

left in the wrong direction. So I think

01:03:02

broadly the argument is going to be very

01:03:04

straightforward, which is are you happy

01:03:07

with the way things are going in

01:03:08

California? Do you want more of it? And

01:03:10

if you do, you vote Democrat or do you

01:03:12

think we need a change? So that's it's a

01:03:15

classic, you know, change versus more of

01:03:17

the same election. Getting into the the

01:03:20

numbers, it's I know a lot of people

01:03:22

look at California and say it's

01:03:23

impossible for a Republican to win. And

01:03:25

Jason was pointing out we've had

01:03:27

Republicans in the past, but that was,

01:03:29

you know, a long time ago. And you could

01:03:31

say special circumstances cuz Arnold

01:03:33

Schwarzenegger was elected in a recall

01:03:35

election and so on.

01:03:37

>> And he was a celebrity who was highly

01:03:39

and loved in Los Angeles, half the

01:03:41

state.

01:03:41

>> Exactly. All of those things are true.

01:03:43

But and so I've always said from the

01:03:45

beginning of this that it's not going to

01:03:46

be easy to win. It's going to be very

01:03:48

difficult because of the structural

01:03:50

factors in California. But it's not

01:03:51

impossible. And given the seriousness of

01:03:54

our predicament and how much I think the

01:03:57

whole country depends on a a successful

01:03:59

growing thriving leading California,

01:04:02

then we should go for it because getting

01:04:04

things back in a common sense direction

01:04:06

is just a really important thing. I

01:04:08

always say California means to America

01:04:10

what America means to the world. And so

01:04:13

this matters. If you look at the numbers

01:04:16

on the on the some people look at the

01:04:18

voter registration numbers and they say

01:04:20

Democrats outnumber Republicans 2 to1

01:04:23

and that is true, but when you look at

01:04:25

actual voting, the gap is a little bit

01:04:27

closer. Over the last 20 years where you

01:04:29

haven't had Republicans elected, the the

01:04:31

the pretty much the average Republican

01:04:34

vote has been just over 40%. So it's

01:04:37

been like a 6040 split. Obviously,

01:04:39

that's not close, but the gap is perhaps

01:04:41

not as wide as some people might think.

01:04:43

But then you look at a couple of factors

01:04:45

that I really think are different this

01:04:47

year. First of all, there's a

01:04:50

dissatisfaction

01:04:51

with the way things are going that

01:04:53

wasn't there before. If you look at that

01:04:54

basic number, is the state on the right

01:04:56

track, wrong track? In the even four

01:04:59

years ago in the last governor's race,

01:05:01

the wrong track number was kind of mid

01:05:03

to high 40s. Now it's mid to high 50s.

01:05:07

So there's a majority for change in

01:05:09

California, just put it that way, which

01:05:11

is a good environment to be going into

01:05:13

as a candidate representing change. The

01:05:16

second point is if you look at the

01:05:18

actual votes you're going to need to

01:05:20

win, this is a midterm election 2026. If

01:05:25

you try and get some kind of sense of

01:05:27

how many votes will be cast in the

01:05:30

midterm election this year, take the

01:05:32

average of the last two, 2018 2022, you

01:05:35

get a total of 11.7 million total votes

01:05:38

as an estimate. So to win, you're going

01:05:40

to need just over half of that. Call it

01:05:42

5.9 million. Now, when people say there

01:05:44

aren't enough Republicans in California

01:05:46

to win, in the in 2024 in the

01:05:48

presidential race, President Trump in

01:05:50

California, without even campaigning

01:05:52

here or spending money on ads or

01:05:54

anything, wasn't a targeted state, got

01:05:57

6.1 million votes. In other words,

01:06:00

there's more than enough people who just

01:06:02

voted Republican for President Trump.

01:06:04

Now, of course, you're not going to get

01:06:07

100% of a presidential year turnout in a

01:06:10

midterm election, but the reason I make

01:06:12

that point is that the votes are there

01:06:15

actually, even with just Republicans.

01:06:17

Now, I don't think we're going to get

01:06:19

there just with Republican votes, but

01:06:21

that's the starting point is a strong

01:06:23

campaign to turn out Republican votes.

01:06:26

And a big driver for that this year that

01:06:28

again is a unique feature this year is

01:06:30

the fact that in November we're going to

01:06:32

have voter ID on the ballot. that just

01:06:34

qualified for the ballot. Um, and

01:06:37

Republicans particularly are

01:06:38

enthusiastic about voter ID. I'm going

01:06:40

to help us get a big turnout. And then

01:06:43

in terms of the coalition for victory, I

01:06:45

think that you've got a real opportunity

01:06:47

to put together the kind of multi-racial

01:06:50

workingclass coalition that President

01:06:53

Trump put together because it's as going

01:06:56

right back to where we started. It's

01:06:57

workingclass people who are really

01:06:59

really struggling and being hammered the

01:07:02

most by these policies. They get to vote

01:07:04

directly for no taxes. No state income

01:07:06

taxes.

01:07:07

>> Exactly. Because that's my tax plan. I I

01:07:08

just put this out there just the other

01:07:10

day, which is no and and no tax on tips.

01:07:13

That's the other part. I mean, which has

01:07:14

been implemented at the federal level,

01:07:16

but California won't do it at the state

01:07:18

level. Just my whole plan is geared

01:07:20

toward $3 gas. I call it Californable.

01:07:23

$3 gas. Cut your electric bills in half.

01:07:26

Your first 100 grand taxfree. A home you

01:07:29

can afford to buy. really simple,

01:07:31

practical, common sense things that

01:07:33

particularly help the people who've been

01:07:36

hurt the most over the last few years.

01:07:39

And I think that's how we pull this off.

01:07:40

>> Steve, on behalf of all, I just want to

01:07:42

say thank you for being so incredibly

01:07:44

candid and open with us. We're wishing

01:07:47

you the best of luck.

01:07:48

>> Thank you for joining us.

01:07:50

And just from my seat, if if you want

01:07:54

>> moving back.

01:07:55

>> No, I mean if you want it just I left

01:07:57

for a reason and part of it was the

01:07:59

dysfunction of the state and if you want

01:08:02

things to continue I think you know

01:08:04

having an unbalanced government that's

01:08:06

all in one party is a way to do that.

01:08:08

You got to try to find some balance here

01:08:10

and I think why not give it a shot? If

01:08:12

you're in California, you have nothing

01:08:14

to lose. The state is in a massively

01:08:16

dysfunctional

01:08:18

situation. So, I wish you great luck,

01:08:20

Steve Hilton.

01:08:21

>> Thank you, guys. Great to be with you.

01:08:23

>> All right. Cheers. Now,

01:08:40

>> I'm going all in.

Words per Minute Over Time