All right, everybody. Welcome back to

the All-In Interview Show. We're very

lucky today to have a candidate for the

governor of California who is extremely

unique in a number of ways. First of

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

a Brit. [laughter] Welcome to the

program, Steve Hilton. You've decided to

increase the degree of difficulty

in two ways, but you're polling

fantastic. You've got five or six people

in the polls. So,

>> he's leading the field.

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

it's going to get narrowed a bit when

the Democrats shiv a couple more people

and get them out of the race and then

pick their eventual winner in their

cobble um whenever that happens when

Nancy Pelosi picks who's running. But,

uh Steve, [laughter] maybe you could

start by

Sorry guys, I got jokes. But, Steve,

maybe you could introduce yourself a bit

and tell us why you're running.

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

that great intro where you just tried to

kill my chances in just a couple of

words. Thanks a lot, Jason. Really

appreciate it.

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

Steve since 2012 2013 when he and his

wife Rachel Wetstone moved to Silicon

Valley. Rachel worked at Facebook

initially and then she worked with you

Jason at Uber and then has had a great

run and then Steve similarly. And you

said it in a funny way, but ultimately

this is an incredible land of immigrants

and Steve has a really compelling story.

So before we jump into the questions, I

know your background, Steve, but I do

think it's important go back to your

parents, your mom, how you grew up,

>> and just set the stage for how you made

it out from the way you started because

I think that's important and then how

you got to the United States and why.

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

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

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

be here. By the way, just want to say

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

don't have to wear the the suit and

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

one of the things about running for

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

it, but dressing up is not the favorite

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

you. I thought for this show, you know,

we got to get it right. I think that the

back the more I think about my

background, the more I think it is

really important um in in terms of how I

see things and what I want to get done.

Um my parents are Hungarian. They were

refugees from communism and I grew up in

in England in a town called Brighton on

the south coast and you know we just had

a regular workingass

um immigrant aspirational family story I

guess. You know it was my my parents

actually split up when I was young. My

stepfather's also a Hungarian. He had an

amazing story. He was um a refugee as

well, but literally ran across the

border. He grew up in a small village on

the west side of Hungary. And in 1956

when you had the Soviet invasion, he

tells this amazing story. They heard on

the radio, "The Russians are coming."

And he and his brother and some friends

from his school, he was 14 years old,

like one year younger than my youngest

son right now. Um and they just ran.

They literally ran for they said,

"Right, the we want our freedom." and

they ran to the border, barbed wire

fences, minefields got shot at by the

guards. All that half of them were

killed and he ended up in a refugee camp

in Austria and from then to England. So

all of that I guess just gives you that

sense of real appreciation for actual

for freedom for freedom and opportunity.

And [snorts] I grew up in England,

worked very hard, ended up at Oxford

University, but my first job was project

manager for a construction company. I

just wanted to earn money. I just wanted

to, you know, get out. I think that's

exactly the right phrase that you used

and um that's been the story. You know,

after Oxford, I went to work for a

little bit of the Conservative Party in

England. Then I worked all I worked for

an big ad agency, worked all around the

world, started my own business, couple

of um offshoots of that, including a

couple of restaurants. then went back

into politics when my friend David

Cameron, who I'd met many years before,

um had gone into politics, got elected

to parliament. I helped run his campaign

for the leadership of the British

Conservative Party, won that election

and then wor with him to get the

Conservatives elected when he became

prime minister in 2010. Uh joined him in

10 Downing Street. I was senior adviser

to the prime minister. Most of my job

was really focused on trying to

implement our uh reform program. And

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

moved here because Rachel, actually

before Facebook, she was at Google. Um,

and she had this big global job at

Google. She was running um comms and

public policy for Google worldwide. I

had my job in number 10. It was actually

when our second son was born. Um, it

just there was a lot, you know, the

travel for her and the time difference.

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

know, should I stop there or do you want

me to keep

>> Well, you're also notably you became

naturalized. You're a citizen of the

United States now. So you have dual

citizenship. less people are confused by

the accent. You're running for governor

and you're a citizen of

>> Let's talk about your political setup.

So, being a child of Hungarian

immigrants raising communism, you're

going to hear a certain version of what

the role of the state is versus what the

role of the family or the individual is.

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

your attitudes either get cemented or

change.

>> Give us the setup. What is the political

evolution of Steve Hilton? what did he

believe and then what does he believe

now and what has shaped these beliefs.

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

around the when I first really started

thinking about it all it was just as

Margaret Thatcher was coming to power

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

disaster and a decade that was just the

the economy was completely stagnant and

slurotic unions ran everything. Um there

was this period called the winter of

discontent in 1979 when you had massive

strikes um famously you know the dead

went unburied and trash was piled up in

the street just real collapse of

everything and that's what thatcher came

in to fix and I really did identify with

that as well as with the very clear

stand against communism and so really

she was funny enough when I was thinking

about the the video that I made to to

launch my campaign about a year ago now.

We ended up putting that in there and I

thought, well, actually that was the

thing that got me going. I was totally

inspired by her, but also the focus that

she had on business and enterprise and

hard work. And remember my stepfather, I

mean, they weren't at all political, by

the way. It wasn't like some household

where we talked about politics. It

really wasn't. But he had this thing

that stuck in my mind when he talked

about the like in in England you've got

the Conservative Party equivalent of the

Republicans and for the Democrats it's

the Labor Party and I remember he just

used to say Mrs. Thatcher's for the

workers and labor are for the layabouts

and I just this phrase stuck in my mind

about the importance of work and hustle

and I think about that all the time.

>> Where do you think California is if you

contrast? Well, this is the this is the

point I was just about to get to is we

really are there. There are so many

things I see in California today that

are exactly like the UK in the 70s.

You've got the massive dominance of the

unions in policym. You've got a slurotic

economy. You've got massively high

taxation. I mean it was higher then the

at one point I think the top rate when

you add in the wealth taxes in the UK

was literally 98%. Um but you had that

confiscatory taxation and top rate of

60% and so on. So very very similar and

actually funny enough um someone Mike

Moritz actually sent me a report that um

someone had done about the UK today and

and again there's just these eerie

parallels with just how how impossible

it is to do anything in the UK to build

anything. the overregulation. When I

read this report, it just is exactly

like California today. By the way, one

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

proud American now, but I'm not I

actually renounced my UK citizenship. I

did that because

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

to borrow the title of the show,

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

think it's really important everyone

knows that and I am.

>> And you have some to get into some maybe

some policy. Thanks for the background

there. You have some unique uh policy

positions. Taxes, I think, is the most

unique and dare I say pretty populist.

You want to have no state tax in

California for people with under

$100,000 in income and then a flat tax

for everybody over 100K of but 7.5%.

>> How is that possible? And is that

something you've studied? And where did

this come from? the tax plan that um

that I put out there, that was the first

day of my campaign. I think of it as

proworker and prog growth. And I think

we need both of those things because if

you look at what's going on in

California today, just big picture.

Obviously, you can look at the data

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

sure people appreciate just how bad

things are because hiding behind that

data point of having the fourth largest

economy in the world, which is true, and

obviously I'm proud of that. I want

California to be big and successful and

growing. But that fourth biggest economy

data point underneath that you've got

this with the state with the highest

unemployment rate in the country and the

highest poverty rate in the country tied

with Louisiana. There's a United Way

report just the other about about a year

ago. They do it every two years. sort of

an assessment of of of of living

conditions in California. And they found

that over a third of Californians cannot

afford to meet basic needs. And so the

starting point for my tax plan is what

can we do quickly to help people who are

really struggling. Um if you think about

it, the working poor who aren't

particularly um being taken care of by

the welfare system. They're working

incredibly hard, but they're they're

being squeezed by all these costs. We

have the highest gas prices in the

country as you know the highest electric

bills everywhere except for Hawaii. Um

housing costs the highest in the country

insurance all these costs are so high.

So what can you do to help working

people quickly and so the starting point

was and what's affordable the $100,000

mark. I remember when when we I I was

just playing around with numbers

actually I did it with um some

economists from the Hoover Institution

where I was a fellow the first couple of

years that we moved to I taught at

Stanford um including in the public

policy department also the D school at

Stanford but I was also a fellow at the

at Hoover and so we did the math on the

tax plan there just just about a year

ago and so the that first part first 100

grand taxfree actually in many counties

in California today the def the official

definition for low income is 100,000.

Um, which so that number may sound very

high to people in other parts of the

country. It's actually the definition in

in a lot of counties of low income. So

you've got people earning 70 grand, 80

grand, 90 grand in California. They are

paying 9.3% state income tax. That rate

is higher than the top rate in most

states in America. So to me that's

ridiculous when you've also got all

these other taxes that those exact

people are paying sales tax, property

tax, gas tax, all of those are the

highest in the country.

>> So cutting taxes this significantly

means you have to then also cut

spending.

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

it?

>> I just did the other part which is the

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

when you look at the the the the facts

about economic performance, the fact

that, you know, for example, Chief

Executive Magazine ranks us and has done

for the last 10 years or so the 50th out

of 50 for business climate. A big driver

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

into the the insane proposed

billionaires tax and you know, all these

things that are driving wealth creation

out of our state and business investment

out of our state. So it's not enough

just to take care of or give some relief

to people who are on the lower end of

the scale. You've got to actually have a

pro-investment, progrowth tax framework.

And so apart from anything else, the

complexity is ridiculous of our tax

system. These endless different rates is

ridiculously complicated. Um and that

itself is a cost. The bureaucracy and

hassle associated with that. That's why

I think a flat tax makes sense. Remember

this is in you know in the context of

federal taxes, all these other taxes.

It's not the only component, but the

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

got to reduce spending exactly as you

say. And basically the the the cost of

that in total is about an 18.5%

reduction in revenue, which takes us

back it takes us down about 60 billion,

something like that, which is not even

going back to what the budget was just

before the pandemic. They've actually d

if you look at the budget of the state

of California, it's nearly doubled in

the last 10 years. is in the last 5

years it's gone up something like 75%.

And so this is just bringing the budget

back to achieve that entire tax cut

would bring the budget back just to

where it was roughly before the

pandemic.

>> Let me just summarize. So if you make

between 0 and $100,000 a year as a

California resident under your plan, no

tax,

>> no state income tax.

>> No state income tax. If you make

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

7.5% flat tax.

>> Yes, that's the concept.

>> Okay. How many Californians

does that impact? So, what percentage of

the population now get that affordance

if you were to

>> million the tax numbers usually only

households and so it's about 7 million

households would benefit from from the

under 100,000.

Do you know how many that is as a

percentage?

>> Well, working house, we got 40 million

people. I think that's about um probably

just over a third, something like that.

>> Okay. So, a third of homes now

essentially go to zero tax.

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

these other taxes that

>> now the push back would be if we then

take it dollar for dollar from the

operating budget, programs will suffer.

>> And to to your point, your comment is

I'm putting words in your mouth, but you

filled them in. Well, not really because

we're just going to go back to 2019 2020

budgets and the difference was we spent

a dollar in 2020, we now spend $2 and

nothing has changed. So, yeah, go from

$2 back to $150 and everything should be

fine is your point.

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

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

happen to the budget is basically the

expansion that we saw in in the in the

pandemic and afterwards is gone baked

into the baseline, which is totally

unsustainable. And so we got to get back

to even even without tax cuts, I would

argue you've got to get back to a more

reasonable growth in spending because we

go bankrupt. Um, as we're seeing with

these deficits that that we're getting

even when in times when we're not in

recession and taking money out of the

reserves, out of the rainy day fund to

plug the gaps, which is what they're

doing, totally irresponsible fiscally.

But actually, it's more than that. Even

if you just if if you don't change

anything in the composition of the

spending and just get back to where we

were, that gives you scope for a major

reduction in tax. But the other part of

it is what we're discovering in terms of

where the money is actually going. And

so obviously the whole fraud story has

exploded as a national political and

economic story um ever since Nick

Shirley's first investigation in

Minnesota just around the time of

Thanksgiving last year. Well, we've been

making our own um contribution to that.

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

literally called it Cal Do California

Department of Government Efficiency. I

know that's a controversial brand, but

you know, then the idea of it efficient

government is something I think everyone

would support. So, I thought why not use

that because everyone knows what it is.

So we've been just looking at the

published data on spending to find

examples and to make an estimate of the

total amount of of fraud, waste and

abuse in the system. And we've now

published four separate fraud reports

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

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

we can get into, but one of the ways I

think I'm running this campaign

differently is that I'm actually putting

together a team uh before the election

of the of in terms of others who will

run with me for statewide office because

you've got some very important positions

alongside the governor that are going to

be crucial in putting us back on track.

In this instance, the state controller

is very important because the state

controller is an elected position has

the legal power to audit any

organization receiving state money and

to stop the flow of money if there's any

um suspicion of improper spending. So,

there's a guy running with me called

Herb Morgan and we've been doing this

work together and we've published four

reports now, three of them on individual

examples of fraud. We can get into that

in a second if you want to know some of

the examples are really shocking. And

then the fourth one was an estimate of

the total and we just went through

published data from the state auditor

from Medicaid error rates and so on to

make an estimate of the total amount of

fraud.

>> What did you find?

>> Give us a couple of examples.

>> Here's some specific examples. The

second fraud report um with it's a

classic $1 billion over the last 10

years 100 million every year since 2015.

This is from the climate change

mitigation fund which is part of the cap

and trade system. This is actually gas

taxes and search charges on electric

bills and so on. 100 million a year was

allocated to be spent on climate change

mitigation. In this case, it was solar

panels for lowincome apartment

buildings. So, we actually tracked that

money and um with an AI partner that can

get all the reports and of that 1

billion total in 10 years, the actual

amount spent on the purported benefit

here solar panel installation was 72

million. 928 million actually went to

nonprofits doing all all the usual

Democrat associated

frankly, voter registration,

um environmental justice campaigns, all

that kind of stuff. The actual thing was

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

The the first one was the cannabis tax,

Proposition 64, legalizing cannabis.

There's a tax associated with that

supposed to be spent on um substance

abuse prevention. We found $350 million

that was supposed to be spent on

substance abuse prevention. Again, going

to this network of nonprofits, over 500

of them and small individual grants.

When you look at what each of those

organizations does, it's all the usual

stuff, voter registration, activism. So

the the third one was project home key

that we we looked into which was the

homelessness thing that they set up

after the pandemic which was buying up

property for homeless people um and

sometimes can building new property for

homeless people or converting hotels 3.8

8 billion that was on that one that we

found. I mean there others have found

other amounts um most of which went into

the pockets of developers without any um

real

>> the California budget if I'm not

mistaken 350 odd billion

>> 350 billion 349 this year. Yeah.

>> What percentage of it in your best

estimation with you and your team do you

think is inefficient fraudulent wasted?

Well, our number over the last five

years total our estimate was 425

billion. So averaged over the years it's

about 80 billion a year. So that's so

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

unbelievable.

>> Yeah. And now just to bring some reality

to the situation, you would have to get

through the legislature, which is both

controlled by Democrats. You can't

unilaterally as the governor just say,

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

we had a governor Schwarzenegger who

tried this very thing. He had to move to

the center. You of course I believe in

California have a line item veto. So you

have some balance there.

>> But this is fantastic for people to

maybe get a reprieve from taxes. You're

going to get a major fight with

Democrats to cut any spending. What's

your plan there if you were to win?

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

right about that. Um, and I'm very

thoughtful about the realities of these

things and I always make clear that I

think certainly on the tax plan that

taxes definitely you can't do that

without the legislature. I think that

actually we'll get a we there's a

possibility of a consensus around some

of these items where we can actually

work together with the legislature to

make it happen. One indicator of that is

actually one of my Democrat opponents in

the governor's race, Katie Porter. Um,

actually, you know, we were doing a

debate the other week in Fresno and she

just said, we were talking about

affordability or whatever it was and she

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

stealing Steve Hilton's tax plan. I

agree with him. First 100 grand

tax-free, and I think we should take

good ideas where we find them." So, this

is an interesting example that I think

that part of it I think we may be able

to actually persuade the legislature to

do.

>> And then I noticed she yelled at you and

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

>> [laughter]

>> her video

>> except a stronger word than eight.

Exactly. Than hell. Um so the the

attitude that I've got on that whole

question of the legislature is that when

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

eyebrows are raised and saying what are

you talking about? It's impossible for

Republicans to win and we'll get into

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

basis that I will and I'm preparing to

actually start implementing the big

changes we need to make um in a

thoughtful manner on day one because

otherwise what's the point of doing

this? Steve, do you think that there's

legislative agreement or momentum to

give you the win? Even though to your

point, I think it's quite significant

that the Democrats would signal that

it's a legitimate policy proposal, but

do you think that if you win, people

would see the forest from the trees and

realize how important it would be to

take salaries under 100,000 to no state

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

the, you know, the Democrat arguments

now up front many many times. We've done

a lot of events together, some of the

televised debates, many more that aren't

televised.

We're literally all saying the same

thing in all the in terms of the

diagnosis of the problem.

>> It's incredibly expensive to live here.

People can't, you know, people are

really struggling. The business climate

is a disaster. We're massively

overregulated. We can't build anything.

everything takes too long, everything's

too complicated. You know, there's a

there's a real consensus about

diagnosing the problem among all the

candidates. And so I think that that

doesn't mean that we agree, of course,

on the solutions. I would argue that the

Democrats all, you know, in some version

of more of the same actually, despite

what they say about the problems, but I

think that um there are certain things

where we will be able to get agreement.

I also think that when you have a

situation where you have the first

Republican governor elected for 20

years, that really will change the

dynamic in Sacramento, I think it'll it

actually may,

>> you know, loosen things loosen things up

a little bit because I think that there

are people there in the legislature who

really understand that things have gone

too far. Some of them have said it to me

personally, Democrats there, but they

feel constrained by the current

political situation, the machine being

in control. They can't really move and

and I think that'll shake things up a

little bit. That's one point. Secondly,

you know, I really do have experience

working across party lines like this. I

think that I'll be able to bring some of

that into play. I mentioned earlier I

worked in in 10 Downing Street, senior

adviser to the prime minister. He was a

conservative prime minister, but it was

a coalition government. Um, and I

literally shared an office in 10 Downing

Street with my opposite number from

another party and we would, you know,

hash things out and argue and, you know,

we were part of the team that negotiated

a coalition agreement and then tried to

implement it. And I think that those

skills of actually putting something

together where you don't agree about

everything, but you can make some things

happen. I think it'll be useful in this

situation. And I think we can I mean,

look, everyone agrees. we call going

like this in California.

>> And it's not farical to think a

Republican can't win here. Pete Wilson

did two terms. Schwarzenegger did two

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

36 years. It is completely conceivable

that a Republican could win. And you and

Katie Porter have the same plan. I think

Chad Biano has the same plan, which is

under 100,000. All of you agree no

taxes. That you're all attacking

affordability. They don't believe in

cutting services though. They want to

increase taxes on businesses, if I'm

correct. And so, why is that plan not as

good as yours, I guess, is the question.

Which one do you think would be more

more appealing to the voters? Would the

voters I think they'll all agree. Paying

less taxes, fantastic. Makes you more

competitive with Florida and Texas. But

if they had their brothers, they're

probably going to want to see Google and

Apple pay more in taxes and not lose

their services.

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

that that's the consequence of of of

squeezing

um businesses and high earners more and

more. And you're seeing it right now.

You're seeing the business exodus. Um if

the billionaire tax proposal goes

through, I mean that absolutely puts,

you know, I think that's a just complete

disaster for for the tech ecosystem and

what we've built in Silicon Valley over

the years and all the job creation and

and wealth creation that comes with

that. um you're seeing I mean I just

it's not just everywhere you go in the

state there are so many conversations

you sit down with business people you

know we we are we are on the brink of

leaving I don't think people realize

quite quite how near the cliff edge we

are um and if and it's I give you

another example we are I was just in

Pomona the other day down in Southern

California fantastic company sheet metal

um it's an HVAC duct manufacturing it's

exactly the kind of thing you'd want

here they're union jobs actually it's a

great um you know manufacturing facility

they are making the these HVAC systems

the air conditioning incredibly

important as as you know for uh TSMC and

these semiconductor factories and all

these the high-end manufacturing that's

happening in other states in and these

these facilities now massive amounts of

investment in the AI economy and and

tech more broadly but none of it's

happening in California I mean we just

published our policy report on that

today how we can get some of that that

full stack of those jobs in California.

But that company l they said to me since

the the facilities are all now being

built in other pl in other states. We're

on the brink of moving our facility to

be closer because what's the point of

making this stuff in California. It's

not going to be used because nothing's

happening nothing's going to be

happening in California. So you have to

stop this squeeze on business. You

really do.

>> Let me ask about the broader cost of

living for a second. Probably the most

impactful cost to people's lived

experience is the cost of housing.

>> Yeah.

>> Double click into that for a second. For

the 40 million residents of California,

what is going on? Why are rents so high?

Why are homes so expensive? And what can

actually be done to make the cost of

living and rent cheaper? So the thing

this particular issue I think almost

captures better than anything else the

underlying structural reasons why

everything is so difficult in California

and so expensive because you got these

three structural forces that I think

underpin the problem and show why a

Democrat can't fix it. And the three

things are union power, litigation and

climate dogma. and they all come

together in the housing story. The first

part of the story is that we're just not

building enough homes for the number of

jobs that we're creating and the size of

our population. It's a classic supply

and demand situation. Now, within that,

there are certain, you know, wrinkles.

You could point out that because of rent

control, which has got completely out of

control, there are a lot of empty

properties in California that could be

used to house people, but they're not

because landlords don't want to don't

want to do it because the the rights

have gone have swung so far in favor of

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

major driver. The major driver is the

fact that we just haven't built enough

housing of different kinds. And if you

go through the reasons for that and why

it's so expensive, it brings into play

these three factors. First of all, it

just costs more to build anything in

California. The same exact floor plan,

house, apartment building, industrial

building, whatever it is, cost cost two

or three times more to build in other in

in California than in neighboring

states. The first reason is the building

codes, the actual requirements for

construction which is way more ownorous

driven by climate dogma that actually

doesn't really provide much specific.

What does that mean climate dogma?

>> Well, you have to install here we are

>> because like Nevada's hot and

droughtridden and Arizona has issues. So

what is it that we say that those states

don't say? So when you build apartments

or when you when you build parking you

have to put in EV charging

um and the scale of what's required for

the EV charging just makes it more

expensive. You have to you know like you

do a parking structure they have to

reinforce the floors. The bays have to

be wider just it adds you can have you

you have fewer bays per structure. Um

there's the specific cost associated

with that. um solar panels, we talked

about that earlier in terms of

low-inccome apartments that the that

taxes are paying for. Um developers have

to pay for that as well. Um insulation,

um energy efficiency, all these things

are good. And I think that's pretty much

the story of California, which is things

that start with good intentions actually

end up being taken to an extreme where

it just makes it too expensive to build

at a rate that people can afford to buy

the properties. And the other two are

really that SQA where anybody can sue on

behalf

>> exactly the private right of action

under SQA. So that and and but let's

unpack that because that brings together

the three things climate um litigation

and unions because see the California

environmental quality act itself is is a

nightmare in terms of this the amount of

regulation you have to comply with the

private right of action means anyone can

sue 70% of SQA lawsuits are used to

block housing most of those lawsuits are

filed by unions they're used as leverage

to negotiate pro what they call project

labor agreement ments where you have an

agreement for the site and usually they

have one or one of both one or two of

these components both of which sound

great skilled and trained workforce

which means union only so it's a closed

shop and prevailing wage again sounds

very good but it's two or three times

market rate wages so both of those

things inflate the cost often I've

spoken to many developers there aren't

enough union workers in in the area to

actually do the job so They have to

sometimes fly them in from other states

to do the job and the cost of travel and

accommodation. It's just

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

to SQA in Texas uh where I now reside uh

after 20 years in California. The other

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

in fees to the government. Exactly.

Yeah. To to build a door in California.

It's under a thousand in Texas. And in

California has three times the new units

per capita than California. So every

year we produce three times as many new

homes per capita.

>> Just a simple question though guys, put

this into chat GPT or whatever.

>> California's mandate with SQA is to

protect the air, protect the water,

protect the land by some measures.

Texas doesn't have it. Is it the case

that Texas's air is worse, the water is

worse, and the land is worse?

>> No, definitely not.

>> Yeah.

>> So is is it roughly the same? meaning

the particulate count, the pollen count,

is the air quality the same because if

it is then what is SQA doing other than

just slowing down and retarding the

progress of housing? Why hasn't that

study? Because I think again all of this

guys comes back to when the data is

presented in a way that's factual,

there's very little room for people on

both sides to argue it because they're

all relatively smart. It's when it's

presented either in a partisan way or by

somebody who reeks of partisanship that

I think people attack the messenger

versus the message. So I'm just trying

to understand why hasn't the California

government confronted this? It has the

highest rents in America. It has the

highest poverty rate in America and it

also has the highest regulation that has

the lowest and the slowest unit housing

growth. Steve, I guess what I'm asking

you is how does that not get to the

legislators more?

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

afraid the answer is the corruption

within the system and the interest

groups that have taken over the system.

I'll tell you a story which is my first

I I know a lot about housing policy

because the first area of policy I

studied when I decided that I wanted to

get into the whole world of policy and

politics in California. I actually tried

to get a ballot initiative qualified for

the ballot that would have two elements

to it. One is what Jason just mentioned

capping impact fees which are now up to

about 20% of the cost of housing. Um I

wanted to do a statewide cap of 3% um of

construction cost and the second

component was eliminating the private

right of action under secret. I didn't

succeed in getting it on the ballot.

Didn't raise enough money in time. So

then I tried to pursue it through the

legislature said well let's see if we

can make some something happen in the

legislature. So I went to Sacramento I

took meetings with legislators started

to engage with Sacramento. There was one

meeting I had with the legislator who

was described to him is good on housing.

This is a person you need to talk to and

we had a great meeting. They said this

would be transformational.

I said great let's work on it together

bipartisan. You're Democrat. I'm a

Republican. That'd be great. People like

that. Oh, I couldn't support you

publicly. Why not? Well, the unions

would hate it. Why? Because if you take

away the private right of action, you

take away the union's leverage. And I

said, "Yeah, but you just told me it

would be transformational." We were

sitting in an office. You could see the

state capital down below, high up. They

just waved their arm around like this

and said, "Yeah, the unions run this

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

you look at for example Newsome touted

these two bills last year AB130 AB131

that were going to solve the housing

crisis. He said this is the moment where

we are embracing abundance and all the

rest of it big squa exemptions for

certain types of housing. But if you

look at the fine print tucked away in

it, you only get the exemptions if you

have these project labor agreements and

union union closed shop and prevailing

wage. So you're just writing back in

exactly the things that Sequ is causing

the cost increases from. So because the

UN and what let's follow all the way

through. If you look at Gavin Newsome's

political donations over the 16 years

he's been running statewide just as a

proxy for Democrat politicians by

category. The number one category

government unions, number two trial

lawyers, number three non-government

unions. So these are the that's why

nothing changes because the the

interests that benefit from this system

are funding the politicians that make

the decisions.

>> Yeah. And Chamat to your other question

of like is the environment better since

1970 when this regulation came into

pass.

>> California still has the worst air

quality in the country largely because

of the addiction to cars and traffic.

And then Texas as a comparison just has

industrial waste problems because we

have a lot of chemicals here or chemical

processing done here.

>> So we have a car loving culture in

California to your point Jason. It's

part of our cultural fabric driving down

Highway 1. It's just a very iconic thing

that's embedded in this state. Steve, I

have two questions. What has all of the

incremental regulations

done with respect to climate quality,

whether it's EV mandates or the ice

engine requirements? And then

separately, just as a more general way

to explain it,

>> why is gas in California 7 8 gallon and

why is it $3 everywhere else? Why is

ours more than 2x that it costs

everywhere else, including other states

that are also quite expensive to live

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

we have the highest gas in the country,

including Hawaii in the middle of the

Pacific Ocean, even though we have

abundant oil reserves here. So, we have

way higher gas prices than states that

don't have oil reserves. We actually

have very significant oil reserves in

California. Um the the fundamental

reason that gas prices are so high is

because again in the name of climate,

but without actually in this case, it's

counterproductive to climate. um instead

of using the production that we have

here in California, I've been to the oil

fields in Kern County mainly near

Bakersfield. Um we are now importing

nearly 80% of the oil that we use over

the period of the since really this all

started in 2006 with the passage of the

global warming solutions act. That was

the sort of foundational climate

legislation in California. Over that

period, our use of fossil fuels has

declined by not that much. And the

proportion of our energy that's coming

from fossil fuels is is about 80% still.

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

So it's barely any different. But the

difference is we used to produce most of

what we use in state. Now we are

importing nearly 80%. And that has

driven up course you have to ship it

from halfway around the world. Our

number one provider is Iraq right now.

That's the number one source of oil.

>> Sorry, sorry.

The state of California

itself, we

are the wholly dependent on Iraqi oil to

sustain our economy.

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

provider. Yes. So if you look at the

sources of oil, number one, Iraq, number

two, I think it's Ecuador and Brazil.

But the the the broader point on that is

because the we used to have a let's just

go back a few steps. We had a really

strong energy industry and

infrastructure in California where we

produced most of the oil and gas that we

use and we had refineries about 40 of

them um around the state mostly in the

Bay Area down near LA that refined and

turned it into products that we use

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

seven refineries. One of the main

reasons for that is that we're not

producing what we what we what we could

be refining. we're shipping it in

instead because there are no pipelines

of of there are no oil pipelines into

California. Whatever we don't if we

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

in by tanker. Um because of this and

because of the the the fact that the

refineries were built to to refine

California crude, which is known as

heavy crude. Um there different types

around the world. You got to have a good

match. Iraq provides Iraqi oil is a good

match. The other place whose oil is a

good match for our refineries is South

America. And so as a result of Democrat

climate policy, we are now expanding oil

drilling in the Amazon rainforest in

order to provide the right kind of oil

for California's refineries. I mean,

it's just so utterly insane and

incoherent. And of course in the process

we're spewing out carbon emissions

because the tankers run on what's called

bunker fuel which is the most polluting

form of transportation there is. And

just to make the whole insane scheme

work carb the California Air Resources

Board which is obsessed with having all

other businesses account for their

carbon emissions right down the supply

chain. Miraculously the carbon emissions

for the oil imports are only counted

from when they're 12 miles off the coast

of [laughter] California. It's just so

crazy.

>> Yeah. Change the finish line. Yeah.

>> The taxes add like a dollar a gallon and

then there's this carb standard.

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

like 61 I thought or 65. I can't

remember exactly. It's just going up

again. Yeah. Yeah.

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

$2 premium as it were for California is

regulatory, not taxes.

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

pulled out of the ground in California,

we got the easy stuff out. what's left

is generally dirtier or thicker

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

lots of conversation with the industry

on this and the the the problem is that

you've got fields that could be

producing but and actually it's a good

example of what you can do as governor

without the legislature because the way

that they've been shutting down

production is not legislatively is

through an agency of the state

government called Calgen the California

Department of Geologic and Energy

Management and it's simply a question of

refusing to issue permits for the

various stages of production including

including maintaining existing wells or

expanding. There's a process called

sidetracking where you can take a well

that's doing five barrels a day and

increase it to 100 whatever um and then

drilling new wells in existing fields

and they're denying permits for all of

that. Actually, you can pretty much turn

that around overnight by appointing

people who are pro- energy who will

issue permits because I think there's a

simple common sense rule here, which is

as long as we're using oil and gas in

California, let's use our oil and gas

rather than importing it. But the my

conversations with the industry is that

I said, "Look, what could what could we

do if we had a kind of green light from

a governor that and and a regulatory

framework that just says, "Let's do what

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

estimate that I've got from them is that

we can double production every two years

in California. If we're already one of

the big gas burning states with the

worst air or previously my state, you

know, then you're gonna get into the

circular conversation with the public of

do we want the air quality to decrease?

And most people would say the EV credits

were actually a good thing because we

had 20 years of smog going down. Even

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

lot better. So that smog is not to do

with carbon, but that there's a real mis

mis misunderstand. So the completely

agree on air quality and and one of the

major advances that has been made is on

picking the LA basin is on smog.

Obviously I wasn't here then but people

say you know it's really bad and now

it's not. You have clean skies and you

can see Mount Baldi or whatever. You

know it's like a really different world

but that's nothing to do with carbon

emissions. Um and so and that that's to

do with actually the the main driver of

this of the air quality improvements in

California actually car technology. Um

and if you look at EVs I mean EV

penetration even with all the subsidies

and so on. It's incredibly low in

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

point it's about four or 5% something

like that tiny. So actually the

improvements in air quality, dramatic

improvements that you saw in LA were

nothing to do with EVs.

>> Steve, I want to switch topics to

education. This is a thing that

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

all the byproduct of a pretty fantastic

education system, affordable education,

frankly, at every level. We had options

to pay for it.

>> We all had access to things like AP to

really distinguish ourselves.

>> Even Jason.

>> Yeah. Um, [laughter]

>> that's true.

>> What's happening in the California

education system? Why are we stripping

away things like AP? And how do we tie

compensation to outcomes? Because I

think,

>> yeah,

>> a lot of us would want to pay teachers

triple, but we'd want to tie it to

something that says, "Wow, the test

scores are going up. Our kids can read.

Our kids can write. Our kids can compete

on the global stage." And it just feels

like we are moving backwards.

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

numbers are horrific. I mean, you've got

we first of all, we we spend nearly the

most of any state per student right now

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

it's more than just over 27,000 per

student per year in California. If you

take the average out the money and we

get some of the worst results in the

country le I think the number for you

know 40 it's 47% that meet basic

standards in English and reading so less

than half meet basic standards for math

it's 35%.

So twothirds do not meet the standards.

It's just an insane level of failure

considering we spend nearly the most.

And I think again you've got to look at

this in a practical way. There's a

long-term structural reform that I think

we need because the the driver of this

is really the grip on the government

school monopoly of the teacher unions

who increasingly have been driven by

ideological factors. You saw that for

example in the pandemic when you saw the

you know the longest and most

destructive school closures in the

country and I was always struck by LA

the teacher union in LA when they put

out their demands for reopening schools

it was just a list of polit was a wealth

tax Medicare for all something about

Palestine you know it's just they've

completely become an organized political

interest group that's about their

members and broader political goals

rather than anything to do with the

interests of students and kids in

school. So I think that the fact that

you got this monopoly is of of the

public tool system controlled by the

unions. They of course in turn control

the politicians as I mentioned earlier

the number one donor to democrat

politicians of these government unions

including the teacher unions. And so you

got to break that grip. So I think that

long-term the answer is to move in the

direction of school choice which I've

always been a strong advocate of. You're

seeing that school choice revolution

across the country now. many states

moving very rapidly in the direction

with really good results. It's not a

panacea. Um but I think that that is the

long-term structural change you need,

but that takes a long time and it's

going to be very very hard to get that

moving in California given the fact that

the teacher unions basically control the

legislature through the Democrat

politicians they put there. So there are

some practical things that we've got to

do immediately to improve these basic

standards. And here we got to look at

what works elsewhere. And you see a lot

of lot of attention now on Mississippi.

Rightly so, because for onethird of

their spend per student than California,

their results are spectacularly better.

And it's really happened in the last 10

years. And there's some simple practical

things that they do. Number one is how

you teach kids to read. There's a

technique of to of reading instruction.

I mean, this was a debate I remember

having back in the day in England in the

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

which is there's a technique called

phonics. It's a way to teach kids to

read, and it's totally clearly

established as the most effective. It's

barely used in California schools at

all. It's like in a very small

proportion of schools of public schools.

So, that's something that the governor

can drive forward through the state

board of education where you appoint all

the members. Secondly, in Mississippi,

they introduce something very common

sense, which is, as everyone in

education says, up to about third grade,

you're learning to read. And then from

fourth grade, you're reading to learn.

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

And so there's widespread consensus that

reading by third grade, by the end of

third grade, is incredibly important

benchmark. In Mississippi, if you don't

read by, you not don't pass the basic

reading test by end of third grade. They

give you a bit of help over the summer

and if you still don't make it, you

repeat the year. They don't let you go

forward. That single change has

transformed their results. And then your

point about accountability also happens

there where they give and and this is

something else that we could implement

here which is taking the publicly

available test scores and data but

really assigning it in a very visible

way to individual teachers and

individual schools. And that's one of

the proposals I've got in my campaign,

which is a grade for every school and a

grade for every teacher so we can reward

the good ones and remove the bad ones.

>> Two more topics that Californians are

very passionate about and have a lot of

opinions about. I think one is pretty

challenging and the other one seems

pretty easy and other states have

handled it where it's easier. Crime and

then homelessness. uh crime obviously as

a society we've seen violent crime go

down over the long arc of our lifetimes

in the last 40 or 50 years but

California still 30% more violent than

the rest of the country so we definitely

have a violence problem specific to

California and if you live in the major

cities San Francisco Los Angeles they

let people out for petty crimes under

$850 there seems to and we see going to

a drugstore everything's locked up so

there is a feeling and a lot of debates

over the numbers that there's a lot more

property crime. Some people claim people

don't report it anymore. That was my

lived experience in California.

What is your take on crime and then

we'll go to homelessness?

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

thing in California where they seem to

be brilliant at passing laws, right?

Every year more and more laws, more and

more bloat and bureaucracy, more on

nanny state nonsense. Last session, for

example, they passed, this is one

session, 1,118

bills. One that that's the number of

bills that the legislature passed. I we

did an thing outside the state capital.

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

them all out. It's like double my

height. I mean, just ridiculous. The

point I'm making is really good at

passing laws, but not very good at

enforcing them. there's just something

missing in terms of the app of the

willingness to just enforce the law.

That's going to be one of the main

points I make in terms of homelessness.

But when you get to crime, there's just

this attitude. I mean, there's something

off about how the left has has has seen

this issue. And just when you think

it's, you know, the worst excesses of

defund the police and all that have

receded, you've now got them popping up.

What is it this new thing? microl

looting, right? Oh, microl looting.

Isn't the New York Times and Slack

podcast are going on about, oh, it's

fine cuz it's just social justice and we

we're allowed to kind of basically steal

things cuz it's okay. It's just

unbelievable subversion of basic

>> um values and morality. Just

unbelievable on crime. It's very

decentralized in terms I mean there's

some state things that need to be d

remember the law that you're talking

about that legalized theft up to $950 a

day that has that part has been

overturned that was Prop 47 which was a

few years ago has been overturned by

Prop 36 which was overwhelmingly passed

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

not being properly implemented. Gavin

Newsome was against it and so were most

Democrats in the state. the people

passed it anyway, but now there's real

resistance to enforcing it, which is

ridiculous in terms of the overall

picture though, it is very localized.

You know, you've got local police forces

and sheriff's department and so on. So,

my focus has been well, what can you do

as governor? And the one of the biggest

drivers I think that's that's caused the

problem is is really started with Jerry

Brown before Gavin Newsome. Gavin

Newsome's accelerated it, which is the

prison closure program. They've they've

they've they've basically al also this

is classic California. They've reduced

the number of prison places by half.

Guess what happened to the budget? It

doubled.

>> Not [laughter] quite not quite that bad,

but like it's a classic. They double

they cut the numbers in half. Double the

budget. But the point, the serious point

is that you've had tens of thousands of

really dangerous violent criminals

either released directly into the

community or more or or more, you know,

um destructively for this for the system

transferred to county jails which are

now completely overcrowded. Um and

therefore at the local level, the whole

system is aware that you've had all

these transfers from state prison. the

system is full and so there's no

capacity and that really undermines the

kind of accountability that judges and

prosecutors would want to seek at the

local level because they know the jails

are full and so that in turns undermines

law enforcement because they say what's

the point I mean I hear this term all

the time from law enforcement around the

state I'm traveling the state the whole

time they talk about catch and release

as the basic operating rule for local

for the kinds of crimes you're talking

about you catch them they just release

nothing happens

And so that that undermines law

enforcement. They think, why bother if

we're just going to bring these people

in and nothing's going to happen to

them. And that in turn undermines public

confidence because everyone sees that

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

bother reporting it. So a simple thing

we can do that is completely within the

governor's control is stop and reverse

the prison closure program, which is

what I've committed to doing is to

increase prison capacity in California.

That means that you can relieve the

pressure on county jails, but also that

means that you can use the prisons for

what they should be doing. Not just

bringing accountability. You commit a

crime, you should be punished, but also

rehabilitation. We've got one with not

the worst, but one of the worst

recidivism rates in the whole country.

And if you had if you if we did one of

the best one of the best states is

Virginia, they're they're less than half

what we have. that would massively

reduce crime if you could just get, you

know, there's that, you got to take

seriously the rehabilitation part. I

mean, a huge proportion of prisoners in

these jails, they can't read properly.

Many have dyslexia. You know, you you've

got to have a really serious view on it.

And they just don't. They have an

ideological view. I think that is the

problem with so many of these issues.

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

decarceration. Can't have people in

prison. Prison is racist. Criminal

justice reform. All this ideology

instead of just practical things to keep

people safe.

>> Newsome shut down four or five of the

California state prisons. You're

absolutely correct. Uh, according to my

notes, and then it peaked in 2006.

California had 165,000 people in state

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

definitely a trend. Uh, and I think a

lot of folks who are living here or who

were living in California where I used

to live are not in favor of that. Uh,

looking at homelessness, is it

intractable in California?

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

are interested in digging in further to

some of the things I've been saying.

There's a couple of places you can go

for real depth on this, which is the

last three years, um, I've been

traveling the state and kind of learning

about this stuff and developing

solutions. And I had a policy

organization for that called Golden Toto

together. goldento together.com and you

can find policy reports on many of these

areas we've discussed and more including

one on homelessness called ending

homelessness. And actually my real

partner in developing that was someone

called Michelle Ste who's done a lot of

work on this. She actually run um

homeless shelters and and really at the

at the kind of street level of this for

many many years. also someone called Tom

Wolf who's given me a lot of great

advice. He's in San Francisco, a

recovering addict um a recovered addict

who's who's just fantastic.

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

common sense approach. Yeah.

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

simply I'll try and sort of capture it

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

one, it actually already is illegal to

live on and the homeless encampments

already are illegal. They've always been

illegal. Um it's another example of

where we just got to enforce the law. Um

for years local politicians in

California hid behind a court ruling

that is called the Boise ruling from

many years ago which stated it's the

ninth circuit ruling applies to the

western states which is that the the

statement there was you can you can't

remove people from the street unless you

have sufficient shelter available

locally. And they used this to say we

can't remove people because we don't

have enough shelter. It didn't define

what shelter was. They defined it as

these permanent supportive housing units

costing $900,000

a door, but it could have been, you

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

no reason. But even that excuse has been

lifted because there's a Supreme Court

case called Grants Pass versus Oregon in

2024 overturned that. So there's no

excuse. you you these people running

local governments what they they they

have the power and the legal authority

to remove every single homeless

encounter and they should and my

argument is I'll give that once I'm

elected I'll give them a certain amount

of time and if they haven't done it then

I'll use state law enforcement resources

to take people off the streets and then

you get to point two and three of the

plan which is what do you you got to

give people help in a compassionate way

help them get their lives back on track

so over 80% of people who are homeless

have drug or alcohol problems s

addiction or me severe mental health

problems. So you got to deal with that.

So the second part is drug and alcohol

recovery. Got to you got to get people

into recovery. That used to be the rule

in California, rehab or jail. And we got

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

option. You got plenty of service

providers who can do it. You got to

require it. I mean last year even the de

going back to our point about the

legislature even the democrat

legislature passed a bill called the

sober housing act which would have taken

a certain proportion of homeless

spending and allocated it to uh shelter

where you had a requirement was

sobbriety vetoed that bill. It's

unbelievable. So we got to have it 100%

um sober requirement for any kind of

state services on homelessness. The

third part is mental health where

honestly going back to the jails

conversation, you talk to sheriffs

around the state, they the number

varies, but they say 50 I've heard as

high as 70% of the people in their jails

have severe mental health problems.

That's where we are actually treating

people with mental health problems.

Either they're on the street or they're

in jail is totally barbaric. And one of

the reasons is that we when you're

talking about the homeless population,

obviously low-income people. So it's

very much entwined when you talk about

mental health care with Medicaid, with

the federal system. And there's a rule

in Medicaid that was set up right at the

beginning when it was founded in the

mid60s called the IMD rule, institutions

of mental disease. And this was a time

when they didn't want large mental

asylums and whatever. The idea was you

have small facilities in the community.

So the rule is there is no Medicaid

reimbursement to the states for any

mental health care provided in a

facility with more than 16 beds. It's a

16 bed rule. Of course, that makes the

whole thing incredibly uneconomic and

inefficient. Imagine if hospitals could

only be 16 beds. How inefficient that

would be. The first Trump administration

created a waiver, the IMD waiver that

states could apply for so you could get,

you know, get around the rule.

California. A lot of other states have

have taken that up. California hasn't.

There's plenty of money in the system.

Like we've been saying, the budgets have

are there. They've just been diverted

into the wrong places. So, the third

part of the plan is to take the money

that's currently going into the homeless

industrial complex, these ridiculous

apartment units for people who should be

either getting mental health care or

recovery treatment. Take that money and

put it into modern largescale mental

health facilities. And then we can treat

people.

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

for you to put a big magnifying glass

because that's where there's massive

amounts of corruption. People cannot

believe how much we spend in this

>> or we spend in California on

>> homeless and if you pay for something

you will get more of it and they're

getting a lot more of it. Yeah.

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

quarterback view of your path to

victory. Walk us through the sequence of

events, the key moments leading up to

the primary vote and then from primary

to election day. what has to happen for

you to get to Sacramento?

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

those who I mean, another crazy

California thing where you end up with

two candidates going through to the

general election regardless of party.

The idea of this was to have more

moderate politics. Ever ever since it

was introduced, the state's gone further

and further to the left. Um, and so

you've got various scenarios that are

possible. Right now, I'm leading in all

of the polls. Um, on the Republican

side, there's one other candidate. I I

think with the president with President

Trump's endorsement of my campaign, I

think we can expect um I'm pretty

confident that we can make it into the

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

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

over the next month or so. The ballots

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

think that we're going to have a a top

two with myself and one other Democrat.

And right now it looks as if it's going

to be one of Tommy Styer, Katie Porter,

or Javier Basera. And all of those three

represent either no change from what we

have now or a move even further to the

left in the wrong direction. So I think

broadly the argument is going to be very

straightforward, which is are you happy

with the way things are going in

California? Do you want more of it? And

if you do, you vote Democrat or do you

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

classic, you know, change versus more of

the same election. Getting into the the

numbers, it's I know a lot of people

look at California and say it's

impossible for a Republican to win. And

Jason was pointing out we've had

Republicans in the past, but that was,

you know, a long time ago. And you could

say special circumstances cuz Arnold

Schwarzenegger was elected in a recall

election and so on.

>> And he was a celebrity who was highly

and loved in Los Angeles, half the

state.

>> Exactly. All of those things are true.

But and so I've always said from the

beginning of this that it's not going to

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

difficult because of the structural

factors in California. But it's not

impossible. And given the seriousness of

our predicament and how much I think the

whole country depends on a a successful

growing thriving leading California,

then we should go for it because getting

things back in a common sense direction

is just a really important thing. I

always say California means to America

what America means to the world. And so

this matters. If you look at the numbers

on the on the some people look at the

voter registration numbers and they say

Democrats outnumber Republicans 2 to1

and that is true, but when you look at

actual voting, the gap is a little bit

closer. Over the last 20 years where you

haven't had Republicans elected, the the

the pretty much the average Republican

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

been like a 6040 split. Obviously,

that's not close, but the gap is perhaps

not as wide as some people might think.

But then you look at a couple of factors

that I really think are different this

year. First of all, there's a

dissatisfaction

with the way things are going that

wasn't there before. If you look at that

basic number, is the state on the right

track, wrong track? In the even four

years ago in the last governor's race,

the wrong track number was kind of mid

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

So there's a majority for change in

California, just put it that way, which

is a good environment to be going into

as a candidate representing change. The

second point is if you look at the

actual votes you're going to need to

win, this is a midterm election 2026. If

you try and get some kind of sense of

how many votes will be cast in the

midterm election this year, take the

average of the last two, 2018 2022, you

get a total of 11.7 million total votes

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

to need just over half of that. Call it

5.9 million. Now, when people say there

aren't enough Republicans in California

to win, in the in 2024 in the

presidential race, President Trump in

California, without even campaigning

here or spending money on ads or

anything, wasn't a targeted state, got

6.1 million votes. In other words,

there's more than enough people who just

voted Republican for President Trump.

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

100% of a presidential year turnout in a

midterm election, but the reason I make

that point is that the votes are there

actually, even with just Republicans.

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

there just with Republican votes, but

that's the starting point is a strong

campaign to turn out Republican votes.

And a big driver for that this year that

again is a unique feature this year is

the fact that in November we're going to

have voter ID on the ballot. that just

qualified for the ballot. Um, and

Republicans particularly are

enthusiastic about voter ID. I'm going

to help us get a big turnout. And then

in terms of the coalition for victory, I

think that you've got a real opportunity

to put together the kind of multi-racial

workingclass coalition that President

Trump put together because it's as going

right back to where we started. It's

workingclass people who are really

really struggling and being hammered the

most by these policies. They get to vote

directly for no taxes. No state income

taxes.

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

just put this out there just the other

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

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

been implemented at the federal level,

but California won't do it at the state

level. Just my whole plan is geared

toward $3 gas. I call it Californable.

$3 gas. Cut your electric bills in half.

Your first 100 grand taxfree. A home you

can afford to buy. really simple,

practical, common sense things that

particularly help the people who've been

hurt the most over the last few years.

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

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

say thank you for being so incredibly

candid and open with us. We're wishing

you the best of luck.

>> Thank you for joining us.

And just from my seat, if if you want

>> moving back. [laughter]

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

for a reason and part of it was the

dysfunction of the state and if you want

things to continue I think you know

having an unbalanced government that's

all in one party is a way to do that.

You got to try to find some balance here

and I think why not give it a shot? If

you're in California, you have nothing

to lose. The state is in a massively

dysfunctional

situation. So, I wish you great luck,

Steve Hilton.

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

>> All right. Cheers. Now,

[music]

[music]

>> I'm going all in.