Matt Nahm, welcome to Allin.

>> Thanks, David. I have no idea who you

are. Who are you? I mean, you're a guy

who kind of popped up running for

governor of California last minute.

How'd that come about? And who is Matt

Mayan?

>> Well, David, like everybody, I'm

frustrated with a state that keeps

spending more and seemingly getting

less, which is why I jumped in. But to

back up, I grew up in a little farming

town here in California, a town called

Watsonville, where your strawberries

come from. Home

>> I do work in Watsonville.

>> Frisco berries. You know it well.

>> I got green houses. Yeah.

>> Yeah. Exactly. working-class family. Mom

was a teacher, dad was a letter carrier.

My lucky break in life was getting into

a great college prep high school on a

work study scholarship. I took buses

about two hours each way. Worked my way

through high school and college and uh

came back as a public school teacher

through the Teach for America program.

Always was very community oriented, was

interested in politics, wanted to know

how to make our city, our world a better

place. ended up in the tech sector and

spent about a decade building civic tech

tools to help people navigate their

democracy.

>> What did you build?

>> I was involved with an early Facebook

application called Causes and then went

on to start a platform called Brigade

that was sort of like LinkedIn for

voters. And the whole premise was to

build grassroots bottomup power by

connecting voters around issues they're

passionate about, outcomes they want to

see, and help them organize to hold

their elected officials accountable.

After about a decade in the civic tech

space, our company was acquired. I

decided to run for city council, and I

went out and knocked on 10,000 doors,

got yelled at for a lot of things that I

wasn't necessarily responsible for, but

I got a real feel for the common sense

of the residents of California who would

ask questions like, "If I'm paying

$20,000 a year in property taxes, why

haven't my local roads been paved in the

last 15 years?" And I thought that made

a lot of sense. So, I went to city hall

to try to find out

>> how dysfunctional is California and how

did it get this way.

>> Pretty bad. I'm really worried, which is

why I jumped in. I think the state is

heading toward an inflection point past

which there there may be no return. We

have increased spending in state

government by 75%. To put that in

perspective, that's $150 billion more

this year than six years ago. And as far

as I can tell, none of the outcomes have

gotten better. Never mind 75% better.

Many of them are flat or down over the

same time period. So there is a real

lack of accountability in government. We

don't have a money problem in

Sacramento. We have an incentives

problem. We have a structure that allows

us to keep shoveling more money into

things that aren't working. Just take

highspeed rail. If a startup took 20

years, spent $14 billion, and didn't

deliver a product, people would have

been fired a long time ago. And we're

just not seeing that level of

accountability in our state government.

>> Is this theft? Where does the money go?

$14 billion. Who has that $14 billion

today? It's contractors. It's lawyers.

Some of it has gone into actually

building the project. But belatedly,

what happens in California and the

reason we can't build, we can't do big

things anymore, is that we've got

endless process, years of environmental

review, the most latigious environment

imaginable. Anybody can sue under SQA.

You don't even have to be a resident of

California to sue under SQUA. And so,

you just get years of litigation,

bureaucracy,

when it comes to housing. Just to

slightly switch topics, the fees that

cities can assess, one-time fees can add

20% to the cost of a project. So, we've

just we've bureaucratized the state to

the point where it's total paralysis. We

can keep spending more and more and not

getting anything for it. It's like I'm

trying to understand as a citizen and a

taxpayer, I pay a 53% tax rate living in

California. I pay my federal tax and my

temporary California tax, which I've

been temporarily paying for 11 years,

and I'm paying 53 cents of every dollar

I earn to the state and to the federal

government. I'm like, where'd my money

go? It's such a mind-boggling number.

Pick the highspeed rail project alone.

$14 billion

>> spent.

>> Spent. We don't have a rail. We don't

have anything. Is it lawyers that made

$14 billion? You mentioned contractors.

like is this just like there's a whole

bunch of people that are all making 20

30 grand and it all adds up to 14

billion like just help me understand

where my money went. So on that project

specifically and I haven't done the line

item by line item analysis to be totally

clear but you have years of consultants

doing environmental reviews and and

doing all of these studies and reports

of of the impacts it might have. So tons

of consultants you have the cost of

litigation. You have an entire cottage

industry of people doing design and

studies and reports and managing

litigation and buying right ofway and

managing community engagement processes

and we just we take years to do to do

anything and so it just gets vacuumed up

into this sea of little groups of

things. So there isn't like one big

thief like the grandmaster thief of

California that's taking all the money

and then it's just like the dysfunction

is just like everyone's getting a little

piece of

>> my sense I mean let's be clear there is

fraud there has been fraud very well

documented in California and other areas

during the last 5 years or so roughly

during the pandemic unemployment claims

in California that were fraudulent

totaled over $30 billion that is well

documented there's emerging

research right Now that shows that there

are hundreds if not thousands of hospice

providers who may or may not exist. I

mean we're just getting this information

now. This is very real time

investigative journalism. So there's

fraud I think by an order of magnitude.

There's even something bigger here which

is which is waste and inefficiency is a

system where you just keep incrementally

growing headcount, growing the size of

programs, growing the grants that we

give out to nonprofits. And we're

funding and managing around process, not

outcomes. And I've tried to approach it

very differently in San Jose. I think

it's why without raising taxes, in fact,

our revenue has actually slowed a bit

the last couple of years just because

the economy is cyclical, real estate is

struggling. We're very dependent on

local property taxes. But without

raising taxes, we have dramatically

changed the outcomes we're getting. We

have led the state in reducing crime and

become the safest big city in the

country. We've reduced unsheltered

homelessness, meaning people living

outside in tents and vehicles, by about

a third in the last few years. We've

unblocked housing uh production. We're

seeing thousands of new homes under

construction. In all of those cases, we

had to change existing process that was

in the way, reduce fees, and cut funding

for programs that weren't delivering so

that we could fund other solutions that

were more efficient.

>> Well, let me also ask about legislation.

If you look at Washington DC, we have

our nation's Congress, the House and the

Senate, and there's a Republicans and

there's Democrats, and they fight. And

they fight so much they don't get

anything done, which by the way may be a

good thing because in California, the

legislature passes hundreds and hundreds

of bills a year, and they all um come

from one party, the Democrat party.

Gavin Newsome on average vetos 15 to 20%

of these bills every year which says

something but maybe you can just explain

a little bit your view on how are all

these laws getting passed in California

how are these how does the legislature

in Sacramento where you're vying for a

seat to have the right to veto and the

right to push back how are they making

decisions and what's motivating the

California state legislature

>> yeah and I I would just to be clear as

governor veto even more of these bills

because there's a a total lack of

accountability. And I think too many of

our legislators think that their measure

of success is how many bills they can

write, get to the governor, and

ultimately get signed. What you see is

you actually read what these bills do.

They generally just add more cost and

more process. And what the legislature

needs to be told by our next governor is

that we're not going to fund failure.

We're going to publicly set goals. We're

going to measure the performance of

every dollar we spend. We're going to

audit the heck out of existing programs.

Right now, 75% of the audit

recommendations from the state auditor

never get implemented. So, there's just

there isn't a feedback loop with the

public or or an accountability for the

outcome. There is a lot of performative

politics, a lot of discussion of how

much good we're trying to do, how we're

trying to be responsive to everyone. We

have a tendency, particularly in the

Democratic party, to want to be

empathetic and tell everyone that we're

working on everything. We try to be

everything to everyone all at once

rather than very strategically saying

some things matter more than others. The

high cost of housing, the high cost of

energy, the quality of our public

schools, the safety in our

neighborhoods. These are the things

people care about and think that they

should be getting when they pay taxes.

But despite increasing spending in the

state by 75%, none of those outcomes

have actually gotten better. Some have

gotten worse.

>> The irony is that sometimes it may be

the case, and I think it's very often

the case that less government solves the

problem better than more government.

Trying to do more to create housing may

make housing more expensive. Sounds

ironic. Trying to do more to make

education accessible makes education

more expensive. The more government gets

involved, the more prices seem to

skyrocket. How do you get over that with

all the interested groups that are

getting themselves elected in the

California state legislature by saying,

"I'm going to do more. I'm going to do

more. I'm going to do more." Because

that's how you get elected. How are you

possibly going to come in and say, "We

should do less, and that's how we're

going to fix some of this stuff."

>> Yeah. Well, certainly, if you're if

you're in a hole, don't keep digging.

And sadly, one of my opponents in this

race, Eric Swallwell, just in a debate,

he said it a couple times now in

debates. When asked what his top three,

we were all asked what are our top three

priorities for the state, said revenue,

revenue, revenue. And to me, that is

just that is a mindset that doesn't get

what has broken down in the state.

You're absolutely right. As Democrats,

we have to own the outcomes we're

getting in this state. And for too long,

our reflexive answer has been, we need

more revenue. if we just have more

money, we'll solve this problem. I I

just don't believe that. And and I say

that as the only current executive in

this race. I'm the mayor of the largest

city in Northern California, San Jose.

And because of a quirk of history, we

were built as a bedroom community for

the job centers just north of us. We

actually have significantly lower

revenue per capita than many other

cities. We're not a job center. And so

with Prop 13, our tax revenue goes up

more slowly and it is smaller. Our

revenue is about a third less than some

of our neighboring cities. And we're

delivering huge increases in sheltering

people, getting housing built, reducing

crime by thinking differently. But it

all starts with being willing to set a

goal publicly and allow the public to

hold you accountable for spending

dollars in a way that actually achieves

outcomes. And that sounds so simple. I

know most of your audience, I've been

listening for years, are in the private

sector and it almost seems so obvious

that why would you even need to say it?

But the truth is, as elected officials,

we almost never set public goals where

we can actually be held accountable.

Heaven forbid in your next election you

might get called out for not actually

reducing homelessness or reducing crime

or getting housing built. And instead,

to your point, we pass bill after bill

showing that we're doing something. And

half the time, with the the law of

unintended consequences, we make it

slower and more expensive to do the very

thing that we want.

>> Right. Well, let's talk about maybe some

of the competing interests that want to

get capital, that want to pull capital

through the government for their base,

and that would be labor unions. They're

a very powerful lobbying coordination

set of groups in California. They have

significant influence over who gets

elected in the legislature, who gets

elected in city mayor's races, and who

gets elected in the governor's seat.

Tell me your view on the role that labor

unions play in California politics today

and some of this dysfunction in

government and unaccountability in

spending because I know that this might

be a very controversial topic to talk

about because you don't want to piss off

the labor unions, but I'd love to hear

your your candid views on their role.

Yeah, let me start by saying I am not

afraid to take on any organized

interest. And it is not just labor

though. Let's talk about the role of

public sector unions. It's not just

labor that is highly organized. You have

trade associations. You have the doctors

and the dentists. You have the public

sector unions. You have the oil and gas

industry. You fi tech has actually been

late to the party. Tech is starting to

organize. So the the way that I look at

the landscape in Sacramento, and I think

it's largely true in Washington as well,

is you have wellresourced, highly

organized, professional advocacy,

lobbying, and political operations that

essentially defend the status quo. And

you are absolutely right that the single

biggest spender in Sacramento when it

comes to advocacy, lobbying, and

elections is organized labor and

particularly public sector unions. Now,

I don't think it's a monolith. I have a

great relationship with our public

sector unions. Our building trades want

to see the economy grow. So, u many

unions are very pragmatic and all of

them are doing what they're supposed to

be doing. It's spineless politicians who

cave to their aggressive demands who are

the the root cause of the problem here.

So, when the teachers union organizes

and says, "We don't want more

accountability. We don't want to be told

to use evidence-based curriculum. We

don't want more technology in the

classroom." whatever it is they may

advocate for uh presumably on behalf of

or at least what they perceive to be the

interests of their members. It's our

elected officials who need to step up

and say, "Well, for the good of the

community, we're going to push you on

that. We're not just going to give you a

pass. We're not just going to veto that

legislation or stay quiet when we know

that for what we're spending, we aren't

getting what we should be." We've gotten

to the point where Mississippi and

Louisiana are doing a better job of

helping low-income kids get on grade

level for reading than we are in the

very well-resourced, very progressive

state of California. That is a function

of a system that is more responsive to

the highly organized interests than the

people we're elected to serve.

>> Right? That's the fundamental

dysfunction. U some see it as

corruption, and I don't think that's too

strong of a word. I don't mean it in the

narrow sense of anyone breaking the law

or or um you know stealing money but but

the system has become again back to the

core point here that the incentives are

all wrong. The incentive for an elected

official is to cater to highly organized

interests who disproportionately spend

money in elections. Follow what's

happening up in the legislature. Draft

the bill language. Draft the friendly

amendments. get legislators to do their

bidding. And I just I'm running against

the system because it doesn't matter if

you're a Democrat, a Republican, an

independent. We need a high functioning

government that delivers

lower housing costs, lower energy costs,

better schools, safer neighborhoods, an

end to street homelessness. We have the

resources to do it. What we haven't had

is the political will and accountability

to do it. And I don't think that's a

partisan point. And frankly, if the

Democratic Party doesn't start to wake

up and be more responsive to the needs

of our constituents and deliver with the

resources we've got, we're going to see

the pendulum swing all the way the other

way and you're going to see a MAGA-like

movement happen here in California.

>> If I look at California, I can

understand we're not solving certain

problems, but what I'm trying to grock

is how did some of these problems become

the worst in the nation? So there are

statistics and you can debate per capita

statistics versus absolute number of

people but number one in poverty, number

one in unemployment, nearly half the

nation's homeless live in California.

Yeah.

>> How did California go from being bad and

not solving these problems to making

them worse?

>> Well, I think you my my grandmother used

to always say that the road to hell is

paved with good intentions. And I do

think generally speaking, people have

had good intentions but have been

unwilling to look at data and react when

the things that they're championing

aren't working. On homelessness, we've

well, first of all, we've broken the

housing market, which we should talk

about as its own issue. We've also been

incredibly lax when it comes to dealing

with cycles of addiction and mental

illness. We've sort of diluted ourselves

into thinking that leaving someone to

choose to live however they'd like, even

if that means suffering in misery on the

streets and ultimately dying of an

overdose is somehow more important than

intervening and saving their life. And

that's how we've ended up in this

horrific situation that frankly has been

under reportported over the last decade.

We've had 50,000 people die on our

streets in California, about half from

overdose and suicide. These are people

with deep behavioral health issues where

we're kind of just watching them

deteriorate and die because we're so

precious about protecting civil

liberties may also be an excuse for not

spending money in new ways. In San Jose,

we had to move away from spending a

million dollars a door to build a brand

new apartment to get someone off the

streets and pivot to buying sleeping

cabins that can be deployed in small

communities on publicly owned land

hooked up to utilities. all-in cost of

$85,000 a unit. We've added over 2,000

shelter beds in my first three years as

mayor and led the state in reducing

unsheltered homelessness. But we had to

overcome an incredible amount of

opposition from advocates, affordable

housing developers, and and you know,

much of it well intended, maybe some of

it self-interested, but we either are

going to be committed to solving the

problem or we're going to cave to highly

organized interests or a progressive

ideology that needs to be willing to

revise itself when when its ideas and

practice aren't working.

>> Yeah. I mean, it just feels some of the

policies are just crazy. I always

commented on the managed alcohol program

for homeless in San Francisco. They give

away free alcohol to alcohol addicted

unhoused people. And I can't imagine

that that disincentivizes people to

>> No.

>> Right. It's it's like you go to you go

to San Francisco, you get needles, you

get free alcohol. I mean, you get these

things. So, it incentivizes people to to

go to go to San Francisco. The whole

thing just seemed absolutely nuts to me.

Let's get into the housing question. I

mean, what is the core of the housing

affordability problem in California? Is

it that we don't have enough houses?

Because I see a lot of homes for lease,

a lot of houses for sale, a lot of

houses for rent, or is it that we have

regulation that makes it hard to

maintain a house and it's expensive? Or

is there something else going on that's

making housing unaffordable in

California? Like, what's the the core

here?

>> Look, I I think it's fundamentally a

supply problem. We've seen most recently

in Austin. We saw in Seattle, we've seen

dozens of markets around the country

that when we remove barriers to the

market investing in housing to meet

growing demand, you slow down cost

increases. It's economics 101. Part of

our challenge is that we've also made it

impossible to build affordably. So, part

of the challenge was zoning, high fees,

all of the things government imposes

that block housing from getting built.

But we also have a building code that's

incredibly cumbersome. We I mentioned

litigation earlier when it came to

highspeed rail. Same thing is true for

housing. We're not building condos in

California, partly because construction

defect liability allows a trial lawyer

to come in in year nine of a project and

if they see that the paint is starting

to bubble, they'll file a suit and they

they care about the fees. Their

incentive is to generate fees. And we've

created a legal framework that allows

them to do that. And if you try to

change it, the another highly organized

interest in Sacramento, the trial

lawyers will push back on that.

>> I think this is so important. People

don't understand how expensive. Someone

told me it was like a sizable percentage

of GDP in the United States is spent on

litigation and trial lawyers and that

they are the largest donor in certain uh

state elections all over the country to

try and create a legal framework that

allows them to pursue litigation and

earn significant fees. I mean, it's a

multi multi multi-billion dollar

industry.

>> That's right. And California is very

much at one end of the spectrum. I I

mean, I've talked to municipal leaders

in cities that are settling at such a

high amount for a trip and fall that now

they can't afford to maintain the rest

of the sidewalks in the city for the

next few years. So, they're going to

have more trip and fall cases. We are

going to or at risk of allowing

travelers to sue the state into

oblivion. So, that is a it is a major

issue. And on condos, it may seem like a

peripheral issue, but traditionally that

has been how young people get some

equity in society, become a homeowner

for the first time and build that nest

egg to eventually perhaps trade up into

a town home or a single family home.

We've essentially taken that rung of the

ladder away by making it cost

prohibitive to build. You good luck

getting financing or insurance to build

a new condo building in California right

now?

>> Right. Is it fair to say we have a

regulation crisis, not a housing crisis

in California? I mean, is there a way to

kind of reframe this? I

>> I think that's fair. I think regulation,

bureaucracy, a a set of codes and laws

that don't work for people and work for

the special interests in Sacramento.

>> I interviewed this guy, Adam Corolla.

You know him? The

>> I know of him. I know.

>> Yeah. Dr. Drew, what was the term he Oh,

very inappropriate. He called it

gynofascism. He said that all of the

regulatory is a safety thing and it's

like a very feminine safety protective

kind of origin in a lot of the

regulations that have been passed that

make it impossible. Everything's about

safety and more regulation, more

regulation, more regulation and as a

result you can't get anything done and

the lawyers show up and everything gets

sued. What's the right way to think

about the origin? Cuz his argument is

that there's a mindset of safety and

protectionism that's driven this. Is it

just the trial lawyers or like why does

someone keep passing? Why do the

legislators keep passing laws over and

over and layers and layers and layers

and layers that make it impossible to

build and make it super expensive to

maintain because otherwise you'll get

sued.

>> Yeah. Look, I I would take the the

gender content out of it. But I think

the the deeper point that we suffer from

safety, it's actually easier to add one

more rule, one more process. I see this

play out every day with our city council

at the local level and I think it's even

a greater temptation at the state level

where you're not able to point to a

concrete service that you're delivering.

So much of the implementation happens at

the local level. Every time there is a

negative story about something bad

happening in the world, there is an

impulse for a legislator to say, "Let's

create a new rule. We could always be a

little bit safer. let's let's add

another check, another balance, another

process, another rule, another fee,

whatever it is. And the reason for that

in my view is that we have not created

an incentive structure in government to

reward actual performance and outcomes.

And so we are by default rewarding the

performiveness of showing that we're

doing a lot of activity without a lot of

impact. And I just I think that we have

to help voters be smarter about

analyzing what their elected officials

are doing and whether or not it's

working. That's why I want to be held

accountable. I came into office running

on dashboards. I mean, I put up public-f

facing dashboards and said, "Here's our

baseline. Here's how we compare to

others. Here's the goal we're setting.

We're going to reduce homelessness by

10% year-over-year. We're going to

reduce crime. We're going to remove

barriers and get housing built. We're

going to speed up permit reviews. I want

to be held publicly accountable because

I would rather, frankly, have a feedback

loop with the people whose doors I

knocked on than whichever group doesn't

like that we're trying to change

something.

>> What's your metric for being governor of

California as it relates to housing?

What's the dashboard you're going to put

up and what's your goal?

>> So, I think that the the ultimate

outcome has to be that we're building

more housing, but that we're building it

more affordably. We have to pull the

cost out of building because as long as

the state of Colorado can build the

exact same home at half the cost of what

it what it is in the Bay Area, we're

never going to be able to compete. So, I

want to see more housing in absolute

terms get built. We need to start moving

in a better direction. We've gone from

about 100,000 units a year to about

80,000 a year. You go farther back, it

was 150,000 a year.

>> What do you want what do you want to get

to in your term?

>> I think we need to get we need to get

well over a h 100,000. I think the right

way to think about it though is it's

really a ratio with jobs. For every two

jobs an economy creates, you need at

least one home. Part of the reason the

Bay Area and particularly Silicon Valley

is so unaffordable for working people

and we're seeing displacement of working

families is that over the last 20 years,

this incredible economy here, the engine

of of innovation for our country and

really the world has created about eight

jobs for every one new home we've built.

That is a completely unsustainable

ratio. So, I'm a little hesitant to come

out and say we're going to build 10

million homes. I think it's a ratio

thing. It's a it's a rate of change. We

need to be building more year-over-year.

But importantly, we need to pull back

the fees, the long timelines, the overly

complicated building codes.

>> So, each of those get a metric.

>> Yeah, each of those get a metric because

ultimately the per square foot cost of

building needs to go down.

>> What does that need to get to? Where is

it today? Where does it need to get to?

>> Oh, it varies dramatically by product

type and market. So I don't I mean it's

a good question. I think I think we

should we should lay that out. But I

just visited a modular construction f

factory factory built housing. They can

bring down the cost per unit by 20%

speed up overall project timelines by up

to 50% by just industrializing the

production of housing. So we need to

pull the cost down. We should be able to

drop the cost on a per square foot basis

by at least a third with actions that

are within our control as regulators. If

you become governor, you're going to be

fighting against a legislature that's

got all of the various vested interests

tied up in keeping this from happening.

How do you take action without

partnership with the legislature? Cuz

what I think might be very hard is again

to wind things back that all these

incentive systems have been created to

to deliver.

>> Yeah.

>> Are there emergency powers or action you

can take as governor that can just say,

you know what, I'm going to fix this in

a year or do you have to work with the

legislature to solve these problems? a

bit of both. I mean, the the governor

has certain levers that are very

powerful driving the budget process.

There's the veto, the bully pulpit, just

kind of naming and shaming is really

powerful. Executive orders, the the

appointments. I mean, the governor

appoints 3,000 people who run all of

these commissions that have incredible

discretion over how to implement

regulations. But there's no doubt that

ultimately you need the legislative

branch to to change. And I think that a

lot of Democratic legislators, many of

whom I know personally in private, will

admit that things are broken, that

things aren't working. There just hasn't

been that willingness publicly to name

what is going on, say that the system's

broken, the incentives are are

completely backwards. I think, you know,

as governor, I'd be in a position to

change the conversation, help um either

persuade existing legislators to think

differently or elect different

legislators. Do you think it's also

because if they're public about it,

they'll lose their donors and they'll

lose their donor class that's supporting

them?

>> Well, it's hard to step out on a limb

without knowing if you're going to have

support for it. It is difficult to just

go direct to voters in an environment

where money talks. It's a very large

state. Uh it's expensive to deliver a

message. Social media has lowered

barriers. That's part of my bet is that

we can go straight to the voters with

this message and get traction around

around the truth around what it takes to

actually solve our problems. Uh but it's

it's you know I understand why people go

with the sure the sure thing and it's

it's not fun to be labeled. They will

call you everything when you fight for

change. You're a corporate sellout.

You're um you're racist. You're

whatever. I mean there's always some

label that people will ascribe when you

try to fight for change. But I try to

stay laser focused on the real world

outcomes. Housing costs, energy costs,

quality of schools, public safety, the

things that people care about in

neighborhoods like the one I grew up in.

That has to be the north star.

>> Yeah. What causes homelessness?

>> It's a big question. There a few things.

I mean, one, you can't ignore our broken

housing market because in places where

housing is cheap and widely available,

you can have high rates of addiction and

mental illness and most people can

remain indoors even um even with those

challenges. You know, typically what

happens if you if you actually look at

it as a life cycle issue is someone

who's already vulnerable for some

reason. could be of their own choosing,

could be circumstances, but job loss,

health issues, addiction, mental

illness, you know, domestic violence.

There's a range of really awful things

that happen to people and that people

sometimes do to themselves. And in these

circumstances, if the rent is $3,000 a

month, you are just one medical bill,

you know, layoff away from really

having, you know, ending up in your car

very quickly. and and people working

people in California especially don't

have a lot of savings. They don't have

something they can fall back on. So the

macro cost structure of California the

highest housing costs second highest

energy cost with the highest gas prices

which dis disproportionately hurts

working people. Um an educational system

that is preparing far too few of our

children for the jobs of the future. We

can go through that list, but that is

creating these conditions of of sort of

vulnerability or fragility that means

that people living on the edge are much

more likely to end up in their car.

But I would add that we have a massive

public policy failure. Not only did we

break the housing production market,

which is the macro challenge, but we

haven't built shelter and treatment

beds. So for folks for whom an addiction

or mental health issue is the the thing

that has them on the edge, we have far

fewer beds than other states. And then

when people do become homeless, it ought

to be brief and it should not be

outdoors. And yet we we lead the nation

in unsheltered homelessness. Over 40% of

the people living outside in tents in

the entire country live in California,

which is only about 12% of the country's

population. We haven't built shelter. We

haven't built treatment. We're not doing

what we need to do to rapidly rehouse

people, connect them to a case manager,

give them tools to turn their lives

around, and hold them accountable for

turning their lives around.

>> If there's mental illness, should they

be committed to some facility to help

them recover from their mental illness?

>> Yes. In short, I I think you have to be

able to involuntarily hold people for

addiction treatment, mental health care.

if they're repeat if someone is

repeatedly

refusing help, if they are harming the

broader community, which is often the

case, whether that's vandalism, retail

theft. It's been a battle here in our

downtown where windows are constantly

being broken by people who clearly are

suffering from serious addiction and

mental health issues. I think we should

give people opportunities to accept

help. It needs to be dignified. They

need to be alternatives to the streets.

We've stood up over 2,000

indoor placements, interim housing

placements, almost all individual rooms

with doors that lock, giving people

privacy. These are low barrier

alternatives to the streets. Bring your

partner, your pets, your possessions.

We're really trying to meet people where

they are. The good news, twothirds of

people say yes. The bad news, the other

third is so deep in the throws of

addiction to substances like meth and

fentanyl that they can't make a rational

decision about their own self-care. I

believe that that is that it is not

compassionate or progressive to leave

them to endlessly cycle between streets,

emergency rooms, jails, and ultimately

die of an overdose. I think we have a

moral duty to intervene, help them detox

and get connected to a counselor and

give them a chance to turn their lives

around. Drugs are coming from somewhere

fueling this crisis. Can the governor

address the drug crisis? Can the

governor get drugs off the street,

arrest drug dealers? Is that a federal

issue? How do we resolve the fueling of

fentinyl, methamphetamines, prescription

painkillers, etc. that have made their

way onto the street?

>> It has to be all levels of government,

all hands on deck. So much law

enforcement is done at the local level.

We have a police department with about a

thousand officers out on the street

enforcing local laws. They're on the

front lines of this crisis as are our

firefighters, social workers. Certainly

having federal federal tools and um and

and state u we have the National Guard,

we have CHP, we have a variety of of

tools here. What I do know though is

that we can reduce demand by intervening

in public drug use and getting people

into treatment and holding them

accountable for turning their lives

around. If we get people into recovery,

that's one more customer not available

out on the streets to buy these

dangerous products.

>> And how many times do they cycle through

before they have to be held more

permanently?

>> Well, I think it has to scale up over

time. And with Prop 36, I was the first

Democratic mayor in the state to come

out in support of Prop 36. The rule of

thumb there is on your third public drug

offense, you can be given a choice

between treatment and incarceration. And

that's bringing a consequence to a

decision that doesn't just affect you.

We can talk about civil liberties, but

when you are actively choosing not to

engage in treatment, you are more often

than not creating imposing real costs,

real harm on the broader community.

We've seen businesses shutter in our

downtowns, parks where families can't

play. So we

>> It's direct and indirect.

>> That's right.

>> And I think a lot of people don't

account for that, which is critical. I

want to shift topics to energy costs.

There's an Iran war going on. So there's

an acute spike in energy gas prices in

the state, but over the last number of

years, California Governor Nuomo and the

state legislature have pursued an effort

to drive green energy policy in the

state. California has a 70 cents per

gallon roughly tax rate. The California

price for gasoline this week is $5.50

compared to 350 in the rest of the

country. Did we get it wrong? Should we

have taken a different path in the state

versus fighting for green, chasing

Chevron out of the state. Chevron's now

relocated to Houston. They're shutting

down the largest refinery on the West

Coast because of the policies and the

the bureaucracy. And you know, how do we

balance this climate change green

interest? with the real hard cost for

everyone on the price of living in the

state.

>> Yeah, I do think we've gotten our

regulatory solution here approach wrong.

I would reject the notion that it's

either or. I don't think it has to be. I

think innovation is the is the middle

path, the way to do both. Look, Texas is

providing dramatically cheaper power

that is cleaner than California. You see

places like China leaning heavily into

solar, wind, storage, EVs. the the path

is investment in innovation in

infrastructure, a smarter grid. What

we've done in California is is another

classic case of well-intended

regulations leading to massive

unintended consequences. Let's just take

the example of our refineries. The state

has lost most of its refineries over the

last decade because we have

intentionally regulated them out of out

of existence. And so what's actually

happened is we still import oil and gas.

We've just pushed refineries. We have

the cleanest, best regulated refineries

with some of the highest paying jobs in

the sector. We pushed that out of state.

Now we're importing the same amount of

gas from thousands of miles away. It is

dirtier. It has a bigger carbon

footprint. We lost those good,

high-paying jobs. We lost the tax base

of those companies paying local taxes.

It has been a hit on every level. And

actually because climate and climate

change is a global phenomenon, we we

have not actually made the we've

actually made the problem worse while

hurting ourselves economically. So

that's the opposite of what we need. We

need win wins. We should be paying EV

owners today in the middle of the day,

strongly incentivizing them to charge

their vehicles in the middle of the day

when power is so cheap and abundant in

California that we sometimes pay Arizona

to take our excess solar and then have

them plug in at night to power the grid

and get through that roughly 5:00 p.m.

to 900 p.m. evening peak where we've got

to start firing up gas power plants

because there just isn't enough power on

the grid. So, we need to be smarter. We

need to invest in innovation and

infrastructure, not regulate energy

sources out of state that we still rely

upon.

>> But it's hard. So now we've got the 70

cents a gallon tax in California. The

legislators passed a series of bills to

to make that tax go up and up and up.

Now they're talking about increasing it

even further.

>> It's the most regressive tax imaginable

because it's even worse than a sales

tax, which is already fairly regressive.

But as you know, higher income,

wealthier people have already adopted

EVs. They're they're not paying this

tax. It's working folks, particularly in

towns like Watsonville where I grew up.

I mean, when I was in high school, I had

to go 50 miles one way for high school.

My parents went 50 miles the other way

for their jobs. And so, it

disproportionately hurts working people.

My proposal is that we to start

temporarily suspend our gas tax to

provide immediate relief to working

families who are paying the price for a

war that they didn't ask for and they're

disproportionately paying the price. I

would temporarily suspend it, but we

have to be intellectually honest about

this. It is our primary source of

revenue for paving and maintaining roads

and our transportation infrastructure.

We will need to shift how we do this

rather than being a gas tax. First of

all, the general fund is up 75% in the

last 6 years. So, I'm pretty confident

that in a state that's spending $350

billion, we can afford to pave our roads

without punishing working families. But

I also think over time, as EV adoption

increases, we'll have to find a smarter

way of charging a basic user fee so that

people who use the roads pay to maintain

them. One of the other big costs in

California related to housing and

related to this climate change question

is the cost of insurance for your home.

We had this massive wildfire that spread

destroyed a large part of areas in Los

Angeles last year and as a result many

of the home insurance companies have

left the state. I just lost coverage on

my home because I live near a bunch of

trees. So my house is deemed too risky

to have coverage. And I'm fortunate in

that I don't have a mortgage that I've

got to deal with the loss of of

insurance coverage. But this is becoming

an increasing burden for the state of

California because the states had to

step in

>> and create a bigger and bigger insurance

pool that financially and accounting

wise the state can't really afford. How

do we solve this problem of the cost of

homeowners insurance? What's the right

structural solution here for either

incentivizing the return of insurance

companies creating an insurance pool

that's well capitalized and can actually

afford to make the payouts instead of

needing to go to the federal government

when there's a crisis and ask for a

bailout? How do we fix this problem in

California? I think there are a few

components to the strategy going forward

here. Uh number one, we have to rebuild

the private marketplace. 90%

of homeowners, maybe more, can be

covered by private insurance affordably,

and we have to rebuild that part of the

market by bringing them back, allowing

them to appropriately price risk, and

creating more granularity. If you're

willing, and you may not be, but if

you're willing to remove those trees

within 100 ft of your home, you should

pay a lower premium. If you prefer to

have the trees there, you should pay the

higher premium. So more granular

pricing, allowing appropriate pricing of

risk is is just really important. Now,

for the 5 to 10% of homes that are up in

heav, you know, in the in the in the

hills, heavily wooded areas where

there's lots of vegetation,

we'll have to have higher, first of all,

when you build, there's a question of

how much more we should be able to build

out there. Probably not a lot. what

materials you use, they need to be fire

resistant and you'll have to pay much

higher insurance just to cover the true

cost of of the likelihood of a fire and

the cost of replacement. The other piece

of this though is the state has to take

more ownership for vegetation

management. We spend $8 in fire response

and recovery for every $1 we spend on

prevention. And there are plenty of

urbanized areas that are at risk because

they're proximate to dense vegetation

that the state has not taken ownership

for clearing. And yes, it should be in

partnership with the federal government.

If they're federal lands, we should hold

the federal government accountable for

doing it. But I just toured Altadena and

Palisades, met with the homeowners there

who are incredibly frustrated about the

lack of rebuilding. No one is

quarterbacking this. And if you go walk

the palisades today, you will see once

again vegetation that's 5t tall that

hasn't been managed in an area where

people are trying to rebuild their

homes. So the state has to step up. As

governor, I would create a a task force

that just focuses on fixing the

insurance market. And if the state will

invest in vegetation management to

reduce the risk of catastrophic loss,

you're going to see premiums go down

over the long term. I mean, I I think

it's insane that the state sets rates

and then tells the insurance companies

how much to charge and assumes they're

going to stick around and keep charging

it. If they can't make money doing it,

why not let the market decide? There's

hundreds of insurance companies that if

they were able to set their own rates

and not have to have the state dictate

the rate, they would compete for and

price would come down. This idea that

the state should be determining what

companies should charge for anything is

a problem. But fundamentally in the

insurance markets, it's literally chased

every insurer out of the state. I just

don't understand like how this

>> Yeah, these kinds of obvious don't work

in practice as we've seen. And when I

that's what I mean by saying we have to

be able to appropriately price risk.

Insurance companies need to be able to

charge rates that reflect the true risk

and cost. I think they should be

strongly incentivized if not held

accountable for allowing homeowners to

adopt best practices and thereby reduce

their premiums. And I think there's a

subset of folks who may need to be on

and pay into a public option of some

kind because they just won't be covered

by the market or perhaps they have to

choose that based on where they live

they won't have insurance. I I don't

know. But I don't think you can force

everybody else to pay exorbitant rates

to ensure that we cover the last

riskiest home that's going to be the

most expensive to cover.

>> Yeah.

>> It's just it's an illogical setup.

>> Well, look, let's shift to one of the

other big liability questions in the

state. It's the one I care not I

wouldn't say the most, but it's one that

I've observed may end up being a big

driver for what's ahead for us.

California's public employee retirement

system. So, Kalpers and Calsters, they

provide the retirement benefits to

roughly 3 million California public

workers. And there's roughly a trillion

dollars of capital in those two

investment funds that are meant to

support those retirees. They've been

making about 7% a year compared to the

S&P making 11% a year. And the current

accounting estimates that they're going

to be short by some estimates 250 to30

billion by other estimates as high as a

trillion dollars in the years ahead in

paying out the benefits that they're

legally obligated to pay to public

employees as they retire. And you can't

just change those benefits. There's a

state supreme court case that's made

that known that you can't go in and

rescend benefits that you've promised

someone. So you are stuck with that

liability. And because they're public

entities, California's state taxpayer is

ultimately going to be stuck with a

trillion dollar liability if that's what

it comes to. How do we fix this frigin

problem?

>> Yeah, I'm worried about it as well and

I'm intimately uh familiar with it

because we've had to tackle pension

reform in San Jose. We were sort of the

canary in the coal mine quite a few

years ago as our unfunded pension

liabilities began eating up our general

fund. Even today after pension reform,

19% of our general fund in San Jose this

year goes to paying an unfunded pension

liability. That just comes off the top.

That is one out of every $5 goes first

to our obligation to retirees. And

again, I don't blame the retirees or

those who advocated. politicians who

didn't do the math, didn't recognize

when the math wasn't working out, and

swept it under the rug because they knew

they'd be long gone by the time uh the

the bill came due. And so, look, there's

there's really only two options here.

One is to move toward a defined

contribution model as we have in the

private sector. You see all over the

world, the employer and the employee pay

in. It's put in the market. It needs to

grow over time. people need to calculate

their savings and their

>> you see your account you track it

>> you track it you can up your

contribution level if we were to move to

that uh the private sector I'm sorry the

public sector would need to be a a

strong match and I I think the challenge

is this I don't think politically that's

likely to happen what we've done in San

Jose which could be a roadmap for the

state is we negotiated well we had to go

to the ballot we went to there were

lawsuits it was a very messy process I

think it needs to be better handled. But

effectively, we created a a different

pension system for new employees that

said, "As you come in, this is what a

right-sized pension system needs to look

like. We're going to have the employee

and the employer pay in more upfront.

We will be more realistic about the

returns we're expecting. We'll adjust

over time faster if the returns are

underperforming. We've brought in better

fund managers who get who are heavily

incentivized to make smart investments

and grow the the the investment. And

then most importantly, if our if the

returns fall short, the the delta, the

gap is covered 5050 by the city, meaning

the taxpayers and the employee in terms

of loss benefits. So there's shared pain

on the backside if we miss our targets.

And what do we do for what we have now?

>> Well, well, what that has allowed us to

do because of the legal limitations that

you've mentioned is, and I'm not saying

it's perfect, but this is just legally

and politically what we were able to get

to was the best outcome we were able to

get, is that we're on a long glide path

of paying off all of the the the

unfunded liabilities for the tier one

employees, all of those older employees.

It's a 20 year process. By the early

2040s, San Jose will have cleared the

debt. our general funds going to be

flushed. We're going to be increasing

staffing and service levels and and

you'll start to feel that here much

sooner. We are actually roughly at peak

cost for unfunded liabilities today

because we took the medicine and now

we'll start that slow glide path where

each year there'll be a little more room

in our general fund because we actually

bit the bullet and took this on. Well, I

think that's like how do you fund that

glide path? It may be the case that our

budget has some margin for error, let's

say, because of how much we're spending.

Let's just do the statistics. California

Governor Nuome has proposed a $349

billion budget this year in the state.

That's up from 209 billion. So almost 2x

60% 70% 80% more 75% more than the year

before co. And that's up from 110

billion 10 years prior. So we went from

110 to 350. 3 and a halfx is how much

we're spending since, you know, feels

like yesterday, like just a couple years

ago. Yeah. Despite having the nation's

highest tax rates, the largest revenue

base, we're still looking this year at a

$35 billion deficit California state

budget. What happened? Like, how did

this get so bad? And how much of this do

you think is this term of fraud, waste,

you know, abuse? Like, where is this

money going? Well, part of what we've

done is something we talked about

earlier, which is we have increased our

our pay for public sector employees and

our our pension obligations and and post

retirement health benefits at a faster

rate than we could actually afford. And

we haven't been honest with ourselves

about that.

Part of where the money's gone though is

is is really just a sprawling

bureaucracy that when we in good years

have more money, we create new programs.

We add headcount. The state's population

has stayed flat over the last six years.

Spending is up 75% as you point out, and

headcount in state employees is up, I

believe, over 20%. So, we're we're

adding more state workers. We're pouring

more money into public programs that

aren't starting from the premise of what

is the outcome we need and how do we

most efficiently get there. I mean, it's

time for California to go through an

exercise of zerobased budgeting and say

what are the outcomes we need and are we

actually spending dollars to achieve

those outcomes or are we just funding a

sprawling bloated bureaucracy where it's

just easier to add 2% 3% headcount every

year, give everybody a 4% raise and call

it a day. And I think it's it's that's

generally been the approach is whenever

revenue is up, we just kind of give

everybody a raise, hire more people,

initiate a few new programs. We never go

back to basics and say, well, this is if

these are the resources we have and

these are the outcomes we need, are we

really optimizing our spend for those

outcomes? And the answer is no, we're

not. Can you do that riff restructuring

zerobased budgeting as governor or do

you need to do this in partnership with

the legislature that all has their

special programs that they fired up

where money's flowing to their local

county, money's flowing to their

friends, money's flowing to their

donors? How do you actually execute

this?

I think yeah, as I said before, I I

think electing a pragmatic,

independent-minded governor who's

willing to who understands this problem

and is willing to tackle it is step one

and is necessary but insufficient.

Ultimately, we have to build a more

moderate coalition of legislators who

understand how broken the system is, who

are willing to do to do hard things. I

don't I don't think that this just

happens overnight, but the governor has

a lot of tools that he or she can choose

to use that, you know, you do drive the

budget process. Ultimately, you need

legislative support for it. You have the

bully pulpit. You have the ability to

manage state agencies in a very

different way. The governor appoints

3,000 people to run state bureaucracies

that can either come in with the mindset

of business as usual. I'm going to sit

behind a desk. We're processoriented.

Or can be held accountable and maybe it

should be 3,000 employees. Maybe we

should slim how many people it is, but

can be told here are the outcomes we

need. Tell us, you know, go ground truth

these. Go down to the local level, spend

time with the school boards, the cities,

and the counties where all the money

actually meets the constituent where the

rubber hits the road and come back with

answers on how to reform these systems

to get more for what we're spending. And

if you can't hit more aggressive goals,

we'll bring in someone else who can. We

need a different mindset for how we

operate our government agencies.

>> What you're saying is starkly different

from what others are saying. And one of

the biggest points that others are

making right now is that they want to

increase programs and increase spending

particularly in healthcare. So what's

your view on government provided health

care? Should all healthcare in

California be free? There's a big

movement, a big legislative effort to

try and make this the case. Does this

make economic sense? Can we afford it?

How do we actually do it? or do you

think that this should remain a private

market effort?

>> I don't think it's realistic for

California to create a um a single

staterun free healthc care for all

system. I just I I don't understand. I I

know my uh many of my opponents in my

party, Democratic party, are proposing

this. I think we have a pretty good

sense of how to reduce cost. We just

have to be willing to do it. price

transparency and competition could bring

down costs in health care by 5 to 10%.

Preventative care, we should be

incentivizing

insurers and and um health providers for

helping someone get healthier and

reducing their overall demand on the

system over the course of their

lifetimes. things that may seem small,

but getting a hundred thousand plus

people off of our streets and into

shelter dramatically reduces the burden

on our health care system. I I just I I

think that prevention take another one.

Nurse practitioners can do so much more

than we often allow them to do, which

again is a function of this

behind-the-scenes negotiation in

Sacramento over what are doctors allowed

to do, what can nurses do. nurse

practitioners providing preventative

upstream care in clinics in communities

can be far more effective at preventing

long-term chronic illness than what we

do today, which is end up with everybody

in the emergency room needing care after

they're already really sick. So, we need

to restructure our health care system.

California should be demanding and

investing in innovation and better ways

of doing things and bend the cost curve,

not fall back on this lazy answer that

we're just going to find a way to raise

taxes more to fund free services that

will ultimately break just break the

bank.

>> You've been criticized by many for being

against the billionaire tax. I think

you're the only candidate running for

governor right now that has spoken out

against it. I've heard your comments on

it obviously. I think I was probably the

first to identify it and bring it up on

my show when it first came out the day

it was filed. For me, it's fundamental

to private property rights. If you can

take people's assets after they've paid

taxes on it, there's no stopping that

train. I mean, why not take everyone's

assets at some point? Like that, you

know, you pay your income tax, that's

your private property, you get to keep

it. Shouldn't be that the legislature

can later say, "I'll take 10% of what

you own." That just seems wrong to me.

Do you think we need to have a continued

increase? Like do you think we need to

maintain the temporary high income taxes

in California? What's your general view

on revenue? We've talked a lot about you

think hey, you know, we don't need to

rely on growing revenue, but based on

the current tax system in California,

what else do you think needs to change

or do you think it's just like let's

leave it as is, no billionaire tax, no

new taxes, but let's just not go back.

>> Yeah, let me say a couple things. one, I

I think where this push is coming from

is a deep concern about economic

inequality and declining social

mobility. And I think these are

>> real issues. I am worried about economic

inequality. I think in the long run it's

a threat to democracy. I think there are

a number of better solutions to this

than the proposed wealth tax which is as

you point out say aside even the

philosophic arguments it simply won't

work certainly not at the state level

half the people I know have already left

the state

>> right we've seen over a trillion dollars

of capital flight our ongoing revenue

going forward is now going to be lower

that the dirty secret of this proposal

is that it won't be the billionaires who

pay higher taxes it'll be middle class

and working families who are left

holding the bag. So that mean that's why

I just immediately felt that I had to

say something because it's working

people who are going to be hurt by this.

It's not going to be billionaires.

They're the most mobile people in

society. Um so look, I I think first of

all there are things we can do to make

the tax code uh fair. I think there's a

legitimate debate about what should the

absolute rate of capital gains tax be.

There's the phenomenon of very wealthy

individuals borrowing against uh

appreciated assets where you're not

you're sort of you're effectively

avoiding paying capital gains. I think

that's a loophole we can close. There's

the step up in basis upon death. I'm not

sure that um it's very fair for

somebody. Well, let me just use an

example. I'll just say this. I don't

think Elon Musk should be able to pass

on $500 billion of appreciated but

untaxed stock wealth to his children.

And the moment that they inherit it,

it's rebased at current market value and

no one ever pays the capital gains on

it. I mean, there there are a lot of

things we can do to capture billions in

revenue to close loopholes in the tax

code. This is of all the proposals, the

the worst, the least likely to work, the

most likely to hurt working people. But

I also think we have to acknowledge in a

state that keeps asking for more before

we do better, we we've got to

acknowledge that social mobility is down

because of po public policy failures

first and foremost, public schools that

aren't performing, housing that isn't

affordable, energy that isn't

affordable. We when half of people sorry

when most Californians are spending over

a third of their income on housing many

spending over half of their income on

housing that hit social mobility a lot

more than the fact that the tech sector

has had a bunch of growth. It's just

these are fundamental public policy

failures and the sooner we own them and

think differently about our regulatory

environment and our policies so we start

fixing them the the better for

California, the better for the

Democratic party. Uh most importantly,

the better for the people we serve. But

what you're saying makes a lot of sense,

but I think people hate other people's

success. I think there's a lot that's

been going on, this fueling that's going

on with the lack of social mobility, but

seeing a small segment of the population

accelerate. Technology's really had that

driven that. I'll be the first to admit

there's a small population in California

that's done extremely well while most of

Californians have been left behind. Do

you think you're electable in a sense? I

mean, you're not fueling the populist

sentiment that I think every one of your

candidates has found they can tap into

and uh that may put you at a big

disadvantage in this race. Look, I I do

think we we need to take economic

inequality and social mobility much more

seriously than we have. I think we need

to ask and ultimately demand our um our

wealthiest individuals, our tech sector,

industries that do well to be structured

in a way that works for people. Um I I'm

curious what you think. Maybe I'll turn

the tables for a moment. I think that we

need a shared prosperity that includes

people having some sort of equity from

or more direct benefit in the incredible

gains that tech has produced. AI is

scaring a lot of people because it could

lead to the elimination of jobs, further

concentration of wealth. What do you

think is the appropriate role for the

tech sector and those who have profited

immensely from it to ensuring a level

playing field or at least you know some

some notion some semblance of of

equality of opportunity?

>> That's a longer conversation but I do

think giving more people more ownership

is important but I'm not sure people are

going to want to or need to work at big

companies anymore with AI. the longer

conversation. But in the same way that

Instagram,

Shopify, Etsy created a Tik Tok created

new

jobs almost like new roles, new ways

that people could earn.

>> Yeah.

>> I think AI is going to create a thousand

times more new ways for people to earn

than they do today. And they're not

going to have to have the job that they

feel like they're stuck with today. And

AI is actually going to accelerate more

people up the ladder faster than

anyone's really realizing. And I can

give you countless examples of this that

I've seen recently, but I think we're

all going to wake up pretty happy with

the next advance in in economic mobility

that's going to be unleashed because of

AI, not in spite of it. I hope that's

true. It's a very optimistic read. I do

think my read of history is that

technological change while ultimately

producing greater abundance, if you

will, often is really hard on people.

And that's why in in San Jose at least,

we've done we've created AI upskilling

courses for our workers. We've gotten AI

companies to come into our libraries and

provide tools and training. We're really

trying to figure out how we lower

barriers to learning how to use these

tools, apply them in people's lives,

start those new businesses, create the

new jobs of the future.

>> The cool thing is AI can teach people

how to use AI.

>> That's true.

>> Which is where where I I'm starting to

see a lot of people learn how to use

these tools on their own by asking the

AI and engaging. And then there's almost

like you

watching people get knocked down like

bowling pins in terms of wo that wo

moment that I've I've been vis like

visibly seeing people just in the last

couple months

>> is making me very optimistic.

>> That's good. It does though get back to

this basic point that we need our public

education system to teach people to

think critically. When half of our kids

aren't on grade level for reading or

math proficiency, it's going to be very

hard for them to be lifelong learners.

>> I mean, curiosity and asking questions

and learning how to think, not teaching

them knowledge is a massive problem that

we're dealing with in education in the

United States, in my opinion, on its

own. Kids are not being taught how to

question, how to build. They're being

taught facts. Those facts are irrelevant

because they all exist in AI. Now you

don't need to know all those facts. You

It's good to have basis. But what are

you really trying to get? A curious

mind, an engineering mind, a creative

mind, a thoughtful mind, and teach

individuals agency in a world where they

have infinite capacity. That's what AI

gives all of us.

>> But what do you think of Donald Trump?

>> I'm not a fan.

Um,

my concern with Donald Trump, even if he

may get certain

issues right, I think he's channeled the

frustration of working Americans who

feel that they've been left behind, is

that I don't believe he really

understands what makes our country

great. I think that he has created a lot

of fear and division around immigration.

doesn't recognize how many people we

have had in this country in part because

both Democrats and Republicans wanted

access to cheap labor in places like

Watsonville where I grew up who have

been here 20 30 years working hard

paying their taxes otherwise playing by

the rules raising children who are US

citizens who are now living in in terror

because they're worried their families

going to get ripped apart. Um, I I don't

understand and don't support this war in

Iran that I think is a huge uh huge

blunder and it's going to drive up

energy costs and it's it's not clear to

me why we're losing American lives over

there. Um, I just, you know, I think

tariffs, yes, I do believe China, this

is something I think he's gotten right,

has been competing unfairly with the US.

I think a targeted approach to tariffs,

focusing on that issue would have made a

lot more sense than the general

inflation we've seen. So, I mean, I

could go issue by issue, but I just I

worry mostly about the health of our

democracy. I think it requires a um a

real honest dialogue, a respect for rule

of law and the independent judiciary.

Um I just yeah I have deep concerns that

this

not just populist but um reactionary

quasi authoritarian

rhetoric and mindset is the outcome of

declining trust in government when we

don't hold ourselves accountable for

delivering for working people. I think

it's predictable and I think you're

seeing an equal and even um I'd say

equally risky rise in populism on the

left in reaction and these two are

playing off one of one another. And part

of the reason I jumped into this race

was to offer a third way, a pragmatic

alternative. I'm a I'm a Democrat, but I

also recognize that something's broken

in California. The incentives are all

wrong. The highly organized interests in

Sacramento are being taken care of.

Sacramento is working great for highly

organized interests. It is not working

great for regular people. And I think

the best antidote to that is to get back

to basics, be competent, be data driven,

deliver results for people because I'm

worried that if we don't, we're going to

see this epic populist battle on the

right and the left where people are

offering really easy answers, not the

honest answers that we need. rate

Governor Nuome and the job he's done as

governor of California.

>> I think Governor Nuomoe has been a bull

work against some of the worst ideas

coming out of the legislature. You

mentioned that he's vetoed 10 to 15% of

the bills coming out of the legislature.

Uh many of those vetos I agree with and

I think have averted

um real harm. I my my critique has been

around not doing enough to take on the

entrenched interests in Sacramento and

uh and we've we've disagreed very

publicly on certain policy issues, Prop

36, recovery housing,

um some energy policy points, but it's

it's always I mean I try to attack

problems, not people. I'm not really

interested in, you know, evaluating

somebody's intentions or or or their

ideology so much as the results of their

actions. And I think he's done some

really good things. Uh I also think he

he could do even more. And that's been

my appeal to him is let's work together

to drive even more change faster. But

some of the things he's brought forward

like care court, right idea. Now we need

to execute it. We need to actually make

sure that care court's actually getting

people with addiction and mental illness

into care. I think he's got the right

right idea, right intention, but we've

got to follow through and as governor, I

would make sure that Prop 36, Prop 1,

Care Court, uh number of things he's put

in place are actually used to deliver

the intended outcome.

>> Governor Newim's put out a lot of these

memes kind of making fun of Donald Trump

by doing tweets sort of like the way

Trump does truth social posts and yeah

and so on. It's very antagonistic to the

president, at least publicly

antagonistic. At the same time,

California relies on federal funding and

requires a lot of federal cooperation, a

lot of federal land in the state. How

would you interact with President Trump

and talk a little bit about how the the

governor has interacted with President

Trump publicly?

>> Look, I understand what the governor's

doing. He's, you know, been holding a

mirror up to Donald Trump and um

both fighting for California's values,

which I appreciate. I think there's also

just back to incentives. I mean, he's

he's running for president and and

that's where I think this approach is

coming from.

I would take a different approach in the

sense that as governor focused on

delivering for Californians, I will

fight the Trump administration through

through the courts, through the bully

pulpit whenever necessary to protect our

values, to protect our people, to

protect state funding. I also think

though that we need to find places where

we can achieve a win-win with the

federal administration. I'll give you

the example that's top of mind for me. I

just spent time walking through

Altadena, the Palisades where people

have lost everything, over 10,000 homes

lost between the two. People are

desperate to rebuild. They're not

getting the help that they need. And

part of the reason they're not getting

the help that they need is this

hyperartisanship

in which uh California and Washington

are fighting rhetorically and

politically and the people who are being

hurt are the families who have lost

their homes who are waiting on the $40

billion of federal aid that's been

promised and that if it weren't for this

political battle would have already

flowed to help those neighborhoods

rebuild. And I just as governor, yeah, I

I will absolutely fight for our values,

but I'm committed to fixing our

problems, which means finding a way to

make it a win for this president and

this administration to rebuild Los

Angeles. That we have to put the people

before our politics. And as it relates

to ICE and immigration enforcement, do

you consider undocumented immigrants in

the state of California individuals that

you would represent as governor? Is it

part of your job to protect undocumented

immigrants who came here illegally that

ICE would like to remove?

>> Yes, unless they're committing serious

and violent crime. Look, if you're here,

you're not documented, you're committing

violent felonies, I think you should be

deported. But like many of the people I

grew up with, if you were

essentially if ta maybe tacitly welcomed

here because we had an a industry or a

construction industry that needed

lowcost labor and you came, started a

family, started working, paid taxes,

raising kids here who were born here who

were US citizens. The only practical and

ethical solution is for parties to put

the hyperartisanship aside, come

together, and come to a grand bargain in

which we secure the border. We deport

those committing violent crime who are

undocumented, and we create a pathway to

a legal to some sort of legal status. If

citizenship is a bridge too far for that

older generation that came earlier, so

be it. But their kids are US citizens

and they deserve to still live with

their parents. And I think we've got to

find that the the approach that respects

people's humanity and is practical and

ethical. And I'm incredibly

disappointed, frankly, with both parties

for years of kicking the can down the

road. And I will absolutely stand up to

protect undocumented residents who are

playing by the rules, who are doing the

most American thing. And I get all the I

get all the arguments around lawful

immigration. Let's secure the border and

set up a proper system of lawful

immigration going forward. and not

create a bad incentive. So, let's do

that and then create this pathway to

legal status. But what we've seen play

out in in Minneapolis is horrible for

the country. We're seeing citizens

arrested, even killed. This is this is