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>> Jonathan Movroydis: It's Thursday, April 11th, 2024 and you are listening to matters of policy and politics at Hoover Institution podcast devoted to governance and balance of power here in America and around the free world.
I'm Jonathan Movroydis, senior product manager at the Hoover Institution and I'm sitting in the chair of Bill Whelan, the Virginia Hobbs Carpenter distinguished policy fellow in journalism, so that he can answer questions and provide commentary about California policy and politics in which he's well versed. Bill Whelan, in addition to being a Washington Post columnist writes weekly for Hoover's California on your mind web channel.
Whalen is joined today by Lee Ohanian, Hoover Institution senior fellow and professor of economics and director of the Ettinger Family Program in macroeconomic research at the University of California, Los Angeles. Ohanian also writes weekly about the policy environment of the Golden State for California on your mind. Good day, gentlemen. Let's talk about the latest developments in policy and politics in the Golden State.
Lee, let's begin this episode by discussing your recent column for California on your mind. The topic is California Assembly Bill 2751, also known as the right to disconnect bill. If passed and signed into law, the bill will make contacting employees during non working hours, except during emergency situations, a violation of state law. Lee, you write that the bill threatens California's competitive edge which it cannot afford to lose at this moment.
Lee, could you describe the potential cost of passing a bill of this nature for the economy of the Golden State? >> Lee Ohanian: Yeah, hey, Jonathan. Hey, Bill. So AB 2751 which is known as the right to disconnect bill, that was introduced by Assemblymember Matt Haney. And so he's worried about workers getting contacted by their employers on off time. So weekends, perhaps at night, perhaps early in the morning, perhaps even on holidays.
So this would be another regulation that California businesses would need to address. And the major problem with this is that California businesses are already among the most regulated in the country. The rankings of California businesses are typically around 49th or 50th in terms of competitiveness. If you ask CEO's around the country, they will tell you that California is dead last in terms of being able to do business at a low cost.
If you look at the rankings put out by the American Legislative Exchange Council, California is ranked 49th. We already have a lot of regulations. It's an important reason why we're losing businesses to other states. So this would just be one more, you know, this would just be one more nail in the coffin on California businesses. But moreover, this is really an issue that's a private matter between employees and employers within the state.
On the one hand, we've had enormous technological innovation that has substantially increased productivity of workers and substantially increase their pay. This also substantially increased their ability to have flexible work plans. So we have roughly one third of California workers work either full time or at least part of the time at home. And that's because of the ability to have email, the ability to do zooms, the ability to do texting.
All of these technological innovations have increased flexibility for workers and workers love this. You know, by the same token, if you want to have a really flexible work plan, then that may include the possibility that your boss will want you to respond during these off periods. So Haney is worried about blurring the line between home life and work life. Well, that's been blurred by remote work and remote work is something that, that workers want.
It's a private matter in the sense that if workers really don't wanna have to deal with work issues on Saturdays or Sundays or at 7 o'clock at night, then they can choose jobs where their employer's not gonna ask them for that type of flexibility. So those employment opportunities are available to workers.
If, on the other hand, a worker is willing to deal with a text from their boss on a Saturday afternoon, they can choose that type of job and they'll get compensated for being able to deal with that. So I see this as really kind of a nanny issue more than legitimate regulation. Back in the day when Jerry Brown was governor, he had a famous quote that bill knows really well and that quote was he was vetoing a bill and this was in 2011. And Brown said, not every human problem deserves law.
So this is really an example of that. So legislating away jobs in which an employer and an employee would willingly agree to have this type of flexibility, legislating away those jobs is not going to be in the interest of those people. It'll make compliance more expensive and it'll increase the incentive of businesses to move out, and reduce job creation, and California right now is dead last in the state, and job creation.
>> Bill Whalen: So Lee, great timing for writing this cuz I think the economy is about to become a very big deal in California. If people haven't noticed, this is a state with the nation's highest unemployment. I think you see both the public and private sector, Lee and Jonathan, the state trying to figure out this balance between work at home versus work in the office space.
I think yesterday, Lee, the governor announced that he wants state workers to be in the office for at least two days a week, so we'll see how that comes out. Here's my question for you, Lee, before we get into a bigger conversation about where California's economy is going and what's gone wrong with it because I think it's lost something like 400,000 jobs since February 2020. Here's the question for you, Lee. Lawmakers in Sacramento sometimes come up with bills like this on their own.
Apple hits them on the head, bolt of lightning, what have you. They decide to do it. But sometimes, Lee, somebody whispers in their ear which is oftentimes the case for legislation they're trying to help out. Somebody take care of a constitutional constituency, what is the story behind AB 2751? Lee, is this one individual's inspiration or is there a more cynical question of who benefits? >> Lee Ohanian: Bill, great question.
A lot of these types of regulatory introductions are motivated by unions and the state's public sector is highly unionized. Private employment within the state is not heavily unionized. There's always a tension within the state of unions trying to get their way into private businesses. AB 5, which essentially legislated away a lot of independent contractor opportunities.
When most people who work as independent contractors, four to five, want to be an independent contractor, they don't want to be a full time employee, or they don't want to be an employee in any dimension. That was a bill that was passed free unions. The minimum wage laws we see in California, the living wage laws, those are all passed free unions.
Because when these regulations are put into place, they're almost always exempt if the business has a collective bargaining agreement, because the collective bargaining agreement defines all aspects of the employer employee relationship. So whenever you see laws like this in the back of your mind, you're always wondering is there a union that instead of the apple hitting Haney on the head. Bill, I love that. I'm gonna use that in the future, I will give you attribution.
There could be some pressure from unions because whenever you see these kinds of legislative bills, almost always there's a union lurking in the background. >> Bill Whalen: So, Jonathan, you have a political hack on this podcast and a world class economist. Why don't we take advantage of the world class economist knowledge in this regard? We've talked about job loss since February 2020. Something else that happened back in 2020.
Lee and Jonathan, the governor's office put out a very cutting-edge video. I think they dubbed images, to street music, kind of hip hop music, if you will, bragging about California poised to move from fifth to fourth in terms of world economy. We forget that California is a nation state, and it has an economy of world scale, something that's not getting a lot of attention. But by the time we get together next month for our next podcast, California may have received a demotion Lee and Jonathan.
It may be about to drop down to sixth in the world in, in terms of economic size, India moving past us. So, Lee, I wanna have a serious economics conversation here. Can you explain why California is going south and nothing north in terms of economy? >> Lee Ohanian: Yeah, so for years, California was growing very, very quickly. Gavin Newsom is often waxed very poetically, bragging almost about the size of California's economy.
>> Bill Whalen: Right. >> Lee Ohanian: It became fifth largest, I think probably about three years ago. Two or three years ago, it surpassed Germany. So now we have India. India, of all countries, is surpassing California. And the reason why India is surpassing California is because India is now growing very, very quickly, California is not. California has lost 414,000 jobs in roughly the last five years.
And if you lose that many workers, it's really hard to maintain the status quo of where you are on that world GDP ranking. And the reason we've lost 414,000 jobs is twofold. One is because a lot of people have left California. Over half a million people have left California since 2019. And California's business atmosphere is no longer nearly as vibrant as it used to be. Silicon Valley is not as vibrant.
I mean, Bill, to give you an example, back in the day, it was inconceivable that small tech firms that are still in the process of growing very, very rapidly, still being incubated by Silicon Valleys, famous venture capital and street, it was inconceivable that they would leave. Now it's routine that tech firms are leaving. And it's not just the big tech firms who have become mature, like Tesla or Oracle or Helipakit Enterprises, which have all relocated to Texas.
But it's really tiny companies that have the potential to become unicorn companies. One example I'd love to give is AquaMetals, which has relocated from Silicon Valley to, Bill, you want to take a guess? Arkansas, losing a tech firm from Silicon Valley to Arkansas is a little bit like Duke University losing a five-star basketball recruit to a junior college. >> Bill Whalen: Now let me just say in defense of Arkansas.
I have several friends who moved from the Bay Area to Bentonville to work for you know who, and they love living in Bentonville. They tell me it's like living in Mayberry, RFD. It's just an idyllic town to be in. So let's don't hit Arkansas too hard, but you do raise a point, Lee. >> Lee Ohanian: Yeah, no aspersions to be cast on Arkansas. But you never think of Arkansas being a tech capital of any sort. Losing a tech company to Austin, losing a tech company to Salt Lake City, to Seattle.
These are all large existing tech hubs. Arkansas's lovely State, not a tech hub. So in a nutshell, the reason California is losing ground is because we're losing a lot of jobs. And among the businesses that are remaining, we're putting more and more requirements on them, more and more compliance requirements. Taxes are rising, it's just a recipe that is not conducive to great economic growth. >> Bill Whalen: Can you explain, Lee, how inflation plays into all this?
I know we're talking about a world scale economy. We're talking about unemployment and sectors and so forth, but let's talk about how inflation is also hitting this economy. I was talking to one of your brother economists who's out here, Hoover has a monetary policy conference coming up in a couple of weeks. I might be seeing Jonathan up here, actually for that. And I asked him a very simple question, getting back to my political hack hat. I said, here's what fascinates me, an election year.
You have a president out there who's really struggling to sell his economy. He's trying to tell you that things are getting better. But if you look at the polls, voters just arent buying it. And I asked this economist, whats the disconnect? And he said, well, its pretty simple. If you look at lower middle, upper middle income households, you're all getting slammed by higher prices than just about anything. He threw out a pretty amazing stat.
He said 38% of households who rent are paying dramatically more for housing and are getting pushed down by higher home values. And they dont benefit from higher stock market, by the way. And then he just noted that just about everybody, all of us on this call, pretty much everybody listing is getting hit by sticker shock in various forms, food prices, car prices, just getting an Uber and so forth. His term for it is disinflation, but higher prices.
So, Lee, explain how inflation fits into this kind of myriad explanation of what's wrong with California's economy. >> Lee Ohanian: Yeah, Bill, so I'll just add one piece to the discussion you had with the Hoover economist, which is that worker compensation has not kept up with the prices we pay for our consumer goods. So that's, so the big problem with inflation is when the prices of the items that you buy are rising faster than the compensation you receive from your paycheck.
And that's been a huge problem, it's been a huge problem in the United States. And I think my understanding is that Biden, rants to his advisors and says. You're not doing a good job getting out the message of how wonderful Biden economics is and why the economy is actually so much better than people think. And the simple observation is that people aren't really thinking about the entire economy.
They're thinking about their paycheck and how much they're spending on rent and gasoline and utilities and food. And that's the simple issue. And wages compensation simply isn't keeping up. And that's a really extreme problem in California because there's a lot of families that simply don't have much of a cushion. The number of households in California paying 50% or more for rent.
Now, the industry standard, in terms of a landlord who is willing to lease out a house or apartment, the industry standard is typically 30%. In California, there are a large number of households paying 50%. That's a huge stress on a family budget. So there's many more people in California in that situation than any other state in the country.
So now when you have prices of groceries and gasoline and utilities and rent far out, stripping your compensation, that's pushing more and more California households to the brink much more severely than in the rest of the country. So this is a huge issue. And there's a lot of California households that are really close to the tipping point. There are 13 million households living either under the poverty line or sort of within a stone's throw of the poverty line, so 13 million.
And when you think about that, and compensation is not growing to keep up with the prices they're Paying, this is a disaster and California is paying a much larger price for this than any other state and country. >> Bill Whalen: One last question then, Jonathan, I will give you back the microphone. I worked with the governor 30 years ago, Lee, who faced similar problems with California's economy.
He was a Republican, so he worked very closely with the California Chamber of Commerce, the business community. You studied the legislature, you study policy. Let's say that Gavin Newsom, the governor of California gets kinda hit by a two by four when the news comes out that we're now number six, number five and he thinks, I got to do something. Here's the question, Lee. What should he do? But realistically, what can he do? And what could be done given how the stars are lined at Sacramento?
>> Lee Ohanian: Yeah, Bill, so when that news comes out, I don't think he's gonna do anything. And the reason I don't think he's going to do anything is because there's just been a penalty of bad economic news since Newsom took his governorship in January of 2019.
There's really been nothing but bad economic news during that period of time in which there's been increasing homelessness, increasing job loss, increasing unemployment, an economy that just seems much less vibrant, much more sclerotic than at any time in the past. And as these hits have mounted, the governor really hasn't done anything. His signature campaign pledge back in 2018 was a Marshall plan for housing, and we're roughly 85% below his goal of housing.
Housing starts are lower today than they were back when the governor took office. And you look at these statistics and you look at the governor and just say, hey, do something. Do something productive. And in my opinion, he has it. What he should do. There's a long laundry list of things he could do and things that he should be able to get done. Because we live in a one party state. There's a super majority in the assembly and in the state senate.
He should be able to get done anything he wants, assuming it's a positive, assuming it's good for constituents, assuming that the Democratic Party can take credit for this. Those things should fly through. Modifying California's Environmental Quality Act, which would enormously reduce the cost of building housing in the state and substantially reduce the number of people living out or near poverty. That's a no brainer.
The governor rails about that act literally every other week, he criticizes it. He has issued, I believe some executive orders regarding impediments to building new housing for students over at UC Berkeley. He and the legislature can change that in one second. He can issue as many executive orders. The legislature can issue exemptions to this, but they don't.
And the reason they don't do this is because the environmental lobby within the state is incredibly powerful and they do not want to upset that apple card. Another thing they could do is reduce business costs in the state by dealing with more flexibility in terms of minimum wages. They can do that in one second and they won't do that, because they don't wanna upset their very close relationship with labor. They could reduce a number of regulations that impact state businesses.
So in the piece I wrote this week for California on your mind which was about the right to disconnect law, the right for employees not to have to respond to bosses on a weekend or off times, I suggested the state really should conduct an audit on their business regulations and then do away with ones that don't make any sense from a cost benefit standpoint. >> Bill Whalen: Agree. >> Lee Ohanian: That's low hanging fruit. So Bill, sadly, there's a lot of things we could do.
Sadly, I don't think the government's going to pursue any. And ironically, I think if he really wanted to get some stuff done, he certainly could, given the makeup of the state assembly and state senate. >> Jonathan Movroydis: Gentlemen, it appears as if Governor Newsom has so far had a rough springtime.
First, there was the reported Panera bread exemption to the new fast food $20 minimum wage law that would have benefited a Newsome donor, Greg Flynn, whose company owns and operates 24 panera bread restaurants in California. You both covered that topic in the last episode, then there was a piece in CalMatters that took apartheid Governor Newsom's embellished credentials as a collegiate baseball player for the Santa Clara University Broncos baseball team.
And then there was the Wall Street Journal dinging longtime LA Times political columnist George Skelton's column for suggesting that the population loss in California and Newsom's policies are coincidental. Bill, could you maybe talk about why Newsom is now getting such critical press? >> Bill Whalen: Well, there are different reasons here. So you mentioned, for example, the Wall Street Journal going after George Skelton.
If you read George Skelton's column and I've known George for a long time, I like him. He's a nice man, but it really is just kind of trying to cover up for the governor in terms of what's gone wrong. He just says it. Yeah, California's Asian population. And by the way, Gavin Newsom has been governor, but the two are not aligned. So the Wall Street Journal, James Freeman, I think wrote the piece and just absolutely had a field deal with it.
So that's just bait for the Wall Street Journal cannot resist and Newsom's had some squabbles with the Wall Street Journal, which we might wanna get into. The CalMatters thing is a little more complicated. Let me save that, but the french laundry story. Excuse me, the PlumpJack story. This was Newsweek writing about this and what this happened was lee has written very much on this law, the panera carve out the $20 minimum wage.
And so somebody took it upon themselves to look at PlumpJack, which is Governor Newsom's business empire, restaurants and wineries and resorts and so forth. And they started looking at job listings and they found, in one case, I think the job in question was a part time busser. You guys may know more about restaurants. I think a busser moves dishes off tables, right? I think so, what a part time busser does.
And I think the listing was to, quote, assist the food server and the restaurant to ensure guest satisfaction during all aspects of the dining experience. A lot of words were saying, clean up that table. Anyway, at $16, not $20 even though PlumpJack Cafe which is the restaurant in question is not subject to the fast food law. The story was basically, well, it's rules to thee for not me. On the one hand, the governor wants his mandate for fast food. On the other hand, his restaurant.
He doesn't run it, his sister runs it. Loses business, is there in a blind trust, his restaurant runs otherwise. And so his people had to push back and say, look, the governor's not aware of this. This is all just kind of hitch up, blah, blah, blah. It's the CalMatter story that's far more interesting in this regard and not just because I'm a hopeless baseball junkie. This is the matter of looking at something with Gavin Newsom has always liked to brag about, which is his baseball prowess.
He will tell you that his ability to play baseball got him into college and made up the man he is today because of that break. And so baseball is very important to him. He's written a children's book talking about this. So CalMatters took it upon themselves to look into the story and what they found. The story doesn't quite hold up. Yes, he played baseball at Santa Clara. No, he never played on the varsity.
He was brought in to play on the JV team, gave it a go for a couple of years and then left. There's no record of him playing on the varsity, nothing like that. Varsity baseball players who take a lot of umbrage for him, talking up his credentials and past stories, have said that he was scouted by the pros and was a pro prospect. And that's not the case as well. Look, I played high school baseball. Pro Scouts talked to me as well. They talked to every high school kid, basically.
And I can tell you I was never pro material and neither was Gavin Newsom. But what's interesting about the commenter story, Lee and Jonathan, is this. I think here you have the case of a Sacramento media outlet, which has decided two things. Number one, this governor doesn't really work with us at the end of the day. And the news administration is notorious for just not returning reporters calls, letting stories go by, angrily responding. Sometimes they don't like it.
They think it's really kind of their town, their rules, and the poor press are at their mercy. Cal manners, I think, has decided enough is enough on that tone, I'm going to be critical about that guy. Which ties into something else, Lee and Jonathan, which is that this Newsom governorship pays a lot more attention to the national media than it does local media. This is part of just his intriguing national desire.
So I think this is what pushback looks like from the Sacramento media in terms of that base story. It was very personal at times it took a ding at him, not just for embellishing his baseball skills. But Lee and Johnson had also took a swipe site saying that back when he had the affair with his staffer, when his mayor of San Francisco, and he said he had an alcohol problem and wanted to rehab, that he never went into rehab.
It's just kind of like sticking somebody at the ribs when you mentioned that in a story about baseball. But it was very much kind of an FUPs. But this might be a teaser, a preview of coming attractions. Cuz we're now looking at two more years of the administration, things are gonna start winding down and you just might see more critical coverage. This is the downside of being a second term politician. Lee, what do you think? >> Lee Ohanian: Yeah, Bill, I agree entirely.
I think the governor brings us on himself. I see the United States as an incredibly forgiving country. People get second chances, and when they deliver what happened before, that simply dries up and blows away. People focused on the production and the creativity of individuals. And if they made mistakes in the past, then those simply become non issues. The real problem with Gavin is that he's just so much more focused on the national spotlight. There's no getting away from that.
Everyone knows that. And an awful lot of people worry that he's ignoring his, his day job, he's ignoring the real duties of the state. We talked a little bit about just some of the state's economic problems. We're now dealing with a 70 plus billion dollar projected budget deficit, which is bigger than the general fund budgets of every state in the country except for Texas and New York. This is what the governor really should be focusing on.
He should have focused on this long before to try to avoid the challenge of dealing with the 70 plus billion dollar budget deficit. You look at other governors around the country, there are many who have approval ratings way above 50%, including, I believe, the governor for Vermont has an approval rating of something like 87%. Governor from Maryland, I believe, has an approval rating that's in the high 60s.
There's a number of governors in this situation, and they kind of have one thing in common, which is they take care of business. [LAUGH] They're not out there criticizing governors in other states, such as Newsom is constantly criticizing Ron DeSantis. And Florida, he's constantly criticizing Abbott in Texas. He's constantly criticizing Republicans in US House of Representatives or in the US Senate.
These every governors are going about doing what they're supposed to be doing, being governor, taking care of their constituents and staying in their lane. And Gavin just can't, he just can't do that. >> Bill Whalen: Note, Lee, Ron DeSantis was a very good baseball player in college. He was the captain of the Yale baseball team, as was the Bush 41. So interesting enough, DeSantis is not really teed off, pardon me for mixing sports metaphors here, but he didn't go after Newsom on this at all.
He was quiet. So maybe he just, he doesn't really play in the game. But I think what's telling is this. If the governor is thinking about running for president in 2028, this is the kind of stuff you can expect the national media love to build up candidates, especially aspiring, aspirational democratic candidates. And boy, do they enjoy tearing them apart if they find flaws with them. And Gary Hart comes to mind. Lee, you and I are old enough to remember.
We're gonna get nostalgic here in our next segment here, but I'm now going into eighties nostalgia. Gary Hart came out of nowhere in 1984 and gave Walter Mondale a very competitive race. And then come 1988, he was the early front runner. So two things happened. Number one, he famously told reporters, follow me around, you'll get bored. And guess what? They followed him to Miami. He was on a yacht with a very attractive young woman who was not his wife, ouch.
But secondly, they just kind of went into his character, Lee and Jonathan, and they just started saying that essentially there's a strange guy. They noted that Hart, his name was actually Hart Pence, and he shortened it to Hart. And he changed at one point how he signed his name. And then he started developing these John F Kennedy affectations, like putting his hand in his suit jacket when he walked and things like that.
And so they just kind of went from this dreamy guy in 1984 to this kind of creepy guy in 1988. Not saying they're gonna make Gavin Newsom do a creep. But I'm just saying that compared to the relatively easy treatment you get with a very diminished press corps in Sacramento, anything is fair game when you run for president. And so, yes, they're gonna come after you on baseball. Yes, they're gonna look up whether or not you got rehab after you got caught having the affair.
The governor is working on a biography, an autobiography. If he's gonna run for president, reporters and opposition researchers gonna go through that thing line by line and try to pick it apart. And if you get caught embellishing your own life story, especially when you're trying to say that, look, it was important to me because I had dyslexia. I had a hard time getting into college. Baseball is my ticket. If you're embellishing that, that really quickly erodes your credibility.
>> Lee Ohanian: Yeah, it does. And today it's so much easier to find this information than it was back in the day when reporters actually had to dig through hard copies of things and follow Gary Hart around as opposed to now, TMZ does that for you. There's some drone up there that would show you on that yacht with a woman other than your wife. And it's unfortunate for Newsom because, God bless him for dealing with dyslexia and getting to college, and God bless him for enjoying baseball.
But that's enough. That's enough for people to understand what he overcame. You don't have to say, hey, I was on the Santa Clara Broncos baseball team when he was on the JV squad, and apparently he never played. He never played in a game. That's okay, you overcame dyslexia, you went to college. You became California governor. Kids will be proud of you. You don't have to embellish it. And I think, Bill, it shows a pattern with Gavin that he lives a little bit in his own bubble.
Where we're dining at the French laundry, he didn't really violate his own rules. There was an open window next to the table. He lived in his own bubble, in his own world, when he commiserated with parents about Zoom schools, when his own kids were in private work, in person schools, because they went to a private school. He now says that the $20 an hour minimum wage carve out for Panera bread was never for Panera bread.
And we're left with the embarrassing question of, well, who was that exemption for? And there's just crickets. There's no answer from, there's no answer from Sacramento about who that exemption was for, zero. And so we obviously know who the exemption was for. It was for Panera, period. So there's a pattern here.
And the pattern includes a public servant that just loves to talk and loves to make enormous promises ranging from, hey, I'm going to end homelessness in San Francisco, and it'll be gone to having the absolute worst homeless situation in the country. And who promises to create a Marshall plan for housing? And who promises to do all of these things and they don't get done.
And, Bill, unless Gavin has just a complete remarkable turnaround in the last two years of his administration, his second term. There's not gonna just be a personal record to pick apart and criticize him for personal issues, but there's gonna be a record of really no accomplishment in perhaps what should be the greatest state in the country. And in a state where anything he wants to get done should be able to get done because of the supermajority.
Right now, looking at him, I see him as having really no national political ambitions. I mean, unless he wanted to go for us senator. But we're going to have senators, they're going to be in there for six year terms. So I don't know, I'm not particularly optimistic for his, there's certainly where all the aspirations run for president.
I just don't see how that's gonna happen unless, unless there's an enormous about face in California so he can point to some accomplishments- >> Bill Whalen: That make one final comment for Jonathan boosts onto our final segment, and that's this. I watched the last episode of Curb Your Enthusiasm the other day, and so I've been swimming in a lot of Seinfeld nostalgia as a result.
I remember an episode of Seinfeld back in the 1990s where George Costanza is trying to get an apartment and he's up against a guy who survived from Andrea Doria sinking. And then George realizes, yeah, what was the trauma here? The ship went down gently. [LAUGH] It's like an old man getting into a bathtub. [LAUGH] And so Jerry says to George, why don't you start telling him your life's problems? And they called it the harrowing tales of hardship from George Constanza.
I mentioned this because presidential politics, unfortunately, with the exception of Donald Trump, has become this game of harrowing hardship. I worked on the Bush campaign in 1992, and we just looked in disbelief to what Bill Clinton and Al Gore were doing at the time. Bill Clinton was telling you serious sad stories about his father died before he was born and he never knew him. And he grew up with a very hard to deal with stepfather.
Al Gore talked about how he just about needed psychological counseling to figure out how to cope with his formidable father. Al Gore Sr was a United States senator. Barack Obama talked openly about the challenges of being biracial. George W Bush talked about kicking alcohol. Trump didn't get into this, but Joe Biden has always talked about what it's like to grow up in the hard streets of Scranton, Pa. And so forth.
This is the challenge for Gavin Newsom Lee and Jonathan, he's a very handsome guy who has a very beautiful wife. Just looks model handsome. He's made a lot of money. He just kind of reeks of privilege when you look at him. And he wants to tell you that, no, I've had a hard life. And so that's the importance of dyslexia. I'm talking about that to him.
You're right, Lee. It's, you know, you know, bless him for overcoming this challenge, but he's using dyslexia, the hook for, you know, I've had things tough. Don't hate me because I'm beautiful, as the old ad used to go. So dyslexia is his hook for kind of making himself relatable and likable to you.
So again, the problem is when the story comes out, not just picking apart the baseball story, but also picking apart how he got into Santa Clara, because apparently his father, who was a judge at San Francisco, friends with Jerry Brown, got Jerry Brown to write a letter on his behalf. A trustee wrote a letter on his behalf, and the trustee said it's the only letter he ever wrote for Newsom. So clearly, strings were pulled.
So again, it just tugs at this fabric of this story that he wants you to believe in and to close out. Again, welcome to the big leagues, Governor Newsom, because this is what the national press corps will do. They will elevate you, but at the same time there will be people out there who wanna tear you down. So you better be ready. >> Lee Ohanian: Yeah, no more softballs. They're gonna be bringing the heat, and we'll see if Newsom is ready for that.
>> Bill Whalen: Yeah. >> Jonathan Movroydis: Gentlemen, there was some breaking news this morning. Orenthal James Simpson, better known as OJ Simpson, San Francisco native USC Heisman Trophy-winning running back, one-time NFL MVP for the Buffalo Bills, who stepped away after playing his last two years in the NFL with his hometown 49ers, died today from cancer. He was 76 years old.
Simpson is best known for being accused of the double murders of his ex wife, Nicole Brown Simpson, and her friend Ron Goldman in June 1994. Following the murders, police pursued a white Ford Bronco driven by his close childhood friend, Al Cowlings in a chase through the Los Angeles and Orange County areas. Simpson was a passenger in that car, and the pursuit ended with Simpsons arrest at his Brentwood estate.
After a highly publicized and controversial trial, Simpson was acquitted in October 1995. However, a couple years later, he was found guilty in a civil trial and ordered to pay millions of dollars in legal damages and forfeit his Heisman trophy. Gentlemen, do you remember where you were on the day of the chase in June 1994? And could you also reflect on how OJ's legacy and that of the trial remain in so many Californians minds today? Bill, let's start with you.
>> Bill Whalen: Well, on Friday, June 17, in 1994, I was sitting at a meeting in Sacramento. I was working for the governor at the time, and I remember, like a lot of Americans, I was sitting in that meeting. But somebody had turned on a television because the NBA Finals were going on at the same time the Knicks were playing the Rockets, and NBC at the time had the NBA contract. So they're showing the game.
And then as the game began, you had this news coming out of Los Angeles that OJ Simpson was in a white Bronco, driving north to his home in Brentwood. Which for those not familiar with Los Angeles, is a very posh part on the west side of Los Angeles, next to Pacific Palisades, which OJ had this very lovely house. So you suddenly had this very strange thing going on, and you'd see the game going on with a little box in the corner showing the white Bronco.
And then suddenly the white Bronco would dominate the screen, and then it'll go back and forth, back and forth, if you will. This is 1994 media similar then as to now, I remember just what an absolute circus has quickly became, because you remember, it was not just OJ going up the 405. There was people coming out and getting on the overpads to watch the Bronco go by, cheering him on, by the way people gathering around his house, him getting in.
We didn't know if OJ was going to kill himself that night or not. So the first thing that stands out is just what an absolute shock this was, because we have to take a step back here for a second. For those of this podcast who are not my age [LAUGH] or Lee's age, maybe you don't remember this as well. OJ Simpson was a very, very big sports figure in the 1970s, and then even in 19 8019, still a big cultural figure.
He was one of the first, if not the first, black athlete in America to really cross over. And by that, I mean take his athletic prowess and become a marketable entity. Hertz signed him on, I think the old Tv Dinner Swanson, I think at one time got him as a spokesman. You just didn't have black athletes doing that back in the day. But OJ came across. OJ was an incredible California success story.
He grew up on the projects in San Francisco, because of football he makes his way to USC, he wins the Heisman trophy. He's just a likable guy. He's a great football player. He appears to be a good family man. He makes it in television, he makes it in movies, he makes it in business. He is playing golf in Brentwood. He is leading a very privileged life. And we all like OJ very much. And then suddenly, on June 17th, 1994, we come to realize, holy smokes, the guy might be a double murderer.
We can get more into legacy in a moment. But I think what it showed, Lee, was that LA then is very similar to LA, not Los Angeles. Now, at least one regard, OJ exposed racial divides in Los Angeles that maybe we already were aware of because of the riots a couple years before, but he kind of re-exposed them. OJ lived a very privileged, dare I say, white existence in Brentwood as a black man. Where as Black Angelenos didn't live as well as OJ did. There's still economic disparity in the city.
There's still educational disparity. But then the views on OJ and that Black Californians, Black Angelenos thought he was innocent, and White Californians, White Angelenos thought Thought he was guilty. And you might remember, Lee, when the verdict was read, and you would see screenshots of White audiences gasping in horror, and Black audiences cheering for the guy. So OJ kinda became a symbol of fighting the system, if you will. But it's just a sad story overall, Lee.
And don't take a cheap shot at USC now, because you're a UCLA guy. But this was just the destruction of a guy who had really been venerated by a lot of people. >> Lee Ohanian: It's just devastating. He was so loved by everyone. As you noted, he crossed over racial lines. In fact, he was the example to show that we could become a completely colorblind society. I'm trying to remember among athletes or former athletes at that time, who'd have been more popular.
And I can't say that Jack Nicklaus from golf was more popular than OJ or Troy Aikman, who was quarterback for the Dallas Cowboys. UCLA graduate, I'll throw that in there, around that time. Multiple Super Bowl winner Troy Eggman, I can't say he was more popular than OJ. He was a natural actor. As kind of easy comedies go, he was in the Naked Gun, the Naked Gun series. I think there were three naked guns. He worked great with Leslie Nielsen, one of my favorite comedians. Everything just.
He seemed to be a natural at almost everything. Meeting people, making you feel like you were something special. He seemed so genuinely a warm and good person. And then this happens, and it destroys the lives of many of the Kidmans, of the Goldmans. And how could a person do something like this? That was light years away from the OJ we knew.
And he was such a symbol of hope for so many people in a town that had always faced difficult racial issues, dating back to the Watts riots of the 1960s and then the riots in the early 1990s. So OJ meant so much to many people. And one thing that was also exposed is that for those who believe that he was guilty of those murders, and the trial was broadcast every day, is it showed that if you have enough money, you can buy. I think they were called the legal dream team.
I think was a takeoff on the name of the NBA dream team of 92, was Maggie Johnson and Michael Jordan and Charles Barkley. And he hired the legal dream team, F Lee Bailey, and, I mean, he had a team of lawyers. And what that showed is that if you hire the best lawyers, they can do a lot. And for those who believe he was guilty, he obviously, in the criminal courts, was found not guilty. So what I was doing at that time, I was an assistant professor of economics at the University of Pennsylvania.
It was my first teaching job, and it was the summer, so I happened to be working at home. I clicked on the tv, and then just there it was. And it was mesmerizing. It was hard not to watch. It was hard not to watch that whole story as it unfolded. But what a tragedy. What a tragedy for the families involved, and then what a tragedy for everyone more broadly. And he lived really as a pariah for the rest of his life.
And I'll just throw in one little personal observation, which is, when I was teaching at Penn, I had a friend who was in the medical school, and the University of Pennsylvania had an outstanding department for orthopedics and rehabilitative medicine. And he went to that clinic. He went to that clinic to get a checkup. And what they found was he had severe arthritis in both knees and severe arthritis in his back.
And pretty much every joint on his body was arthritic from playing professional football for so many years. And that finding was actually used within the trial to say, hey, he was completely broken down. There was no way that he could have physically been able to do these things, which suggests some premeditation on his part. But anyway, just an enormous tragedy, just extremely sad, and one that- >> Bill Whalen: Working for the governor as I was.
I remember, first of all, that trial was on every day during the daytime, and it became something of a national obsession. And we had to go around and make sure people turned their TVs off so they could work, because you're just easy to get sucked into it on a daily basis. Writing speeches for the governor, I remember we got a heads up when the verdict was coming down, and I had to race into my office and bang out not one, but two statements for the governor. One, what if he's found guilty?
In other words, please don't destroy Los Angeles. Don't riot. And the other one, if he's found innocent, don't give up on the judicial system. But it was very difficult and tricky to write because you couldn't have the governor kinda weighing in the verdict. Remember, Richard Nixon famously said that Manson's guilty. That almost became a mistrial as a result, so had to walk a fine line. For those who want to know more about OJ, who didn't live it, I would point you to two things.
One, ESPN did a 30 for 30 series of shows on him. It's called OJ Made in America. And I think there are five installments, and it talks about how OJ became OJ, but also how OJ and the murder and the trial really began. This conversation about race. And the other one is another ESPN 30 for 30 called June 17, 1994, which just shows you the feed coverage of things going on that day, which is not just OJ on the 405. Arnold Palmer was playing his last round of golf at the US Open.
Ken Griffey was chasing a home run title in baseball. Just a lot of fascinating stuff going on that day day. And it really captures kind of the crazy media feed, if you will. By the way, one other legacy about OG Simpson. I would like to think that maybe it started a conversation about domestic violence, because part of the ugliness of this trial exposed that, to the extent that people knew that Nicole was being treated roughly, a lot of people turned a blind eye to it.
The cops really didn't go after OJ the way they should have. So that should have raised our consciousness on that. But you know what else OJ Simpson maybe gave us? The Kardashians, because who was on the dream team? Robert Kardashian. And here we are now, 30 years later, and it's World War Kardashian. So you kinda wonder in ultimate universe, if OJ doesn't commit that murder, maybe OJ is still beloved. Maybe America's been spared the Kardashians.
>> Lee Ohanian: Yeah, I can't say that was a good thing for us, Bill. No criticism of the Kardashians. Kudos to them for monetizing and marketing whatever they do. But Bill, I would say, yeah, for those who maybe are younger and weren't around then. Google USC, UCLA, 1967, the football game, because that was one of the great collegiate football games of all time. It was number one UCLA with Heisman Trophy winner Gary Beban, who I'm lucky enough to have been friends with after he left UCLA.
Wonderful, wonderful person. He was the quarterback on UCLA's number one team, was undefeated. It was for the city championship. USC was number two with OJ Simpson, who would be the Heisman Trophy winner the following year. Beben had cracked ribs. He threw for over 300 yards, which in the 1960s was unheard of for a quarterback. I mean, simply unheard of.
Simpson ran for a 64 yard touchdown in the closing seconds of that game, where he avoids, literally, I think, every possible person who could have tackled. It's a remarkable run. It's a remarkable football game. USC won 21 to 20 and ended up winning the national championship that year. And I can't say, bill, almost, almost, I guess almost 60 years later, UCLA has never come close to having that level of football ever again. And Jonathan, just to give you an idea of how the game has evolved.
Gary Beban was the Heisman Trophy winner. He is about 5 feet 10 today, probably 170 pounds. He's just a normal looking fellow and he told me that his offensive line was about 200, 230 pounds. And he said, playing against USC then was like he went to the NFL after graduating from UCLA. He hurt his knee and retired early, but he said playing against USC was like playing against an NFL team. He said, I just don't know. I don't know how we did it.
But anyway, great, absolutely wonderful football game. >> Bill Whalen: Lee, if you go to the Coliseum and see a USC football game, they have a tradition of putting up the jerseys of players who won Heisman trophies. And there are two people missing right now, and one is OJ Simpson. The other one is Reggie Bush. Because remember, Reggie Bush had to forfeit his Heisman because it found out that his parents are getting paid money.
There's a lot of push within the USC community to resurrect Reggie Bush. Bring him back, put the jersey back up, but you know what? But OJ Simpson's 32 is just never coming back, you don't come back. Though it was acquitted on the homicides, you just don't come back from that. So he's forever gonna be just kind of a canceled man. Final thing to close here, by the way, guys, do you know what happened to Al Cowing's car, the Bronco. >> Lee Ohanian: No. >> Bill Whalen: Well, I do.
>> Lee Ohanian: That's not Bronco ever. >> Bill Whalen: Yeah, it was a 2-door white 94 Bronco, I think. So here's what happened. Collings gave it up, he sold it to a guy who happened to be a porn king in California. Yeah, I mean, a part of the California economy. We didn't talk about that little vibrant business in the San Fernando Valley. We could never brag about that when I was in the governor's office, but it was crazy to do the economy itself. It gets sold to the porn king guys.
It sits in his garage in Los Angeles for a long time, then finally he gives it up. He sells it and it ends up like OJ himself. It ends up in Las Vegas at a sports memorabilia museum. It sits there for a while and then it gets moved to a museum in Tennessee, I kid you not. It's called the Alcatraz East Crime Museum. It's about ten minutes from Dollywood, Lee and Jonathan. If you're planning your next vacation, there it sits today.
It's in the company of Ted Bundy's VW Beetle and John Dilliger's Essex terraplane. So if you wanna go see the white Bronco, go to Tennessee. There it is. >> Lee Ohanian: Yeah, with that story, there ought to be a movie. >> Jonathan Movroydis: Well, as always, gentlemen, this has been an hour and an interesting and timely analysis. Thank you for your time. >> Bill Whalen: Thanks guys. >> Lee Ohanian: Great to see you fellas.
>> Jonathan Movroydis: You've been listening to Matters of Policy and Politics, the Hoover Institution podcast devoted to governance and balance of power here in America and around the free world. Please don't forget to rate, review, and subscribe to this podcast where you might hear it. And if you don't mind, please spread the word. Get your friends to have a listen. The Hoover Institution has Facebook, Instagram, and X feeds. Our X handle is Hooverinst.
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