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Reversing the Califailure

Apr 04, 20251 hrEp. 735
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Episode description

It's been said that California is to America what America is to the world. This is troubling for all parties involved given the current state of affairs in the now-inaptly named Golden State. While today's guest Steve Hilton pulls no punches in his new book, Califailurehe carries some glad tidings in the form of voter trends that magnify what look to be glimmers of hope. Our resident Californians Peter Robinson and Steve Hayward soak up the glad tidings, putting them in a good enough mood to momentarily get over their post-Liberation Day jitters.

Transcript

Speaker 1

I almost prefer you over zoom to in person.

Speaker 2

Harsh ask not what your country can do for you, ask what you can do for your country.

Speaker 1

Mister girl. But you'll tear down this wall, read my lips.

Speaker 2

Welcome everybody to the Ricochet Podcast number seven hundred and thirty five. This is Steve Heyward sitting in James Lylyc's chair on top of a booster seat, and I'm joined with Peter Robinson today with a special guest who is Steve Hillman.

Speaker 1

So let's have ourselves a podcast.

Speaker 3

I agree, you'll never get bored with when and we never get bored?

Speaker 1

Well, Peter, here.

Speaker 2

We are without the dulcet tones and firm hand of James Lylac for episode seven thirty five. That's pretty amazing, isn't it.

Speaker 1

Staggering? Absolutely staggering. Oh here's the good news. And having done seven hundred and thirty five, if we just keep doing these things, John pot Horritz and the boys and girls, that commentary will never catch up. I think that's right.

Speaker 2

Yeah, although I have to imagine there, how do they ever go back to get a magazine out?

Speaker 1

Oh wait a minute, And of course they will catch up. Of course they will of course they will. They do it five days a week. In fact, they've probably done ten thousand already.

Speaker 2

It could be, but I figured you were pard of the new Math, Peter, which you know, Yes, I don't know.

Speaker 1

Right, in the New Math, I'm always a step ahead of John.

Speaker 2

Right right, Well, now, you know, I guess we should start with two old Reaganites like you and me. Remember that Reagan fought a v a valiant effort while he was president to fend off protectionism and defend bolaires. He was a free trader. Now he did concede a lot. I went back into research on this recently.

Speaker 1

You know, Oh yeah, you would know, you of all people would know, you'd be the authority they were, go ahead, do you do the history. But here's my memory is he made tactical retreats. Yes, only in the interest of a strategic position, right, yeah, yeah.

Speaker 2

The point is he compromised to stave off worse from his first days in office.

Speaker 1

Right.

Speaker 2

But I was startled to find out some particulars. For example, in nineteen eighty six, Reagan threatened Spain with a two hundred percent tariff across the board in order to get Spain to relax its restraints on American farm imports to Spain, and they did right. So Reagan was not a verse

to playing hardball with the trade measures. There were literally hundreds of bills introduced in Congress, many of them by Republicans for tariffs and protection, and some of the trade bills that Reagan vetoed were by Republicans, one of them by strom Thurmon in his diary talks about how I had a veto at trade bill. It's a bad bill. I called up strom Thurman. He took it better than

I thought he would. He said, so, yeah, that's the point is that you had a you might say, a trumpest bipartisan majority in favor of protectionism in the eighties. And and you know, I get impatient my libertarian friends who say, yeah, Reagan talk like a free trader, but he was a hypocrite because they ignored that he was a working politician at a principal man, but a working politician.

Speaker 1

You put the two of those together, and if you can't distinguish between tactics and strategy, you'll just not You'll make a hash of the Reagan record. You just won't get it exactly.

Speaker 2

And so now the odd thing is there is I think you'd say a week bipartisan majority now in favor of liberalized trade, maybe not complete free trade. I think Democrats are still protectionists at their core.

Speaker 1

But I mean I asked question when you talk about the when you talk about the weak majority in the old days of weak protectionist majority versus a week free trade majority today, are you talking about I hate the term elites, but are you talking about the hill essentially or are you talking about the general population? Because I have been very struck that in poll after poll after poll, the American people are against the majorities very but they're

quite sizable majorities. It's two thirds or so. Thiniffs are a bad idea. Yeah, you know, what do you have in mind when you.

Speaker 2

I think it's both. I think there's a weak majority. I think it was a strong majority for protection in the eighties. I think it's a weak majority. I mean, look, you know the n After Treaty got through with a lot of Democratic votes. You know, Bill Clinton had to break arms to get it through and so forth, and reel out al Gore to debate Ross Paroe.

Speaker 1

You remember that.

Speaker 2

Famous moment thirty years ago. Yes, but so I think it's a weak majority. And then I think the public. You know, my hunch about that, Peter, is that people like getting inexpensive consumer goods. They say, the maid in China made in Vietnam on the labels, And I think in an unsophisticated way, they recognize the benefits of liberalized trade. It's benefited especially lower in common working class people, right, and I think they understand that tariffs could blow up

and make their lives more expensive. Again, I don't know that's a I'm surprised there are more surveys that try to get at that more deeply because I've seen the same numbers that you have that people oppose it. But that may be an odd combination of Republicans who don't like trade protection and Democrats who are opportunists. So I think right now there's a lot of opportunists. I mean, my joke is this boy Trump is a genius. Think of the things Trump has accomplished in the last several months.

He's made Democrats hay to Kennedy, We've been trying to do that for sixty years, right, Yeah, what else has he done? The other one now is that he's made Democrats come out against a tax increase, which is what a terriff essentially is, and in favor of free trade. I mean, there's you know, I don't go in for the three D chess stuff very deeply, but I do wonder sometimes what the political thought behind all this is, because it certainly confused the scene.

Speaker 1

Yeah, it has confused the scene at a minimum. So let's rehearse the argument, shall we? Very briefly? Excuse me? What I mean is, let me rehearse the arguments and then you tell me where I'm right or wrong, as I understand it. First. So, first of all, we have that we can grant. I think we can stipulate that even a very cursory examination of American history shows that the protectionist impulse, I would almost call it a protectionist temptation,

is permanent. It is always with us. You are always going to find political figures, major political figures, at any given time, who are willing or insist on putting up protectionist barriers. Item one. Item two. You have the counter

argument of Milton Friedman. For example, Milton had what I would call the strong free trade position, which is that it is always in your favor to engage in free trade, even if your counterparties are not we hear a lot about I can remember Milton saying, as you know, I knew Milton Friedman in his final years when I overlapped him for a few years at the Heritage at the Hoover Institution. In fact, his office was down the hall from so Milton would say, we hear a lot about

Chinese dumping products in the United States. What that means is they're willing to give us their products for less than it costs them to produce them. If they intend to make us a gift, why should we object Over the longer term, the people who are out are the Chinese, not us. Okay, So that's the strong argument. The counter argument is that if you're going to engage in a

welfare state. Actually I had this conversation with an economist, my friend Tom McCurdy, who argued the point with Milton Friedman himself, and Tom argues that if you're going to engage, if you're going to set up a welfare state, then you have to think twice about free trade, because you have two ways of helping the poorer people. One is income transfers and that runs through the tax system. The other is to increase their wages and that would imply tariffs.

And if you use tariffs to increase their wages and benefit workers, you don't have to run it through the federal government. In a certain it is a tax, there's no doubt about that, but you don't have to send it to the IRS and get bureaucrats involved who will take the viig so to speak. And Tom said, in a certain sense, you could even argue that tariffs are a more efficient way of benefiting workers, the less privileged,

less privileged persons in the United States. Okay, So you put all that together, and there's some pros and there are some cons. What do you make of it? Of the artica, I'm not yeah, I'm not sure I buy that.

Speaker 2

I think there are better arguments, one for in favor of tariffs.

Speaker 1

Better arguments in favor. Okay, give me your best argument in favor of tariffs.

Speaker 2

Well, let me just say make one comment about that, the argument you just gave, which is, tariffs may protect domestic workers' wages, but only at the effect of lowering the wages of workers overseas. And it takes a lot to explain why that's true. And I think that makes her stability in trading relations and so forth and can't be sustained over time, which is why it's likely a mistake.

I think the argument in favor of tariffs is not their intrinsive sweet goodness or whatever Trump is saying about them. It's that they are an important tool for two reasons.

One is when other nations are practicing predatory trade, which certainly would be the case of China, and they do that two ways, either by dumping or in the case of China, currency manipulation, which means that the basics straight up econ one oh one flows of currencies that would adjust their values, and then the currency we send overseas to buy stuff comes back here in the form of

investment capital. It distorts all that badly. And then remember domestically, the theory about why trade protections that could be justified is the same as antitrusts. Right, we prosecute predatory pricing where someone credibly uses predator rate. That's right, Yeah, you want to crush your competition. Then you have a monopoly and you get monopo rents. As the economist would say, I think those are both sort of limited, and the basic idea the trade deficit is in and of itself bad.

Is just I think economically illiterate and totally Trump seems to have bought into that.

Speaker 1

I don't know whether he is. It possible that he doesn't know better himself. I mean, the argument is Jonah mentioned someplace in the web the other day that if you go into whatever, you go into McDonald's and buy a hamburger. On the Trump argument, McDonald's is stealing from you unless they buy your Jeanes in return.

Speaker 2

Yes, John, you and I have been talking about how we need a tariff against McDonald's for their untrair trade advantages over us, especially with that predatory product that mcribb that he loves so much. Yeah, you know, Look, I think Trump's instincts and its policies are mostly fantastic. But I have joked over the years that I don't think he knows the difference between Friedrich Heydrich and the Selma Hayaks the problem.

Speaker 1

Right.

Speaker 2

It pains me to say this, but it's very worrying because, again going back to the Reagan example, the Reagan people knew from day one that if they didn't fix the economy, they couldn't accomplish anything else they wanted to do. And now the hazard for Trump, who I think has made the biggest bet of any president ever perhaps is that if he screws up economy, it's going to crush all the other great things that he's doing.

Speaker 1

So I think a correct as far as that goes. But b if you're going to try to save the economy, if you know, if you screw it up, you can get nothing else done, then you say to yourself in politics, as you know, Steve's sequencing matters, and this guy has decided to impose tariffs, caused turmoil in the market, shrink everybody's four O one K, and then extend his tax cuts. He only has a margin of three or four seats in the House on a good day. All you have

to do. He's already lost four Republicans in the Senate. He has already he's got four Republicans McConnell, the usual suspect mckowski, Collins, but also Rand Paul have now voted against Trump to reduce or eliminate the tariffs on Canada. You just get this slight stirring in the Senate of the constitutional position of the Congress, which is that the

Constitution gives Congress authority over tariffs and taxation, not the president. Well, if you lose rand Paul, you're in a position to lose three four or five a dozen in the House. And if you do that, as you're coming up on an extremely complicated, huge bill, to the centerpiece of which is to extend the tax cuts, and that fails, or it gets hung up, or it gets turns into a long protracted process, he will get wiped out in the midterms. It is to me, it is just a sa right,

and then he's done. Then he's just done. Well, my big worry immediately, not the midterms, is this could screw up the tax bill. You can see things on that next right. Yeah, exactly what I'm saying. Exactly what I'm saying. Well, let's get out with I'll give you two more quotes, Peter. You'll like our instances that I'm getting animated on. I'm getting animated on the anti tariff side. But I mean as you are. I was about to say, gamely pointing out,

but you're doing it more than gamely. You're granting real credence to the pro tariff It's particularly if he's using them just as a tool for if the idea is imposed tariffs to get to a world without tariffs. All right, that's sensible. You can argue about sequencing and how you do it and so forth, but at least there's a at least there he has tariffs become tactics in the interest of a larger and sensible strategy. Yeah.

Speaker 2

Well, let me give you three quick quotes to get us out, because we're going forever on this one. Is you know, here we are, as we're talking, the stock market is crashing for a second day. And I remember there's a moment in the fall of nineteen eighty one when the stock markets started going down after Reagan's tax cut pass tax cuts passed, and a reporter, you know, a typical antagonistic border said, gee, mister President, wall Street doesn't seem to think very much of your economic policy.

And Reagan's response was, I've never found wall Street to be a very good source of economic advice, which I thought was terrific.

Speaker 1

Right boom.

Speaker 2

But then I got to thinking about something a little older, back in the nineteen twenties, when Churchill was Chancellor of the Exchecker and facing a decision that is parallels this one in some respects, and it was when and at what valuation to return to the gold standard, which they botched. Yes, but he had a line that it sounds very trumpy, and he said I would rather see finance less proud and industry more content. That is, in substance what the Trump pro tear people say.

Speaker 1

All right, they want to, except that industry doesn't seem to be content at all. I correct winging and whining and re shoring, as the term now goes very grudgingly. Well, in particularly these tariffs. Some there are industries that over the last couple of years has made a real effort to get their supply chains out of China, so they've put them in places such as the Philippines and Vietnam.

Boom Trump puts on them as well. Yeah, all right, well, I'm sure, I'm not sure contented industry is quite the right way to put it.

Speaker 2

Well, no, I mean there's evidence that capital investment is pausing right now, which is a bad thing. Yeah, because of the uncertainty.

Speaker 1

But I did dust off.

Speaker 2

It's very rare that I would say anything nice about John Maynard Keynes, but he wrote a pretty good essay at the time called the Economic Conquences Economic Consequences of mister Churchill, And after going through a very coach and explanation about why they made a mistake in their valuation point for gold, he has a sentence which you can use right now. He said, what now faces the government is the ticklish task of carrying out their own dangerous

and unnecessary decision. I have a hard time running away from that right now, but I'm hoping for the best. There's a lot more illumination we can bring to the subject, Peter. But right now, that reminds me that speaking of illuminating things are sponsored Lumen.

Speaker 1

Well done, well done, well done. I mean, right up until the last moment you had me wondering where you were going.

Speaker 2

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Steve Hilton joins us. Now you may know him well from Fox News, but you should know him now for his brand new book called Cali Failure and Boy. For a native of California like me, and for a transplant like Peter. This is a subject near and dear to our heart and about which we have lots of thoughts. But we want to hear yours. So, Steve Hilton, welcome to the Ricochet Podcast.

Speaker 4

It's fantastic to be with that. I'm so happy we could do this.

Speaker 1

It's great.

Speaker 4

I don't know what you know. I feel terrible, Peter, you know, it's so why haven't I done this before?

Speaker 1

It's exactly exactly, and we see each other quite often. Actually we only live a few miles apart. We should simply start recording our own conversations. Oh, Steve, let me ask you the large question. Yeah, I'll give you the large questions. A touch of biography here so you can see why I really care about this question.

Speaker 3

So.

Speaker 1

I grew up in the Northeast. I had relations who had moved to California and written at the end of the nineteenth century, as it happens, and in the family collection we have letters that they wrote back to the men who are still farming northeastern Pennsylvania, and they said, come to California. You don't go through another winter again with just they were describing paradise. I worked for Ronald Reagan in the White House. Reagan his old California hands

ed Meese Linnofziger. They spoke about California as if it were paradise. They really loved it. It meant everything to them. Ronald Reagan himself used to say that if the Pilgrims had landed in California instead of back east, nobody would ever have bothered to discover the rest of the country. The state was that beautiful, It was that much of a paradise to ordinary working people, which, by the way, the families of Ed Mees and lindov Sigger and Ronald

Reagan were when they went to California. What went wrong? How could you take a state so blessed with talent and beauty and natural resources? What went wrong? Well?

Speaker 4

I first want to underline how much I agree with all those sentiments, and I'd add or add to it. It's not just the physical beauty, their magnificence of our landscapes and the diversity of them, and the weather and all those things. There's also something magical and inspirational about the idea of California, the ideal of what California represents. And to me, there's a spiritual, emotional, intellectual dimension to it. It's not just it's the most amazing place to live

in that sense, or should be. It's that it represents the best of what I think of as America. And there's a line, right, I think it's actually the first line in the but I can't recall now, But which is this? I I feel very strongly about this. California means to America, what America means to the world. And what I mean by that is that I had this love for California even before we moved here, and it represented to me the best of what I thought of

as America. And we can throw around words, but I think we all kind of have a feeling for, you know, innovation and energy and optimism and ambition and swagger and start up hustle and this sense of anything is possible, and also another dimension which is less referred to, but I feel it very strongly, and it very much connects to where things have gone wrong, the rebel spirit. That's why we've got so many people creating in this incredible industry.

You know that's Hollywood, you know, centur Aco or Silicon Valley and so on. Inventions and just the rebels and the builders and the dreamers and the creat that's what it's all about. And I felt that very strongly. I'll just tell a very quick story, which is that back in the day when I was working for David Cameron before he was Prime Minister, there was a story, a cover story in the Spectator magazine and which of the print edition.

Speaker 1

I remember.

Speaker 4

I know people in America read the Spectator online, but it's I think it's the oldest political magazine in the world printed. And the cover story, the headline was California Dreaming and the theme of the article was Steve Hilton, David Cameron's policy guru, as he's developing the ideas that will drive the Cameron administration, is inspired by the notion of making the UK more like California. And that was

I mean, you know, twenty years ago. Yes, that seemed like a good idea at the time, and now as we all we love thing because there's not a single policy advisor to a single political leader anywhere in the world that would want to make their country more like California, which just tells you how far and fast we've fallen. And we could go through the details, but the real answer to your question, I think I'll just very quickly,

you know, get to that, which is the combination. The headline is why it's all gone so wrong in California is the combination of one party rule and really bad ideas, and that's what we've had. The one party rule has been achieved over the last couple of decades with a couple of that's mechanical and structural things. The building up of the government unions is a dominant funding block for Democrat politicians. This seriously hard to beat Democrat machine has

emerged funded primarily by government unions. And I mean the other aspect of that, there's very important of the lawyer, the trial lawyers. Then there's a real issue there, but there's really the government unions that control them. So you've got this big machine that wins elections because they've just got a lot of money and activism and union members that go out and phone bank and work and all

the rest of it. Secondly, very important and not discussed enough, is because of the fact that the policies that have caused this decline, that have given us these absolutely catastrophic outcomes in California, the highest poverty rate in the country for most of last year, the highest unemployment rate. Imagine that, the highest rate of unemployment of all fifty states. Right

now in number two. You know that great progress the highest cost for every essential housing, gas, electricity, water, the worst business climate in America ten years in a row. So it's spectacularly bad outcomes. And the thing that's not discussed enough is that a lot of that, a lot of the policy that has led to that, which I'm

sure we'll discuss, emanates from the legislature. And so what you've had is is a legislature that since twenty twelve has had a supermajority for Demo over two thirds majority, which means that they can pass whatever they want with no Republican input, no real constraint, and they've had no constraint from the governor because you've you had a governor that just simply hasn't pushed back on that. Jerry Brown

a little bit did. That's why the decline has accelerated so much under Gavin Newson, because he really hasn't pushed back against what's coming out of the legislature at all.

Speaker 1

Too busy with podcast.

Speaker 4

Well exactly, and then you've got so why, But the supermajority is very important. It is not a legitimate supermajority, is the direct result of jerry mandering. Is very important. Everyone understands this California is a much more republican state than people think. People look at the supermajority and the way people talk about it outside of California. Oh, it's

so deep blue. Caln never be Republican again. Well, actually, if you look at the average share of the vote in statewide elections since the last time Republicans won, which was twenty two thousand and six Arnold Schwarzenegger's reelection, the average share of the vote for Republican candidates is forty one point seven percent. So that's not fifty, but it's not twenty either. But twenty percent is the number that for many years was the representation of Republicans in the

state legislature. Because in two thousand and eight, voters passed a ballot initiative on independent inverticomas redistricting. That was the process was hijacked by Democrats. They're very good at that, and they completely distorted the intent of that ballot initiative. The superficially, yes, it was an independent commission with equal numbers of Democrats and Republicans. But now for this book, I spoke to people involved in that process. The maps

were drawn up by government union members. The staff of the audit Department and whatever in Sacramento, and then they inserted all these criteria. One notorious one that they inserted. The original tent of the ballot initiative was to have districts formed around existing city county boundaries and so on. They added a new thing called communities of interest, which enabled them to in the English phrase, driver coach and horses through it. So you end up with this jerrymanned legislature.

Instead of forty percent representation in the legislature, which is what roughly speaking, Republican support would would entail, it's not thirty five, thirty twenty percent right now, it's up by a little bit. So the supermajority pushes through whatever it wants. And then you combine it with the bad ideas, which is this ideology that has just gone has been let run rampant. And that's really what I try and define

in the first chapters of the book. What does it mean when the phrase that I use is that California really has been treated like the Wuhan lab of far left extremism. They've been cooking up this.

Speaker 1

Experiment the same results too.

Speaker 4

Yes, right, And so what I've tried to do in the book is unpack what that is, because it's not enough just to say, oh, it's democrats. California is bad because we had democrat put it's worse than that. The outcomes are worse than anywhere else in America. So what really has been driving it? And so the the main trust of the book, the first part is to understand this ideology, this new leftism that has had these calamitous results.

Speaker 1

So Steve, I'm going to turn you over to Steve Hayward in just a moment to discuss the ideology and the policy. But first it occurs to me that there are people hearing you for the very first time who want to know why am I listening to a man who's written a book on California who has a British access. So I mean, your story is in all kinds of ways of California story in the sense that, like me,

you're an immigrant. But briefly so that we can get to Steve and get back to the book, but briefly you'd better explain to you start in Hungary and get yourself here, get your family here, what was doing exactly?

Speaker 4

By the way, very beautiful moment, I had two lovely Hungarian moments. Why Hungry because my parents are Hungarian, both my parents, my stepfather is Hungarian. Everyone's Hungarian, the whole family. Most of my family still lives in Hungary.

Speaker 1

Finally they live Hungary for what reason?

Speaker 4

Well, my father and step My father was a sportsman in Hungary, pretty well known. He was the goalie for the national ice hockey team, played in the Olympics, pretty well known anti communists, got targeted by the regime, defected, I think that's the right way. He was playing in Berlin and actually went to the British embassy and ended up in Australia. My mother came in a less dramatic fashion.

She was able to get to London for an English or something with English, learning English or studying something like that. Met my father actually working at Heathrow Airport in the restaurant there, the cafe. That's where they met in the early sixties. But my stepfather has the most interesting story.

He actually really did. He was from a small village in the western side of Hungary, and he tells the story about how they when the Russians, when the Soviets came and crushed the revolution in nineteen fifty six, they heard on the radio the Russians are coming. The Russians are coming, and they said, okay, so we're going, and they literally ran. He and his brother and some friends they ran for the border with Austria. They climbed barb by fences. Half of them were killed in the attempt.

Ended up in a refugee camp in Austria, and thence to England, where I was born, So that's the Hungary part. We moved here in my family and I twenty twelve. My wife who you know very well, Peter Rachel. She and she was then working for Google, had a big job at Google, running global communications and public policy for Google. I was working in ten Downing Street, a senior advisor to David Cameron, he's the Prime Minister at the time. And it was really the when our second son was born.

It was just very you know, the traveling for Rachel back and forth California, the time difference. So we just decided to move and we really didn't have an intent of staying. Well, we didn't really think long term about it. We just thought, let's see how it goes. But there was a very, really, really moment I remember very clearly, which is four years in. We'd been living in the Bay Area to be close to Google. I was teaching at Stamford. That's the first thing I did, and then

I did a tech startup and whatever. But twenty sixteen I went back to the UK to campaign in the Brexit referendum, which I felt very strongly about it. I'd always been especially since working in ten Downing Street and seeing the impact of the EU. I was very in favor of leaving and back there for a couple of weeks doing that, and I remember really clearly landing in at San Francisco Airport straight after the referendum and we

were just taxing to the term. I really remember this, just looking out at the hills and I just thought to myself, Oh, it's so nice to be home. And then I thought, oh, that's interesting home. And really that's the moment when I realized and actually really de facto is all, you know, we really had no intention of moving but moving back to England. But it really is home in the deepest sense, not just literally where I'm raising our family with my wife and establishing our life here.

We've now been here thirteen years, but just spiritually I used that word a lot. I just feel so connected to California. I feel at home here in a way I never have anywhere else. And then just to bring everyone up to date, yes I still have the accent, but I am an American now. I want to reassure listen views. I became a citizen in twenty twenty one.

Very proud American, but a proud Californian as well. You know this is there's nowhere better than California, and we've just got to stop this disastrous ruining of it, which is effecting us here but the whole country because California means so much to the country.

Speaker 2

Yeah, in spite of it all, you can say that I'm glad to hear that I'm a native Californian. But there's actually a deeper personal parallel. My British grandfather, who struck out from London as a young man to the some of the far eastern colonies, somehow made his way

to Los Angeles in nineteen ten and never left. You know, he bought a little house and watched the Hollywood sign go up in whenever that went up in the thirties, whenever it was right, sort of seen it all, and you know, I grew up, you know, came of age

in the sixties and seventies, back on that era. Maybe I don't know if you know the famous article worth finding James Q. Wilson from nineteen sixty seven in commentary on a guide to Reagan Country, and he said, you know, Long Beach is Iowa by the sea, and I can go on a long time about the importance of the aerospace industry, and it's declined at the end of the Cold War for being one important factor. And how we got to this point that I think is an important part.

But you're onto the more important enduring parts, which is one party rule, bad ideas, unions and all the rest of that. You just said something there at the end, which is California is important to the country. Here's an odd thesis for you. California is what has brought the Democratic Party nationally to its lowest public approval ratings in its history of the history of polling right. And the reason I say that is California has always been the future.

We always used to like to say that when California was conservative or at least voted for conservative ballot measures and elected conservative governors. And I think Democrats looked up at some point in the last twenty years. Remember, Democrats were anti illegal immigration until very recently, even Obama made tough statements about immigration, right. I think they looked up

and they made a simple conclusion that was wrong. It was, Oh, California flipped from being, you know, a red state to a blue state really fast because of immigration.

Speaker 1

Let's do that everywhere.

Speaker 2

And they said, we're going to flip Texas the same way, We're going to flip the whole country the same way. And it turns out that not only was that an unpopular policy, turns out a lot of those population groups that immigrated don't like it either. And we've seen this shift, right, And so I think that, you know, in an odd way, the fetish for California among liberals, it's what explains a lot of their current travel.

Speaker 4

I mean, that's why I use the analogy of the Wuhan lab and the virus, because it has infected the rest of the country, and so many of the bad ideas that have caused being a misery in destruction across the country really did start here. Whether that's you know what it's called global the climate legislation in California that we've been stuck with that. It's been so disastrous for you know, our economic competitiveness and jobs and people's living standards.

That is the model for the Green New Deal, banning gas stows, gas cars, all that stuff that all started here. The race and gender ideology, the extremism there that started here, the ballot harvest. You know, you know, you can go through all of these things. Is actually pretty much all the bad things started here, but from this ideological kind

of mindset. And I think actually it is connected to the one party all because when you are in that position of complacency, like you think, well, I'm never going to be beaten by the other side, and it just makes you open to take over by the extremists and the activists because you're not paying attention to your voters

and your constituents. You're only thinking about the party and and and and and pandering to what they want, and so it throws up a one party rule like that throws up I think this an increasingly weak and useless mediocrities,

these machine politicians. You see that now, and what California is producing on the Democrat sides, people like Newsome and and and Kamala Harris and Karen Bass, and I want to give you a really this may sound like a small example, but I think it's really significant in terms of why everything is a disaster. Karen Bass, classic California machine politician. Just the other day I saw her You're a post on X and it was I think, I'm getting this almost exactly right. I have just signed an

executive order streamlining pers for rebuilding in Los Angeles. This is like a week ago. I think, oh, great, okay, fine, good. I mean four months too late, but I'll take it anyway. Then I just but the post was above a video clip from her press conference making the announcement. So on the principle of you know, do your research, I thought, well, I'll watch what she actually said. I did watch it.

This is what she actually said. Remember, the post is I just signed an executive with a streamlining What she said was, I have just signed an executive order tasking agency heads with developing paths forward towards streamline. This is it. This is the problem because you have people, and that's the attitude and the mindset that is everywhere in California and explains because the root cause of all of the you know, when you look at the unemployment, the poverty,

the housing costs, et cetera. So much of that category of problem, which really are the foundational problems, because housing costs, for example, are the number one reason people are leaving California. We lost representation in the Congress for the first time in our state's history. The projection is we're losing another three or four seats in twenty thirty. So because nothing is done, nothing gets done. You can't build anything. You

can't build the water infrastructure. That's why our farming industry is being crushed. We don't build energy infrastructure. That's why electricity prices are so high, gas prices, that's why industries cost go up, and that's why they're leaving. Because you've got this bureaucratic mindset. You've got people who think that doing something equals tasking agency heads with developing paths forward and they sincerely believe that is action.

Speaker 2

Yeah, I mean that would have made Sir Humphrey Apple be very proud here that state.

Speaker 1

And if you know the old reference right, well, let me uh.

Speaker 2

So I mentioned growing up in the sixties in California with aerospace. That was my dad's business. But it was also when liberals built things. Pat Brown built water projects, dams, lots of schools, and abundant housing was allowed. That was, by the way, usually below the median price for the national average.

Speaker 4

It was the most affordable. It's unimaginable today, but California had the most affordable housing in the country. Exactly the typical house price in California, the median is this is the real number. So half of the houses homes in California are more expensive than this nine hundred and nine thousand. Yeah, that's unbelievable, it's insane.

Speaker 2

Well, here's a two part question for you, and I think they go together. I think I know which one you want to talk most about. I'll do in reverse order. I'm following great interest these abundance liberals who have come along like as reclined, and you know, we talked about it on this show last week.

Speaker 1

I wasn't on, but I you.

Speaker 2

Know, and then also, you know, in my time in the Bay Area, like you, I've become aware to spend some time with the Yimbi movement to progressives, I said, gosh, we're over regulated. And what I find in both cases is well this you may remember this, Peter, the abundance liberals we have now remind me of the Atari Democrats of the eighties, you remember them, Peter. They were going to be the They were struggling to compete with Reagan and his pro growth policy. So we're going to be

Atari Democrats. And within months Atari moved to the Philippines and then ceased to exist. So I think the Abundance Liberals are not going to get very far with their unions and all the interscripts you know about. But part two is and you can skip that if you want, but part two you can't. What do you make of Gavin Newsome trying to change his tune so radically right.

Speaker 4

I'll put them together. So I'm very so abundance, Yes, agree, that's what we need. But who caused the scarcity? They did with their bad ideas and the ideology and the incompetence and the bureaucratism and all this that I detail in the book. If you look at the two years ago started a policy organization focused on California's policy problems and how we turn them around, called Golden Together, And if you look at the policy papers that we published,

it basically is the abundance agenda. I mean, we literally have Our policy paper on energy is called Energy Abundance. Our policy paper on water is called Water Abundance. So no argument that we need that. Then you look at Gavin. I'm going to bring in Gavin Newsom so on this kind of fake rebranding tour in this podcast announ where he had Ezra Client on his podcast to talk about a bundle, and it was just it reminded me of

the time a few years ago. Do you remember when you had those shocking scenes of the railway theft, the looting of the railway the trade trains in Los Angeles and we had that do you remember that and packages all over the railway lines.

Speaker 1

Yes, yes, yes, of course.

Speaker 4

And Gavin Newsom goes down there, he's the governor, literally does oppress availability in front of all this chaos and mayhem and says, what the hell's going on here? It looks like a third world country. I would say, yes, who's in charge?

Speaker 3

You are?

Speaker 4

So it reminded me of that, but this time with even less excuse because that was three years ago and he'd only been governor for I know three years. Now he's been governor for over six years. So he's sitting there with Ezra Clent and they're talking about abundance, and in this hilarious he says, yes, terrible the regulation, it's so bad, it's really terrible. On and on like this, Gavin Newsom is agreeing, and then at one point he said, yeah,

that's on us, the sort of fake accountability. He's expressing that it's on us. No, well, who's this nebulous us? It's not on us, it's on you. You're the governor.

Speaker 1

It's you.

Speaker 4

And so that's what I think about the Gavin us to think there's this extraordinary detachment of himself from any kind of agency in these matters. So he says the party is toxic without any kind of acknowledgment that he drove a huge proportion of the agenda that made them toxic.

He said on another podcast, we've become too judgmental, without actually acknowledging that he's the one that constantly smeared people who I mean, do you remember when he talked about people who didn't take the vaccine, didn't comply with vaccine mandates. It's like drunk driving, do you like killing people? Totally disgraceful smear right, And he's now saying we're too judgmental. I mean, it's just unbelievable and so and then of course the obvious and hilarious if it wasn't so terrible.

One about agreeing with Charlie Kirk that the biological men and girl sports is deeply unfair and then doing absolutely nothing about it. Even in the week where you have two Republican state legislators bringing forward legislation in Sacramento to you would to deliver what Gavin Newsom just told us he agreed with.

Speaker 1

Steve the future. It looks hopeless to me. And here's why. Super majority Democrats holding a supermajority in the legislature for more than a decade now Republicans the middle class leaving the state, fleeing the state. It has benefited some states. The state of Idaho has moved into the firmly into the Republican column. I have a friend who's in the state government in Idaho, and he said, it's really very simple. All the bad Californians moved to Colorado, and all the

good Californians moved here to Idaho. Well, good and bad, they're not here anymore. You've got the unions running raising the union which you just described that is now enshrined in law and longstanding political practice. Here we have a Democrat demographic shift. Steve was talking about this that the Democrats found it so appealing that the large influx of Hispanics tend to vote Democratic that they tried to replicate

that on a national level. That's a separate problem. Okay, it all looks pretty hopeless to me, and yet Steve has titled the second half of his book, Cali Future, What can we do well?

Speaker 4

The Cali Future is the policy plan turning things around, replacing this ideological extremism with positive, practical solutions that address all the things and more that we've been talking about. People can read that in the book. I am very proud of it. I think it's a really serious, comprehensive plan that, if delivered, would restore California to the glory that we all understand and that basic idea of the

California dream, which is not complicated. It is a good job that pays enough to raise your family in a home of your own, in a safe neighborhood with a good school, so your kids have a better life than you. That's it, and we can get back to that with sensible policies, but they won't be implemented if we don't win elections and achieve power. So that's what you're really driving out. Let's address that I think that it is.

First of all, let me just say very clearly, I think twenty twenty six, the next round of elections here in California, is our best shot at winning power in California for at least twenty years, without question. And here are the ingredients. I'm not saying it's easy or inevitable. It's going to be very difficult for the reasons we've discussed, but it is not completely impossible, and it seems to

me it's looking more likely with time, not less. So if you look at the ingredients, first of all, the baseline is higher than most people think. It's not twenty percent, it's call it forty percent. That's already the gap is less than people think. Secondly, the gap is growing less all the time. In twenty in the last election, you saw really interesting signs of progress for Republicans. Ten counties flipped from blue to red, including but you know, Fresno County,

the fifth biggest city. You saw ballot initiatives. Just to be partisan about it, Republicans won on all the key policy based ballot initiatives. So the big one that a lot of people paid attention to Proposition thirty six, which reversed the worst successes of Prop forty seven, the legalized crime up to legalized theft up at nine hundred and

fifty dollars a day. Carmla Harris won Prop thirty six, which didn't completely reverse that, but did some good work on it past seventy percent, including in every county, a majority in every county. George Gascon defeated in LA. The mayor and da in Oakland and Alameda County defeated. Mayor of San Francisco defeated, and so on. You saw signs of progress elsewhere locally. So Huntington Beach is really interesting story.

Huntington Beach not a huge city in Norwich County. It's like number thirty I think in the league table in California, but iconic surf city USA. So just over four years ago, the council in Huntington Beach was six to one Democrat Republican six to one. A friend of mine, Tony Strickland, put together a slate of candidates in twenty twenty two they called themselves the Fab four. They ran on a very very strong conservative common sense message, very trumpy, you

could use that term. And they won control four to three.

Speaker 1

Wow.

Speaker 4

And they went ahead and implemented a very direct and they did what they said they would do. They cleaned homeless encampments, They prosecuted low level crimes, they addressed the books in the library that parents were concerned about, They introduced about initiative for voter ID, etcetera. They did the things they said they would do. Just now, in November, they ran a bigger slates seven can. They called themselves

the Magnificent seven. So for those who say won't win in California's room, but you have to detach yourself from President Trump, these guys literally called themselves the Magnificent seven, they won seven zero. So you've now got a clean suite. And just this week Huntington Beach rated by by wallet

dot com or whatever best run city in California. So you've got a combination of political energy policy results being delivered and a city that was that's gone from six to one Democrat to seven zero Republican in four years. So these are ingredients. Then you look at the Latino vote exactly as you said, there's the largest group in California were now forty Latino thirty five percent White, fifteen percent Asian, five percent Black, five percent other. It's not

true that Latino is a Democrat. It's more true that they're just disengaged and so don't know. I mean, if you just think about the lot of it, and in California, particularly hammered by these policies, especially the climate extremism that dries up the cost of everything. You know, telling people you can't have a single family home when that's your dream, you have to live in some apartment like we're North Korea.

You can't have that truck that you been aspiring to because you've got to have some electric thing that you hate and doesn't make sense for your job. All of these things really really coret messages that can bring into the Republican fold working class Latinos. And that is the opportunity I think. And there's one more aspect to this. I think it's important for people to understand because sometimes you look at the percentage totals and you think, well,

that's an insurmountable gap. But you know, even if you know, we're looking at it more positively, it's forty percent Republican sixty percent Democrat. That the gap is less than some people might assume, but it's still a very big gap. Big swing would be needed. But here's another way of looking at it that's particularly struck me after the twenty twenty four election in California, which is the number of votes, the total number of votes that you would need to win.

So twenty twenty six is a midterm election, and midterm elections have a lower turnout, and political people tend to, when they're projecting what the turnout would be, take the average of the last two and if you do that, the number you get for a reasonable assumption of how many votes will be cast in California in twenty twenty six is eleven point seven million. That's the number. So to win with fifty plus a little bit percent, five point nine million votes, that's your target to win five

point nine million in California in twenty twenty six. In the presidential election just now, without even campaigning in California, not really doing anything, not spending any money, President Trump got six point one million votes in California. And so when people say there are no they're not enough Republican votes in California. You've got to convert all these Democrats. How are you going to do that? All these independent how are you going to convert them? There are enough

Republican voters in California. To put it in a simple way, if every person who voted for Donald Trump in California in twenty twenty four votes for the Republican candidate for governor in twenty twenty six, that Republican governor candidate will win. Now, of course that is a big if because it's hard to get presidential level turnout in an off year. But that's a solvable problem. That's something you can do with

a good campaign. You can and actually Republicans and in twenty twenty four really accelerated ahead of Democrats in their ability to turn out votes and the whole delivery of those. You know, the swing state suite for President Trump was based on really good work turning out, registering and turning out voters, especially what they call low propensity voters, voters who tend not to vote. Latino voters come into that category from California. And so you put all that together

and you say it's absolutely doable. We just got to get to those people who voted for a president. True, of course, it'd be wonderful to persuade Democrats and persuade independence. And that's true, you are on a big tent. But the argument that is impossible because they're just not enough Republicans in California has just been comprehensively disproved.

Speaker 2

Well. I think, Steve, you may know the numbers from this Democratic analyst David Shore, who I've met is very very good, and Peter, you're oblivious to these nerdy number things, I know, but you know he had report recently that noted that Trump won not because of higher numbers among white voters.

Speaker 1

It's been flat for Republicans for twenty years.

Speaker 2

All of his gains came from minority groups, every single one and beyond all that. But Trump won the popular vote by one point seven percent. Shor's analysis was I think his bulletproof says, if you'd had turnout of all eligible voters in the country, Trump would have won the popular vote by five percent, and some of his biggest gains were here in California, many of them in Los

Angeles County. This is causing night sweats among Democrats who pay close attention and the rest want to ignore all this, So I think you're onto something there, Steve.

Speaker 1

Could you began we began this conversation by talking about matters. Really you use the word spiritual. Since then, you've been talking about practical politics and bolts of policy, and of course that's what you have to do to accomplish anything. But I wonder if I could ask a question. This is just occurring to me for the first time, so I'm not even sure that I can formulate it correctly.

But we have forty percent Hispanic. I talked recently to my old friend Chris Cox, who served sixteen years in Congress from Orange County, a district in Orange County, and I said, how does the GOP come back? And he said, there's one answer to that question. Right now. The GOP in California is a white party doing reach out to Hispanics. It needs to become the other way around. It needs

to become a Hispanic party reaching out to Anglos. So there's this problem that politicians' longtime political figures here understand. Archbishop Gomez of Los Angeles once made a remark to me that struck me as very beautiful. But I don't quite know what to do with. But you, Steve Hilton, being the creative figure that you are, might know what to do with. There may be some kind of opening or some Archbishop GM has made this remark. Now, of

course he was born in Mexico. A huge proportion of his people, the Catholics in the Diocese of Los Angeles, which is by the way, the largest Catholic diocese in the country, are of course Hispanic. And he said something beautiful can arise from this, and he spoke of the double founding of America. We all know, of course that the Declaration of Independent States from seventeen seventy six. That's

when Mission San Francisco was founded seventeen seventy six. So there's a kind of what was taking place, the European Anglo founding of America on the East coast, which of course built the country. All our great institutions are fund

arise from that. But there is something something wonderful that at the same time there was a Hispanic founding here in cal and there's maybe there's some It feels to me as though this is one area where California could once again be the future for the country somehow or other. An openness a fundamental openness to the to Hispanic culture. But as expressed through practical politics, there is no recent immigrant from Mexico who doesn't want all the things that

you just described. Schools that work, the ability to buy a car so that he can travel from the central Valley over here to do his job as a gardener or construction work, all of that. But there's some It feels to me as though there's some Anyway, I just put that to you, because you're so creative in these matters.

Speaker 4

Well, I agree completely, and I would say I've you know, personally been spending a lot of time really understanding that, you know, literally living with families over you know, in East La of the weekend, so I'm going to church with them and going to the baby shower, you know, and really unders standing it. And we know, it's really interesting to me. It reminds me totally. I mean, it really does remind me of the immigrant experience that we

had in England as Hungarian immigrants. It's the same, it's exactly the same thing. You just want to work hard and climb the ladder of opportunity. And the Democrats who have been in charge, who've patronizingly assumed that these people are always going to support them. Have smashed the wrongs

of that ladder one by one. The good job that pays well, well, we have the highest unemployment and we tax you so much that you don't keep enough to raise your family in a comfortable manner, a home of your own, and that's totally out of reach to people, A safe neighborhood. Don't make me laugh. A good school Latina. Do you know the proportion of Latino kids in students in our schools who who read at grade level about thirty percent. It's just unbelievable. You know, it's a crime

what's being done. And so you know, all of these things are just that it's almost that it's not like their Latino it's just that they happen to be the largest group in our state, and so of course have to be central to everything that we do. But it's a universal message and Republicans get it and Democrats seem

not to because they've crushed it. And I think that it's going to be a really really exciting moment when we can, like you know, make those two things come together, and it's just restore that California dream that is so simple and basic and beautiful. It really is, and you just it's and that's what this state is all about. And when people think of the American dream, I think for many, for decades, they thought of California, and that's

what we need to get back to. I'm very confident that we can and hopefully before people, you know, sooner than.

Speaker 1

People think we will, before everybody leaves the state. Right.

Speaker 2

Yeah, I'm glad Peter you asked that question about the second half of the book because you know, people only think about the main title, Cali Failure, to think it's only doom and gloom and how did we get in such a mess, But the second half Cali Future. So the whole title for listeners is Cali Failure, Reversing the ruin of America's worst run state. Steve Hilton, thanks for doing this book. Good luck, Thank you so much. Great to be with you.

Speaker 1

Thank you, Steve.

Speaker 3

Well.

Speaker 2

You know, Peter, we could spend hours talking to Steve Hilton. I know you probably have, and hopefully we'll get him again. There was one other part of his personal story that resonated with me. You know, I mentioned how, you know, my British grandfather came to California never left, but I

didn't know about his Hungarian background. And you know, I never tired of mentioning my late friend Peter Shram, who left at exactly the same time after the Revolution of fifty six, and his father said, we're out of here, We're going to America. Why are we going to America, dad? And his dad said, because we were born American but in the wrong country. But his story of getting out

is exactly the same. They might have been in the same group of people walking across the plain to get to Austria, having to dodge, you know, army troops firing at them, having to ditch their weapons at the border, climbing a fence, and then being in an Austrian refugee camp before coming to California. So I don't know, it's funny how small the world can be sometimes and yet here we are. So anyway, I was thrilled to hear

all that. That was great stuff. That's a cheery note on which to end this week of tariff turmoil and trouble. And for listeners, you know what comes next. You're supposed to give us a five star review on Apple or Spotify or wherever you source your podcasts and please we want to hear from you in the comments section at Ricochet four.

Speaker 1

Point Oh, Peter, great to see you. I hope we have you back again soon. Steve A pleasure, And I'm feeling I'm feeling encouraged about our beloved Golden State. Yeah, and it's not easy to make me feel encouraged about this place, all right.

Speaker 3

It's hard to take your times right right Bye bye next week, guys. Oh, I'm James Lonnix and I'm at the diner. You know, classic American diner chrome long boomerang pattern for my cocounter with little jukeboxes. We love these and you can join me here every Saturday, where we talk about whatever happens to spring into my mind at the moment. There's no predicting where it will go, except that it'll be done in about thirty minutes. Join me, won't you, Every Saturday from the Ricochet Audio

Speaker 1

Network Ricochet Ye, Join the conversation

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