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What on earth is going on in California? Voters in this blue state will choose among dozens of candidates. And it is likely that one of the two victors going to November's runoff will be a Republican endorsed by Donald Trump. They're just going to make life, as I put it, Californable. What does the battle in California mean for the future of the state and for the state of national politics? I wanted to talk to you about whether this caricature of California is being absolutely dysfunctional, whether it is fair. There are definitely fair criticisms to make of the state. You know, voters passed ballot measures decades ago that have um tied budgets in knots and distorted housing markets. Um
this state has endless regulations that um make, you know, building housing and infrastructure really slow and tie the bureaucracy in knots. But I think the Republican party also has an incentive to portray the state as a kind of um dystopian hell hole because California represents a kind of alternative governance for America. And if Republicans want to, you know, win elections against people like Kla Harris, um it behooves them to portray the state that they come from um as one that is run very poorly. There's also though these endemic problems to California and I just want to get a bit of a sense of the scale of these maybe it's not as bad as people say um some of these problems are and then whether you think Democrats who've been in charge
are to blame for that or is it because of these ballot initiatives it's actually California voters who have been uh setting these restrictions and various policies that lead the p the state on a path toward dysfunction to talk about the biggest issue in the race which is affordability. Housing plays hugely into that. California has got some of the highest housing costs in the country in large part because the state has made it so hard to build over the past 50 years or so. Some of the laws that we're talking about that make it hard to build, they were passed in the 1970s. So, this predates, you know, any of the modern politicians that we're going to talk about today. Um, and they were passed in the name of good
governance, in the name of protecting the environment, things like that. But the way that they have been implemented over the years and I would say co-opted by groups who would use them to their own gain um environmentalists, labor groups, neighbors who don't want housing has been extremely detrimental to the state. And this has become, you know, California's existential crisis where you have people moving away which dilutes Democratic power in um Congress. And so that's really kind of the backdrop for this election. The caricature of California is that it is a state that is teetering on the edge of financial ruin. And that bloated government and the uh steady accretion of rules over time have just led the
state to a place that's absolutely untenable and is contributing to these problems that you laid out uh with people leaving the state because the tax burden is so high to sustain this huge bloated government and so forth. Is that criticism fair? Can you describe the state's fiscal standing? The size of the state budget has absolutely exploded under Gavin Newsome. It's remarkable. And a recent report from the legislative analyst's office found that it's not really new programs that's pushing up costs. It's like inflated costs of existing ones and the cost of um you know paying state
employees more, things like that. Um and it's led to structural deficits. every year Gavin Newsome has to find more money basically to plug a hole in the budget. So I think you're you're completely right, Charlotte, to point to that as a problem. It's interesting, Erin, because hearing you talk, I haven't heard anything that really debunks the caricature of California, right? I mean, the state budget is enormous and uh the state's not on solid fiscal ground. There are these persistent problems of housing. there are these persistent problems of good governance in the state where there are minor goals that are getting in the way of pursuing bigger ones. I think all of that is true. It's also true that
California is America's economic powerhouse, right? I don't want to disregard that fact, the fact that it's home to Silicon Valley and Hollywood. It's got this incredible manufacturing and agricultural industries. Like all of that is true. It's system of higher education. But there are there really these really persistent intractable problems that the next governor will have to deal with. That's part of the reason why we're paying so much attention to this race. James, you've been looking at candidates across the country, whether they're running for the Senate, for Congress, uh, for a governor's seat. What do you
make of Tommy Styer's campaign in California? I mean, I just think Charlotte, it's a it's he's testing the limits of what a self- finance campaign can look like under our crazy campaign finance system. The AP's reported he's spending 20 times as much on advertising as his nearest um uh competitor uh Bera. And he's spending hundreds of thousand dollars on social media influencers, which is the new way of campaigning, of course. And it may well work in the end. We'll see. Maybe it's a consequence of being the billionaire in the race, but he has taken the most progressive positions and if he actually governed that way, um, he would be in some ways fulfilling the Republican caricature of
what of what governance in California looks like. Or is that too strong, do you think? Would you expect him to be more pragmatic as in office than he sounded on the trail? He's he's consistently antagonized corporations on the campaign trail. His favorite one of his favorite campaign lines is that like he's the candidate that big oil is trying to take out or that the um the three big energy utilities in California don't want to win. Um he has advocated consistently for singlepayer healthcare. There's huge questions about how much that would cost, how you would implement something like that. Um, but he has also, I would say, been wonkier than I expected. Um, we were talking earlier
about ballot measures that distort California's housing market. He has a plan to reform one of them. Um, in a way that makes a lot of sense, actually. Um, so, but I think one of the interesting things is when I was in Santa Barbara, people brought up the fact that he was a billionaire to me before I even asked them about it. there the support that he has is people kind of holding their nose and voting for him anyway because he offers the progressive choice in the race. Um but they're not thrilled about it. What do you make of Basera? I mean, is he someone who now seems credible as both a candidate but also as a leader of this giant economy?
He has this great resume. He was a congressman. He was attorney general. He was Secretary of Health and Human Services under Joe Biden, but he carries around this reputation in Washington, there's no polite way to say it, of kind of being a lightweight, you know, that he was good at constituent service as a congressman. He was good at performative kind of lawsuit filing as an attorney general. He was sort of good at the politics of that, but not that effective. I'm still very uncertain what Bera's plan is besides becoming governor of California. Um he consistently dodges giving specifics on tackling affordability, tackling the housing shortage. Um and other candidates will
kind of make slights about this behind his back. They're all together so much that they're um kind of nitpicking each other when they're talking to reporters. And I think post Swallwell and the fact that there was this panic over two Republicans possibly making it into the runoff, people kind of rushed to a candidate that they felt was safe that would do a good enough job. And I think that's a question, you know, that the media kind of have to reckon with. Did we blow this possibility of Democrats being shut out of the general election out of proportion and it spooked people? Is it encouraging tactical voting rather than people just voting for who they think would do the best job?
To that point, how is it that we got this group of people who are kind of fine, right? I mean, is the general description for the people running to have the highest office in this enormous state. I think part of this is that California for 23 years at this point has had a succession of superstar governors and Arnold Schwarzenegger, Jerry Brown, and Gavin Newsome. They've all been stars in the national stage in their own right for, you know, very different reasons obviously. And so after them, yeah, this group of candidates, there's no star among them, right? They're all like much lower level figures. Gavin Newsome did not have an error parent. Um that said, I don't think that means they're
necessarily bad candidates, not all of them at least. Um there are good ideas that have been brought up during this campaign. It's very exciting to see all of the Democrats talk about the ways in which they're going to try to build housing. So, I'm not as pessimistic about the field as some other folks. We are going to turn to the Republican party next and hear from Steve Hilton who is Donald Trump's pick for the governor of California. Donald Trump, of course, being historically unpopular in the state, but nevertheless using his weight and throwing it behind Steve Hilton. Our British listeners will remember Steve Hilton from his time in Westminster. He was a top adviser to David Cameron, the former prime
minister. After that role, he moved to California where that chapter included hosting a show on Fox News. He became an American citizen. Now he is running to be the state's next governor. He is endorsed by Donald Trump, as I've said, and it looks like he is going to make the runoff. When I spoke with him earlier this week, I asked him why he wanted the job. I love California so much. I think it's literally there's nowhere better in the world than California. But I think everyone can see that it's gone off the rails somewhat in recent years when you look at the data on how we're
performing as an economy, our education system, homelessness. There are so many problems that need to be fixed. And over the years that I've been here, I just felt more and more um that I want to get into the thick of it, as it were. Right now, we're in the country of Donald Trump, who has endorsed you, who's deeply unpopular in California. So, are there any areas of policy where you diverge from this president? Well, of course, um there's another way of looking at it, which is that he got more votes in California than any other state. And then, in fact, the if everybody who voted for the president in 2024 votes for me for governor in 2026,
then I'll be elected with hundreds of thousands of votes to spare. I think you saw the seeds of what's become known as the populist movement in um in the US and certainly in the UK and other places. And it seemed to me that Trump alone among the candidates in either party was really speaking to that in 2015. And I think that still remains the sort of central point of commonality and really the focus of what I'm trying to do here because it's the same story in California today. Well, so let's talk about that about your tax proposal, right? Which is no income tax. Is this correct? Up to $100,000 and then flat income tax. No state income tax and then flat above that. So, so that has a clear um uh benefit I guess for the
people who are below 100,000 though many of them would be getting big refunds, but above 100,000 the benefit would seem to be for those who are billionaires in the state, not for middle class families. So tell me how that goes after the problem that you described that President Trump identified. Well, I think you're making rather a big leap. I think you're making rather a big leap from someone who's let's say earning 110,000 a year to calling them a billionaire. No, but a flat tax. It's a flat tax, right? Of course. But I just But there's a lot there's many people in California. I mean, let just to put it in context for those who may not be aware of just how bad it's gotten in 16 years of democrat
one party rule where one party has controlled absolutely every part of the government. So in those 16 years, we've now got to a point where, as I mentioned, we have the highest poverty rate in the country. But let's just be clear what's happening. And you've got people in California who are earning it starts at 72%. So uh 72,000. So people earning 75, 80 grand, 90 grand, 95 grand, which is under the official poverty level in many counties paying 9.3% state income tax. That is a higher rate than the top rate of tax in most states in America. So I think the case for removing those people from state income tax is inarguable. But then you just go above that. You got people
earning 150,000, 200,000, 300,000 who are really struggling financially in California. And so we need to reduce their taxes as well. And the way I think about my tax plan is that it's proworker but also progrowth. We are driving away entrepreneurs and the people who are going to create the jobs and wealth and opportunity. We've got, as I repeat, the highest unemployment rate of all 50 states. Why? Because we're driving away businesses and wealth creators because of our high tax rates. And so that has to change. Obviously, it has to change. I don't think people have appreciated the extent to which California is in an economic crisis. It's a crisis.
Erin, are you surprised that Steve Hilton is doing so well in California, or do you think, you know, actually he's pretty compelling? I'm I'm not surprised. I think also the fact that there's some malaise in the state, feeling like the state is too expens expensive to live in gives his argument some weight. Um that said, the Republicans who have come closest to winning statewide in recent years and no Republican has actually won statewide since Schwarzenegger um have been moderate centrist Republicans. Um, and I don't think with Steve Hilton's ties to Donald Trump, some of the things that he's said about immigration, um, we can consider him part of that group.
Charlotte, that's part of what jumped out at me about your conversation with him was so interesting. It's just such an illustration of the predicament of a Republican trying to run right now. Um, Erin, I think Democrats have like a 2:1 advantage in California in terms of voter registration. And then there's, I think, a number of independents that's roughly equal to the number of Republicans. Um, and as you say, Republicans in the past have been able to overcome that obstacle. And I think one of the ways they've done it is the message we're hearing from Steve Hilton, which is, are you happy with 16 years of democratic governance here? are you
happy with the outcomes you're getting from one party rule? Why don't we try something different? And then you'd make an argument for a new pragmatic centrist kind of governance. But you know, Charlotte, you asked him several times where he would disagree with Donald Trump on any particular policy and each time he avoided answering that question because he can't. um if he does uh open up serious daylight between him and the president, maybe the president will take a different approach in the general election campaign, but it's unlikely based on what we've seen in other states. Um he'll come after him. And so it gives him it doesn't give him the political running room he needs to be able to really present himself as an independent-minded um candidate in
California. That just seems like a very heavy burden for him to be carrying into the general election campaign.
