The Exchanges

Q Steve, as we wrap up, give us the quarterback view of your path to victory. Walk us through the sequence of events, the key moments leading up to the primary vote, and then from primary to election day. What has to happen for you to get to Sacramento?

A So we have the top two system, um, for those who I mean, another crazy California thing where you end up with two candidates going through to the general election, regardless of party. The idea of this was to have more moderate politics. Ever since it was introduced, the state's gone further and further to the left. Um, and so you've got various scenarios that are possible. Right now, I'm leading in all of the polls, um, on the Republican side. There's one other candidate. I think with the president, with President Trump's endorsement, Of my campaign. I think we can expect, um, I'm pretty confident that we can make it into the top two. It's not certain we're, we've got to, you know, fight very hard over the next month or so. The ballots go out next week, early May. Um, but I think that we're going to have a top two with myself and one other Democrat. And right now it looks as if it's going to be one of Tom Steyer, Katie Porter, or Javier Becerra. And all of those three, Represent either no change from what we have now or a move even further to the left in the wrong direction. So I think broadly the argument is going to be very straightforward, which is, are you happy with, with the way things are going in California? Do you want more of it? And if you do vote Democrat, or do you think we need a change? So that's, it's a classic, you know, change versus more of the same election…

AI assessment note: “I'm pretty confident that we can make it into the top two.”

Q Sorry, sorry, sorry, sorry, sorry, sorry, sorry. The state of California itself, we, are wholly dependent on Iraqi oil to sustain our economy?

A It's not wholly, it's, it's the number one provider, yes. So if you look at the sources of oil, Number one, Iraq. Number two, I think it's Ecuador and Brazil, but the broader point on that is because We used to have, let's just go back a few steps. We had a really strong energy industry and infrastructure in California where we produced most of the oil and gas that we use, and we had refineries, about 40 of them, um, around the state, mostly in the Bay Area, down in LA, that refined and turned it into products that we use, gasoline and so on. Um, now we're down to seven refineries. One of the main reasons for that is that we're not producing what we, what we, what we could be refining. We're shipping it in instead. Because there are no pipelines of, of, there are no oil pipelines into California. Whatever we don't, if we don't use our own, we have to bring it in by tanker. Um, because of this and because of the, the, the fact that the refineries were built to, to refine California crude, which is known as heavy crude. Um, there are different types around the world. You've got to have a good match. Iraq provides Iraqi oil is a good match. The other place whose oil is a good match for our refineries is South America. And so as a result of Democrat climate policy, we are now expanding oil drilling in the Amazon rainforest in order to provide the right kind of oil for California's …

AI assessment note: “It's not wholly, it's, it's the number one provider, yes.”

Q What did you find? Give us a couple of examples.

A Here's some specific examples. Now, the second fraud report, um, Well, it's a classic. One billion dollars over the last 10 years, a hundred million every year since 2015. This is from the climate change mitigation, uh, fund, which is part of the cap and trade system. This is actually gas taxes and surcharges on electric bills and so on. A hundred million a year was allocated to be spent on climate change mitigation. In this case, it was solar panels for low income apartment buildings. So we actually tracked that money and, um, with an AI partner that can get all the reports and of that one billion total in 10 years, the actual amount spent on the purported benefit here Solar panel installation was seventy two million. Nine hundred and twenty eight million actually went to non-profits doing all, all the usual Democrat associated bullshit, frankly. Voter registration, um, environmental justice campaigns, all that kind of stuff. The actual thing was mostly spent on that. That's one billion dollars. The first one was the cannabis tax. Proposition of 64 legalizing cannabis. There's a tax Associated with that. Supposed to be spent on, um, substance abuse prevention. We found three hundred and fifty million dollars that were supposed to be spent on substance abuse prevention. Again, going to this network of nonprofits, over 500 of them, and small individual grants. When you look at w…

AI assessment note: “Here's some specific examples. Now, the second fraud report, um, Well, it's a classic.”

Q Because like Nevada's hot and drought ridden, and Arizona has issues, so what is it that we say that those states don't say?

A So when you build apartments, or when you, when you build parking, You have to put in EV charging, um, and the scale of what's required for the EV charging just makes it more expensive. You have to, you know, like you do a parking structure, you have to reinforce the floors, the bays have to be wider. Just, it adds, you can have, you need, you have fewer bays per structure. Um, there's specific costs associated with that. Um, solar panels. We talked about that earlier in terms of Low income apartments that the, that taxes are paying for, um, developers have to pay for that as well. Um, insulation, um, energy efficiency. All these things are good, and I think that's pretty much the story of California, which is things that start with good intentions actually end up being taken to an extreme where it just makes it too expensive to build at a rate that people can afford to buy the properties.

AI assessment note: “things that start with good intentions actually end up being taken to an extreme”

Q Double click into that for a second for the forty million residents of California. What is going on? Why are rents so high? Why are homes so expensive? And what can actually be done to make the cost of living and rent cheaper?

A So the thing, this particular issue, I think almost captures better than anything else. The underlying structural reasons why everything is so difficult in California and so expensive, because you've got these three structural forces that I think underpin the problem and show why a Democrat can't fix it. And the three things are union power, litigation, and climate dogma, and they all come together in the housing story. The first part of the story is that we're just not building enough homes for the number of jobs that we're creating and the size of our population. It's a classic supply and demand situation. Now, within that, there are certain, you know, wrinkles. You could point out that because of rent control, which has got completely out of control, there are a lot of empty properties in California that could be used to house people, but they're not because landlords don't want to Don't want to do it because the rights have gone, have swung so far in favor of tenants. But I don't think that's the major driver. The major driver is the fact that we just haven't built enough housing of different kinds. And if you go through the reasons for that and why it's so expensive, it brings into play these three factors. First of all, it just costs more to build anything in California. The same exact floor plan, house, apartment building, industrial building, whatever it is, costs two o…

AI assessment note: “The first part of the story is that we're just not building enough homes”

Q incremental regulations done with respect to climate quality, whether it's EV mandates or the ice engine requirements, and then separately, just as a more general way to explain it, why is gas in California, seven, eight dollars a gallon, and why is it three dollars everywhere else? Why is ours more than two X That it costs everywhere else, including other states that are also quite expensive to live in.

A Well, also that they don't, that we, we have the highest gas in the country, including Hawaii in the middle of the Pacific Ocean, even though we have abundant oil reserves. So we have way higher gas prices than states that don't have oil reserves. We actually have very significant oil reserves in California. Um, the, the fundamental reason that gas prices are so high is because Again, in the name of climate, but without actually, actually in this case, it's counterproductive to climate. Um, instead of using the production that we have here in California, I've been to the oil fields in Kern County, mainly near Bakersfield. Um, we are now importing nearly 80% of the oil that we use over the period of the, since really this all started in 2006 with the passage of the global warming solutions. That was the sort of foundational climate legislation in California. Over that period, our use of fossil fuels has declined by not that much, and the proportion of our energy that's coming from fossil fuels is, is about 80% still. The rest of the country, it's about 81%, so it's barely any different. But the difference is, we used to produce most of what we use in-state, now we are importing nearly 80%, and that has driven up Because you have to strip it for halfway around the world. Our number one provider is Iraq right now. That's the number one source of oil.

AI assessment note: “we used to produce most of what we use in-state, now we are importing nearly 80%”

Q you're going to hear a certain version of what the role of the state is versus what the role of the family or the individual is. Then growing up in the UK, I'm sure your attitudes either get cemented or change. Give us the setup. What is the political evolution of Steve Hilton? What did he believe? And then what does he believe now? And what has shaped these beliefs?

A It's really, I think it goes back to Just around the, when I first really started thinking about it all, it was just as Margaret Thatcher was coming to power, and you'd had the seventies in England were a disaster, and a decade that was just, the, the, the economy was completely stagnant and slurotic, unions ran everything, um, there was this period called the winter of discontent in 1979 when you had Massive strikes, um, famously, you know, the dead went unburied and trash was piled up in the street. Just real collapse of everything. And that's what Thatcher came in to fix. And I really did identify with that as well as with the very clear stand against communism. And so really she was, funnily enough, when I was thinking about the, the video that I made to launch my campaign about a year ago now, We ended up putting that in there, and I thought, well, actually, that was the thing that got me going. I was totally inspired by her, but also the focus that she had on business and enterprise and hard work. I remember my stepfather, I mean, they weren't at all political, by the way. It wasn't like some household where we talked about politics. It really wasn't. But he had this thing that stuck in my mind when he talked about, like in England, you've got the Conservative Party equivalent, the Republicans, and for the Democrats, it's the Labour Party. And I remember he just used to s…

AI assessment note: “I was totally inspired by her, but also the focus that she had on business”

Q Where do you think California is, if you contrast?

A Well, this is, this is what I was just about to get to, is we really are there. There are so many things I see in California today that are exactly like The UK in the seventies. You've got the massive dominance of the unions in policymaking. You've got a slurotic economy. You've got massively high taxation. I mean, it was higher than the, at one point, I think the top rate when you add in the wealth taxes in the UK was literally 98%. Um, but you had that confiscatory taxation and top rate of 60% and so on. So very, very similar. And actually funny enough, um, somewhat Mike Moritz actually sent me a report that, um, someone had done about the UK today. And, and again, there's just these eerie parallels with just how, how impossible it is to do anything in the UK, to build anything, the over-regulation. When I read this report, it just is exactly like California today. By the way, one thing, Jason, just to be clear, I am a proud American now, but I'm not, I actually renounced my UK citizenship. I did that because I just wanted to be clear that I'm just to borrow the Title of the show. You want it to be all in. Literally. I really, I think it's really important that everyone knows that, and I am.

AI assessment note: “There are so many things I see in California today that are exactly like The UK”

Q they let people out for petty crimes under 850 dollars. There seems to, and we see going to a drugstore, everything's locked up. So there is a feeling and a lot of debates over the numbers that there's a lot more property crimes. Some people claim people don't report it anymore. That was my lived experience in California. What is your take on crime? And then we'll go to homelessness.

A Yeah. I mean, it's just, it's this classic thing in California where they seem to be brilliant at passing laws, right? Every year, more and more laws, more and more bloat and bureaucracy, more nanny state nonsense. Last session, for example, they passed, this is one session, 1118 bills. One, that, that's the number of bills that the legislature passed. I, we did another thing outside the state capital. I mean, I'm not very tall. We printed them all out. It's like double my height. I mean, just ridiculous. And the point I'm making is really good at passing laws, but not very good at enforcing them. There's just something missing in terms of the app of the willingness to just enforce the law. That's going to be one of the main points I make in terms of homelessness. But when you get to crime, there's just this attitude. I mean, there's something Off about how the left has, has, has seen this issue only just when you think it's, you know, the worst excesses of defund the police and all that have receded. You've now got them popping up. What is it? This new thing, micro looting, right? Oh, micro looting is the New York times. And it's like podcasts are going on about, oh, it's fine. Cause it's just social justice. And we were allowed to kind of basically steal things. Cause it's okay. I was just so unbelievable. Subversion of basic Um, values and morality. It's just unbelievable. O…

AI assessment note: “Remember, the law that you're talking about that legalized theft up to 950 dollars”

Q that plan not as good as yours? I guess is the question. Which one do you think will be more, more appealing to the voters with the voters? I think they'll all agree paying less taxes. Fantastic. Makes you more competitive with Florida and Texas. But if they had their druthers, they're probably going to want to see Google and Apple pay more in taxes and not lose their services.

A Yeah, but we're losing jobs, and I think that that's the consequence of, of the squeezing, um, businesses and high earners more and more, and you're seeing it right now. You're seeing the business exodus. Um, if the billionaire tax proposal goes through, I mean, that absolutely puts You know, I think that's just a complete disaster for, for the tech ecosystem and what we've built in Silicon Valley over the years and all the job creation and, and wealth creation that comes with that. Um, you're seeing, I mean, I just, it's not just tech everywhere you go in the state, there are so many conversations you sit down with business people. You know, we, we are, we are on the brink of leaving. I don't think people realize quite, quite how near the cliff edge we are. Um, and the, if, and it's, I give you another example. We are just in Pomona. The other day down in Southern California, fantastic companies, sheet metal, um, it's an HVAC duct manufacturing. It's exactly the kind of thing you'd want to get. The union jobs actually, it's a great, um, you know, manufacturing facility. They are making the eight, the, this HVAC systems, the air conditioning, incredibly important as, as you know, for, uh, TSMC and these semiconductor factories and all these, the high end manufacturing that's happening in other States. In, and these, these facilities now massive amounts of investment in the AI e…

AI assessment note: “Yeah, but we're losing jobs, and I think that that's the consequence of”

Q background there. You have some unique, uh, policy positions. Taxes, I think, is the most unique, and dare I say, pretty populist. You want to have no state tax in California for people with under a 100,000 dollars in income, and then a flat tax for everybody over a hundred K. But, but, 7.5%. How is that possible, and is that something you've studied, and where did this come from?

A The tax plan that, um, that I put out there, that was the first day of my campaign, I think of it as pro-worker and pro-growth, and I think we need both of those things, because if you look at what's going on in California today, just big picture, obviously you can look at the data that's a real economic disaster. I'm not sure people appreciate just how bad Things are because hiding behind that data point of having the fourth largest economy in the world, which is true. And obviously I'm proud of that. I want California to be big and successful and growing, but that fourth biggest economy data point underneath that, you've got the, we're the state with the highest unemployment rate in the country and the highest poverty rate in the country tied with Louisiana. There's a United Way report Just the other, about, about a year ago, they do every two years, sort of an assessment of, of, of, of, of living conditions in California. And they found that over a third of Californians cannot afford to meet basic needs. And so the starting point for my tax plan is what can we do quickly to help people who are really struggling? Um, if you think about it, the working poor who aren't particularly, um, being taken care of by the welfare system, they're working incredibly hard, but they're, They're being squeezed by all these costs. We have the highest gas prices in the country, as you know, th…

AI assessment note: “I was just playing around with numbers. Actually, I did it with, um, some economists”

Q Steve, do you think that there's legislative agreement or momentum to give you the win, even though To your point, I think it's quite significant that the Democrats would signal that it's a legitimate policy proposal, but do you think that if you win, people would see the forest from the trees and realize how important it would be to take salaries under a 100,000 to no state income tax?

A Look, the, we, I've, I've seen the, you know, the Democrat arguments now up front many, many times. We've done a lot of events together, some of the televised debates, many more that aren't televised. We're literally all saying the same thing. In all the debt in terms of the diagnosis of the problem, it's incredibly expensive to live here. People can't, you know, people are really struggling. The business climate is a disaster. We're massively over-regulated. We can't build anything. Everything takes too long. Everything's too complicated. You know, there's a, there's a real consensus about diagnosing the problem among all the candidates. And so I think that that doesn't mean that we agree, of course, on the solutions. I would argue that the Democrats all You know, as in some version of more of the same, actually, despite what they say about the problems. But I think that, um, there are certain things where we will be able to get agreement. I also think that when you have a situation where you have the first Republican governor elected for 20 years, that really will change the dynamic in Sacramento. I think it'll, it actually may, you know, loosen things, loosen things up a little bit, because I think that there are people They're in the legislature who really understand that things have gone too far. I mean, some of them have said it to me personally, Democrats there, but they…

AI assessment note: “there are certain things where we will be able to get agreement”