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
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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
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