February 18, 2025 • 52 mins
The following episode was recorded on December 10, 2024.
An adventurous year in California politics and policy ends with a special legislative session to “Trump-proof” the Golden State. Will a pair of would-be reformers – a newly elected mayor of San Francisco and a Los Angeles district attorney, both of whom ran against the status quo, be able to deliver the goods? Hoover senior fellow Lee Ohanian and distinguished policy fellow Bill Whalen, both contributors to Hoover’s California on Your Mind web channel, join Hoover senior product manager Jonathan Movroydis to reflect on 2024’s lessons as well as this year’s winners and losers, plus causes for California-based optimism come January 2025.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
[MUSIC]
>> Jonathan Movroydis (00:02):
It's Monday, December 9, 2024, and
you are listening to Matters of Policy andPolitics at Hoover Institution podcast
devoted to governance and balance of powerhere in America and around the free world.
I'm Jonathan Movroydis, senior productManager at the Hoover Institution, and
I'm sitting in the chair of Bill Whalen,
the Virginia Hobbs Carpenter DistinguishedPolicy Fellow in Journalism.
So that he can answer questions and
provide commentary about California policyand politics in which he's well versed.
(00:24):
Bill Whalen, in addition to beinga Washington Post columnist,
writes weekly for Hoover's Californiaon your Mind web channel.
Whalen is joined today by Lee Ohanian,Hoover Institution Senior Fellow and
Professor of Economics andDirector of the Edinger Family Program in
Macroeconomic Research at the Universityof California, Los Angeles.
Ohanian also writes weekly about thepolicy environment of the Golden State for
California on Youn Mind.
Good day, gentlemen, let's talk aboutthe latest developments in policy and
(00:46):
politics in the Golden State.
Some of the biggest news comes out of theelection is Governor Newsom's pledge to,
quote, Trump proof California.
He has called a special session withCalifornia legislators to approve a $25
million fund to help cover the costof anticipated legal battles against
what he deems are unconstitutional andunlawful federal policies.
Including assaults on reproductive rights,the rights of immigrants,
(01:08):
environmental protections,as well as commandeering of state and
local resources for federal purposes.
Gentlemen, I'd like to ask you, why didCalifornia go down this road while other
states with a progressive edge,including New York and Vermont, did not?
Bill, would you like to start?
>> Bill Whalen (01:22):
Yeah, I think the simplest answer is he did it because he can do it.
Let me read to you very briefly somelanguage from the state constitution.
This is article 4, section 3B, which says,and I quote, on extraordinary occasions,
the governor by proclamation may causethe legislature to assemble in special
session.
When so, assembled,
it has power to legislate only on subjectsspecified in the proclamation, but
(01:43):
may provide for expenses andother matters incidental to the session.
So, can Gavin Newsom do this?
The answer is yes, and I should note, Ihave a column in California in mind coming
out in a couple days,which we'll talk about this.
Does this really fit into the ideaof extraordinary occasions?
Keep in mind, it's not like thelegislature is going away for 10 months.
(02:05):
They're actually gonna be backon January 6th, ironically,
the same day that the presidentialelection results will be
certified in Washington,hopefully without any kind of riots.
That gives the legislature two weeksto address the main action item in this
special session.
Which was giving the CaliforniaState Department of Justice,
that is the Attorney General, extra$25 million to Trump proof prepare for
(02:28):
lawsuits againstthe incoming administration.
By the way, Lee and Jonathan,
the California attorney general hasa budget of about $1.3 billion.
So, I think it's kind of a sadtestament to government that they don't
have an extra $25 million lying aroundunder the sofa to throw to this.
So, my first of many questions was why theurgency when you're coming back in power?
(02:51):
The second question is, okay,why do it now when other states aren't?
And yeah, New York State looked at doingthis, and they came to the conclusion,
look it, okay, we'll be in session soonenough, we'll deal with they happen.
So that doesn't quite explain it,
the answer is I think the governorwants to put himself in a very anti
Trump posture and be rather unique indoing this doing so, that's the simplest.
(03:12):
It puts him at the forefrontof anti Trump measures.
Now, what's funny here,what since we look at,
is the governor is tryingto have it both ways.
On the one hand, Gavin Newsom issaying that he wants to deal with
the Trump administration withan open hand, not a closed fist, yet
he does this Trump proofsession with the legislature.
He also goes to the border a few days ago,and talks about immigration, and how he
(03:33):
doesn't want the Trump administration tocause pain and suffering in California.
So again,he's trying to have it both ways.
Lee, what do you think?
>> Lee Ohanian (03:42):
Dope, a lot of this is curious, and
I say that because one of the major issuesthat the governor is worried about,
and ostensibly Sacramento isworried about, is abortion rights.
Trump has said a number of times inrecent months, before the election,
that he believes the right place forabortion is to be within the states.
(04:08):
And that's where it is right now,he's happy with that.
And then, he would not sign legislationon a national abortion ban.
So, this is obviously the abortion is areal weak point for the Republican Party.
It would be politically, I think,very unwise for him to start, you know,
(04:28):
backpedaling on that about abortion,and put pressure on California and
within California abortionswithin the state's constitution.
So, it would most likely needto be become a SCOTUS case,
now if that did happen, andnow I'm just speculating.
The state's right to abortion isprobably on a slippery surface
(04:50):
because it's based on an argument forthe right to privacy.
And of course, in the Dobbs case,Alito talked about, or
say it in opinion that the Constitutiondoes not provide support for that.
But in any case,I don't see reproductive, or
abortion issues being somethingthey need to worry about.
(05:10):
Deportation is another curious one,because every major voter demographic
group in the state, including Hispanics,worries about the border.
They view illegal migrants asan economic drain on the state.
So, trying to preserve the sanctuarystatus of the state is not aligned with
voter interests.
(05:31):
The one area I think where the state doesneed to worry about with Trump, but again
is not gonna be within the best interestof the voters, is about carbon emissions.
California, is one of the most aggressiveclean energy policy platforms,
one that in my opinion, is not inthe best interest of Californians because
(05:52):
the benefits of reducing carbon emissions,when California accounts for
less than 1% of global carbon emissionsis tiny and the cost is very high.
So, I could see that being an issue,and on this end,
I believe Trump would be right.
And then the other issue I suspectthey worry about is high speed rail.
(06:13):
So, of course, in 2008,California voters approved about a 33,
$34 billion bond for a train systemthat was gonna connect San Francisco and
Los Angeles,connect the Central Valley with the coast.
That was supposed tobeen ready around 2018,
where in 2024 nothing's been completed.
The bill might be as high as 128 billion,
(06:35):
that was the figure thatcame out earlier this year.
I suspect it's higher now,
the federal government gave Californiaa few billion about a year ago.
Well, they approved a few billion abouta year ago for a high speed rail.
I know Trump is, I expect Trump to bevery upset with the lack of progress.
(06:56):
And I could see him looking forreasons to pull that money back.
So, I can see that as possibly be an area.
>> Bill Whalen (07:05):
Well, you know, Lee, that's not so much Trump,
that's Vivek Ramaswamy, who, along withElon Musk, is running the Doge Initiative,
the Department of Government Efficiency,as they call it.
Here's what he tweeted the other day,he called high speed rail a wasteful
vanity project and accused it of wasting,quote, billions in taxpayer
cash with little prospect forcompletion in the next decade.
You get to see the acts coming downon that, but, you know, getting back
(07:28):
to the spirit of this special session,Lee, this is about just revisiting
what happened the last time we had a newTrump administration with California.
I believe the state filed somethinglike 122 lawsuits against the Trump
administration.
You have a hyper ambitious attorneygeneral right now in Sacramento
in the form of Ron Bonta, who's one ofmany Democrats mentioned as running for
(07:49):
governor in 2026.
Tell me he's not chompingthe bit to just file lawsuits.
The last attorney general to go throughthis, Javier Becerra, he ended up getting
a very nice job in Washington,the head of the federal HHS agency.
So there is political capital here.
But what I have an issue with here is thisis not an abusive gubernatorial power,
but I think it's a misuse in this regard.
(08:10):
Our listeners may know I worked for
Pete Wilson when he was governorof California in the 1990s.
And I went back and I looked atwhat he did with special Sessions.
And in 1995, January of 1995 and February1995, he called for two special sessions.
The first one in Januaryhad to do with flooding.
I believe something like 34 or 58counties in California have been declared
disaster areas by the federal government.
(08:32):
He wanted the legislatureto deal with this urgently.
And then the next month, he called inthe legislature, Lee and Jonathan, for
a special session to deal withthe bankruptcy crisis in Orange County.
These are kind of bona fide houseon fire problems in California,
not what Donald Trump [LAUGH] may or maynot do to California in the near future.
So again, I just think that the governoris taking advantage of the ability for
(08:53):
extraordinary occasions to deal witha problem that is not necessarily a,
a problem so far, but,b, not extraordinary.
So just, you know, not a good moveby the governor, if you ask me.
>> Lee Ohanian (09:04):
Well, the language of the reason for calling a special session,
as you point out, Bill,is that there's an immediate emergency.
>> Bill Whalen (09:12):
Yeah.
>> Lee Ohanian (09:13):
Or there's an emergency we can see coming on the horizon.
There's the mother of all storms andit's gonna hit and
we need to take some precautions andwe need to do it immediately.
So, Bill, I agree with you this.
There's nothing here that you can'tsee having not being able to wait.
And until January there are, you know,California has many pressing challenges.
(09:37):
And I believe in my opinion, that someof those that are being listed for
this special session would be far down mypriority list relative to many others.
>> Bill Whalen (09:46):
Let me point out that I'm not also alone on this island as some sort
of partisan professionalGavin Newsom hater.
I would refer you to Matt Meehan, whois a very Democratic mayor of San Jose.
Now, he's the interesting Democrat,Lee and Jonathan,
in that he has taken poke atGovernor Newsom in the past.
He's taken pokes over crime.
Meehan supported Proposition 36,much to the state of Newsom.
(10:10):
Also, he's been very critical of Newsompolicy when it comes to clearing
homeless encampments.
It's a big problem in San Jose.
But here's what Mayor Meehantweeted the other day.
Let me read it to you, quote,
the best resistance is creatinga California that works.
We need a special session focusedon getting everyone housed,
controlling the cost of living forworking families, and
ensuring our state is the mosteconomically, viable and competitive.
(10:31):
We can continue to lead if we focuson policy instead of politics.
Lee and Jonathan, missing fromall of that is the word lawfare.
>> Lee Ohanian (10:39):
Yeah, great ideas for me.
And yes, those issues,housing, affordability,
other cost of living issues,
the state's deficient K through12 public education system.
If you wanted to talk aboutimmediate emergencies,
those would be ones thatwould come to my mind.
>> Jonathan Movroydis (11:00):
Gentlemen, recapping the year,
you've looked a lot intoCalifornia policy and politics,
whether it be California on your mind atthe Hoover Institution and elsewhere.
And recapping the year, what have youlearned about the Golden State in 2024?
Lee?
>> Lee Ohanian (11:16):
Well, Jonathan, the issues that trouble me the most about the state,
there are two andthey're related housing and homelessness.
So housing has become, has become, hasbeen unaffordable for many, many years.
The median single family homeprice today is close to $900,000.
(11:42):
The median value in the condotownhouse category is $670,000.
And they're about 16% of Californiahouseholds that can afford
that single family home and about 25%who can afford that median price condo.
So again, getting back tothe idea of the special session,
(12:05):
this is an immediate emergency andit's not just those who wanna buy a home.
The median rent in Californiais about 2,800 per month,
which would require an annual incomeabout $112,000 to qualify at the normal
industry standard of spending, no morethan 30% of your pre tax income on rent.
(12:27):
$112,000 household income is significantlyabove the state's median income.
So housing is unaffordable.
Of course, the way to reduce housinghousing costs is to build more.
2024 is going to be oneof the lowest housing
construction years we've hadin qu based on home permits.
(12:54):
And you know, this begs the question,why don't we build more housing?
You know, my opinion is that we're barkingup the wrong tree with our policies.
Over a 100 housing laws havebeen passed since 2016 and
none of them really move the needle.
And I think it's when I go back tothe analogy of barking up the wrong tree,
(13:17):
the state's focus has been to really push,
I'll even go as far as to say,force high density housing
into areas that are either high income andsingle family homes or
areas that are high to moderate income butare already very dense.
(13:38):
So these aren't areas that would,that would, you would typically want to,
you would, they would typically be seeinga lot of housing in play because those
are areas where housing is very,very costly.
So a better idea for the state isto emphasize policies that build in
areas with much lower land values,so that means away from the coast,
(14:01):
and also emphasize much lowercost building technology.
So in California,it's becoming commonplace to
spend 400 to $500 per squarefoot to build a home.
Manufactured housing, which is housingthat's built from start to finish in
a factory that's built on averageof about $87 per square foot.
(14:24):
And when you think that about 30%of California households have
annual household incomes of $50,000 orless,
you simply can't imagine how tohouse those people unless, and for
them to be able to afford it on their own,
unless you're building housesin the 200 to $250,000 range.
(14:47):
That's what we need to do.
But the only way we're going to be able todo that is build away from the coast and
utilize much,much more efficient building technologies.
But that is not happening, unfortunately.
>> Bill Whalen (14:58):
Let me ask you a question,
what if California wanted to considerwhat New York did after World War II?
And what if California wanted to createa Levitt town, for those not familiar,
Levittown was a community build,I believe, out on Long island.
And it was just a, what is todaya modern suburb, if you will, but
something groundbreaking,no pun intended, back in the late 1940s.
(15:19):
Lee, if California want to do this,if the government decided that we wanna
create a Levittown community,would the issue.
Lee, be finding available land,with the issue being deciding how much to
charge per house to make it bothaffordable but also profitable for
the endeavor or the issue just beinggetting around myriad regulations and
(15:40):
rules to actually get itdone in a timely fashion?
>> Lee Ohanian (15:44):
Bill, it's the third issue.
There's an enormous amount of open space.
95% of Californians live in about5% of the state's land area.
So there's, you know, when we drivearound, see all those open spaces,
Is not surprising.
Most of California is unoccupied,so land is not an issue.
(16:06):
But the regulatory morasswould be a huge issue,
particularly with respectto environmental.
Environmental concerns.
There's some legitimate environmentalconcerns when major developments
are pursued and built.
I love the idea of doinga 2025 version of Levittown,
which was very efficiently built becauseit was almost a pseudo mass production.
(16:32):
It's like, okay,
we've got these cookie cutter houses[LAUGH] we're gonna start building.
Okay, we'll build a bunch offoundations now, we'll frame them, etc.
But while there are legitimateenvironmental concerns,
there's also a very politicallypowerful environmental lobby that views
building on virgin land as crossingthe line that they drew in the sand.
(16:55):
They simply do not want more buildingon land that has been built on before.
So I see that as the major problem.
The governor and the state legislaturecould deal with that very effectively
by implementing substantial reforms thanCalifornia Environmental Quality Act.
(17:16):
I hope every year that they do that.
I'll continue to hope for that for 2025.
>> Bill Whalen (17:21):
I think one other thing, Lee, if you're going to build a Levitt
town, if you're going to try to do vasthousing projects, you have to also have to
address the issue of work and wherepeople are going to be working vis a vis
where they're living, which ties intothe issue of infrastructure in California.
And I wanna go back for a second backto our conversation about things
the legislature should be thinkingabout in a special [COUGH] session and
(17:42):
its relationship with Washington.
Getting into fights with the Trumpadministration is great for
political ambition.
It is very tempting if you want to run forpresident or if you want to run for
governor of California.
But unfortunately, when it comesto management of the state and
moving the state forward,
you have to have an adultconversation with the powers that be.
Now, granted, this is two way street.
The Trump administration, the presidentand people around the president can be
(18:04):
very juvenile when they talk aboutCalifornia, and I'll grant you that.
But on an issue like infrastructure,if the Trump administration wants to
kill high speed rail, Leah, Jonathan,I think California has to counter and say,
fine, if you don't wantto build high speed rail,
help us manage a populationof nearly 39 million people.
So let's talk about roads,let's talk about maybe lighter rails.
(18:27):
Let's talk about howto move people around,
which then leave a tie into the issue,I think,
of where you're gonna find availableaffordable housing in California.
>> Lee Ohanian (18:34):
Yeah, yeah.
I mean, the Valley would bea great place to expand housing.
Land is very affordable.
And Bill, I love your idea that.
And in fact, even if you didn'thave Trump in the White House,
my opinion is that investmentsin infrastructure, you know,
with smaller lines that connect areassuch as Stockton to Silicon Valley,
(18:59):
Stockton to the Bay Area, where a largenumber of people live in Stockton, work in
those, you know, work in those communitiesbecause of the high paying jobs.
I think that would probably movethe needle more than worrying about
California's high speed railfrom Bakersfield and Mercedes,
(19:19):
which is what we're doing right nowat a budget of about 35 billion
in which may not be ready foranother 10 years.
>> Bill Whalen (19:27):
Yeah, a piece of advice for
any individual thinking about running forGovernor 2026, go back and
look at Pat Brown's master plan foreducation back in the 1960s.
We continue to have a master plan foreducation now for higher ed.
I would suggest if you're running foroffice in 2026,
you should think about a master plan forinfrastructure, master plan for
housing and other various thorny problemsin Sacramento and at least, you know,
(19:48):
have a plan forhow to address these things.
It seems we do this in suchslapdash fashion in California.
>> Lee Ohanian (19:55):
Yeah, a lot of dollars are spent and
it's very difficult to see where they go.
And you know, just,just to close on this point about housing,
another huge problem withinCalifornia is homelessness.
So we're up to about a hundred 180,000plus homeless people within the state.
If you put them all together, you'dhave a size of the capital of Oregon,
(20:20):
Salem, and $24 billion over the lastfive years was spent on homelessness.
The state auditor conducted a studyof homelessness spending and
when the report came out, it was a bitof an eye opener because the auditor
was in their own way,really quite crit critical of the state.
(20:43):
They indicated that normal accountingpractices hadn't put in place.
You simply did not knowwhere the dollars went.
You could not construct metrics to figureout what spending was successful and
what spending wasn't so successful.
And to just reconnect to this pointabout housing, we are now spending
upwards of at the million dollar levelto build new housing for the homeless.
(21:08):
So a million dollars per apartment unit.
And when you think abouthow we could be levering
investments when we couldbe creating housing,
essentially single family homesbased on my calculations,
at $250,000, that'll hose three or
(21:30):
four people versusa single apartment unit.
$1 million, you know, again, Bill,you go back to the point about what do we
really need to figureout in terms of a plan?
Well, the plan should be we'renot gonna spend a million dollars
per apartment unit.
So let's figure out why we are, and
let's figure out a way toreduce that enormously.
(21:51):
It should be reduced enormously.
And we could do so much more if we couldbuild much more, much more efficiently.
>> Bill Whalen (21:58):
Yeah, the other thing I wanna get your thoughts on,
Lee, is just the ongoing fascinationwith fast food in California.
And as I always tell you whenwe tweet back and forth,
just which continues to come back likea bad meal, the minimum wage controversy.
It just seems that hardly a month goesby with some study showing job loss in
California over this.
The governor's office gets verydefensive over this measure.
(22:21):
Why this particular matter, Lee?
Is it just because it's complicated forthe governor to try to explain?
Is it because ultimately it's a bad law,or
maybe it has something to do withthe nature of fast food with itself and
just how that's kind ofintertwined in our society?
>> Lee Ohanian (22:34):
Well, yes, it's interesting, Bill.
And then in the,I don't recall the proposition number.
You might, but was it 18?
Was that the minimum wage proposition?
So proposition was minimum wage.
And California's voted down for the firsttime, they voted minimum wage increase.
So this really put the spotlighton fast food, minimum wages,
(22:59):
because with fast food,the minimum wage is $20 per hour.
For almost every other industryin California, $16 per hour.
So you have an unlevel playing fieldthat puts fast food at a disadvantage.
And not to go in the weeds too much, but
I think the first reasonablygood data on whether
(23:22):
on the impact of the $20minimum hour wage came
out just either earlier this week orlast week.
And it does show job loss in fastfood since September of 2023,
which is when the governorsigned the bill.
(23:45):
Data that was being looked atbefore that was based on a survey
of businesses that don'talways respond to the survey.
So for a variety of reasons,that data may not be nearly as accurate.
Accurate as the,as the census data that came out.
Now, the census data willbe revised over time, so
we'll get a better look as we go forward.
(24:07):
But thus far it is looking likeit is looking like there has been
job loss in the industry sincethe governor signed the bill.
And before COVID bill, job growth in thefast food industry was remarkably rapid.
I think about, if my memory serves me,growth in fast food jobs was
(24:30):
about twice as fast as growth inall the other jobs in the state.
And that was roughlybetween 2010 up to 2020.
So about that 10 year period.
It was a rapidly expanding industry.
We're not seeing that now.
>> Bill Whalen (24:44):
Yeah, it's funny, I don't know if you guys watched Donald Trump in
Paris when he went tothe reopening of Notre Dame, but
he was sitting one seat awayfrom first Lady Jill Biden.
So of course,
the Internet's been going crazy withmemes of the two of them talking.
And of my favorite ones showsTrump whispering into her ear.
And what he says is he goes, and thenafter I worked my shift at McDonald's,
(25:07):
I got a garbage truck.
He's hearkening back to when that dayin Pennsylvania when he showed up at
the drive thru at McDonald's andserved out French fries.
I was fascinated with how fast food playeda role in that presidential election,
both his ability to seize on the issue andKamala Harris never quite really
explaining whether she did ordidn't work at a McDonald's in Oakland.
And I mention this because, again,if Gavin Newsom's looking to run for
(25:27):
president in 2028, you can get crippledvery fast running for president.
People develop a very bad narrative view.
And one of him is gonna be thatthe guy does not like fast food and
the guy likes the French laundry.
So I just wonder if somewherein the recesses of his mind or
his people around him, they know thatultimately the guy who raises the minimum
wage in California for fast foodmakes fast food more expensive and
(25:48):
cost people fast food jobs,that that is a liability down the road.
So maybe that's why this issuehas continued [INAUDIBLE].
>> Jonathan Movroydis (25:55):
Bill, to the original question,
what have you learned this past year?
And maybe you could also provide somewinners and losers in California.
>> Bill Whalen (26:05):
Let's go to winners and losers a moment.
What I looked at politically was not muchchanged in California in this regard.
If you look at the election returns,Kamala Harris came in at about 58.8%,
I think, or thereabouts, a little low fora presidential candidate.
She should have beenup four points higher.
But this is a reflection of herjust being a weak candidate.
(26:25):
Democrats lost a few seats in legislature,but they still have supermajorities.
Democrats actually picked up, I think,three House seats in California,
which is one reason why the Republicanshave a skin of your teeth existence.
I think they have 220 seats in the House,two more than the majority.
But if you look past that, I look moreat the relationship that the governor
(26:46):
has with Democratic lawmakers,mayors in particular.
I mentioned this frictionhe has with Matt Meehan,
the mayor, San Jose, which I thinkis complicated on several levels.
First of all, a mayor maybea punk in the governor's eyes,
defying him on issues,questioning his judgment on issues.
Secondly, Meehan seemsto be ambitious himself.
(27:08):
Maybe he wants to run in 2026.
And he has kind of a hip look to him,
which maybe kind of makes hima next generation, Gavin Newsom.
So I noticed the friction there.
But then I also noticed that Newsom didnot get involved in the San Francisco
mayor's race.
A city that he was once the mayor he didnot endorse London breed the incumb.
But mayor,he did not endorse Daniel Lurie,
(27:29):
the private sector fellowwho ultimately won.
A real departure from San Franciscopolitics because usually they hire
from within.
They pick a machine politician, but no,they're going to the bonafide outsider,
see what happens there.
He did not weigh in on the recallacross the bay in Oakland,
where the mayor got recalled andso did the county DA as well.
So you saw this kind of divisionbetween Newsom and on top of that,
(27:51):
as Lee knows, with homelessness,when it came time for cities to came up
with their own homeless plans, Newsomwas very critical of what they did and
basically sort of kicking them back andsaying try harder.
So this friction that exists betweenthe governor and the mayors,
I think represents a larger problem,Lee, which is just Sacramento,
not necessarily be in touch,was going out on the cities.
And we certainly saw thatmanifested in Proposition 36,
(28:13):
which breed ended up supporting.
Why she saw the train coming down thetracks, a train was coming right at her.
And so she had to get tough oncrime very much in a hurry.
So this might won't be one thing tolook at 2025 coming ahead just to see if
Sacramento is a little, dare I say,
more responsive to what'sgoing on outside the bubble.
>> Lee Ohanian (28:31):
Yeah, Bill, yeah, I agree with that.
There's a substantial andgrowing disconnect between Sacramento and
many counties and cities and there'senormous difference across counties and
cities in terms of the kind of financialpressures they are feeling in terms of
the economic prosperity they are having.
(28:52):
Recently, Newsom and Bonta fileda lawsuit against the city of Norwalk,
which is probably 20 milesoutside Los Angeles, but,
much smaller city,relatively less prosperous than LA,
one that's really strugglingwith homeless issues.
And their city council said,you know what?
(29:15):
We're throwing up our hands.
We're not gonna buildmore supportive housing.
It is so expensive trying to manage this.
Our businesses are struggling with this.
Our neighborhoodsare struggling with this.
So that really highlights just thefraction between cities and Sacramento.
(29:36):
And, Bill,
I was interested in your remarks aboutNewsom staying out of city politics.
I'm wondering just how much ofthe fact that Oakland, which, I mean,
God bless them, but that is just, if it'snot the most troubled city in America,
it's certainly one of the mosttroubled cities in America.
(29:56):
I know he was quite critical about Oaklandin terms of some other governance issues.
He also had to send in [INAUDIBLE].
>> Bill Whalen (30:04):
He sent in the California Highway Patrol at one point to help get
crime under control.
So it's not like he's tonedeaf to what's going on.
>> Lee Ohanian (30:10):
Yeah, and I'm just wondering whether in the back of his mind
or in the front of his mind,he thought the Oakland mayor,
I can't remember how to pronounce hername, but, that she should be recalled.
It's not obvious that who stepsin will be able to do better job.
But, that's the city that is justa huge outlier in terms of California,
(30:35):
one that just needs an enormous help.
And Bill, in terms of San Francisco,I'm just curious.
I believe all the Mariel candidates,
at least the ones that had any typeof chance, they were all Democrats.
>> Bill Whalen (30:49):
Yep.
>> Lee Ohanian (30:51):
Does that make it tricky for him to pick sides?
>> Bill Whalen (30:55):
No, because he engaged in a congressional race here
in Silicon Valley, which pitted,because of our open primary system,
two Democrats made the general election,and he endorsed one of the two.
Again, a curious move because, andI wrote about this in California mind,
he chose the guy who wastrailing badly in the race,
who ultimately lost by a handful,but in part.
(31:15):
Now, one of his former aideswas running the campaign, but
also he had issues withthe other fellow running,
who was a former mayor who againdefied him on Proposition 36.
So he did kind of getpersonal in that one.
But he stayed out of these city races.
And I think it just might be simple that,governors are supposed to have clout.
Their endorsements are supposed to matter.
And maybe since he's been througha few ballot measures lately where his
(31:38):
involvement was not necessarilybeneficial to the cause.
Remember, he barely survives the Homelessbond earlier this year, Prop 1A,
despite being the verypublic face of that.
Maybe he came to the conclusionthat it's best I stay out,
because if London Breed loses,if the recall goes through in Oakland and
I'm on the wrong side of it,it'll just maybe look weak.
>> Lee Ohanian (31:58):
Yeah that's very interesting.
Prop 1A, I believe in,in a poll had, was winning 2 to 1,
perhaps just two months before the vote.
And what, what was, what was the,what was the final tally?
Was it 51, 49, 50 and 50?
>> Bill Whalen (32:17):
And no, it's much, much closer than that.
Remember, it was just skin of yourteeth and if you also remember, Lee,
this got this complicatedlife in Sacramento.
Newsom was going to do a state of thestate address right after the primary in
March and he kept pushing it backbecause it took time, results for
that and that he had to kindof internally scramble and
figure out now what is my message sinceI almost got my head handed to me.
(32:39):
So again, I think maybe he was justa little shy about getting involved.
Maybe just because,been tougher to be on the ballot lately.
>> Lee Ohanian (32:46):
Yep. >> Jonathan Movroydis
we're coming off a tumultuouselection season for the state.
Just wanted to ask you both whoare the winners and losers of 2024,
given the election season,everything that's gone on this year.
Bill?>> Bill Whalen: Let's Lee go first.
>> Jonathan Movroydis (33:05):
Okay.
>> Lee Ohanian (33:06):
Well, you know, it's interesting,
I think winners would includevoters who are moderate or
conservative because a number ofballot measures went their way,
including Prop 36,which redoes some of the 10 year old law
that made theft below, I believe,I believe the limit was 975.
(33:30):
That was a misdemeanor.
Retail theft is up in California and
Prop 36 makes some of thosesmaller thefts felonies.
It addresses drug use Ithink in a productive way.
If an individual linkedto get drug treatment,
(33:52):
that felony is dropped andthat pass was 70%.
So that was, so that's one data pointabout that would be in favor for
those voters.
Another was rent control went down,I think was 60 to 40.
So that was one that was pushed veryaggressively by the progressives.
(34:12):
Minimum wage went down, proposition,I believe it was Proposition 5.
This was a very important one.
This would have loweredthe super majority standard for
local bonds to finance infrastructure andaffordable housing.
That would have essentially undonesome of the protection for Prop 13.
(34:35):
So this in my view is a reallyimportant one that went down.
So I think voters were winners.
I'm also going to callGavin Newsom a winner,
potentially a big winner becauseTrump is in office for four years.
If Newsom has national politicalambitions, those would come up in 2028.
(34:58):
That would give him some time todistance himself from the governorship
in California where an awful lot ofthe country is just not going to see eye
to eye with him orwith a lot of California.
So I think the outcome forhim is really quite a good one.
(35:18):
In terms of losers, I think it'sgoing to be the California taxpayer
because the Legislative Analystoffice came out and they're looking
at potentially another budget deficit forthe following fiscal year.
The forecast is relatively small,I don't recall the exact number,
(35:39):
but the state just has a hugespending problem that's too high.
They have a huge revenue problem thatcontinues to be much too dependent on,
on capital gains, essentially,which are very, very volatile and
which create these kinds of boombust cycles in state finances.
We've never fixed that.
(35:59):
It's been around inpolitical years forever so
California is going to continue toface a lot of fiscal stress and
it's going to end upfalling on the taxpayer.
So sad to say,my loser is the California taxpayer.
>> Bill Whalen (36:15):
Okay, I would go with the winner,
a variation of Prop 36, Lee andI would pick Nathan Hockman,
who is the new district attorney inLos Angeles for several reasons.
First of all, his opponents ran a verypredictable playbook against him.
They said, look, the guy used to beRepublican, now he's an independent, so
you can't trust him asfar as you can throw him.
(36:35):
But he got easily sent into office,so that didn't work.
Secondly, if you looked at his inaugural,who attended it?
Arnold Schwarzenegger,
which was very impressive to get Arnoldto show up because he's a busy man.
It was a very Arnold moment.
Interview asked him what hethought about Nathan Hawkman,
I'm going to do a verybad Arnold invitation.
He goes, I think he's an eagle.
He goes, because eagles fly high.
(36:58):
And then George Gascon,he's a turkey, turkeys fly low.
It's just kind of very Arnoldway of summing up things but
Hockman has come into officewith a very simple promise.
You commit a crime,
you're going to get prosecuted you'renot going to get slapped on the hand.
You're actually going to do time.
And people in Los Angelesseem to want that.
I don't want to get over my skis here andput him into higher office.
(37:20):
But being an independent and also beinga guy coming in and cleaning up a problem,
that puts him on a path to things higherthan Los Angeles if he does a good job.
So I'd make him my winner.
The loser I'd have would beCalifornia Democrats, but
a very particular subsetof California Democrats.
Not Kamal Harris, not Gavin Newsom,but those Democrats who thought they
were going to make out like Banditswith Kamala Harris in the White House.
(37:43):
So this would be every lawmakerwho thought that he or
she was going to getan appointment to Washington.
This would also be every donor who thoughtthat he or she who helped create a million
dollar war chest for her whichsomehow magically she ran through.
And then some would think theywould get an appointment or
be on first name basiswith the future president.
They are all SOL out ofluck at this moment.
So they're the losers andI have a tweener, Lee, and
(38:06):
that's going to be Gavin Newsom.
He is in a interesting position for2028 right now, but
he had kind of a rough 2024 because henever materialized as the white knight.
He was going to rescue the party and
he still has a lot explaining to do as towhy he would stand up time and again for
Joe Biden andsay what great condition he was in.
His favorite term for Biden was hedelivered a masterclass tonight.
(38:27):
He said that after that,a disaster of a debate.
So he has, as Ricky Ricardo said, he hasa little splaining to do on Joe Biden, so
I give him the tweeter.
>> Jonathan Movroydis (38:36):
Gentlemen, I'm more or less in line with you on your losers.
And Bill, your, your tweener, I havean out of the box winner which somewhat
explains my background working at theNixon foundation before coming to Hoover.
And that's the legacy of California'snative son, Richard Nixon.
Given that Trump was able to survive twoimpeachments in a series of criminal
(38:57):
indictments, some of which seempolitically motivated, Richard Nixon,
if Watergate took place today, might havebeen able to survive politically and
do what Trump essentially wantsto do in his second term.
Nixon wrote in his memoirs that he hadthree main objectives for a second term.
One, reform the budget andterminate wasteful programs.
That sounds a lot like whatTrump wants Elon Musk and
Vivek Ramaswamy to do at Doge.
(39:18):
Number two, a massive reorganizationof the federal bureaucracy.
That sounds like Project 25 orsomething like it.
Something interesting about this isthat Nixon wanted to tap Hoover's very
own George Schultz as head of all ofeconomic affairs with the Treasury,
Commerce and some of the otherdepartments reporting under Schultz.
(39:39):
And number three, revitalizingthe GOP along new majority lines.
It sounds like Trump making newinroads with voters that hadn't voted
Republican in the past.
What's say you gentlemen, Bill?
>> Bill Whalen (39:52):
Yeah, this is interesting.
Nixon in 1968 brings in disaffectedwhite Democratic voters.
Archie Bunkers,
we might call them, Nixon in 1972 doesquite handsomely with youth voters.
He understands it now that the youth votehas been raised lower to 18-year-olds.
If you look at this Nixon 68poster behind me, by the way,
that's one of the many sides up there,let 18-year-olds vote.
(40:14):
He did very well in withthem in that election.
And also like Trump, Nixon at the end ofthe day is not very easy to peg in terms
of his ideology and his beliefs.
One thing that people find frustrating,Trump supporters find frustrating about
him is just when they think they havehim pegged, he comes out and says or
does something that doesn't necessarilynecessarily fit their narrative.
You know, he's not necessarily an opponentof big government at the end of the day,
(40:36):
even though he has the Doge initiative.
And Nixon also had striations, peoplewho think he's an arch-conservative.
The man createdthe Environmental Protection Agency.
And so again, just kind of a hardpolitician to put into a box.
The one big difference, though,
who was shrewder thanRichard Nixon on foreign policy?
And we're in a very complicatedworld right now, and
2025 is gonna be a huge test ofDonald Trump's foreign policy acumen.
>> Lee Ohanian (40:59):
Those interesting ideas about being difficult to pigeonhole Nixon,
absolutely.
In terms of economics, I think one of hisworst decisions was setting up wage and
price controls,which failed predictably, in my opinion,
based on kind of standardeconomic reasoning.
(41:20):
You interfere in a market,you set a price that's too low,
you're gonna have shortages,you're gonna have lines.
As we know, we saw gasoline, gasolinelines around that time, and I believe,
if I recall correctly, I believeSchultz may have either resigned or
threatened to resign around that timewhen Nixon put in place price controls.
(41:45):
George, being a University ofChicago economist, price and
wage controls are about the lastthing that he was gonna tolerate.
He was remarkably gifted, brilliant,
may have been close togenius in terms of IQ.
Not that long ago,I was looking at some YouTube videos of
(42:06):
the Nixon Kennedy debates inthe 1960 presidential election.
And it is just remarkableto watch those and
to look at the level of discussion andthe ideas that are being discussed.
And I think the respect that both had foreach other and
such a high level discussion ata time that's over 60 years ago,
(42:29):
when the average American had muchless education than they do now.
It's remarkable.
I mean, I recommend that to anyone.
You can find those on YouTube.
But I agree,Nixon on foreign Policy was a master.
We need people with thosekinds of skills now.
>> Bill Whalen (42:49):
Yeah, it's interesting, Nixon and
Kennedy were both congressionalclass in 1946, as was Gerald Ford.
It's a rare class thathas three presidents.
But Kennedy respected Nixon verymuch in part of Nixon's background,
his upbringing, as compared to Kennedy.
No silver spoon there.
And also, Nixon was what,four years younger than Jack Kennedy, but
by the time they're running forpresident, 1960,
(43:09):
Jack Kennedy is a former congressman,now a senator.
Nixon is a former congressman,former senator, now vice president.
So Nixon was kind of ahead of him.
But, Jonathan,one thing I'm curious about,
maybe you might havesome thoughts on this.
If Kamala Harris could somehow talk toRichard Nixon right now and ask him for
his thoughts on her running for governor,2026, what do you think he would tell her?
(43:30):
Because remember, 1962,that is Nixon's route to rehabilitation.
He's going to run for governor.
>> Jonathan Movroydis (43:36):
That's right, yeah.
I don't think Richard Nixon wasvery invested in that race.
From the people I've heard talk about it,
my guess is that maybe he would tellher to take a break from politics,
travel around the world,build up her policy chops,
(43:56):
you know,comment on the big issues of the day.
Sort of like what he did in New Yorkin the mid, in the mid-1960s and
that sort of that, that era really gavehim the time, given the ability to relax,
reflect and position himself forthe campaign in 1968.
>> Bill Whalen (44:16):
Yeah, that's well put.
And that's one of the very bad parallelsof Harris running for governor in 2026.
Like Nixon, she would look at a racethat she would think she could win.
But I don't think her heart's really intobeing the governor of California because
as we've talked about before, it isa very difficult policy centric job and
as opposed to something a littlelighter like being the vice president.
(44:36):
And I just don't think she'sthe right person for it.
Gentlemen, final question toround up this, this episode.
>> Jonathan Movroydis (44:42):
What are some reasons to be optimistic about California
in 2024?
Lee, why don't we start off with you?
>> Lee Ohanian (44:49):
Well, I'm always optimistic because, yeah,
this is still the best place.
[LAUGH] It's the best place to live.
There's still remarkabletransformational businesses here.
There is a ton of economic opportunity.
And even with just relativelymodest policy reforms in
(45:09):
the areas of homelessness andhousing regulations and
taxes, getting trying to developa tax base that's not so
dependent on capital gains thatleads to these boom bust cycles.
California is a great place,and it could be even better.
(45:30):
So I'm always optimistic about that.
Bill, I think you might be talkingmore about Daniel Lurie as
mayor of San Francisco.
And I do think San Franciscanshave reasons to be optimistic.
I don't know much about Mr.Lurie, but there's been a groundswell
of support within the city formuch more moderate politics.
(45:54):
Dean Preston was voted outfrom the Board of Supervisors.
Preston, I believe, is a member ofthe Democratic Socialist Party.
He was voted out in favor of a moderate.
Erin Peskin is also out,who is also extremely progressive.
And when people criticize Breed,London Breed is San Francisco mayor.
(46:19):
One thing to keep in mind is that formost of her mayorship,
she was dealing with an extremelyprogressive Board of Supervisors that made
it very difficult to implement anythingresembling a common sense policy choice.
That Board of Supervisorsis very different now.
It's no longer has thatprogressive majority.
(46:40):
So Lurie is going to have, I think,
a much better opportunity to createsome common sense in San Francisco.
So I think California can beoptimistic about San Francisco.
And I think San Franciscans can belooking forward to a hopefully good 2025.
>> Bill Whalen (46:57):
Yeah, I agree with you on that.
For years, people like me havebeen blasting San Francisco and
saying they need to do what New York did.
You need to bring in Rudy Giuliani,be tough on crime.
You need to bring in Michael Bloomberg,a guy who just knows how to manage things,
and have a strong executive.
You have to stop pickingpeople from within the system,
ultimately just part of the system.
So this is really the put up or shut upmoment for San Francisco because now they
(47:18):
have somebody in office who is not ofthe system and let's see what he can do.
And if there's reason to be optimistic,it's because the timing is right.
I don't know if the cityhas hit rock bottom or not.
I would hate to think thatit could go further south.
But if ever there are a moment to reallybe ambitious and be inventive and
thinking outside the box, my God,it would be 2025 in San Francisco.
(47:39):
My other choice for optimism is,
I am hoping that we get a State ofthe State address sometime early in 2025.
Lee wrote a really good column on this forCalifornia.
On your mind, Lee,
I think Gavin Newsom finally produceda State of the State address.
And I think what early July,[LAUGH] of this year, and
it was really just kind ofa warmed over leftovers.
(48:00):
By the time he finally gave it,
you just kind of wondered whyhe even bothered to do it.
And he doesn't have to under state law,by the way.
But I'm hoping, given if we're supposedlyin this moment of crisis with Donald Trump
coming into office,if Newsom does have national ambitions, so
he has to show that he'sin charge of California.
I'm hoping that he does whatgovernors did back in the day,
(48:20):
which was give a speech early inJanuary or even early in February, and
kind of lay down the marker forhis vision of the Golden State.
The longer the governortakes with this speech,
it just begs the of what visiondoes he have for the state?
So that's my choice for
optimism that he's going to come out earlywith the state of the state next year.
>> Lee Ohanian (48:39):
I agree with you.
I hope that does happen.
I hope he has an ambitious, but
realistic agenda that challenges his own
party to start making some progress.
We pass about a thousand laws every year.
I think there's 2,000 come down the pike,
(49:00):
about a thousand get passed andsigned into law, and it's 2024.
I think back on 2014, roughly 10,000 newlaws have hit California since 2014.
I kind of think about 2014 and justwonder, well, just how different is my
life now in 2024 than it was in 2014from perspective of all these new laws.
(49:22):
Let's do fewer laws and make themsensible and advance the ball for
cost of living, building,housing, homelessness.
I hope Newsom challenges his supermajority in the legislature to do this.
(49:43):
It will be what his lastroughly two years in office.
There's still time, soI would love to see that happen.
>> Bill Whalen (49:51):
Yeah, it's funny, by the way, I was looking at Texas the other day
just to see how Texas does thingsdifferently in California.
And one thing I've noticedis limitations on number
of bills that lawmakers canenter introduced in a session.
And if we're gonna haveterm limits in Sacramento,
maybe we should havelegislative limits as well,
because does the governor really need todeal with a thousand bills every year?
(50:12):
No, that's just excess.
So back in the day when I worked forthe Governor, there was one year in 1995,
I believe it was, when Republicanshad control of the Assembly.
And so therefore you justcouldn't pass bills willy-nilly.
And I think the number of bills that wentto governor that year was some somewhere
around 450.
So we could get by with less legislation.
>> Jonathan Movroydis (50:31):
Well, as always, gentlemen, great analysis.
Happy holidays and happy new year.
>> Bill Whalen (50:35):
Same to you.
And Jonathan, thank you for moderatingthis podcast over the course of the year.
Speaking as a fellow moderator, it isa thankless job you have to put up with
Leah and I,gabbing all the time if anyone to jump in.
So we appreciate your efforts.
Well done my friend.
>> Jonathan Movroydis (50:49):
Thank you.
Thank you so much.
It's been a pleasure to speak withboth of you this past year as well.
>> Lee Ohanian (50:53):
Thank you, Jonathan.
Thank you, Bill.It's always great.
It's a lot of fun to do this.
>> Jonathan Movroydis (50:58):
You've been listening to Matters of Policy and
Politics, the Hoover Institution Podcastdevoted to governance and
balance of power here in America andaround the free world.
Please don't forget to rate,
review and subscribe to thispodcast where you might hear it.
And if you don't mind,please spread the word.
Get your friends to have a listen.
The Hoover Institution has Facebook,Instagram, and Twitter feeds or X feeds.
I'm sorry, our X handle is @hooverinst.
That's Hoover I-N-S-T.
(51:20):
Bill Whalen is on X.
His handle is at Bill Whalen CA andLee Ohanian is also on X.
His handle is at Lee_Ohanian.
Please visit the Hoover websiteat hoover.org, and sign up for
the Hoover Daily Report, where youcan access the latest scholarship and
analysis from our fellows.
Also check out California on Your Mind,where Bill Whalen and
Lee Ohanian write every week.
Again, this is Jonathan Movroydis sittingin Bill Whalen's chair, this week.
(51:41):
He'll be back for another episodeof Matters of Policy and Politics.
Thank you for listening.
This podcast is a productionof the Hoover Institution,
where we generate andpromote ideas advancing freedom.
For more information about our work,to hear more of our podcasts,
or view our video content,please visit hoover.org.
[MUSIC]
[MUSIC]
>> Jonathan Movroydis (00:02):
It's Monday, December 9, 2024, and
you are listening to Matters of Policy andPolitics at Hoover Institution podcast
devoted to governance and balance of powerhere in America and around the free world.
I'm Jonathan Movroydis, senior productManager at the Hoover Institution, and
I'm sitting in the chair of Bill Whalen,
the Virginia Hobbs Carpenter DistinguishedPolicy Fellow in Journalism.
So that he can answer questions and
provide commentary about California policyand politics in which he's well versed.
(00:24):
Bill Whalen, in addition to beinga Washington Post columnist,
writes weekly for Hoover's Californiaon your Mind web channel.
Whalen is joined today by Lee Ohanian,Hoover Institution Senior Fellow and
Professor of Economics andDirector of the Edinger Family Program in
Macroeconomic Research at the Universityof California, Los Angeles.
Ohanian also writes weekly about thepolicy environment of the Golden State for
California on Youn Mind.
Good day, gentlemen, let's talk aboutthe latest developments in policy and
(00:46):
politics in the Golden State.
Some of the biggest news comes out of theelection is Governor Newsom's pledge to,
quote, Trump proof California.
He has called a special session withCalifornia legislators to approve a $25
million fund to help cover the costof anticipated legal battles against
what he deems are unconstitutional andunlawful federal policies.
Including assaults on reproductive rights,the rights of immigrants,
(01:08):
environmental protections,as well as commandeering of state and
local resources for federal purposes.
Gentlemen, I'd like to ask you, why didCalifornia go down this road while other
states with a progressive edge,including New York and Vermont, did not?
Bill, would you like to start?
>> Bill Whalen (01:22):
Yeah, I think the simplest answer is he did it because he can do it.
Let me read to you very briefly somelanguage from the state constitution.
This is article 4, section 3B, which says,and I quote, on extraordinary occasions,
the governor by proclamation may causethe legislature to assemble in special
session.
When so, assembled,
it has power to legislate only on subjectsspecified in the proclamation, but
(01:43):
may provide for expenses andother matters incidental to the session.
So, can Gavin Newsom do this?
The answer is yes, and I should note, Ihave a column in California in mind coming
out in a couple days,which we'll talk about this.
Does this really fit into the ideaof extraordinary occasions?
Keep in mind, it's not like thelegislature is going away for 10 months.
(02:05):
They're actually gonna be backon January 6th, ironically,
the same day that the presidentialelection results will be
certified in Washington,hopefully without any kind of riots.
That gives the legislature two weeksto address the main action item in this
special session.
Which was giving the CaliforniaState Department of Justice,
that is the Attorney General, extra$25 million to Trump proof prepare for
(02:28):
lawsuits againstthe incoming administration.
By the way, Lee and Jonathan,
the California attorney general hasa budget of about $1.3 billion.
So, I think it's kind of a sadtestament to government that they don't
have an extra $25 million lying aroundunder the sofa to throw to this.
So, my first of many questions was why theurgency when you're coming back in power?
(02:51):
The second question is, okay,why do it now when other states aren't?
And yeah, New York State looked at doingthis, and they came to the conclusion,
look it, okay, we'll be in session soonenough, we'll deal with they happen.
So that doesn't quite explain it,
the answer is I think the governorwants to put himself in a very anti
Trump posture and be rather unique indoing this doing so, that's the simplest.
(03:12):
It puts him at the forefrontof anti Trump measures.
Now, what's funny here,what since we look at,
is the governor is tryingto have it both ways.
On the one hand, Gavin Newsom issaying that he wants to deal with
the Trump administration withan open hand, not a closed fist, yet
he does this Trump proofsession with the legislature.
He also goes to the border a few days ago,and talks about immigration, and how he
(03:33):
doesn't want the Trump administration tocause pain and suffering in California.
So again,he's trying to have it both ways.
Lee, what do you think?
>> Lee Ohanian (03:42):
Dope, a lot of this is curious, and
I say that because one of the major issuesthat the governor is worried about,
and ostensibly Sacramento isworried about, is abortion rights.
Trump has said a number of times inrecent months, before the election,
that he believes the right place forabortion is to be within the states.
(04:08):
And that's where it is right now,he's happy with that.
And then, he would not sign legislationon a national abortion ban.
So, this is obviously the abortion is areal weak point for the Republican Party.
It would be politically, I think,very unwise for him to start, you know,
(04:28):
backpedaling on that about abortion,and put pressure on California and
within California abortionswithin the state's constitution.
So, it would most likely needto be become a SCOTUS case,
now if that did happen, andnow I'm just speculating.
The state's right to abortion isprobably on a slippery surface
(04:50):
because it's based on an argument forthe right to privacy.
And of course, in the Dobbs case,Alito talked about, or
say it in opinion that the Constitutiondoes not provide support for that.
But in any case,I don't see reproductive, or
abortion issues being somethingthey need to worry about.
(05:10):
Deportation is another curious one,because every major voter demographic
group in the state, including Hispanics,worries about the border.
They view illegal migrants asan economic drain on the state.
So, trying to preserve the sanctuarystatus of the state is not aligned with
voter interests.
(05:31):
The one area I think where the state doesneed to worry about with Trump, but again
is not gonna be within the best interestof the voters, is about carbon emissions.
California, is one of the most aggressiveclean energy policy platforms,
one that in my opinion, is not inthe best interest of Californians because
(05:52):
the benefits of reducing carbon emissions,when California accounts for
less than 1% of global carbon emissionsis tiny and the cost is very high.
So, I could see that being an issue,and on this end,
I believe Trump would be right.
And then the other issue I suspectthey worry about is high speed rail.
(06:13):
So, of course, in 2008,California voters approved about a 33,
$34 billion bond for a train systemthat was gonna connect San Francisco and
Los Angeles,connect the Central Valley with the coast.
That was supposed tobeen ready around 2018,
where in 2024 nothing's been completed.
The bill might be as high as 128 billion,
(06:35):
that was the figure thatcame out earlier this year.
I suspect it's higher now,
the federal government gave Californiaa few billion about a year ago.
Well, they approved a few billion abouta year ago for a high speed rail.
I know Trump is, I expect Trump to bevery upset with the lack of progress.
(06:56):
And I could see him looking forreasons to pull that money back.
So, I can see that as possibly be an area.
>> Bill Whalen (07:05):
Well, you know, Lee, that's not so much Trump,
that's Vivek Ramaswamy, who, along withElon Musk, is running the Doge Initiative,
the Department of Government Efficiency,as they call it.
Here's what he tweeted the other day,he called high speed rail a wasteful
vanity project and accused it of wasting,quote, billions in taxpayer
cash with little prospect forcompletion in the next decade.
You get to see the acts coming downon that, but, you know, getting back
(07:28):
to the spirit of this special session,Lee, this is about just revisiting
what happened the last time we had a newTrump administration with California.
I believe the state filed somethinglike 122 lawsuits against the Trump
administration.
You have a hyper ambitious attorneygeneral right now in Sacramento
in the form of Ron Bonta, who's one ofmany Democrats mentioned as running for
(07:49):
governor in 2026.
Tell me he's not chompingthe bit to just file lawsuits.
The last attorney general to go throughthis, Javier Becerra, he ended up getting
a very nice job in Washington,the head of the federal HHS agency.
So there is political capital here.
But what I have an issue with here is thisis not an abusive gubernatorial power,
but I think it's a misuse in this regard.
(08:10):
Our listeners may know I worked for
Pete Wilson when he was governorof California in the 1990s.
And I went back and I looked atwhat he did with special Sessions.
And in 1995, January of 1995 and February1995, he called for two special sessions.
The first one in Januaryhad to do with flooding.
I believe something like 34 or 58counties in California have been declared
disaster areas by the federal government.
(08:32):
He wanted the legislatureto deal with this urgently.
And then the next month, he called inthe legislature, Lee and Jonathan, for
a special session to deal withthe bankruptcy crisis in Orange County.
These are kind of bona fide houseon fire problems in California,
not what Donald Trump [LAUGH] may or maynot do to California in the near future.
So again, I just think that the governoris taking advantage of the ability for
(08:53):
extraordinary occasions to deal witha problem that is not necessarily a,
a problem so far, but,b, not extraordinary.
So just, you know, not a good moveby the governor, if you ask me.
>> Lee Ohanian (09:04):
Well, the language of the reason for calling a special session,
as you point out, Bill,is that there's an immediate emergency.
>> Bill Whalen (09:12):
Yeah.
>> Lee Ohanian (09:13):
Or there's an emergency we can see coming on the horizon.
There's the mother of all storms andit's gonna hit and
we need to take some precautions andwe need to do it immediately.
So, Bill, I agree with you this.
There's nothing here that you can'tsee having not being able to wait.
And until January there are, you know,California has many pressing challenges.
(09:37):
And I believe in my opinion, that someof those that are being listed for
this special session would be far down mypriority list relative to many others.
>> Bill Whalen (09:46):
Let me point out that I'm not also alone on this island as some sort
of partisan professionalGavin Newsom hater.
I would refer you to Matt Meehan, whois a very Democratic mayor of San Jose.
Now, he's the interesting Democrat,Lee and Jonathan,
in that he has taken poke atGovernor Newsom in the past.
He's taken pokes over crime.
Meehan supported Proposition 36,much to the state of Newsom.
(10:10):
Also, he's been very critical of Newsompolicy when it comes to clearing
homeless encampments.
It's a big problem in San Jose.
But here's what Mayor Meehantweeted the other day.
Let me read it to you, quote,
the best resistance is creatinga California that works.
We need a special session focusedon getting everyone housed,
controlling the cost of living forworking families, and
ensuring our state is the mosteconomically, viable and competitive.
(10:31):
We can continue to lead if we focuson policy instead of politics.
Lee and Jonathan, missing fromall of that is the word lawfare.
>> Lee Ohanian (10:39):
Yeah, great ideas for me.
And yes, those issues,housing, affordability,
other cost of living issues,
the state's deficient K through12 public education system.
If you wanted to talk aboutimmediate emergencies,
those would be ones thatwould come to my mind.
>> Jonathan Movroydis (11:00):
Gentlemen, recapping the year,
you've looked a lot intoCalifornia policy and politics,
whether it be California on your mind atthe Hoover Institution and elsewhere.
And recapping the year, what have youlearned about the Golden State in 2024?
Lee?
>> Lee Ohanian (11:16):
Well, Jonathan, the issues that trouble me the most about the state,
there are two andthey're related housing and homelessness.
So housing has become, has become, hasbeen unaffordable for many, many years.
The median single family homeprice today is close to $900,000.
(11:42):
The median value in the condotownhouse category is $670,000.
And they're about 16% of Californiahouseholds that can afford
that single family home and about 25%who can afford that median price condo.
So again, getting back tothe idea of the special session,
(12:05):
this is an immediate emergency andit's not just those who wanna buy a home.
The median rent in Californiais about 2,800 per month,
which would require an annual incomeabout $112,000 to qualify at the normal
industry standard of spending, no morethan 30% of your pre tax income on rent.
(12:27):
$112,000 household income is significantlyabove the state's median income.
So housing is unaffordable.
Of course, the way to reduce housinghousing costs is to build more.
2024 is going to be oneof the lowest housing
construction years we've hadin qu based on home permits.
(12:54):
And you know, this begs the question,why don't we build more housing?
You know, my opinion is that we're barkingup the wrong tree with our policies.
Over a 100 housing laws havebeen passed since 2016 and
none of them really move the needle.
And I think it's when I go back tothe analogy of barking up the wrong tree,
(13:17):
the state's focus has been to really push,
I'll even go as far as to say,force high density housing
into areas that are either high income andsingle family homes or
areas that are high to moderate income butare already very dense.
(13:38):
So these aren't areas that would,that would, you would typically want to,
you would, they would typically be seeinga lot of housing in play because those
are areas where housing is very,very costly.
So a better idea for the state isto emphasize policies that build in
areas with much lower land values,so that means away from the coast,
(14:01):
and also emphasize much lowercost building technology.
So in California,it's becoming commonplace to
spend 400 to $500 per squarefoot to build a home.
Manufactured housing, which is housingthat's built from start to finish in
a factory that's built on averageof about $87 per square foot.
(14:24):
And when you think that about 30%of California households have
annual household incomes of $50,000 orless,
you simply can't imagine how tohouse those people unless, and for
them to be able to afford it on their own,
unless you're building housesin the 200 to $250,000 range.
(14:47):
That's what we need to do.
But the only way we're going to be able todo that is build away from the coast and
utilize much,much more efficient building technologies.
But that is not happening, unfortunately.
>> Bill Whalen (14:58):
Let me ask you a question,
what if California wanted to considerwhat New York did after World War II?
And what if California wanted to createa Levitt town, for those not familiar,
Levittown was a community build,I believe, out on Long island.
And it was just a, what is todaya modern suburb, if you will, but
something groundbreaking,no pun intended, back in the late 1940s.
(15:19):
Lee, if California want to do this,if the government decided that we wanna
create a Levittown community,would the issue.
Lee, be finding available land,with the issue being deciding how much to
charge per house to make it bothaffordable but also profitable for
the endeavor or the issue just beinggetting around myriad regulations and
(15:40):
rules to actually get itdone in a timely fashion?
>> Lee Ohanian (15:44):
Bill, it's the third issue.
There's an enormous amount of open space.
95% of Californians live in about5% of the state's land area.
So there's, you know, when we drivearound, see all those open spaces,
Is not surprising.
Most of California is unoccupied,so land is not an issue.
(16:06):
But the regulatory morasswould be a huge issue,
particularly with respectto environmental.
Environmental concerns.
There's some legitimate environmentalconcerns when major developments
are pursued and built.
I love the idea of doinga 2025 version of Levittown,
which was very efficiently built becauseit was almost a pseudo mass production.
(16:32):
It's like, okay,
we've got these cookie cutter houses[LAUGH] we're gonna start building.
Okay, we'll build a bunch offoundations now, we'll frame them, etc.
But while there are legitimateenvironmental concerns,
there's also a very politicallypowerful environmental lobby that views
building on virgin land as crossingthe line that they drew in the sand.
(16:55):
They simply do not want more buildingon land that has been built on before.
So I see that as the major problem.
The governor and the state legislaturecould deal with that very effectively
by implementing substantial reforms thanCalifornia Environmental Quality Act.
(17:16):
I hope every year that they do that.
I'll continue to hope for that for 2025.
>> Bill Whalen (17:21):
I think one other thing, Lee, if you're going to build a Levitt
town, if you're going to try to do vasthousing projects, you have to also have to
address the issue of work and wherepeople are going to be working vis a vis
where they're living, which ties intothe issue of infrastructure in California.
And I wanna go back for a second backto our conversation about things
the legislature should be thinkingabout in a special [COUGH] session and
(17:42):
its relationship with Washington.
Getting into fights with the Trumpadministration is great for
political ambition.
It is very tempting if you want to run forpresident or if you want to run for
governor of California.
But unfortunately, when it comesto management of the state and
moving the state forward,
you have to have an adultconversation with the powers that be.
Now, granted, this is two way street.
The Trump administration, the presidentand people around the president can be
(18:04):
very juvenile when they talk aboutCalifornia, and I'll grant you that.
But on an issue like infrastructure,if the Trump administration wants to
kill high speed rail, Leah, Jonathan,I think California has to counter and say,
fine, if you don't wantto build high speed rail,
help us manage a populationof nearly 39 million people.
So let's talk about roads,let's talk about maybe lighter rails.
(18:27):
Let's talk about howto move people around,
which then leave a tie into the issue,I think,
of where you're gonna find availableaffordable housing in California.
>> Lee Ohanian (18:34):
Yeah, yeah.
I mean, the Valley would bea great place to expand housing.
Land is very affordable.
And Bill, I love your idea that.
And in fact, even if you didn'thave Trump in the White House,
my opinion is that investmentsin infrastructure, you know,
with smaller lines that connect areassuch as Stockton to Silicon Valley,
(18:59):
Stockton to the Bay Area, where a largenumber of people live in Stockton, work in
those, you know, work in those communitiesbecause of the high paying jobs.
I think that would probably movethe needle more than worrying about
California's high speed railfrom Bakersfield and Mercedes,
(19:19):
which is what we're doing right nowat a budget of about 35 billion
in which may not be ready foranother 10 years.
>> Bill Whalen (19:27):
Yeah, a piece of advice for
any individual thinking about running forGovernor 2026, go back and
look at Pat Brown's master plan foreducation back in the 1960s.
We continue to have a master plan foreducation now for higher ed.
I would suggest if you're running foroffice in 2026,
you should think about a master plan forinfrastructure, master plan for
housing and other various thorny problemsin Sacramento and at least, you know,
(19:48):
have a plan forhow to address these things.
It seems we do this in suchslapdash fashion in California.
>> Lee Ohanian (19:55):
Yeah, a lot of dollars are spent and
it's very difficult to see where they go.
And you know, just,just to close on this point about housing,
another huge problem withinCalifornia is homelessness.
So we're up to about a hundred 180,000plus homeless people within the state.
If you put them all together, you'dhave a size of the capital of Oregon,
(20:20):
Salem, and $24 billion over the lastfive years was spent on homelessness.
The state auditor conducted a studyof homelessness spending and
when the report came out, it was a bitof an eye opener because the auditor
was in their own way,really quite crit critical of the state.
(20:43):
They indicated that normal accountingpractices hadn't put in place.
You simply did not knowwhere the dollars went.
You could not construct metrics to figureout what spending was successful and
what spending wasn't so successful.
And to just reconnect to this pointabout housing, we are now spending
upwards of at the million dollar levelto build new housing for the homeless.
(21:08):
So a million dollars per apartment unit.
And when you think abouthow we could be levering
investments when we couldbe creating housing,
essentially single family homesbased on my calculations,
at $250,000, that'll hose three or
(21:30):
four people versusa single apartment unit.
$1 million, you know, again, Bill,you go back to the point about what do we
really need to figureout in terms of a plan?
Well, the plan should be we'renot gonna spend a million dollars
per apartment unit.
So let's figure out why we are, and
let's figure out a way toreduce that enormously.
(21:51):
It should be reduced enormously.
And we could do so much more if we couldbuild much more, much more efficiently.
>> Bill Whalen (21:58):
Yeah, the other thing I wanna get your thoughts on,
Lee, is just the ongoing fascinationwith fast food in California.
And as I always tell you whenwe tweet back and forth,
just which continues to come back likea bad meal, the minimum wage controversy.
It just seems that hardly a month goesby with some study showing job loss in
California over this.
The governor's office gets verydefensive over this measure.
(22:21):
Why this particular matter, Lee?
Is it just because it's complicated forthe governor to try to explain?
Is it because ultimately it's a bad law,or
maybe it has something to do withthe nature of fast food with itself and
just how that's kind ofintertwined in our society?
>> Lee Ohanian (22:34):
Well, yes, it's interesting, Bill.
And then in the,I don't recall the proposition number.
You might, but was it 18?
Was that the minimum wage proposition?
So proposition was minimum wage.
And California's voted down for the firsttime, they voted minimum wage increase.
So this really put the spotlighton fast food, minimum wages,
(22:59):
because with fast food,the minimum wage is $20 per hour.
For almost every other industryin California, $16 per hour.
So you have an unlevel playing fieldthat puts fast food at a disadvantage.
And not to go in the weeds too much, but
I think the first reasonablygood data on whether
(23:22):
on the impact of the $20minimum hour wage came
out just either earlier this week orlast week.
And it does show job loss in fastfood since September of 2023,
which is when the governorsigned the bill.
(23:45):
Data that was being looked atbefore that was based on a survey
of businesses that don'talways respond to the survey.
So for a variety of reasons,that data may not be nearly as accurate.
Accurate as the,as the census data that came out.
Now, the census data willbe revised over time, so
we'll get a better look as we go forward.
(24:07):
But thus far it is looking likeit is looking like there has been
job loss in the industry sincethe governor signed the bill.
And before COVID bill, job growth in thefast food industry was remarkably rapid.
I think about, if my memory serves me,growth in fast food jobs was
(24:30):
about twice as fast as growth inall the other jobs in the state.
And that was roughlybetween 2010 up to 2020.
So about that 10 year period.
It was a rapidly expanding industry.
We're not seeing that now.
>> Bill Whalen (24:44):
Yeah, it's funny, I don't know if you guys watched Donald Trump in
Paris when he went tothe reopening of Notre Dame, but
he was sitting one seat awayfrom first Lady Jill Biden.
So of course,
the Internet's been going crazy withmemes of the two of them talking.
And of my favorite ones showsTrump whispering into her ear.
And what he says is he goes, and thenafter I worked my shift at McDonald's,
(25:07):
I got a garbage truck.
He's hearkening back to when that dayin Pennsylvania when he showed up at
the drive thru at McDonald's andserved out French fries.
I was fascinated with how fast food playeda role in that presidential election,
both his ability to seize on the issue andKamala Harris never quite really
explaining whether she did ordidn't work at a McDonald's in Oakland.
And I mention this because, again,if Gavin Newsom's looking to run for
(25:27):
president in 2028, you can get crippledvery fast running for president.
People develop a very bad narrative view.
And one of him is gonna be thatthe guy does not like fast food and
the guy likes the French laundry.
So I just wonder if somewherein the recesses of his mind or
his people around him, they know thatultimately the guy who raises the minimum
wage in California for fast foodmakes fast food more expensive and
(25:48):
cost people fast food jobs,that that is a liability down the road.
So maybe that's why this issuehas continued [INAUDIBLE].
>> Jonathan Movroydis (25:55):
Bill, to the original question,
what have you learned this past year?
And maybe you could also provide somewinners and losers in California.
>> Bill Whalen (26:05):
Let's go to winners and losers a moment.
What I looked at politically was not muchchanged in California in this regard.
If you look at the election returns,Kamala Harris came in at about 58.8%,
I think, or thereabouts, a little low fora presidential candidate.
She should have beenup four points higher.
But this is a reflection of herjust being a weak candidate.
(26:25):
Democrats lost a few seats in legislature,but they still have supermajorities.
Democrats actually picked up, I think,three House seats in California,
which is one reason why the Republicanshave a skin of your teeth existence.
I think they have 220 seats in the House,two more than the majority.
But if you look past that, I look moreat the relationship that the governor
(26:46):
has with Democratic lawmakers,mayors in particular.
I mentioned this frictionhe has with Matt Meehan,
the mayor, San Jose, which I thinkis complicated on several levels.
First of all, a mayor maybea punk in the governor's eyes,
defying him on issues,questioning his judgment on issues.
Secondly, Meehan seemsto be ambitious himself.
(27:08):
Maybe he wants to run in 2026.
And he has kind of a hip look to him,
which maybe kind of makes hima next generation, Gavin Newsom.
So I noticed the friction there.
But then I also noticed that Newsom didnot get involved in the San Francisco
mayor's race.
A city that he was once the mayor he didnot endorse London breed the incumb.
But mayor,he did not endorse Daniel Lurie,
(27:29):
the private sector fellowwho ultimately won.
A real departure from San Franciscopolitics because usually they hire
from within.
They pick a machine politician, but no,they're going to the bonafide outsider,
see what happens there.
He did not weigh in on the recallacross the bay in Oakland,
where the mayor got recalled andso did the county DA as well.
So you saw this kind of divisionbetween Newsom and on top of that,
(27:51):
as Lee knows, with homelessness,when it came time for cities to came up
with their own homeless plans, Newsomwas very critical of what they did and
basically sort of kicking them back andsaying try harder.
So this friction that exists betweenthe governor and the mayors,
I think represents a larger problem,Lee, which is just Sacramento,
not necessarily be in touch,was going out on the cities.
And we certainly saw thatmanifested in Proposition 36,
(28:13):
which breed ended up supporting.
Why she saw the train coming down thetracks, a train was coming right at her.
And so she had to get tough oncrime very much in a hurry.
So this might won't be one thing tolook at 2025 coming ahead just to see if
Sacramento is a little, dare I say,
more responsive to what'sgoing on outside the bubble.
>> Lee Ohanian (28:31):
Yeah, Bill, yeah, I agree with that.
There's a substantial andgrowing disconnect between Sacramento and
many counties and cities and there'senormous difference across counties and
cities in terms of the kind of financialpressures they are feeling in terms of
the economic prosperity they are having.
(28:52):
Recently, Newsom and Bonta fileda lawsuit against the city of Norwalk,
which is probably 20 milesoutside Los Angeles, but,
much smaller city,relatively less prosperous than LA,
one that's really strugglingwith homeless issues.
And their city council said,you know what?
(29:15):
We're throwing up our hands.
We're not gonna buildmore supportive housing.
It is so expensive trying to manage this.
Our businesses are struggling with this.
Our neighborhoodsare struggling with this.
So that really highlights just thefraction between cities and Sacramento.
(29:36):
And, Bill,
I was interested in your remarks aboutNewsom staying out of city politics.
I'm wondering just how much ofthe fact that Oakland, which, I mean,
God bless them, but that is just, if it'snot the most troubled city in America,
it's certainly one of the mosttroubled cities in America.
(29:56):
I know he was quite critical about Oaklandin terms of some other governance issues.
He also had to send in [INAUDIBLE].
>> Bill Whalen (30:04):
He sent in the California Highway Patrol at one point to help get
crime under control.
So it's not like he's tonedeaf to what's going on.
>> Lee Ohanian (30:10):
Yeah, and I'm just wondering whether in the back of his mind
or in the front of his mind,he thought the Oakland mayor,
I can't remember how to pronounce hername, but, that she should be recalled.
It's not obvious that who stepsin will be able to do better job.
But, that's the city that is justa huge outlier in terms of California,
(30:35):
one that just needs an enormous help.
And Bill, in terms of San Francisco,I'm just curious.
I believe all the Mariel candidates,
at least the ones that had any typeof chance, they were all Democrats.
>> Bill Whalen (30:49):
Yep.
>> Lee Ohanian (30:51):
Does that make it tricky for him to pick sides?
>> Bill Whalen (30:55):
No, because he engaged in a congressional race here
in Silicon Valley, which pitted,because of our open primary system,
two Democrats made the general election,and he endorsed one of the two.
Again, a curious move because, andI wrote about this in California mind,
he chose the guy who wastrailing badly in the race,
who ultimately lost by a handful,but in part.
(31:15):
Now, one of his former aideswas running the campaign, but
also he had issues withthe other fellow running,
who was a former mayor who againdefied him on Proposition 36.
So he did kind of getpersonal in that one.
But he stayed out of these city races.
And I think it just might be simple that,governors are supposed to have clout.
Their endorsements are supposed to matter.
And maybe since he's been througha few ballot measures lately where his
(31:38):
involvement was not necessarilybeneficial to the cause.
Remember, he barely survives the Homelessbond earlier this year, Prop 1A,
despite being the verypublic face of that.
Maybe he came to the conclusionthat it's best I stay out,
because if London Breed loses,if the recall goes through in Oakland and
I'm on the wrong side of it,it'll just maybe look weak.
>> Lee Ohanian (31:58):
Yeah that's very interesting.
Prop 1A, I believe in,in a poll had, was winning 2 to 1,
perhaps just two months before the vote.
And what, what was, what was the,what was the final tally?
Was it 51, 49, 50 and 50?
>> Bill Whalen (32:17):
And no, it's much, much closer than that.
Remember, it was just skin of yourteeth and if you also remember, Lee,
this got this complicatedlife in Sacramento.
Newsom was going to do a state of thestate address right after the primary in
March and he kept pushing it backbecause it took time, results for
that and that he had to kindof internally scramble and
figure out now what is my message sinceI almost got my head handed to me.
(32:39):
So again, I think maybe he was justa little shy about getting involved.
Maybe just because,been tougher to be on the ballot lately.
>> Lee Ohanian (32:46):
Yep. >> Jonathan Movroydis
we're coming off a tumultuouselection season for the state.
Just wanted to ask you both whoare the winners and losers of 2024,
given the election season,everything that's gone on this year.
Bill?>> Bill Whalen: Let's Lee go first.
>> Jonathan Movroydis (33:05):
Okay.
>> Lee Ohanian (33:06):
Well, you know, it's interesting,
I think winners would includevoters who are moderate or
conservative because a number ofballot measures went their way,
including Prop 36,which redoes some of the 10 year old law
that made theft below, I believe,I believe the limit was 975.
(33:30):
That was a misdemeanor.
Retail theft is up in California and
Prop 36 makes some of thosesmaller thefts felonies.
It addresses drug use Ithink in a productive way.
If an individual linkedto get drug treatment,
(33:52):
that felony is dropped andthat pass was 70%.
So that was, so that's one data pointabout that would be in favor for
those voters.
Another was rent control went down,I think was 60 to 40.
So that was one that was pushed veryaggressively by the progressives.
(34:12):
Minimum wage went down, proposition,I believe it was Proposition 5.
This was a very important one.
This would have loweredthe super majority standard for
local bonds to finance infrastructure andaffordable housing.
That would have essentially undonesome of the protection for Prop 13.
(34:35):
So this in my view is a reallyimportant one that went down.
So I think voters were winners.
I'm also going to callGavin Newsom a winner,
potentially a big winner becauseTrump is in office for four years.
If Newsom has national politicalambitions, those would come up in 2028.
(34:58):
That would give him some time todistance himself from the governorship
in California where an awful lot ofthe country is just not going to see eye
to eye with him orwith a lot of California.
So I think the outcome forhim is really quite a good one.
(35:18):
In terms of losers, I think it'sgoing to be the California taxpayer
because the Legislative Analystoffice came out and they're looking
at potentially another budget deficit forthe following fiscal year.
The forecast is relatively small,I don't recall the exact number,
(35:39):
but the state just has a hugespending problem that's too high.
They have a huge revenue problem thatcontinues to be much too dependent on,
on capital gains, essentially,which are very, very volatile and
which create these kinds of boombust cycles in state finances.
We've never fixed that.
(35:59):
It's been around inpolitical years forever so
California is going to continue toface a lot of fiscal stress and
it's going to end upfalling on the taxpayer.
So sad to say,my loser is the California taxpayer.
>> Bill Whalen (36:15):
Okay, I would go with the winner,
a variation of Prop 36, Lee andI would pick Nathan Hockman,
who is the new district attorney inLos Angeles for several reasons.
First of all, his opponents ran a verypredictable playbook against him.
They said, look, the guy used to beRepublican, now he's an independent, so
you can't trust him asfar as you can throw him.
(36:35):
But he got easily sent into office,so that didn't work.
Secondly, if you looked at his inaugural,who attended it?
Arnold Schwarzenegger,
which was very impressive to get Arnoldto show up because he's a busy man.
It was a very Arnold moment.
Interview asked him what hethought about Nathan Hawkman,
I'm going to do a verybad Arnold invitation.
He goes, I think he's an eagle.
He goes, because eagles fly high.
(36:58):
And then George Gascon,he's a turkey, turkeys fly low.
It's just kind of very Arnoldway of summing up things but
Hockman has come into officewith a very simple promise.
You commit a crime,
you're going to get prosecuted you'renot going to get slapped on the hand.
You're actually going to do time.
And people in Los Angelesseem to want that.
I don't want to get over my skis here andput him into higher office.
(37:20):
But being an independent and also beinga guy coming in and cleaning up a problem,
that puts him on a path to things higherthan Los Angeles if he does a good job.
So I'd make him my winner.
The loser I'd have would beCalifornia Democrats, but
a very particular subsetof California Democrats.
Not Kamal Harris, not Gavin Newsom,but those Democrats who thought they
were going to make out like Banditswith Kamala Harris in the White House.
(37:43):
So this would be every lawmakerwho thought that he or
she was going to getan appointment to Washington.
This would also be every donor who thoughtthat he or she who helped create a million
dollar war chest for her whichsomehow magically she ran through.
And then some would think theywould get an appointment or
be on first name basiswith the future president.
They are all SOL out ofluck at this moment.
So they're the losers andI have a tweener, Lee, and
(38:06):
that's going to be Gavin Newsom.
He is in a interesting position for2028 right now, but
he had kind of a rough 2024 because henever materialized as the white knight.
He was going to rescue the party and
he still has a lot explaining to do as towhy he would stand up time and again for
Joe Biden andsay what great condition he was in.
His favorite term for Biden was hedelivered a masterclass tonight.
(38:27):
He said that after that,a disaster of a debate.
So he has, as Ricky Ricardo said, he hasa little splaining to do on Joe Biden, so
I give him the tweeter.
>> Jonathan Movroydis (38:36):
Gentlemen, I'm more or less in line with you on your losers.
And Bill, your, your tweener, I havean out of the box winner which somewhat
explains my background working at theNixon foundation before coming to Hoover.
And that's the legacy of California'snative son, Richard Nixon.
Given that Trump was able to survive twoimpeachments in a series of criminal
(38:57):
indictments, some of which seempolitically motivated, Richard Nixon,
if Watergate took place today, might havebeen able to survive politically and
do what Trump essentially wantsto do in his second term.
Nixon wrote in his memoirs that he hadthree main objectives for a second term.
One, reform the budget andterminate wasteful programs.
That sounds a lot like whatTrump wants Elon Musk and
Vivek Ramaswamy to do at Doge.
(39:18):
Number two, a massive reorganizationof the federal bureaucracy.
That sounds like Project 25 orsomething like it.
Something interesting about this isthat Nixon wanted to tap Hoover's very
own George Schultz as head of all ofeconomic affairs with the Treasury,
Commerce and some of the otherdepartments reporting under Schultz.
(39:39):
And number three, revitalizingthe GOP along new majority lines.
It sounds like Trump making newinroads with voters that hadn't voted
Republican in the past.
What's say you gentlemen, Bill?
>> Bill Whalen (39:52):
Yeah, this is interesting.
Nixon in 1968 brings in disaffectedwhite Democratic voters.
Archie Bunkers,
we might call them, Nixon in 1972 doesquite handsomely with youth voters.
He understands it now that the youth votehas been raised lower to 18-year-olds.
If you look at this Nixon 68poster behind me, by the way,
that's one of the many sides up there,let 18-year-olds vote.
(40:14):
He did very well in withthem in that election.
And also like Trump, Nixon at the end ofthe day is not very easy to peg in terms
of his ideology and his beliefs.
One thing that people find frustrating,Trump supporters find frustrating about
him is just when they think they havehim pegged, he comes out and says or
does something that doesn't necessarilynecessarily fit their narrative.
You know, he's not necessarily an opponentof big government at the end of the day,
(40:36):
even though he has the Doge initiative.
And Nixon also had striations, peoplewho think he's an arch-conservative.
The man createdthe Environmental Protection Agency.
And so again, just kind of a hardpolitician to put into a box.
The one big difference, though,
who was shrewder thanRichard Nixon on foreign policy?
And we're in a very complicatedworld right now, and
2025 is gonna be a huge test ofDonald Trump's foreign policy acumen.
>> Lee Ohanian (40:59):
Those interesting ideas about being difficult to pigeonhole Nixon,
absolutely.
In terms of economics, I think one of hisworst decisions was setting up wage and
price controls,which failed predictably, in my opinion,
based on kind of standardeconomic reasoning.
(41:20):
You interfere in a market,you set a price that's too low,
you're gonna have shortages,you're gonna have lines.
As we know, we saw gasoline, gasolinelines around that time, and I believe,
if I recall correctly, I believeSchultz may have either resigned or
threatened to resign around that timewhen Nixon put in place price controls.
(41:45):
George, being a University ofChicago economist, price and
wage controls are about the lastthing that he was gonna tolerate.
He was remarkably gifted, brilliant,
may have been close togenius in terms of IQ.
Not that long ago,I was looking at some YouTube videos of
(42:06):
the Nixon Kennedy debates inthe 1960 presidential election.
And it is just remarkableto watch those and
to look at the level of discussion andthe ideas that are being discussed.
And I think the respect that both had foreach other and
such a high level discussion ata time that's over 60 years ago,
(42:29):
when the average American had muchless education than they do now.
It's remarkable.
I mean, I recommend that to anyone.
You can find those on YouTube.
But I agree,Nixon on foreign Policy was a master.
We need people with thosekinds of skills now.
>> Bill Whalen (42:49):
Yeah, it's interesting, Nixon and
Kennedy were both congressionalclass in 1946, as was Gerald Ford.
It's a rare class thathas three presidents.
But Kennedy respected Nixon verymuch in part of Nixon's background,
his upbringing, as compared to Kennedy.
No silver spoon there.
And also, Nixon was what,four years younger than Jack Kennedy, but
by the time they're running forpresident, 1960,
(43:09):
Jack Kennedy is a former congressman,now a senator.
Nixon is a former congressman,former senator, now vice president.
So Nixon was kind of ahead of him.
But, Jonathan,one thing I'm curious about,
maybe you might havesome thoughts on this.
If Kamala Harris could somehow talk toRichard Nixon right now and ask him for
his thoughts on her running for governor,2026, what do you think he would tell her?
(43:30):
Because remember, 1962,that is Nixon's route to rehabilitation.
He's going to run for governor.
>> Jonathan Movroydis (43:36):
That's right, yeah.
I don't think Richard Nixon wasvery invested in that race.
From the people I've heard talk about it,
my guess is that maybe he would tellher to take a break from politics,
travel around the world,build up her policy chops,
(43:56):
you know,comment on the big issues of the day.
Sort of like what he did in New Yorkin the mid, in the mid-1960s and
that sort of that, that era really gavehim the time, given the ability to relax,
reflect and position himself forthe campaign in 1968.
>> Bill Whalen (44:16):
Yeah, that's well put.
And that's one of the very bad parallelsof Harris running for governor in 2026.
Like Nixon, she would look at a racethat she would think she could win.
But I don't think her heart's really intobeing the governor of California because
as we've talked about before, it isa very difficult policy centric job and
as opposed to something a littlelighter like being the vice president.
(44:36):
And I just don't think she'sthe right person for it.
Gentlemen, final question toround up this, this episode.
>> Jonathan Movroydis (44:42):
What are some reasons to be optimistic about California
in 2024?
Lee, why don't we start off with you?
>> Lee Ohanian (44:49):
Well, I'm always optimistic because, yeah,
this is still the best place.
[LAUGH] It's the best place to live.
There's still remarkabletransformational businesses here.
There is a ton of economic opportunity.
And even with just relativelymodest policy reforms in
(45:09):
the areas of homelessness andhousing regulations and
taxes, getting trying to developa tax base that's not so
dependent on capital gains thatleads to these boom bust cycles.
California is a great place,and it could be even better.
(45:30):
So I'm always optimistic about that.
Bill, I think you might be talkingmore about Daniel Lurie as
mayor of San Francisco.
And I do think San Franciscanshave reasons to be optimistic.
I don't know much about Mr.Lurie, but there's been a groundswell
of support within the city formuch more moderate politics.
(45:54):
Dean Preston was voted outfrom the Board of Supervisors.
Preston, I believe, is a member ofthe Democratic Socialist Party.
He was voted out in favor of a moderate.
Erin Peskin is also out,who is also extremely progressive.
And when people criticize Breed,London Breed is San Francisco mayor.
(46:19):
One thing to keep in mind is that formost of her mayorship,
she was dealing with an extremelyprogressive Board of Supervisors that made
it very difficult to implement anythingresembling a common sense policy choice.
That Board of Supervisorsis very different now.
It's no longer has thatprogressive majority.
(46:40):
So Lurie is going to have, I think,
a much better opportunity to createsome common sense in San Francisco.
So I think California can beoptimistic about San Francisco.
And I think San Franciscans can belooking forward to a hopefully good 2025.
>> Bill Whalen (46:57):
Yeah, I agree with you on that.
For years, people like me havebeen blasting San Francisco and
saying they need to do what New York did.
You need to bring in Rudy Giuliani,be tough on crime.
You need to bring in Michael Bloomberg,a guy who just knows how to manage things,
and have a strong executive.
You have to stop pickingpeople from within the system,
ultimately just part of the system.
So this is really the put up or shut upmoment for San Francisco because now they
(47:18):
have somebody in office who is not ofthe system and let's see what he can do.
And if there's reason to be optimistic,it's because the timing is right.
I don't know if the cityhas hit rock bottom or not.
I would hate to think thatit could go further south.
But if ever there are a moment to reallybe ambitious and be inventive and
thinking outside the box, my God,it would be 2025 in San Francisco.
(47:39):
My other choice for optimism is,
I am hoping that we get a State ofthe State address sometime early in 2025.
Lee wrote a really good column on this forCalifornia.
On your mind, Lee,
I think Gavin Newsom finally produceda State of the State address.
And I think what early July,[LAUGH] of this year, and
it was really just kind ofa warmed over leftovers.
(48:00):
By the time he finally gave it,
you just kind of wondered whyhe even bothered to do it.
And he doesn't have to under state law,by the way.
But I'm hoping, given if we're supposedlyin this moment of crisis with Donald Trump
coming into office,if Newsom does have national ambitions, so
he has to show that he'sin charge of California.
I'm hoping that he does whatgovernors did back in the day,
(48:20):
which was give a speech early inJanuary or even early in February, and
kind of lay down the marker forhis vision of the Golden State.
The longer the governortakes with this speech,
it just begs the of what visiondoes he have for the state?
So that's my choice for
optimism that he's going to come out earlywith the state of the state next year.
>> Lee Ohanian (48:39):
I agree with you.
I hope that does happen.
I hope he has an ambitious, but
realistic agenda that challenges his own
party to start making some progress.
We pass about a thousand laws every year.
I think there's 2,000 come down the pike,
(49:00):
about a thousand get passed andsigned into law, and it's 2024.
I think back on 2014, roughly 10,000 newlaws have hit California since 2014.
I kind of think about 2014 and justwonder, well, just how different is my
life now in 2024 than it was in 2014from perspective of all these new laws.
(49:22):
Let's do fewer laws and make themsensible and advance the ball for
cost of living, building,housing, homelessness.
I hope Newsom challenges his supermajority in the legislature to do this.
(49:43):
It will be what his lastroughly two years in office.
There's still time, soI would love to see that happen.
>> Bill Whalen (49:51):
Yeah, it's funny, by the way, I was looking at Texas the other day
just to see how Texas does thingsdifferently in California.
And one thing I've noticedis limitations on number
of bills that lawmakers canenter introduced in a session.
And if we're gonna haveterm limits in Sacramento,
maybe we should havelegislative limits as well,
because does the governor really need todeal with a thousand bills every year?
(50:12):
No, that's just excess.
So back in the day when I worked forthe Governor, there was one year in 1995,
I believe it was, when Republicanshad control of the Assembly.
And so therefore you justcouldn't pass bills willy-nilly.
And I think the number of bills that wentto governor that year was some somewhere
around 450.
So we could get by with less legislation.
>> Jonathan Movroydis (50:31):
Well, as always, gentlemen, great analysis.
Happy holidays and happy new year.
>> Bill Whalen (50:35):
Same to you.
And Jonathan, thank you for moderatingthis podcast over the course of the year.
Speaking as a fellow moderator, it isa thankless job you have to put up with
Leah and I,gabbing all the time if anyone to jump in.
So we appreciate your efforts.
Well done my friend.
>> Jonathan Movroydis (50:49):
Thank you.
Thank you so much.
It's been a pleasure to speak withboth of you this past year as well.
>> Lee Ohanian (50:53):
Thank you, Jonathan.
Thank you, Bill.It's always great.
It's a lot of fun to do this.
>> Jonathan Movroydis (50:58):
You've been listening to Matters of Policy and
Politics, the Hoover Institution Podcastdevoted to governance and
balance of power here in America andaround the free world.
Please don't forget to rate,
review and subscribe to thispodcast where you might hear it.
And if you don't mind,please spread the word.
Get your friends to have a listen.
The Hoover Institution has Facebook,Instagram, and Twitter feeds or X feeds.
I'm sorry, our X handle is @hooverinst.
That's Hoover I-N-S-T.
(51:20):
Bill Whalen is on X.
His handle is at Bill Whalen CA andLee Ohanian is also on X.
His handle is at Lee_Ohanian.
Please visit the Hoover websiteat hoover.org, and sign up for
the Hoover Daily Report, where youcan access the latest scholarship and
analysis from our fellows.
Also check out California on Your Mind,where Bill Whalen and
Lee Ohanian write every week.
Again, this is Jonathan Movroydis sittingin Bill Whalen's chair, this week.
(51:41):
He'll be back for another episodeof Matters of Policy and Politics.
Thank you for listening.
This podcast is a productionof the Hoover Institution,
where we generate andpromote ideas advancing freedom.
For more information about our work,to hear more of our podcasts,
or view our video content,please visit hoover.org.
[MUSIC]
Popular Podcasts
True Crime Tonight
If you eat, sleep, and breathe true crime, TRUE CRIME TONIGHT is serving up your nightly fix. Five nights a week, KT STUDIOS & iHEART RADIO invite listeners to pull up a seat for an unfiltered look at the biggest cases making headlines, celebrity scandals, and the trials everyone is watching. With a mix of expert analysis, hot takes, and listener call-ins, TRUE CRIME TONIGHT goes beyond the headlines to uncover the twists, turns, and unanswered questions that keep us all obsessed—because, at TRUE CRIME TONIGHT, there’s a seat for everyone. Whether breaking down crime scene forensics, scrutinizing serial killers, or debating the most binge-worthy true crime docs, True Crime Tonight is the fresh, fast-paced, and slightly addictive home for true crime lovers.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.