Making Sense - Sam Harris - #464 — The Politics of Pragmatism and the Future of California

00:00:00.000 i am here with matt mahan matt thanks for joining me thanks for having me sam so you are the current

00:00:27.260 mayor of San Jose and running for governor of California as a Democrat. And you are much

00:00:33.780 celebrated privately. It should happen much more publicly. And I'm hoping to put my shoulder to

00:00:41.020 the wheel on that front for being someone who's just pragmatic and not crazy in the Democratic

00:00:46.820 Party. And that has been all too rare in recent years. So welcome to the podcast. Great to have

00:00:52.440 you. Thank you. I'm looking forward to our conversation.

00:00:55.000 So let's just talk about the beginning here.

00:00:57.520 How did you get into politics and how did you decide to be mayor of San Jose?

00:01:02.240 You know, I think it really goes back to being a kid.

00:01:05.060 I grew up in Watsonville, which is a little farming town, and we had a lot of challenges

00:01:09.300 in our town.

00:01:10.500 We had high unemployment, a lot of crime.

00:01:12.780 When it was time for high school, our local high school had a higher dropout rate than

00:01:17.000 graduation rate.

00:01:17.960 And my mom, who was a teacher, really cared deeply about my sisters and me getting a good

00:01:23.880 Education, encouraged me to look farther afield. And I applied to this all boys Catholic prep school

00:01:29.360 in San Jose and got a work study scholarship. So I worked on the grounds crew and they forgave my

00:01:34.320 tuition. And so I made this long journey by bus over to San Jose. So I had a lot of time every

00:01:38.740 day to read the newspaper, think about the world. And I got really interested in politics and public

00:01:45.900 policy and trying to figure out why was Silicon Valley so prosperous and my hometown struggling

00:01:50.060 so much. And so it was always an interest. I ended up in my career sort of having other careers

00:01:56.680 before I got into politics. I was a public school teacher. I worked in the tech sector for a long

00:02:01.360 time. But about seven years ago, our city council seat in San Jose opened up and it was just kind

00:02:07.340 of serendipitous. Our company had been acquihired. I was sort of in this transitional moment and I

00:02:12.920 decided to throw my hat in the ring. You're in your second term as mayor?

00:02:16.600 As mayor. So I served two years as a city council member. To be perfectly honest, I didn't love being a council member, but I decided when the mayor's seat opened up that it was kind of up or out for me. I was going to try to take on the way that the city was working structurally or maybe try to find another way to create change.

00:02:36.800 ran for mayor about five years ago. At the same time, the voters elected to realign

00:02:44.340 our mayor's race around the presidential cycle. So I got elected and had to immediately turn

00:02:48.660 around and run again. But in those first two years, we really changed our approach. We went

00:02:53.800 from over 40 priorities down to just four priorities and started to really increase

00:02:59.840 accountability for delivering outcomes people cared most about, reducing homelessness, reducing

00:03:04.680 crime, cleaning up our streets, very visible things that people see in their daily lives.

00:03:08.960 And we made real progress. And I was reelected with 87% of the vote. And now I'm in my second

00:03:14.200 term. 87%. That sounds like a lot. That either sounds like a Putin election. Yeah. How common

00:03:23.320 is that for a mayor to be reelected with 87% of the vote? I don't know. I think it's pretty rare.

00:03:28.340 Yeah, it's, well, that's great. So what, as mayor, what have you learned about governance that seems transferable to the larger stage of governor?

00:03:39.640 I think you really have to focus to create change. I think there's a temptation in our politics, at least rhetorically, to try to please everyone and pretend that government can solve every problem.

00:03:54.000 And so what I've seen is sort of a failure of our progressive governance culture in California is this performativeness where we start programs or we do studies or we have these initiatives because we want to cover all of our bases and show that we're being responsive to every need.

00:04:12.420 And I think it comes from a really good place. I think we're empathetic. We want to be responsive. We feel this urge as elected officials to show that we're being responsive to every need. But then we spread ourselves very thinly. And what I think gets lost is the thing that matters most, which is, are we actually holding ourselves accountable for meaningfully improving the things in the world, the outcomes that matter most?

00:04:37.500 And so I would argue that on the handful of indicators that matter most at this moment, the cost of housing, the cost of energy, the quality of our public schools, the quality of our safety in public spaces, the suffering of people who are deep in the throes of addiction and mental illness.

00:04:55.260 And when you look at some of these key things, we're spending more and more and getting less. And what I've tried to do in San Jose is get us to bring a little more of a performance management mindset into government and say, yes, we provide over 200 discrete services and programs, but let's set goals around a few really important things.

00:05:13.260 Let's set some priorities and actually measure every dollar we spend, every hour of staff time, and try to validate that that dollar hour of staff time is actually moving us closer to the goals we have. And so actually setting public goals and measuring performance sounds very simple and obvious. We don't actually do a lot of that as elected officials.

00:05:33.400 So yeah, on that point of around the cost of things, I want to talk about many of these specific issues like homelessness and just the fiscal situation in California. But it does mystify people that we're one of the highest tax states, one of the wealthiest states. We spend a tremendous amount of money on our problems.

00:05:52.420 And yet, certainly the public perception is that we don't get a lot for that spend, right? There's some kind of curse of inefficiency here that seems visited upon California in a way that is worse than other states. Can you just generically, can you explain why, I mean, if this perception's at all wrong, I'd love to know that. But if in fact there's just a tremendous amount of waste and inefficiency, is there a generic answer as to why that's the case here?

00:06:20.000 I think that that general perception is largely accurate. I don't think that there's just one cause of the waste and inefficiency in the system in California. I'd point to a few things. I mean, one is, and it's been pretty well documented by folks like Ezra Klein and Derek Thompson with their book Abundance.

00:06:41.080 You see it in, I think it's Mark Dunkelman with Why Nothing Works. There's a bit of scholarship recently on sort of how is it that government is struggling to turn tax dollars into impact.

00:06:54.500 And I think part of the answer is just how bureaucratic and process heavy and litigious we are in blue cities and states.

00:07:04.660 It will, you know, you'll have a situation where you've gone through a planning process, you've zoned a given parcel for, say, multifamily housing, and then the process to actually do the entitlement and the permitting and allow someone to develop it as multifamily housing can take two years.

00:07:22.520 I think our CEQA, which is our Environmental Quality Act in California, is legendary for allowing anyone anywhere to sue for almost any reason. And so, you know, things can get, investments can get caught up in the courts for years and ultimately die just under the cost.

00:07:37.980 So part of it is bureaucracy and litigation risk. Part of it is, I think you sort of alluded to this, almost a resource trap. It's the weirdest thing, but it's sort of like the countries where you have this abundant natural resource and so you sort of over-rely on that and then therefore don't have to innovate or solve harder problems.

00:07:58.240 I think in California, we've become very used to the notion that high income earners and particularly the tech sector are going to generate this outsized returns and revenue is just going to always go up 5% to 8% every year up into the right.

00:08:14.280 And so you'll end up in these situations where we have huge surpluses and then they just kind of get absorbed into the bureaucracy and we don't have enough accountability around are we spending the dollars efficiently.

00:08:25.140 And then I think there's outright fraud. I mean, look, we just had the example of fraudulent hospice claims that are being investigated, potentially billions of dollars. We know during the pandemic, California had over $30 billion worth of fraudulent unemployment claims. So I do think there's outright fraud, but my sense is by an order of magnitude, it's waste, it's process, it's litigation. It's just a system that can't execute anymore.

00:08:51.880 And that's the challenge is all of those legal protections and bureaucratic processes, they were well-intended. I mean, we layered on all of these steps because we wanted to protect the environment and have strong labor standards and make sure we did a lot of community engagement and tons of checks and balances. But we hobbled government to the point where it can't actually just go deliver the thing that we want.

00:09:14.640 What can the governor do to perform surgery on all that?

00:09:19.140 Yeah. Well, I don't think you can fix the whole thing at once. I think back to maybe the earlier point, I think when you focus on an issue, so you take something like homelessness and the work we've done in San Jose, and I think this is a model for what we can do statewide, if you commit yourself to the right goal.

00:09:35.760 So when I came into the office, it felt like we weren't really trying to solve homelessness. We were trying to sort of right all that was wrong in the world. Inequality, structural racism, all the ills of society. And I said, well, if the crisis really is homelessness and what people mean by that is the poor guy living out in a tent down the street, let's just be laser focused on bringing people indoors.

00:10:01.700 And the first barrier is that we just don't have enough beds for people. So what's the fastest, cheapest, but still dignified and ethical way to add a lot of beds and give people a real alternative?

00:10:15.100 And so we started buying sleeping cabins, these prefabricated modular units and building them into little tiny home communities on public land. We bought old motels and started converting them into transitional housing.

00:10:28.100 turns out you can scale up beds a lot faster than we were. We were spending a million dollars a door

00:10:33.700 and often taking six or seven years to build a project. And so San Jose has actually led the

00:10:40.660 state over the last few years in reducing the number of people living outside because we made

00:10:44.780 that the goal. And we didn't overcomplicate it with a bunch of other things. We just said,

00:10:49.240 we're going to build a lot of shelter. And when it's available, we're going to do our very best

00:10:52.880 to incentivize and even require that people come indoors. You shouldn't be allowed to choose to

00:10:57.660 camp in a public space when we're giving you a dignified, low barrier alternative. But I think

00:11:03.620 that's sort of a template for, as governor, what you can do. You have a lot of tools. You have

00:11:08.160 the bully pulpit, the ability to really shine a spotlight on issues and get people to understand

00:11:12.880 why we have a given problem and how we might solve it and champion real solutions.

00:11:17.520 You have the veto. You can kind of block bad ideas and things that get in the way.

00:11:22.140 You drive a budget process that can reallocate budget and staff time. And then you appoint the people who run the state agencies. And I think often those, that may be the most powerful lever. Often those folks feel like their job is to sit behind a desk in Sacramento and manage process and manage regulation and reduce legal risk versus actually being held accountable for delivering an outcome.

00:11:44.460 If we set a goal that every third grader should be on grade level for reading, and we actually aligned budget and staffing and made sure that the people in charge of the Department of Education and the county departments of education knew that that was their goal and they were going to be held accountable to it, I think you would see us change how we operate.

00:12:07.280 And I think you'd see us move a lot closer to that goal.

00:12:09.240 So I think a lot of it comes down to focus and creating accountability for outcomes.

00:12:12.940 Well, we'll get back to homelessness because I think that's really top of mind for many Californians. But let's start with wealth inequality because there's billionaire wealth taxes, absorbed a lot of oxygen of late. How concerned are you about wealth inequality?

00:12:28.540 I'm more concerned about opportunity. I think wealth inequality can be very corrosive to democracy. I don't think the wealth tax is likely. I don't support it because I don't think it'll work in practice. That's my concern. I'm very supportive of progressive taxation.

00:12:44.600 in California has the highest tax rate or second highest tax rate in the country and arguably the

00:12:50.720 most progressive tax structure in the country. So much so that the top 1% of income earners in the

00:12:56.920 state generate somewhere between 40% and 50% of the state's revenue in a given year. And the top

00:13:02.940 3% generate over 70% of the state's revenue. So we have a very progressive tax structure.

00:13:07.820 And I think that's right. I think the wealth tax concept is fundamentally different in that

00:13:13.680 because people feel that it is taxing something that's already been taxed and earned and in many

00:13:20.440 cases are assets that aren't liquid and then you've got to figure out how to assess you know

00:13:25.060 the value of a painting or a business or some stock that hasn't been that hasn't isn't publicly

00:13:30.300 traded you're gonna actually linger on the mechanics of that a little bit because it's i

00:13:35.420 think it's not obvious for people who haven't thought it through why this is so unwieldy and

00:13:40.000 why it has perverse incentives. So let's just do a dissection of the wealth tax. I mean, I'm

00:13:46.900 quite concerned about wealth inequality, but it seems fairly obvious that this approach to

00:13:51.760 solving that problem is going to backfire. Yeah, I think there are a lot of them. We should talk

00:13:56.000 about all the other things we should be doing to address wealth inequality, and I think even more

00:14:00.100 importantly, opportunity and upward mobility. I think that's the biggest issue is the declining

00:14:05.540 social mobility in America. But look, there are a dozen European countries that have tried this.

00:14:10.840 The majority have rolled back their wealth taxes. Of those, a majority found that their overall

00:14:16.380 revenue declined. You have to hire, to actually implement a wealth tax, you have to first hire

00:14:21.760 an army of assessors to go out and pick through people's lives and try to figure out what they

00:14:27.200 own and what it's worth. And that's really complicated. All people's belongings going

00:14:33.920 through their homes, trying to assess the market value of everything they possess is intrusive and

00:14:41.120 complicated and expensive. I think a particular risk, and part of my concern with this current

00:14:47.520 proposal, is that you have folks who have, say, built a company, have stock, it's paper value,

00:14:56.140 it fluctuates wildly. There's a multiplier effect that is oddly written into this proposal that

00:15:02.520 your voting power. If you have shares that give you 10x the voting rights as a founder of a

00:15:09.220 company, that's actually how it's going to be valued. So now you're in a position where

00:15:13.680 you've created a company, you have paper wealth of $100 million. It could disappear tomorrow.

00:15:20.260 The company could be one mistake, one competitor away from losing all of its value, but you 10x

00:15:27.260 the calculations. Now, theoretically, for purposes of the wealth tax, you should be

00:15:32.600 assessed at a billion dollars. You're then forced to come up with 5% of that or 50 million. There

00:15:40.200 may not even be a market for your shares. And if you try to go dump all of those shares on the

00:15:45.000 market, the value is going to plummet and suddenly your company is worth nothing. So it just, I mean,

00:15:49.780 this is why you've already seen just with the proposal of this wealth tax, you've seen over

00:15:54.760 a trillion dollars of capital flight from the state of California. There are estimates,

00:15:59.600 independent estimates. It was just, I'm forgetting his name now, but a researcher who spoke at

00:16:04.080 Stanford the other day estimated that the net impact of this may be up to $25 billion per year

00:16:10.760 in lower revenue. The tax when first proposed was estimated at the high end to generate $100

00:16:16.560 billion once. This could reduce ongoing annual revenue for the state by up to $25 billion.

00:16:22.120 And if we lose the companies of the future, the big growth drivers and employment drivers of the state, it could actually be much worse than that in the long run.

00:16:29.400 Yeah. Yeah. Yeah. I mean, it's been fairly widely reported that many very wealthy people actually, not just billionaires, are finding some backup plan should this pass.

00:16:41.040 Accountants have been very busy creating new landing places for people, not just billionaires, but wealthier folks, business owners all over the country. They're creating primary residences in other places. And we're very vulnerable to capital flight because so much of our revenue comes from our top income earners.

00:17:00.420 So I just, I worry that in practice, and again, it may be the best intended proposal. I do think

00:17:06.780 wealth inequality is a problem. I think an even bigger problem is people don't feel they can

00:17:11.040 achieve the American dream and that they have the opportunity for real upward mobility. But this

00:17:16.000 proposal is incredibly likely to backfire, which is why I've opposed it and I'm really concerned

00:17:21.580 about it. If it reaches the ballot, does it seem almost guaranteed to pass in the current climate?

00:17:26.980 Not necessarily. I think if you actually educate people on the likely unintended consequences, how much capital flight has already happened, how revenue may be reduced. I mean, here's the sad truth of this is, and this may be the message people need to hear, I don't think it will be the billionaires and the wealthiest who pay this tax. And you're right that it isn't just billionaires who are leaving because people don't believe it's a one-time tax on billionaires.

00:17:50.440 They assume that threshold will be lowered by the legislature over time, and it will become a recurring wealth tax. What that means is as wealthier individuals, people who own companies leave the state, it will be the middle class who is left holding the bag and asked to pay more to cover the existing services and infrastructure maintenance that the state needs.

00:18:12.560 And that's why we've got to look at better ways of doing this. I mean, just when it comes to the tax code, I think there are a number of things that make more sense. You could raise the capital gains rate. If, you know, the argument is that returns to capital are outpacing returns to labor, then we should be adjusting the capital gains rate. I also don't think that very wealthy people should be able to endlessly borrow against appreciated assets as a way to avoid paying capital gains on those assets at some point.

00:18:40.260 Yeah. Double click on that phenomenon. So it's been widely reported that some of the richest

00:18:45.020 people in our society don't pay any income tax because they don't get income. How does that

00:18:50.480 happen? Well, as I understand it, and I don't know, I'm not a particularly wealthy person and

00:18:55.460 not an accountant, so I'm not an expert in this. But as it's been explained to me,

00:19:00.220 if you have tremendous assets, you can go and at a very low borrowing rate, very low interest rate,

00:19:07.360 borrow money against you can put up as collateral say your stock options that have value but you've

00:19:15.980 never paid a capital gains tax because you didn't sell them right and so you have this collateral

00:19:20.500 that you can borrow against then you can use the borrowed money to invest or spend on whatever you

00:19:24.700 want and you've just essentially effectively avoided ever paying the capital gains and that

00:19:29.020 can drag on for decades and and you're not taking a salary so you're not you're not paying an income

00:19:33.560 tax on your salary that doesn't exist. That's right. You're not taking a salary. Your wealth

00:19:37.500 is a capital gain that is sitting there unrealized for tax purposes. And then your

00:19:43.720 income is effectively borrowed money at a low rate. And if you're deploying that money and

00:19:47.740 getting a return on it, you can pay the interest quite easily. So it's essentially a hack of the

00:19:52.460 tax code. That's where I would go. I mean, that is a very logical, if you want to make the tax

00:19:57.800 code fairer, I would start there. There's also this weird... So starting there means taxing people

00:20:03.520 on the loans they're taking? I think that there should be a threshold. And again, I'm not an

00:20:08.320 accountant, so there may be folks smarter than me who have a better proposal, but it just intuitively

00:20:12.520 feels to me that at some point, if there's a level of borrowing against a certain amount of

00:20:20.440 appreciated but unrealized assets that you hold that should trigger a capital gain or

00:20:27.460 basically they should effectively be considered realized. You are realizing that capital gain

00:20:33.020 without that being true for an actual legal or tax purpose. I believe you could regulate that

00:20:41.020 to say at some point of borrowing or some time duration, that is now a realized capital gain

00:20:46.140 and you need to pay the tax on it. Right. Right. It's the optics of this that are going to be so

00:20:52.020 determinative of people's vote. People hear the phrase wealth tax and it just sounds intrinsically

00:21:00.900 good to anyone who's not extremely wealthy. Of course, we need a wealth tax. But I think we have

00:21:05.820 to offer people a better description of what's going on. And I think it is more true that our

00:21:13.160 inability to deliver high quality public services, the extent to which we've gotten in the way of

00:21:18.180 building housing. I mean, you think about it, most people's, both their income, an increasing

00:21:24.880 share of income is going to just the most basic thing being housed. More and more people are

00:21:29.880 renters. We can talk about that. That's kind of an interesting quirk of regulation and construction

00:21:35.800 defect liability in California, a little bit of special interest capture. And most people's wealth

00:21:41.340 is in their homes, but that's increasingly only true for older generations. You have an entire

00:21:45.300 generation of young people, particularly in California, who have become almost radicalized

00:21:50.360 around the fact that they have no hope of becoming homeowners and having any equity in our society.

00:21:54.380 I would focus on solving that. I think that's a much bigger driver of opportunity and upward

00:21:59.420 mobility, the quality of our public schools. I think there are other policy areas where we can

00:22:04.320 have much more impact for people than worrying about who's gotten wealthy by building a business

00:22:10.200 and how wealthy they are. Not that they shouldn't pay their fair share, but I just, I think that

00:22:14.140 we're sort of focusing on the easy target versus solving the bigger, more structural issues that

00:22:20.760 really matter for people. Okay. So let's talk about

00:22:23.820 home ownership and homelessness and just how you think about that problem at the highest level in

00:22:29.300 California. I guess my first question is why do we have, I think, the worst problem of homelessness

00:22:36.040 of any state in the nation. What explains that? I think it's a confluence of a few factors. One,

00:22:42.540 we have a shortage of housing supply. So that's a whole bucket we should talk about, which is

00:22:48.120 we don't build the housing that we need. We have been under building for decades. And when we do

00:22:54.500 build, we build at a very expensive cost per square foot. It is just, we're not, you can't

00:23:00.100 have affordable housing if you can't build the housing affordably. And so we can get into that.

00:23:04.380 That's a whole area of 50 years of layers of public policy decisions that have ultimately yielded a broken housing market. Number two, we have a crisis of untreated addiction and mental illness in California, which kind of famously, and everybody blames Reagan, but at some point, we're going to have to take responsibility for the fact that we have not rebuilt the mental health system in our state.

00:23:25.040 So we've had a lack of treatment capacity, treatment beds for addiction and mental illness. And more recently, fentanyl and meth are much more potent, widely available, cheaper and accessible than, say, heroin was in the 80s. I mean, there's a real crisis around that.

00:23:40.660 And then there's this third thing, which is people always talk about the weather. There is some truth to this. Cities like New York and Boston have comparable rates of homelessness, but they don't have the levels of unsheltered homelessness. If you're homeless in the Northeast, there's a shelter bed for you. There is a place to go that is safe and warm and dry. Not always as safe as it should be. I don't want to sugarcoat this. I mean, our shelters are not great.

00:24:07.100 And that's why in San Jose, we've built individual shelter, meaning you have your own room with a door that locks to give people privacy and safety. But we were never forced in California by some external factor like harsh winters to build the capacity, the shelters, treatment centers that we needed because you actually can survive outside with our weather.

00:24:30.420 And so you have this confluence of a drug and mental health crisis that's going unaddressed, the fact that we were never forced to build basic shelter and safe indoor places for people. And then probably the overall biggest driver is housing's totally unaffordable. We don't build enough of it and people get pushed to the edge.

00:24:46.820 I mean, my dad was born in a little town, mining town in West Virginia, Nitro, West Virginia, where the nitroglycerin plant was. And you go to a place like West Virginia, it's not like they have a lower rate of mental illness or addiction, but for most people, even struggling with addiction or milder mental health challenges, they can maintain themselves indoors if there's an affordable enough place.

00:25:16.020 And in California, it's just, you can do everything right, have no behavioral health challenges, and you're struggling to just hold on because of how expensive the rent is. And so I think that macro factor of how unavailable and expensive housing is, has huge downstream effects.

00:25:36.680 So what is unique about California apart from the weather?

00:25:40.500 I mean, I hear how the weather is kind of a forcing function here where on the East

00:25:43.820 Coast, because people are simply going to die outdoors in winter, they've been forced

00:25:48.640 to build more shelter.

00:25:50.800 By law, by the way, they're called shelter, they're shelter first states.

00:25:55.280 You have to actually have a place for people because of the winter.

00:25:58.540 Right.

00:25:59.140 Yeah.

00:25:59.340 And is there a concomitant factor of people coming to California, but just because of the weather to be homeless, or is that just a rounding error on the actual problem?

00:26:10.180 I think there's some of that. I mean, we certainly see in a place like San Francisco a certain amount of that. I also think it's true that people come not necessarily just because we've got great weather or maybe the drugs are more accessible or whatever the tropes are. I'm sure there's some of that.

00:26:27.300 I always think people genuinely come here for opportunity and don't necessarily have a plan

00:26:32.920 and don't realize how hard it is and how expensive it is. So there are a lot of factors. I mean,

00:26:38.880 most of the research on this indicates that the majority of people who are homeless in California

00:26:44.980 are from California. And we have a- The majority meaning like 90% or above?

00:26:52.900 The claim, I don't know. I mean, I don't want to represent something that I don't know to be

00:26:57.060 true. The claim is that in most places I've seen 80% of folks were last living indoors in the county

00:27:03.480 in which they are homeless. But that, I mean, there's a lot of, you can kind of slice that a

00:27:07.260 lot of different ways. How long were they living there? Did they actually grow up there? I don't

00:27:10.600 know. California has been a destination for people from all over the country, all over the world for

00:27:14.980 decades because of opportunities. I don't think that the primary driver here is that people who

00:27:21.780 were already homeless in a place like New York woke up one day and said, I'm going to find a way

00:27:26.220 to get across the country to go to California because it's so much better to be homeless there.

00:27:29.500 I don't think that is the real issue that we should be talking about. I think the real issue

00:27:34.380 is we need to fix our housing market and build a lot more housing and build it more affordably.

00:27:38.360 In the meantime, as we're doing that, we need to provide safe, dignified shelter and or inpatient

00:27:43.000 treatment facilities for folks who are currently on the streets. And we need to increase incomes

00:27:48.640 by improving education, increasing our employment rate, and making sure that people are actually

00:27:53.620 able to start and grow businesses here.

00:27:56.440 And we need to be willing to enforce our local laws.

00:27:59.820 At some point, if you do have a place for people to go, a shelter bed, a treatment bed,

00:28:04.260 transitional or affordable housing, you should certainly not be allowed to just choose to

00:28:09.020 live outside because you're trapped in a cycle of addiction.

00:28:12.100 I think that's not a very compassionate or progressive position to just let people kind

00:28:17.340 endlessly cycle and ultimately die on the streets. Yeah, there's a strange notion ethically on the

00:28:23.720 far left that what should take primacy is everyone's right to occupy any public space

00:28:30.820 because they're a citizen of this state. And in the case of someone who's addicted to drugs or

00:28:37.200 mentally ill and homeless, just to live out the chaos of their life on the sidewalk, letting that

00:28:43.380 just proceed is the most compassionate, you know, ethical, high, high ethical integrity response,

00:28:50.700 but it's clearly not compassion. I mean, if it's some idiot form of compassion to think that 0.99

00:28:58.480 simply not intruding on someone's freedom to have their life unravel in front of a 0.98

00:29:04.320 banana republic or a Starbucks. And there also seems to be on the left, no acknowledgement

00:29:10.660 that everyone else has taken a major quality of life hit in the meantime, right? Like when you

00:29:16.180 have to cross the street with your kids to avoid some chaos on the sidewalk, I mean,

00:29:22.460 be as compassionate as you want for the people suffering that chaos directly, right? Obviously,

00:29:27.280 mental illness and drug addiction are problems that we should feel real compassion for, but

00:29:32.500 there's this primary ethic of simply don't intrude, right? Any demand that these people

00:29:38.000 be put in shelter or receive treatment is, as you move leftward in our politics, is framed as some

00:29:45.600 kind of Orwellian, you know, authoritarian form of coercion. But everyone is paying an enormous

00:29:52.240 price, both economically and psychologically, for the unraveling of social fabric in this way.

00:29:59.140 What are the barriers to creating shelter and creating an obligate system of receiving

00:30:06.620 treatment of whatever kind is necessary. Yeah, that's well described. I mean, look,

00:30:13.080 I think it is a massive overcorrection on the left, the kind of progressive wing of the Democratic

00:30:22.920 Party, at least, that has overcorrected on resisting the previous abuses of the state.

00:30:30.660 Certainly in the 20th century, we saw the power of the state used coercively and in many places

00:30:36.160 around the world truly violating people's rights and autonomy. And I think the left or a part of

00:30:43.240 the left has sort of overreacted to that. And we've ended up in a really bad place. I don't know

00:30:48.320 how much liberty you really have if you are deep in the throes of addiction to something like

00:30:55.400 meth or fentanyl, or you have a severe mental illness. So I kind of question the very premise

00:31:02.620 that somehow we're protecting people's civil liberties. And then to your point, there is

00:31:06.620 huge harm to others, to the broader community. I've talked to folks who are, say, running a

00:31:12.000 daycare center in a low-income community where these kids need all the access and support they

00:31:17.780 can possibly get, but they literally can't go across the street and play in the park because

00:31:22.480 there's rampant drug use all day in the park. So I think that the answer here really starts

00:31:30.340 with culture. I mean, it's having this sort of dialogue with people and getting them to understand

00:31:35.120 the truth about the nature of addiction and mental illness, the harm that is caused. I find

00:31:40.000 that the folks who are the loudest in resisting solutions to this issue, so building the treatment

00:31:46.820 centers, being willing to intervene, being willing to use the law, use the drug courts, the mental

00:31:52.160 health courts, give a judge the authority to mandate treatment, are the folks who live in

00:31:57.100 the nicest neighborhoods, the gated communities are, you know, living with this immense privilege

00:32:02.640 of not having to actually deal with this failure, this public policy failure on a daily basis.

00:32:09.600 I saw this when I was knocking on doors. When I was running, I knocked on over 10,000 doors.

00:32:14.600 And you might think that the like lower income neighborhoods or communities of color would be

00:32:21.920 the most progressive. It was the opposite. They were the neighborhoods most impacted by crime,

00:32:26.680 by homelessness, by our failure to address these issues. And that's who I want. I mean,

00:32:33.920 I want to be responsive to the people who most need public services and government to work to

00:32:39.140 fix problems. And it's not the wealthiest or best educated people most of the time. It's folks just

00:32:45.360 grinding out in their daily lives, trying to build a better future for their kids.

00:32:49.960 So the barriers are many. I mean, I think part of it though is just philosophic more than anything.

00:32:55.220 I think it's what you described. I think it's people thinking that somehow it is some horrific violation of someone's civil liberty to mandate that they go into a detox center for 30 days. I don't see it that way at all. I mean, we've had 50,000 people die on our streets in California in the last decade, about half from overdose and suicide. That's clearly not compassionate.

00:33:17.900 I actually have a cousin who spent a couple of years cycling on and off the streets with addiction. And he, what saved his life was very serious intervention was my aunt and uncle going out there and like physically pulling them out of the streets and trying to use the law to compel him to come indoor. I mean, you know, leaving people to cycle on the streets and die of overdose is not, it's not compassionate. It's not pragmatic. It's not fair to everybody else.

00:33:43.240 Do you support mandatory psychiatric holds for people who are displaying mental illness?

00:33:49.020 Yeah, I mean, I do in the sense that I think, and again, there's always a balance. I just,

00:33:53.880 I find that in our politics, we tend to want to believe everything's a binary. It's black or

00:33:58.220 white. It's all the way this way or all the way that way. I think there has to be oversight. There 0.88

00:34:03.180 have to be checks and balances. You should be evaluated by a behavioral health, you know,

00:34:07.980 someone with training. I, you know, so it's, look, historically, I think the mental health

00:34:13.020 hospitals certainly had abuses and there were people who didn't get the care that they needed

00:34:18.460 and lost autonomy for long periods of time. And that system needed to be reformed. But we totally

00:34:25.560 threw the baby out with the bathwater. And today, unless you say that you want to kill yourself or 1.00

00:34:30.660 kill someone else, it is very hard to involuntarily hold someone, even for 72 hours. I mean, the bar

00:34:37.280 has been set so high that we are unwilling to intervene in the thousands of cases where people

00:34:42.780 ultimately die on the streets of an overdose. So there's a right sizing that needs to happen. We

00:34:47.340 have to be willing to intervene, that doesn't mean suspending someone's freedom for years on end.

00:34:52.040 But I think with the kinds of addictive substances we have today, requiring someone to detox for

00:34:59.640 a few weeks might be the most compassionate thing we could possibly do.

00:35:03.720 What's your position on distributing needles and parks to intravenous drug users?

00:35:09.160 I'm not a fan. I do think it's complicated though. I want to be intellectually honest

00:35:13.720 about this and all things. I think that safe injection sites from what I've seen can solve

00:35:22.540 one problem, but may create another. And so what I mean by that is if you just take the narrow view

00:35:28.120 of what will reduce overdose deaths in the short run, save lives and reduce spread of disease,

00:35:36.300 safe consumption, safe injection does reduce the spread of disease and the risk of overdose death

00:35:42.920 from what I've seen. On the other hand, and maybe there's a way, there's a middle path here, but I

00:35:48.040 really worry about a culture of enablement and simply, you know, in the long run, I think maybe

00:35:53.680 the greater risk is saying, well, there's kind of nothing wrong with people just choosing to

00:35:58.740 waste their lives in the throes of addiction. And if they want to just use until they ultimately

00:36:04.280 die, that's their choice. Maybe, but again, the question is what's your impact on others?

00:36:09.360 And so if you're just distributing needles and paraphernalia and letting, and kind of, you know, enabling people to use without an intervention that tries to show them another path or get them to embrace a healthier lifestyle. I mean, I understand it sounds a little paternalistic, so I'm a little torn on this, but I just, I don't want to create a culture of enablement that ultimately has these massive spillover effects that we're already suffering from out in public.

00:36:34.200 Is that part of the dynamic in blue cities and especially in California where you're, because there's a permissiveness and a, I mean, the services are there in place kind of without judgment that it's attracting more of the problem to the areas that are most permissive.

00:36:51.200 permissive. I mean, in Los Angeles, it seems that communities like Santa Monica have an outsized

00:36:56.820 problem with homelessness and kind of unregulated mental illness in public and drug abuse, because

00:37:02.640 I would presume they're far more, the community is far more tolerant of it and providing services

00:37:08.060 in a way that a community like Beverly Hills or elsewhere isn't. Yeah, I think that's right. And

00:37:14.460 I think there's a trade-off in the questions always, what is the right, what is the ethical

00:37:18.600 and pragmatic balance. Very permissive blue cities that overleaning on the empathetic and

00:37:26.620 compassionate impulse have the effect of essentially enabling without, because I think

00:37:34.000 they're so worried about being judgmental, telling someone else what to do, any notion of coercion is

00:37:40.740 anathema to that philosophic frame. On the other hand, you have, and I'm kind of oversimplifying

00:37:49.120 here, but more conservative cities, communities, where the truth is the intervention may be too

00:37:56.020 heavy-handed. We may not be doing enough to actually help people turn their lives around.

00:38:00.600 You know, we may not be fully valuing the worth of a human being and their potential,

00:38:05.160 honoring their potential either. And so the question is always, how do you-

00:38:08.340 There are some communities where they just, they literally just give someone a bus ticket to another community, you know?

00:38:13.120 Exactly. Yeah. Or, or where the answer is, well, we'll just, we'll just jail people and kind of that's their, they screwed up. So it's kind of their, their problem, right? Either get out of town or go to jail. I obviously think that's wrong, but I also think it's wrong to have thousands of people every year dying on our streets because we don't want to intervene and we don't want to interfere and we don't want to judge. And it's kind of just their choice.

00:38:35.020 And that's why I've really tried to craft this politics of pragmatism. I don't think there are easy answers. I don't think it's just as simple as there's a right answer and a wrong answer, but kind of iteratively trying to figure out how do we get the best outcomes with the least coercion? What's that balance?

00:38:50.120 And so in San Jose, what we've tried to do is focus first on creating the shelter and the services and the opportunity for people to turn their lives around as we start to expand no encampment zones and enforce our muni code and create a code of conduct and do more policing, but try to do it thoughtfully.

00:39:08.120 My goal, even in that environment with policing and enforcing our muni code, is really to get someone into a drug court so that, yes, it's more coercive.

00:39:17.820 Maybe they need the judge to mandate treatment, but the goal shouldn't be incarceration unless someone's really harming others.

00:39:24.120 At that point, maybe that's appropriate.

00:39:26.460 The goal should always be the least coercive, most life-affirming path, but we actually do have to intervene and try to get people on that path.

00:39:33.360 We can't just leave them to endlessly cycle and die on the streets.

00:39:36.760 How much is NIMBYism a blocker for building affordable housing and treatment centers and psychiatric institutions, et cetera?

00:39:45.800 It's a big challenge. It's a big challenge. In San Jose, we have now built 23 interim housing and shelter sites. We try not to make them too big. I think there's a scale issue. If a site gets to three, four, 500 people, it becomes really unwieldy and you can have a lot of challenges.

00:40:03.620 So we, there's this Dunbar number of what is like a social capital rich community.

00:40:09.580 We have tried to build these smaller, you know, convert a motel with 50 to 75 rooms

00:40:15.180 or build these prefabricated modular units on public land with one to maybe 200 units.

00:40:22.420 And initially when we started on this journey about five years ago, you know, you would

00:40:27.580 get 500 people showing up to a public meeting, you know, practically with pitchforks.

00:40:33.620 threatening to recall everyone and just like red in the face, angry that you would even propose

00:40:38.740 building interim housing in the neighborhood, nevermind the fact that the folks who are

00:40:44.340 homeless are already in the neighborhood. So they're there. They're already having an impact 1.00

00:40:47.840 because there's no structure, no rules, no infrastructure. Their impact is much greater

00:40:52.740 and their suffering is much greater. And so it took a lot of courage for our city leaders

00:40:59.360 early on to kind of break through that and say, we're going to do this because we owe you a

00:41:07.020 solution. We owe you a solution as the residents and taxpayers. We also owe our vulnerable neighbors

00:41:12.820 a better, an option, a path out of the misery that they're in. Now, I was an advocate from

00:41:18.380 the beginning and it took a long time, surprisingly, and this is where I think some of this sort of

00:41:22.820 maybe overthinking, over-intellectualizing progressive impulse can be challenging.

00:41:27.180 I argued we need to be really practical about it with the residents. We need to promise that

00:41:31.420 their neighborhood's going to be better off. So what does that look like? We're going to

00:41:34.340 prioritize moving indoors the people who are homeless in their neighborhood. We should then

00:41:38.220 create a strictly enforced no camping zone around the site in a radius so that that neighborhood

00:41:44.080 sees no homelessness, no tents, no trash. We should enhance our blight eradication. We should

00:41:49.680 enhance our police patrols. We should guarantee that neighborhood that it will be made better,

00:41:55.540 or not worse off by taking on a solution. And we've moved in that direction. I don't think that

00:42:01.680 we've been, we certainly haven't been perfect at it. But philosophically, that's where I think we

00:42:06.280 have to go is we will have to implement, and I think all cities and counties in California should

00:42:11.860 be accountable for building shelter, building treatment, getting people indoors. But the

00:42:17.080 neighborhoods where these solutions are built have to be made better off. They have to have

00:42:22.060 enhanced services and more enforcement. And you can't allow these sites to be poorly run or to

00:42:27.760 become magnets for more homelessness or other challenges. What I will say, though, is we've

00:42:34.660 largely figured that out. Not perfectly. We have our challenges, but we have moved thousands of

00:42:39.160 people indoors. The vast majority, over two-thirds of those folks remain indoors even years later.

00:42:44.740 In the neighborhoods where we've built these sites, we've been able to demonstrate that

00:42:48.160 Calls for service to 911 and 311, so crime and basically blight issues, have dropped, which makes sense.

00:42:55.820 We're moving people from unmanaged encampments with no rules into a site with security, case management, meals, some structure, and some privacy.

00:43:06.360 And it changes the game. It changes their entire possibility of actually escaping this miserable condition.

00:43:14.600 Are there perverse incentives with charities and NGOs around this phenomenon? I mean, many charities are not really committed to, or at least they're not incentivized to truly solving the problem they're addressing because, you know, fundraising on some levels predicated on that problem still existing next year. Do you see any way in which the best of intentions are exacerbating or maintaining the problem in place?

00:43:43.800 You know, Sam, I think there is that phenomenon. I do think that we sometimes have misaligned

00:43:50.340 incentives, but I really blame political leaders, politicians for that more than the nonprofits

00:43:56.900 themselves. Similar to how I feel about highly effective unions who advocate really well for

00:44:02.960 the interests of their members. And I blame not the union, but the politicians who sometimes cave

00:44:09.440 and agree to things, make promises they can't keep, and then the public suffers.

00:44:14.060 And so when it comes to the so-called nonprofit industrial complex, I've read a lot about the

00:44:20.760 critiques of this. It's really incumbent upon us as elected officials to create the right

00:44:25.680 incentives. And I've been a strong advocate in requiring that everything we do in San Jose be

00:44:31.860 outcome-focused. We've rebid contracts. We've changed nonprofit providers at different sites.

00:44:39.220 We are increasingly bringing a performance mindset to everything we do so that we understand the value of a dollar that we spend. For example, we were paying for an unnecessarily large army of outreach workers when we didn't have much of anything to offer people who were homeless.

00:44:56.800 We'd have over 40 full-time people out in the field with clipboards, going around, making contact with folks who are homeless, offering them resources, which at the time was largely, you know, maybe some informational pamphlets about, you know, things they can go learn more about or an appointment they can sign up for, but not really addressing the most foundational need.

00:45:16.680 We've brought a lot of that in-house.

00:45:18.640 We've right-sized it.

00:45:19.740 We have fewer outreach workers.

00:45:21.300 We're training them, I think, more rigorously.

00:45:24.600 We have more data collection.

00:45:25.840 We went from the average outreach worker having nothing to offer to shifting dollars that we were building a lot of shelter and operating alternatives to the streets so that the smaller number of outreach workers could have much more impact by actually offering somebody something real, a real solution.

00:45:41.200 So those are the kinds of things where if the elected officials who are managing these public budgets are not really thinking about the outcomes that matter and how to measure success and aren't willing to apply performance metrics to the spending, you can end up spending millions of dollars on things that aren't really delivering the results that the public thinks they're getting or is demanding.

00:46:07.260 What can the governor do to implement the right policies should the right policies be obvious? I imagine you're a governor of California. What would block you from being able to share this wisdom effectively at the city level?

00:46:22.640 Well, nothing. That's part of why I'm running, because I think we can spend our money more effectively. We spend a lot in California. Our budget this year is proposed at about $350 billion. Six years ago, it was about $200 billion. That's a 75% increase in spending in six years. I don't think anything's gotten 75% better.

00:46:42.360 And as the state spends, most of that money is actually spent. The programs, the services are executed at the local level through counties, cities, and school districts. And there's an opportunity for the next governor to tie that spending to performance and be really clear about the outcomes we should be delivering.

00:47:06.880 If Mississippi, which spends significantly less, I don't know if it's half, but it's significantly less per pupil than California, can get over 90% of their third graders on grade level for reading, we can do that in California.

00:47:22.200 Well, where are we in California?

00:47:23.940 We are, by last count, at 49% on grade level for reading.

00:47:28.520 Wow.

00:47:28.700 We are struggling. And look, this is part of my assessment of what's gone wrong in Sacramento is we have highly organized interests who are doing their job. They're advocating for their members. In this case, you have a very effective teachers union that has a principle of essentially non-interference, does not want the state to mandate that teachers teach a certain way, do a certain thing, be accountable for certain outcomes.

00:47:58.420 But when you say the teachers' union is very effective.

00:48:01.900 At what they do.

00:48:02.880 So I hear this as an obstruction that for whatever reason, the governor hasn't been able to break through.

00:48:09.060 I mean, why hasn't Newsom done all of the things we're talking about?

00:48:12.260 Well, recently and belatedly, we did have the legislature deliver to the governor's desk a science of reading bill that mandates evidence-based curricula for literacy, namely phonics in the early years.

00:48:28.420 it should not have taken that long. It should not have been as big of a fight.

00:48:31.500 The governor, to his credit, signed it. It's still not actually mandated. It basically is saying that

00:48:36.940 the law essentially says that science of reading, evidence-based literacy curricula is the standard

00:48:43.920 and you have to meet a certain bar to basically not follow the standard, but it's actually still

00:48:48.820 not an actual mandate that you use particular curricula. And maybe a certain amount of

00:48:52.960 flexibility is warranted, but we were in a place that I strongly opposed, which is

00:48:58.420 we were sort of just leaving it to let teachers decide what to teach when it comes to teaching

00:49:04.140 our children how to read as other states had quite clearly demonstrated what works and we

00:49:10.020 should follow what works. So, you know, when I say effective, I guess what I mean is in the narrow

00:49:15.020 sense, Sacramento is full of highly organized interests from teachers to dentists to oil and

00:49:23.180 gas industry, to pick any industry, union, advocacy group. But they have such outsized

00:49:32.440 influence. They're so organized, are so well-staffed, have such a strong and consistent

00:49:37.640 presence, both through the legislative cycle, through the writing of laws and bills and the

00:49:44.060 advocacy side, as well as the electoral side, endorsing candidates, spending money on their

00:49:50.200 behalf, that they have this outsized influence. And in a narrow sense, they're actually doing

00:49:55.660 exactly what they should be doing. And it's totally lawful. If you're a union or a business

00:50:00.780 trade group, your job is to advocate for the narrow interest of your members. So I'm not as

00:50:07.000 opposed to them doing what they do. I'm opposed structurally to a system in which there is

00:50:12.860 a lack of transparency and accountability on behalf of the residents for the outcomes that

00:50:19.300 matter. And there's not enough of a check and a balance against those interests. Now, I'm running

00:50:24.300 because I want to take that on and do what I've done in San Jose, which is start from a premise of

00:50:31.120 here's some outcome goals that we're going to commit to and we're going to hold everybody

00:50:35.260 accountable. And interest be damned, if some group is advocating for something that is in the way of

00:50:42.000 us achieving that outcome, I will name it publicly and we will have a public fight about it and we'll

00:50:47.360 use the bully pulpit to kind of force them to align with things that work. I just want to make

00:50:54.240 government work. But I do think we have a very fundamental challenge in Sacramento of special

00:50:59.780 interest capture. I mean, we don't build condos in California anymore because our laws around

00:51:06.180 construction defect liability are so expansive that you can be sued 10 years later after a

00:51:12.700 building's been built because the paint is starting to bubble or chip. And rather than

00:51:17.540 just get it fixed, that becomes a generator of excessive fees, becomes a profit center for

00:51:24.320 trial lawyers. So it just, you know, there are thousands of these kinds of things in the way

00:51:28.900 that the state works in the regulatory environment that create costs. That specifically, is that

00:51:34.120 related to the homeownership versus renting problem in California? Well, it certainly contributes to

00:51:40.340 the fact that California has the lowest home ownership rates in the country, 10% less than

00:51:44.740 the national average. We are not building condos. When we build housing today, if it's not a for

00:51:51.060 sale single family home or townhome, if it's multifamily, if it's denser, it's almost always

00:51:57.120 for rent now. And one of the main reasons is essentially this litigation or over-litigation,

00:52:06.840 a really litigious environment we've incentivized essentially means that it's harder to get

00:52:12.180 financing and insurance on a for sale product. And why does that matter? I mean, condos kind

00:52:18.240 of sounds like a sort of random sidebar conversation here, but that's the most accessible

00:52:23.640 form of home ownership. I mean, traditionally a young person starting out in their career,

00:52:28.960 if they could save a bit of money or had enough income, they could get some equity and start to

00:52:34.320 own through a lower cost condo in one of our cities, essentially. That was typically the path.

00:52:41.700 And then you might, over time, have enough equity in that to trade up and buy a townhome or a single

00:52:46.020 family home. Maybe you'd get married and you'd combine, maybe you'd both own a condo and sell

00:52:50.680 or rent them and then be able to buy a home. That has just kind of disappeared for young people.

00:52:54.860 And so now, where's the entry point? If you're in your 20s, you're making $75,000 a year, maybe,

00:53:01.360 and the average home price over a million dollars.

00:53:04.740 You just, you can never catch up.

00:53:06.060 Can you put a date to this change?

00:53:07.920 I mean, when did this disappear?

00:53:09.720 You know, it's, there has been,

00:53:12.260 there was a bill about a decade ago

00:53:15.460 that attempted to solve this

00:53:16.820 and actually included a right to repair.

00:53:20.300 But the way that it was written

00:53:22.280 essentially allows the trial lawyer in the case

00:53:25.900 to disallow the right to repair

00:53:28.360 and still bring it as a suit

00:53:29.700 and therefore demand a settlement.

00:53:31.360 fee. So there was an attempt to fix it. This is a longstanding piece of law, but it seems to have

00:53:37.320 gotten worse over time. I don't know that I have the exact year when we sort of hit this inflection

00:53:42.140 point, but it's only something we could improve. Other states are building a lot more condos and

00:53:46.060 have a very different regulatory environment. Right, right. Well, what's your view of rent

00:53:50.240 control and how much rent control is there in California? In our large cities, there's quite a 0.91

00:53:55.540 bit. I mean, San Francisco, I forget, I don't want to quote an incorrect percentage, but it's a large

00:54:00.420 proportion of the housing stock. So rent control is another one of these cases where if you're

00:54:06.320 being intellectually honest about it, it has a short-term narrow benefit and then a long-term

00:54:12.460 widespread cost. I think the research on this is fairly clear. If you expand rent control

00:54:18.500 in the short run, the people who are now covered by rent control are less likely to be displaced.

00:54:24.500 So there's this narrow short-term goal that matters. People are scared of displacement

00:54:31.040 for good reason. Cost of housing, cost of rent is going up faster than many people's incomes.

00:54:36.340 That's a legitimate problem. Now, there's not only one way to solve it. One proposal is rent

00:54:40.580 control. There's also building more housing supply. We've just seen yet again in the city

00:54:45.260 of Austin that as they expanded housing supply and built a lot and they build more affordably,

00:54:50.780 rents have come down dramatically. So the market can work. But setting that aside for a moment,

00:54:56.320 when you impose rent control and expand it, you have the, say, social benefit of fewer people

00:55:01.980 being displaced because the rents go up more slowly and are more manageable based on their

00:55:07.580 incomes. You have this long-term problem, though, that's even more significant and is the reason

00:55:12.780 that I don't support expanding rent control in California, which is the market reacts by taking

00:55:20.640 more units out of the rental stock, doesn't maintain, owners stop maintaining their properties

00:55:25.920 because they can't charge the rent that is required to pay for the maintenance. And worst of all,

00:55:31.980 the market underproduces, builds less because there's less expected return on the other side.

00:55:38.100 So people won't, it'll be very hard, becomes harder to get financing to build more units.

00:55:43.440 And over time, it's a race to the bottom in that that declining supply relative to population and

00:55:48.960 job growth puts you in an impossible situation down the road where you have the lucky folks who

00:55:54.880 are covered by rent control and are kind of, they can't move. There's no social mobility that you're

00:55:59.860 kind of stuck in your apartment because you can't let go of this rent controlled apartment or you'll

00:56:03.340 be homeless. And then you have no supply and all of society's worse off. That's a hard thing though.

00:56:08.940 I mean, we know what the right public policy answer is. The research I think is quite clear.

00:56:12.920 And yet it's a lot easier as a politician to go out there and just say the rent's too high. We're

00:56:18.300 just going to expand rent control to every unit and you'll be better off. But in the long run,

00:56:22.320 we will all be worse off. Yeah. Yeah. I mean, I think our biggest challenge around housing

00:56:27.940 and homelessness is that we broke the housing market in California. It's really hard to get

00:56:32.880 anyone to invest in building the housing that we need because the market isn't predictable.

00:56:38.540 It's very expensive. It's very slow. I trace this back to a very positive movement around

00:56:45.860 environmental protection coming out of Rachel Carson and Silent Spring. And we started with

00:56:50.780 setting growth boundaries around our cities and said, we don't want to keep sprawling out.

00:56:54.500 Then we added countless environmental regulations on top of that. We've really enhanced our labor

00:57:00.760 standards, preservation of historical sites, respect for tribal lands and Native American

00:57:07.380 remains that may be in the ground. We've added traffic impact fees. Now you build a building

00:57:14.980 and you've got to have all these offsite improvements and do bike lanes and bioswales

00:57:19.120 and all these, you know, really worry about all the water runoff. All of it is very well

00:57:23.380 intended. The challenge, and this is what, you know, Ezra Klein famously calls the everything

00:57:28.960 bagel liberalism. It's sort of, you've got 50 years now of adding process points, fees,

00:57:37.740 restrictions, requirements, very complicated building code, very complicated fire code,

00:57:43.200 all these environmental laws and you just add up decades of cruft of, you know, it's all,

00:57:49.240 but it's all well-intended. Each one on its own is very justifiable, but the sum,

00:57:53.300 the cumulative effect is that to build housing, you want to build a kind of classic apartment

00:58:00.400 building, condo building that you might be able to put up in Austin or Miami. And you can do it

00:58:05.460 there for literally half the cost and half the time. And at some point, California can't compete

00:58:11.800 with and can't demonstrate that we have better ideas or a better quality of life than a red 0.93

00:58:17.560 state because we literally just can't build housing anymore. And so this is a real public

00:58:21.900 policy failure and we've got to be willing to change our approach. But if each turn of that

00:58:28.000 regulatory ratchet was justified and presumably is justified if you just focus on it once again,

00:58:35.680 you know as though for the first time how do you change that system there's this growing movement

00:58:42.740 driven by young people who are rightly frustrated that the rent's too damn high and they have very 0.99

00:58:48.300 little prospect of home ownership it's called the yimby movement yes in my backyard and they are 0.97

00:58:55.460 very effectively driving a reform agenda that has many components it's you know the biggest has been

00:59:04.880 initially zoning reform. I think they've largely won that battle, not entirely, but expanding

00:59:10.420 zoning for housing and height limits. And that leads certainly to a lot of tough debates with

00:59:16.560 neighbors. The bigger levers, in my opinion, are speed and cost of construction, speed being

00:59:23.960 approvals. I think that's the simplest, which is once you've gone through a public process and

00:59:28.680 decided where to put housing or how dense it can be, getting the actual entitlement and the building

00:59:34.760 permit should be much faster and simpler than it is today. We're using AI to review applications

00:59:40.760 for ADUs to catch errors and omissions up front and make sure the applicant comes forward prepared

00:59:47.020 just to save time. There's no reason for that to sit on somebody's desk in the planning department

00:59:50.560 for three weeks to just tell someone that they're missing a field in the application.

00:59:54.480 So speeding up processing times is really important. And then the next frontier, the really

00:59:58.460 big piece that's left is starting to tackle cost. Some of that can come through innovation. I was

01:00:03.100 just down at a modular construction factory where they're building the components of apartment

01:00:08.280 buildings in a factory on an assembly line, and they can deliver the overall project in half the

01:00:13.780 time at about 20% lower cost by just using a different construction method. Having it in that

01:00:18.940 controlled mechanistic environment is much more efficient. But we also have to, I think, and one

01:00:25.360 of the things I would do as governor is cap the fees that cities are assessing. Some cities increase

01:00:30.920 the cost of housing by up to 20% by assessing just a totally unreasonable number of fees that

01:00:37.300 aren't really fees, in my opinion, and are maybe largely functionally there to stop housing from

01:00:42.540 getting built. And I think that's wrong. Sam, I'm just curious maybe to ask you a quick question.

01:00:47.060 Yeah. I have to, but as you think about the governor's race, politics in California more

01:00:52.060 broadly, we have this threat, I think a threat to our democracy from Donald Trump and his

01:00:58.340 administration on the one side we've gotten in. We've talked a lot about some of the failures of

01:01:03.860 progressive governance in California. I think we're both interested in solving real problems

01:01:09.380 from a maybe more pragmatic position, but it doesn't feel like there's much of an appetite

01:01:14.960 or maybe there's a declining appetite for that kind of politics in America right now.

01:01:19.220 And you've thought a lot about civic discourse and the information environment we're in.

01:01:24.280 I'm curious what, if anything, gives you hope about how we get through this moment we're in.

01:01:29.100 Well, I'm hopeful that eventually the spirit of pragmatism and basic sanity and intellectual

01:01:35.360 honesty is going to have to win because, I mean, reality just keeps getting a vote,

01:01:40.780 whether that's economic reality or epidemiological reality or conflict with genuine enemies out in

01:01:47.580 the world. So, I mean, I just think you can only delude yourself for partisan reasons or

01:01:51.780 self-serving reasons for so long before you bump into some hard objects. And I think we're bumping

01:01:57.120 into them. I guess I would turn that back on you with a question around just the political culture

01:02:02.680 and environment in which we're having this conversation, right? So you are, by all

01:02:07.520 appearances, a very level-headed, not ideological, certainly not, you know, woke activist sort of

01:02:15.060 politician, and yet California has been governed by, I mean, it's basically been a one-party state

01:02:22.040 for as long as I've been alive, and that's had certain consequences. How do you view the political

01:02:27.380 challenge now, and just in the remaining days before the primary, and should you clear that

01:02:32.340 hurdle? The primary is June 2nd? That's right. Yeah, so we don't have much time messaging into

01:02:38.160 this environment around just solving problems and not giving any energy to activist delusions.

01:02:45.060 How are you walking that tightrope to take part of the question you just asked me?

01:02:51.140 The current California governor, Gavin Newsom, is obviously running for president and feeling the need to, to a degree that I think is probably ultimately counterproductive, play a very trollish, partisan, and not altogether, you know, seemly political game with the cartoon character who's running the country.

01:03:14.080 It's understandable. I mean, he's getting a lot of attention for doing that. But he's also, in my mind, not an especially viable candidate because of his history of having to pander to the very activist, you know, far left interests in our state.

01:03:28.420 I mean, he's never had to run a national election. He's had to run for governor. And to run for governor, he's had to, again, pander to things that he might not have fully believed at the time, or if he believed at the time, certainly can't avow now.

01:03:42.200 I mean, some of the very extremely far left positions that we're all too familiar with, you know, that ruled our culture about five years ago.

01:03:50.800 I mean, what I think most Californians who I know are desperate for is something like a hard reset on our political culture here.

01:03:59.440 I mean, I consider myself left of center on virtually every topic, and yet I don't recognize most of what the Democratic Party has been doing for at least a decade.

01:04:11.040 I don't recognize it as politically pragmatic or morally sane. It would be such a relief to have a governor who has his head screwed on straight and who's obviously compassionate but not a masochist. And so I guess I would just invite you to reflect on the politics of California and what sort of reset is possible here for Democrats.

01:04:35.780 Well, I think we're about to find out. My bet right now is that people are frustrated enough with the high cost of living, the high levels of taxation we have in California, and the objectively poor outcomes that we're getting, that they may be open to a mayor, someone who's been accountable in an executive role, who is solving problems every day, has a track record of, in a large city,

01:05:05.660 the largest city in Northern California, San Jose, setting goals that are ambitious and creating a

01:05:14.220 culture of execution and accountability that actually moved the needle. We've led the state

01:05:20.220 in reducing crime. San Jose has become the safest big city in California and in the country.

01:05:25.140 We've reduced homelessness by about a third in just the last four years. We've dramatically

01:05:30.540 cleaned up many of our public spaces. People are coming back out into their parks and trails.

01:05:36.300 We're starting to get investment back into the city. We have thousands of homes under

01:05:40.480 construction that had been stuck in the pipeline for years. We had to do some hard things. We had

01:05:44.700 to speed up our permitting processes, still something where we can do better with. We had

01:05:49.500 to reduce impact fees, but we've been problem solving. We've been going issue by issue on the

01:05:54.440 big ones, the ones that matter, safety, homelessness, housing costs, economic opportunity,

01:05:59.560 setting public goals and rethinking our policies and how we spend our money and our time

01:06:06.820 in city hall to deliver better outcomes and i guess my my hope and maybe intuition on this

01:06:13.300 is similar to what you said which is at some point people just want government to work they

01:06:18.080 get even though folks are i think somewhat rightly whipped up in a in a frenzy of partisanship in

01:06:25.600 reaction to the Trump administration and gross violation of civil liberties that we've seen

01:06:32.400 play out in places like Minnesota. I also think people understand that we need our next governor

01:06:39.320 to both fight legally and rhetorically against this abuse of power from the federal administration

01:06:47.760 while also focusing on fixing our problems. Because we've actually given Trump his most

01:06:55.080 powerful ammunition here in California by failing to fix our problems. And it's incumbent upon us,

01:07:03.120 if we want to save the country, to demonstrate that California's values of diversity, being an

01:07:09.200 inclusive place that welcomes people, investing in human capacity, as we rhetorically say,

01:07:16.720 we really care about things like education and healthcare and providing people with the things

01:07:20.540 that they need a respect for difference um you know the values that we have have to work in

01:07:27.820 practice and if they don't we're actually aiding and abetting this authoritarian impulse that trump

01:07:35.160 represents and so i just i view the project here as being vital to the future of the country and

01:07:40.400 the protection of our democracy because it's not enough to be against something we have to also

01:07:44.820 have to be for something. And we should be for putting our values, our progressive values into

01:07:51.860 practice and proving that they work when they come into contact with reality. And if they don't,

01:07:56.620 we need to at least look at the means and methods. We need to at least say, well,

01:08:00.280 yes, all these layers of 50 years of good intentions that have prevented us from building

01:08:05.080 housing, the values of protecting the environment, including the community and the decision,

01:08:10.960 dealing with the impacts, they're all good values. And maybe the values don't need to be

01:08:14.580 totally thrown out. But if in practice, they're leading us to not be able to build housing or to

01:08:18.860 only be able to build a home at over a million dollars a door, something's wrong. And we've got

01:08:23.760 to go back and revise how we're approaching these things. So I just, I think ultimately,

01:08:28.020 a politics of pragmatism has to prevail. Are we ready for it? I don't know, but Californians are

01:08:33.180 pretty frustrated. And everywhere I go across the state as part of this campaign, we're filling

01:08:36.520 rooms with people who want to hear about a different approach. They don't want to throw out

01:08:40.500 our democratic values but they're not happy with the outcomes we've been getting so on a different

01:08:47.320 approach how would you judge newsom's tenure as governor what should he have done or not done

01:08:54.720 because obviously we're not talking about a resounding success at this moment in his tenure

01:09:00.500 right we're talking about all we've spent an hour talking about all the things that that al us as a

01:09:05.160 state, what could he have done differently? Well, look, I think it's a fraught conversation in that

01:09:11.160 I am hesitant to, with the limited information I have, say that I know with any certainty what

01:09:17.500 someone else has done right or wrong. I think there are certain things the governor's done

01:09:22.020 that should be applauded. He leaned in around interim housing, which is the solution in San

01:09:28.400 Jose that's allowed us to reduce homelessness by a third. I think he correctly diagnosed that

01:09:34.440 we don't have enough places or mechanisms for getting people into treatment. And that's what

01:09:39.560 Care Court and Prop 1 were about, building treatment capacity and then having a mechanism

01:09:45.220 through the courts, a mechanism that has checks and balances for getting people indoors and into

01:09:50.500 treatment. I think what's been missing, and there are other places where we've disagreed. He and I

01:09:55.420 disagreed over Prop 36, over recovery housing. There have been other policy disagreements we've

01:10:01.600 had. Remind people what Prop 36 was. Prop 36 was a ballot measure that passed overwhelmingly a

01:10:07.420 couple of years ago. In fact, it was about a 70 to 30 vote ratio in support. It passed in every

01:10:13.660 county in California. And it essentially brought some accountability back to our drug courts.

01:10:20.920 It did a couple of things. One, it enhanced the punishments around retail theft, organized retail

01:10:26.660 theft, which is important. But the other component that I was most interested in was how we actually

01:10:33.200 bring balance back to the criminal justice system when it comes to drug use. We went from a period

01:10:38.300 of over-incarceration where our jails and prisons became the place where addicts and folks dealing

01:10:45.100 with mental illness were being housed, not rehabilitating them and at great expense to

01:10:49.900 taxpayers. Obviously, that system was broken, but we overcorrected and ended up with our streets

01:10:58.100 and our emergency rooms being just kind of this revolving door and not really helping people

01:11:02.880 either. And so what 36 does is it allows a DA to bring charges and a judge to ultimately sentence

01:11:09.900 someone with what's called a treatment mandated felony, which simply says if you're on your

01:11:15.180 third serious drug offense, like you're using meth in the park and the kids can no longer

01:11:21.340 use the playground, you can be given a choice between treatment and incarceration. So it brings

01:11:26.700 a consequence back, acknowledging the immense societal impacts of things like public drug use

01:11:34.960 that then often lead to trespassing, vandalism, retail theft, and all of these other impacts.

01:11:41.720 And look, the state has refused to fund it.

01:11:44.620 It's one of the first things I would do as governor

01:11:46.200 is make sure that we properly fund Prop 36

01:11:48.440 and get people into treatment.

01:11:49.960 So what's Newsom's reason for not supporting it?

01:11:53.180 I think that's what, you know, again,

01:11:54.760 I'm hesitant to speak for Governor Newsom

01:11:57.800 or any other elected.

01:11:58.900 They can speak for themselves.

01:11:59.980 But my sense is that there is a fear

01:12:04.660 of simply returning to the era of mass incarceration

01:12:07.500 and whether or not, you know,

01:12:09.720 I don't want to ascribe...

01:12:10.940 Motives to that. But look, the truth is we need our government to be willing to do hard things.

01:12:15.580 And the hard thing here is to prioritize the spending and the budget to build treatment,

01:12:20.420 operate treatment, and when necessary, require that people at a minimum come indoors into a

01:12:25.740 safe environment. That's really hard. That means budget trade-offs, which means upsetting certain

01:12:32.240 highly organized interests in Sacramento who like the budget priorities the way that they are

01:12:36.360 currently aligned. That means actually getting people into drug courts and making those drug

01:12:41.680 courts work. That means a modest and I think appropriate suspension of certain liberties to

01:12:48.080 sell someone. You can't just use drugs in public endlessly. You've got to go into treatment.

01:12:52.440 There's a whole set of things that have to change and change is hard. And, you know,

01:12:56.180 we all in our elected offices, I guess the most charitable view is we all pick our battles. We

01:13:00.920 all choose which fights to take on. I don't know deep down where the governor's core beliefs are

01:13:07.300 on that set of issues I just outlined, but it's certainly not an easy thing to do. I give him

01:13:11.540 credit though for bringing forward ideas like Care Court and Prop 1 and supporting conservatorship

01:13:17.280 reform. My bigger issue, particularly as a former CEO, is really around execution. I think my job

01:13:25.700 coming in as our next governor would really be to build on and follow through on these ideas.

01:13:32.660 We need care court to actually work. We need to get people into treatment. We need to follow 0.98

01:13:37.080 through and build the 10,000 treatment beds that Prop 1 promised us. So I think part of it,

01:13:42.260 there's different levels of disagreement around, is it the policy itself or the lack of

01:13:47.060 implementation? The point you made around the dysfunction in California being a gift to the

01:13:54.780 far right and, you know, right-leaning authoritarianism and Trumpism. I mean, this is

01:14:00.600 really my criticism of, or my skepticism, not even so much criticism, my skepticism about Newsom's run

01:14:06.880 for president is not so much his failings as governor or his failings as a politician or,

01:14:12.460 I mean, anything about him personally. It's that he's got the albatross of California's reputation

01:14:17.340 hung around his neck. Now, some of that reputation is, you know, I think a hallucination on the part

01:14:23.000 the other 49 states, but some of it's real. And you can just see the bad campaign ads taken out

01:14:28.700 to his disadvantage of just, you know, scenes in San Francisco that look like they're out of a

01:14:34.200 zombie movie of, you know, homelessness and open-air drug use and, you know, looting and,

01:14:41.060 you know, looting of CVSs. And I mean, just you can walk into a CVS and steal $999 worth of stuff.

01:14:48.620 Well, Prop 36 did change that.

01:14:50.280 But to have been against Prop 36 in that context, again, it looks like it's imagined to be compassion on the far left, right? There's been over-prosecution of black and brown people in our state and in our country, or at least that is what is claimed.

01:15:07.620 And so let's just hire DAs that won't prosecute anyone. Let's just open the jails and we'll reset society that way. Again, it's by turn sadistic and masochistic, and it's not acknowledging the very real costs of crime and dysfunction playing out in front of everyone's eyes in blue cities.

01:15:31.760 and it's a gift to the lunatics on the right, as you pointed out. So, I mean, what we desperately

01:15:38.060 want is to forget, we meaning, you know, every sane person I know is to forget about politics.

01:15:45.380 I mean, it's to forget about, I mean, if we're talking about governance as much as we are,

01:15:50.740 something's wrong with our governance. You know, we want, we want, we want you to have someone

01:15:54.900 like you to have a job that you can just do so that we don't have to think about that job.

01:15:59.100 Right. And yet politics is just sucking everyone's bandwidth now because there is so much dysfunction and there's so much partisan topspin to be had at, you know, as a result of that dysfunction.

01:16:12.560 Yeah. Well, let me agree with part of what you said and then maybe gently push back on another part. I think on the gentle pushback, I don't know that it's realistic that we can have a functioning, a high functioning democracy without a robust civic life.

01:16:26.800 I think that we, I don't know if the story is apocryphal or not, but the, you know, you have a, you have a republic if you can keep it was I think Ben Franklin's response. And I do think that, you know, as Americans, we've maybe fallen into this false assumption that we can just focus on our personal lives, our families and friends, our social lives and our professional lives and build a career and figure out how to make money or survive in this world and have a career and then not have to invest in this third

01:16:56.700 sphere of life that is our public and civic life. And so I do think there's a role. I think all of

01:17:03.020 us have a responsibility for having some understanding of the issues of the day,

01:17:09.000 the trade-offs that are being made, how our tax dollars are being spent. We've made it really

01:17:13.400 complicated. I'm not saying we've optimized the system at all. I think it's in need of serious

01:17:18.040 reform. The average American is represented by dozens of elected officials. That makes it really

01:17:22.760 hard to be an informed and engaged citizen, but there are some substantive demands of citizenship

01:17:29.020 and a democracy that we should all, I think, be willing to sign up for if we want to have a

01:17:34.460 healthy democracy. So not that we necessarily disagree about that, but I just, I do think

01:17:38.560 there's sort of this sense of like, well, I'll just vote, maybe do my jury duty, pay my taxes,

01:17:44.280 and then you guys should just figure out the rest. And I just don't know how realistic that is,

01:17:47.900 because I think what happens is you end up in the situation we have in Sacramento where

01:17:52.300 the electeds are then responsive to the people who are participating at very high levels,

01:17:58.180 the very organized interests. And they need to be hearing from and held accountable

01:18:01.580 by and to the constituents, to the average, to the community. So anyway-

01:18:06.800 Yeah. I think just to clarify, I think what people are most revolted by is not

01:18:11.360 the need for civic engagement, but just the hyper-partisanship of our era, which just

01:18:17.120 distorts everything. And it makes politics a religious preoccupation for people.

01:18:22.300 Fair enough. I do think we all, though, can play a constructive role in kind of batting that down. I think that we sort of get the politics we deserve in that we need to all think about what is it we're liking and sharing on social media? What is it we're celebrating? Are we more interested in the horse race or the boxing match versus an actual dialogue about how we solve our problems?

01:18:45.920 And so to some extent, this is a reflection of the incentives created by our culture and the way that we choose to engage. So I think we can all play a role in maybe reminding our friends and neighbors and folks we're engaged with online that just cheering for or sharing the most egregious meme is not really the practice of citizenship and doesn't lead to a healthy democracy.

01:19:07.700 But on your earlier point, I mean, my mom says, and before her, my grandmother used to always say, the road to hell is paved with good intention. And I think the progressive left, or whatever the right term is, has focused so much on dealing, trying to address big structural issues and has such a deep academic understanding of the failures of government and failed public policies of the past that we've stopped addressing.

01:19:37.700 the basics. We have somehow ended up in a situation where we're not adequately enforcing

01:19:43.500 laws, maintaining and cleaning up safe, accessible public space, enabling our children to read

01:19:50.580 in elementary school. I mean, these are very basic. Issuing a permit quickly and efficiently

01:19:56.380 so someone can build a home. I mean, you think about the most basic things that a functioning

01:20:00.140 society has to provide. We're really struggling to deliver on stuff that ought to be very

01:20:06.000 simple in a way. I think in part because we're almost distracted and scared of just sort of

01:20:12.620 all the ways things can go wrong or all the bigger structural things that we want to tackle. I think

01:20:18.520 it actually somewhat comes out of the educations we get in our institutions of higher learning.

01:20:23.640 You know, we spend so much time deconstructing everything and understanding the full history of

01:20:28.160 the failures of government that we've sort of lost our ability to just act and solve basic

01:20:34.820 problems yeah all right so june 2nd is the primary and uh what what's on the calendar between now and

01:20:42.260 then as far as giving you more exposure is there are there a lot of interviews other debates there

01:20:47.540 are debates yeah we're doing a debate or forum every few days i'm doing a lot of interviews a

01:20:53.000 lot of travel going to different communities around the state and talking about the challenges

01:20:57.940 people face but also offering hope saying here's here are the things we're doing that are working

01:21:02.560 in a place like San Jose.

01:21:03.800 And here's what I think we can do

01:21:04.800 to improve our schools,

01:21:06.120 make our cities safer,

01:21:07.360 build more housing.

01:21:08.680 So just a lot of conversations

01:21:10.100 through different formats.

01:21:12.600 Well, I know a lot of smart people

01:21:14.020 are supporting you

01:21:15.000 because I know many of these people personally.

01:21:17.500 And I'll be watching your campaign.

01:21:20.120 Thank you for taking the time.

01:21:21.520 Well, thanks for having me, Sam.

01:21:22.540 I really enjoyed the conversation.

01:21:23.780 It's an honor to be on your pod.

01:21:25.020 I've listened for years.

01:21:25.900 So it's great to actually

01:21:27.020 be sitting here with you.

01:21:28.140 Thank you.

01:21:28.260 Well, I hope to come to Sacramento

01:21:29.500 and insist that you get rid

01:21:31.240 of our gas-powered leaf blowers in this state.

01:21:33.660 They're the bane of podcasters everywhere.

01:21:36.540 Yeah.

01:21:36.840 Well, I promise to look at it, all right?

01:21:38.660 That's your organized interest.

01:21:40.020 Yeah, exactly.

01:21:40.780 Yeah.

01:21:41.140 Yeah, yeah.

01:21:41.700 This is the arm twisting.

01:21:43.120 This is where I call in my favorites.

01:21:44.600 Yeah, exactly.

01:21:45.500 Yeah, yeah.

01:21:46.020 But good luck to you.

01:21:47.880 Thank you.

01:21:48.500 I appreciate the time.

01:22:01.240 Thank you.

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Making Sense - Sam Harris - March 16, 2026

#464 — The Politics of Pragmatism and the Future of California

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