00:01:17.960And my mom, who was a teacher, really cared deeply about my sisters and me getting a good
00:01:23.880Education, encouraged me to look farther afield. And I applied to this all boys Catholic prep school
00:01:29.360in San Jose and got a work study scholarship. So I worked on the grounds crew and they forgave my
00:01:34.320tuition. And so I made this long journey by bus over to San Jose. So I had a lot of time every
00:01:38.740day to read the newspaper, think about the world. And I got really interested in politics and public
00:01:45.900policy and trying to figure out why was Silicon Valley so prosperous and my hometown struggling
00:01:50.060so much. And so it was always an interest. I ended up in my career sort of having other careers
00:01:56.680before I got into politics. I was a public school teacher. I worked in the tech sector for a long
00:02:01.360time. But about seven years ago, our city council seat in San Jose opened up and it was just kind
00:02:07.340of serendipitous. Our company had been acquihired. I was sort of in this transitional moment and I
00:02:12.920decided to throw my hat in the ring. You're in your second term as mayor?
00:02:16.600As 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.
00:02:36.800ran for mayor about five years ago. At the same time, the voters elected to realign
00:02:44.340our mayor's race around the presidential cycle. So I got elected and had to immediately turn
00:02:48.660around and run again. But in those first two years, we really changed our approach. We went
00:02:53.800from over 40 priorities down to just four priorities and started to really increase
00:02:59.840accountability for delivering outcomes people cared most about, reducing homelessness, reducing
00:03:04.680crime, cleaning up our streets, very visible things that people see in their daily lives.
00:03:08.960And we made real progress. And I was reelected with 87% of the vote. And now I'm in my second
00:03:14.200term. 87%. That sounds like a lot. That either sounds like a Putin election. Yeah. How common
00:03:23.320is that for a mayor to be reelected with 87% of the vote? I don't know. I think it's pretty rare.
00:03:28.340Yeah, 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?
00:03:39.640I 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.
00:03:54.000And 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.
00:04:12.420And 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?
00:04:37.500And 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.
00:04:55.260And 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.
00:05:13.260Let'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.
00:05:33.400So 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.
00:05:52.420And 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?
00:06:20.000I 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.
00:06:41.080You 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.
00:06:54.500And I think part of the answer is just how bureaucratic and process heavy and litigious we are in blue cities and states.
00:07:04.660It 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.
00:07:22.520I 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.
00:07:37.980So 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.
00:07:58.240I 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.
00:08:14.280And 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.
00:08:25.140And 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.
00:08:51.880And 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.
00:09:14.640What can the governor do to perform surgery on all that?
00:09:19.140Yeah. 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.
00:09:35.760So 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.
00:10:01.700And 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?
00:10:15.100And 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.
00:10:28.100turns out you can scale up beds a lot faster than we were. We were spending a million dollars a door
00:10:33.700and often taking six or seven years to build a project. And so San Jose has actually led the
00:10:40.660state over the last few years in reducing the number of people living outside because we made
00:10:44.780that the goal. And we didn't overcomplicate it with a bunch of other things. We just said,
00:10:49.240we're going to build a lot of shelter. And when it's available, we're going to do our very best
00:10:52.880to incentivize and even require that people come indoors. You shouldn't be allowed to choose to
00:10:57.660camp in a public space when we're giving you a dignified, low barrier alternative. But I think
00:11:03.620that's sort of a template for, as governor, what you can do. You have a lot of tools. You have
00:11:08.160the bully pulpit, the ability to really shine a spotlight on issues and get people to understand
00:11:12.880why we have a given problem and how we might solve it and champion real solutions.
00:11:17.520You have the veto. You can kind of block bad ideas and things that get in the way.
00:11:22.140You 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.
00:11:44.460If 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.
00:12:07.280And I think you'd see us move a lot closer to that goal.
00:12:09.240So I think a lot of it comes down to focus and creating accountability for outcomes.
00:12:12.940Well, 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?
00:12:28.540I'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.
00:12:44.600in California has the highest tax rate or second highest tax rate in the country and arguably the
00:12:50.720most progressive tax structure in the country. So much so that the top 1% of income earners in the
00:12:56.920state generate somewhere between 40% and 50% of the state's revenue in a given year. And the top
00:13:02.9403% generate over 70% of the state's revenue. So we have a very progressive tax structure.
00:13:07.820And I think that's right. I think the wealth tax concept is fundamentally different in that
00:13:13.680because people feel that it is taxing something that's already been taxed and earned and in many
00:13:20.440cases are assets that aren't liquid and then you've got to figure out how to assess you know
00:13:25.060the value of a painting or a business or some stock that hasn't been that hasn't isn't publicly
00:13:30.300traded you're gonna actually linger on the mechanics of that a little bit because it's i
00:13:35.420think it's not obvious for people who haven't thought it through why this is so unwieldy and
00:13:40.000why it has perverse incentives. So let's just do a dissection of the wealth tax. I mean, I'm
00:13:46.900quite concerned about wealth inequality, but it seems fairly obvious that this approach to
00:13:51.760solving that problem is going to backfire. Yeah, I think there are a lot of them. We should talk
00:13:56.000about all the other things we should be doing to address wealth inequality, and I think even more
00:14:00.100importantly, opportunity and upward mobility. I think that's the biggest issue is the declining
00:14:05.540social mobility in America. But look, there are a dozen European countries that have tried this.
00:14:10.840The majority have rolled back their wealth taxes. Of those, a majority found that their overall
00:14:16.380revenue declined. You have to hire, to actually implement a wealth tax, you have to first hire
00:14:21.760an army of assessors to go out and pick through people's lives and try to figure out what they
00:14:27.200own and what it's worth. And that's really complicated. All people's belongings going
00:14:33.920through their homes, trying to assess the market value of everything they possess is intrusive and
00:14:41.120complicated and expensive. I think a particular risk, and part of my concern with this current
00:14:47.520proposal, is that you have folks who have, say, built a company, have stock, it's paper value,
00:14:56.140it fluctuates wildly. There's a multiplier effect that is oddly written into this proposal that
00:15:02.520your voting power. If you have shares that give you 10x the voting rights as a founder of a
00:15:09.220company, that's actually how it's going to be valued. So now you're in a position where
00:15:13.680you've created a company, you have paper wealth of $100 million. It could disappear tomorrow.
00:15:20.260The company could be one mistake, one competitor away from losing all of its value, but you 10x
00:15:27.260the calculations. Now, theoretically, for purposes of the wealth tax, you should be
00:15:32.600assessed at a billion dollars. You're then forced to come up with 5% of that or 50 million. There
00:15:40.200may not even be a market for your shares. And if you try to go dump all of those shares on the
00:15:45.000market, the value is going to plummet and suddenly your company is worth nothing. So it just, I mean,
00:15:49.780this is why you've already seen just with the proposal of this wealth tax, you've seen over
00:15:54.760a trillion dollars of capital flight from the state of California. There are estimates,
00:15:59.600independent estimates. It was just, I'm forgetting his name now, but a researcher who spoke at
00:16:04.080Stanford the other day estimated that the net impact of this may be up to $25 billion per year
00:16:10.760in lower revenue. The tax when first proposed was estimated at the high end to generate $100
00:16:16.560billion once. This could reduce ongoing annual revenue for the state by up to $25 billion.
00:16:22.120And 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.
00:16:29.400Yeah. 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.
00:16:41.040Accountants 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.
00:17:00.420So I just, I worry that in practice, and again, it may be the best intended proposal. I do think
00:17:06.780wealth inequality is a problem. I think an even bigger problem is people don't feel they can
00:17:11.040achieve the American dream and that they have the opportunity for real upward mobility. But this
00:17:16.000proposal is incredibly likely to backfire, which is why I've opposed it and I'm really concerned
00:17:21.580about it. If it reaches the ballot, does it seem almost guaranteed to pass in the current climate?
00:17:26.980Not 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.
00:17:50.440They 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.
00:18:12.560And 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.
00:18:40.260Yeah. Double click on that phenomenon. So it's been widely reported that some of the richest
00:18:45.020people in our society don't pay any income tax because they don't get income. How does that
00:18:50.480happen? Well, as I understand it, and I don't know, I'm not a particularly wealthy person and
00:18:55.460not an accountant, so I'm not an expert in this. But as it's been explained to me,
00:19:00.220if you have tremendous assets, you can go and at a very low borrowing rate, very low interest rate,
00:19:07.360borrow money against you can put up as collateral say your stock options that have value but you've
00:19:15.980never paid a capital gains tax because you didn't sell them right and so you have this collateral
00:19:20.500that you can borrow against then you can use the borrowed money to invest or spend on whatever you
00:19:24.700want and you've just essentially effectively avoided ever paying the capital gains and that
00:19:29.020can drag on for decades and and you're not taking a salary so you're not you're not paying an income
00:19:33.560tax on your salary that doesn't exist. That's right. You're not taking a salary. Your wealth
00:19:37.500is a capital gain that is sitting there unrealized for tax purposes. And then your
00:19:43.720income is effectively borrowed money at a low rate. And if you're deploying that money and
00:19:47.740getting a return on it, you can pay the interest quite easily. So it's essentially a hack of the
00:19:52.460tax code. That's where I would go. I mean, that is a very logical, if you want to make the tax
00:19:57.800code fairer, I would start there. There's also this weird... So starting there means taxing people
00:20:03.520on the loans they're taking? I think that there should be a threshold. And again, I'm not an
00:20:08.320accountant, so there may be folks smarter than me who have a better proposal, but it just intuitively
00:20:12.520feels to me that at some point, if there's a level of borrowing against a certain amount of
00:20:20.440appreciated but unrealized assets that you hold that should trigger a capital gain or
00:20:27.460basically they should effectively be considered realized. You are realizing that capital gain
00:20:33.020without that being true for an actual legal or tax purpose. I believe you could regulate that
00:20:41.020to say at some point of borrowing or some time duration, that is now a realized capital gain
00:20:46.140and you need to pay the tax on it. Right. Right. It's the optics of this that are going to be so
00:20:52.020determinative of people's vote. People hear the phrase wealth tax and it just sounds intrinsically
00:21:00.900good to anyone who's not extremely wealthy. Of course, we need a wealth tax. But I think we have
00:21:05.820to offer people a better description of what's going on. And I think it is more true that our
00:21:13.160inability to deliver high quality public services, the extent to which we've gotten in the way of
00:21:18.180building housing. I mean, you think about it, most people's, both their income, an increasing
00:21:24.880share of income is going to just the most basic thing being housed. More and more people are
00:21:29.880renters. We can talk about that. That's kind of an interesting quirk of regulation and construction
00:21:35.800defect liability in California, a little bit of special interest capture. And most people's wealth
00:21:41.340is in their homes, but that's increasingly only true for older generations. You have an entire
00:21:45.300generation of young people, particularly in California, who have become almost radicalized
00:21:50.360around the fact that they have no hope of becoming homeowners and having any equity in our society.
00:21:54.380I would focus on solving that. I think that's a much bigger driver of opportunity and upward
00:21:59.420mobility, the quality of our public schools. I think there are other policy areas where we can
00:22:04.320have much more impact for people than worrying about who's gotten wealthy by building a business
00:22:10.200and how wealthy they are. Not that they shouldn't pay their fair share, but I just, I think that
00:22:14.140we're sort of focusing on the easy target versus solving the bigger, more structural issues that
00:22:20.760really matter for people. Okay. So let's talk about
00:22:23.820home ownership and homelessness and just how you think about that problem at the highest level in
00:22:29.300California. I guess my first question is why do we have, I think, the worst problem of homelessness
00:22:36.040of any state in the nation. What explains that? I think it's a confluence of a few factors. One,
00:22:42.540we have a shortage of housing supply. So that's a whole bucket we should talk about, which is
00:22:48.120we don't build the housing that we need. We have been under building for decades. And when we do
00:22:54.500build, we build at a very expensive cost per square foot. It is just, we're not, you can't
00:23:00.100have affordable housing if you can't build the housing affordably. And so we can get into that.
00:23:04.380That'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.
00:23:25.040So 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.
00:23:40.660And 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.
00:24:07.100And 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.
00:24:30.420And 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.
00:24:46.820I 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.
00:25:16.020And 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.
00:25:36.680So what is unique about California apart from the weather?
00:25:40.500I mean, I hear how the weather is kind of a forcing function here where on the East
00:25:43.820Coast, because people are simply going to die outdoors in winter, they've been forced
00:25:59.340And 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?
00:26:10.180I 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.
00:26:27.300I always think people genuinely come here for opportunity and don't necessarily have a plan
00:26:32.920and don't realize how hard it is and how expensive it is. So there are a lot of factors. I mean,
00:26:38.880most of the research on this indicates that the majority of people who are homeless in California
00:26:44.980are from California. And we have a- The majority meaning like 90% or above?
00:26:52.900The claim, I don't know. I mean, I don't want to represent something that I don't know to be
00:26:57.060true. The claim is that in most places I've seen 80% of folks were last living indoors in the county
00:27:03.480in which they are homeless. But that, I mean, there's a lot of, you can kind of slice that a
00:27:07.260lot of different ways. How long were they living there? Did they actually grow up there? I don't
00:27:10.600know. California has been a destination for people from all over the country, all over the world for
00:27:14.980decades because of opportunities. I don't think that the primary driver here is that people who
00:27:21.780were already homeless in a place like New York woke up one day and said, I'm going to find a way
00:27:26.220to get across the country to go to California because it's so much better to be homeless there.
00:27:29.500I don't think that is the real issue that we should be talking about. I think the real issue
00:27:34.380is we need to fix our housing market and build a lot more housing and build it more affordably.
00:27:38.360In the meantime, as we're doing that, we need to provide safe, dignified shelter and or inpatient
00:27:43.000treatment facilities for folks who are currently on the streets. And we need to increase incomes
00:27:48.640by improving education, increasing our employment rate, and making sure that people are actually
00:27:53.620able to start and grow businesses here.
00:27:56.440And we need to be willing to enforce our local laws.
00:27:59.820At some point, if you do have a place for people to go, a shelter bed, a treatment bed,
00:28:04.260transitional or affordable housing, you should certainly not be allowed to just choose to
00:28:09.020live outside because you're trapped in a cycle of addiction.
00:28:12.100I think that's not a very compassionate or progressive position to just let people kind
00:28:17.340endlessly cycle and ultimately die on the streets. Yeah, there's a strange notion ethically on the
00:28:23.720far left that what should take primacy is everyone's right to occupy any public space
00:28:30.820because they're a citizen of this state. And in the case of someone who's addicted to drugs or
00:28:37.200mentally ill and homeless, just to live out the chaos of their life on the sidewalk, letting that
00:28:43.380just proceed is the most compassionate, you know, ethical, high, high ethical integrity response,
00:28:50.700but it's clearly not compassion. I mean, if it's some idiot form of compassion to think that
00:28:58.480simply not intruding on someone's freedom to have their life unravel in front of a
00:29:04.320banana republic or a Starbucks. And there also seems to be on the left, no acknowledgement
00:29:10.660that everyone else has taken a major quality of life hit in the meantime, right? Like when you
00:29:16.180have to cross the street with your kids to avoid some chaos on the sidewalk, I mean,
00:29:22.460be as compassionate as you want for the people suffering that chaos directly, right? Obviously,
00:29:27.280mental illness and drug addiction are problems that we should feel real compassion for, but
00:29:32.500there's this primary ethic of simply don't intrude, right? Any demand that these people
00:29:38.000be put in shelter or receive treatment is, as you move leftward in our politics, is framed as some
00:29:45.600kind of Orwellian, you know, authoritarian form of coercion. But everyone is paying an enormous
00:29:52.240price, both economically and psychologically, for the unraveling of social fabric in this way.
00:29:59.140What are the barriers to creating shelter and creating an obligate system of receiving
00:30:06.620treatment of whatever kind is necessary. Yeah, that's well described. I mean, look,
00:30:13.080I think it is a massive overcorrection on the left, the kind of progressive wing of the Democratic
00:30:22.920Party, at least, that has overcorrected on resisting the previous abuses of the state.
00:30:30.660Certainly in the 20th century, we saw the power of the state used coercively and in many places
00:30:36.160around the world truly violating people's rights and autonomy. And I think the left or a part of
00:30:43.240the left has sort of overreacted to that. And we've ended up in a really bad place. I don't know
00:30:48.320how much liberty you really have if you are deep in the throes of addiction to something like
00:30:55.400meth or fentanyl, or you have a severe mental illness. So I kind of question the very premise
00:31:02.620that somehow we're protecting people's civil liberties. And then to your point, there is
00:31:06.620huge harm to others, to the broader community. I've talked to folks who are, say, running a
00:31:12.000daycare center in a low-income community where these kids need all the access and support they
00:31:17.780can possibly get, but they literally can't go across the street and play in the park because
00:31:22.480there's rampant drug use all day in the park. So I think that the answer here really starts
00:31:30.340with culture. I mean, it's having this sort of dialogue with people and getting them to understand
00:31:35.120the truth about the nature of addiction and mental illness, the harm that is caused. I find
00:31:40.000that the folks who are the loudest in resisting solutions to this issue, so building the treatment
00:31:46.820centers, being willing to intervene, being willing to use the law, use the drug courts, the mental
00:31:52.160health courts, give a judge the authority to mandate treatment, are the folks who live in
00:31:57.100the nicest neighborhoods, the gated communities are, you know, living with this immense privilege
00:32:02.640of not having to actually deal with this failure, this public policy failure on a daily basis.
00:32:09.600I saw this when I was knocking on doors. When I was running, I knocked on over 10,000 doors.
00:32:14.600And you might think that the like lower income neighborhoods or communities of color would be
00:32:21.920the most progressive. It was the opposite. They were the neighborhoods most impacted by crime,
00:32:26.680by homelessness, by our failure to address these issues. And that's who I want. I mean,
00:32:33.920I want to be responsive to the people who most need public services and government to work to
00:32:39.140fix problems. And it's not the wealthiest or best educated people most of the time. It's folks just
00:32:45.360grinding out in their daily lives, trying to build a better future for their kids.
00:32:49.960So the barriers are many. I mean, I think part of it though is just philosophic more than anything.
00:32:55.220I 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.
00:33:17.900I 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.
00:33:43.240Do you support mandatory psychiatric holds for people who are displaying mental illness?
00:33:49.020Yeah, I mean, I do in the sense that I think, and again, there's always a balance. I just,
00:33:53.880I find that in our politics, we tend to want to believe everything's a binary. It's black or
00:33:58.220white. It's all the way this way or all the way that way. I think there has to be oversight. There
00:34:03.180have to be checks and balances. You should be evaluated by a behavioral health, you know,
00:34:07.980someone with training. I, you know, so it's, look, historically, I think the mental health
00:34:13.020hospitals certainly had abuses and there were people who didn't get the care that they needed
00:34:18.460and lost autonomy for long periods of time. And that system needed to be reformed. But we totally
00:34:25.560threw the baby out with the bathwater. And today, unless you say that you want to kill yourself or
00:34:30.660kill someone else, it is very hard to involuntarily hold someone, even for 72 hours. I mean, the bar
00:34:37.280has been set so high that we are unwilling to intervene in the thousands of cases where people
00:34:42.780ultimately die on the streets of an overdose. So there's a right sizing that needs to happen. We
00:34:47.340have to be willing to intervene, that doesn't mean suspending someone's freedom for years on end.
00:34:52.040But I think with the kinds of addictive substances we have today, requiring someone to detox for
00:34:59.640a few weeks might be the most compassionate thing we could possibly do.
00:35:03.720What's your position on distributing needles and parks to intravenous drug users?
00:35:09.160I'm not a fan. I do think it's complicated though. I want to be intellectually honest
00:35:13.720about this and all things. I think that safe injection sites from what I've seen can solve
00:35:22.540one problem, but may create another. And so what I mean by that is if you just take the narrow view
00:35:28.120of what will reduce overdose deaths in the short run, save lives and reduce spread of disease,
00:35:36.300safe consumption, safe injection does reduce the spread of disease and the risk of overdose death
00:35:42.920from what I've seen. On the other hand, and maybe there's a way, there's a middle path here, but I
00:35:48.040really worry about a culture of enablement and simply, you know, in the long run, I think maybe
00:35:53.680the greater risk is saying, well, there's kind of nothing wrong with people just choosing to
00:35:58.740waste their lives in the throes of addiction. And if they want to just use until they ultimately
00:36:04.280die, that's their choice. Maybe, but again, the question is what's your impact on others?
00:36:09.360And 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.
00:36:34.200Is 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.
00:36:51.200permissive. I mean, in Los Angeles, it seems that communities like Santa Monica have an outsized
00:36:56.820problem with homelessness and kind of unregulated mental illness in public and drug abuse, because
00:37:02.640I would presume they're far more, the community is far more tolerant of it and providing services
00:37:08.060in a way that a community like Beverly Hills or elsewhere isn't. Yeah, I think that's right. And
00:37:14.460I think there's a trade-off in the questions always, what is the right, what is the ethical
00:37:18.600and pragmatic balance. Very permissive blue cities that overleaning on the empathetic and
00:37:26.620compassionate impulse have the effect of essentially enabling without, because I think
00:37:34.000they're so worried about being judgmental, telling someone else what to do, any notion of coercion is
00:37:40.740anathema to that philosophic frame. On the other hand, you have, and I'm kind of oversimplifying
00:37:49.120here, but more conservative cities, communities, where the truth is the intervention may be too
00:37:56.020heavy-handed. We may not be doing enough to actually help people turn their lives around.
00:38:00.600You know, we may not be fully valuing the worth of a human being and their potential,
00:38:05.160honoring their potential either. And so the question is always, how do you-
00:38:08.340There are some communities where they just, they literally just give someone a bus ticket to another community, you know?
00:38:13.120Exactly. 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.
00:38:35.020And 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?
00:38:50.120And 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.
00:39:08.120My 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.
00:39:17.820Maybe they need the judge to mandate treatment, but the goal shouldn't be incarceration unless someone's really harming others.
00:39:24.120At that point, maybe that's appropriate.
00:39:26.460The 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.
00:39:33.360We can't just leave them to endlessly cycle and die on the streets.
00:39:36.760How much is NIMBYism a blocker for building affordable housing and treatment centers and psychiatric institutions, et cetera?
00:39:45.800It'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.
00:40:03.620So we, there's this Dunbar number of what is like a social capital rich community.
00:40:09.580We have tried to build these smaller, you know, convert a motel with 50 to 75 rooms
00:40:15.180or build these prefabricated modular units on public land with one to maybe 200 units.
00:40:22.420And initially when we started on this journey about five years ago, you know, you would
00:40:27.580get 500 people showing up to a public meeting, you know, practically with pitchforks.
00:40:33.620threatening to recall everyone and just like red in the face, angry that you would even propose
00:40:38.740building interim housing in the neighborhood, nevermind the fact that the folks who are
00:40:44.340homeless are already in the neighborhood. So they're there. They're already having an impact
00:40:47.840because there's no structure, no rules, no infrastructure. Their impact is much greater
00:40:52.740and their suffering is much greater. And so it took a lot of courage for our city leaders
00:40:59.360early on to kind of break through that and say, we're going to do this because we owe you a
00:41:07.020solution. We owe you a solution as the residents and taxpayers. We also owe our vulnerable neighbors
00:41:12.820a better, an option, a path out of the misery that they're in. Now, I was an advocate from
00:41:18.380the beginning and it took a long time, surprisingly, and this is where I think some of this sort of
00:41:22.820maybe overthinking, over-intellectualizing progressive impulse can be challenging.
00:41:27.180I argued we need to be really practical about it with the residents. We need to promise that
00:41:31.420their neighborhood's going to be better off. So what does that look like? We're going to
00:41:34.340prioritize moving indoors the people who are homeless in their neighborhood. We should then
00:41:38.220create a strictly enforced no camping zone around the site in a radius so that that neighborhood
00:41:44.080sees no homelessness, no tents, no trash. We should enhance our blight eradication. We should
00:41:49.680enhance our police patrols. We should guarantee that neighborhood that it will be made better,
00:41:55.540or not worse off by taking on a solution. And we've moved in that direction. I don't think that
00:42:01.680we've been, we certainly haven't been perfect at it. But philosophically, that's where I think we
00:42:06.280have to go is we will have to implement, and I think all cities and counties in California should
00:42:11.860be accountable for building shelter, building treatment, getting people indoors. But the
00:42:17.080neighborhoods where these solutions are built have to be made better off. They have to have
00:42:22.060enhanced services and more enforcement. And you can't allow these sites to be poorly run or to
00:42:27.760become magnets for more homelessness or other challenges. What I will say, though, is we've
00:42:34.660largely figured that out. Not perfectly. We have our challenges, but we have moved thousands of
00:42:39.160people indoors. The vast majority, over two-thirds of those folks remain indoors even years later.
00:42:44.740In the neighborhoods where we've built these sites, we've been able to demonstrate that
00:42:48.160Calls for service to 911 and 311, so crime and basically blight issues, have dropped, which makes sense.
00:42:55.820We're moving people from unmanaged encampments with no rules into a site with security, case management, meals, some structure, and some privacy.
00:43:06.360And it changes the game. It changes their entire possibility of actually escaping this miserable condition.
00:43:14.600Are 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?
00:43:43.800You know, Sam, I think there is that phenomenon. I do think that we sometimes have misaligned
00:43:50.340incentives, but I really blame political leaders, politicians for that more than the nonprofits
00:43:56.900themselves. Similar to how I feel about highly effective unions who advocate really well for
00:44:02.960the interests of their members. And I blame not the union, but the politicians who sometimes cave
00:44:09.440and agree to things, make promises they can't keep, and then the public suffers.
00:44:14.060And so when it comes to the so-called nonprofit industrial complex, I've read a lot about the
00:44:20.760critiques of this. It's really incumbent upon us as elected officials to create the right
00:44:25.680incentives. And I've been a strong advocate in requiring that everything we do in San Jose be
00:44:31.860outcome-focused. We've rebid contracts. We've changed nonprofit providers at different sites.
00:44:39.220We 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.
00:44:56.800We'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.
00:45:25.840We 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.
00:45:41.200So 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.
00:46:07.260What 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?
00:46:22.640Well, 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.
00:46:42.360And 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.
00:47:06.880If 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.
00:47:28.700We 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.
00:47:58.420But when you say the teachers' union is very effective.
00:48:02.880So I hear this as an obstruction that for whatever reason, the governor hasn't been able to break through.
00:48:09.060I mean, why hasn't Newsom done all of the things we're talking about?
00:48:12.260Well, 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.
00:48:28.420it should not have taken that long. It should not have been as big of a fight.
00:48:31.500The governor, to his credit, signed it. It's still not actually mandated. It basically is saying that
00:48:36.940the law essentially says that science of reading, evidence-based literacy curricula is the standard
00:48:43.920and you have to meet a certain bar to basically not follow the standard, but it's actually still
00:48:48.820not an actual mandate that you use particular curricula. And maybe a certain amount of
00:48:52.960flexibility is warranted, but we were in a place that I strongly opposed, which is
00:48:58.420we were sort of just leaving it to let teachers decide what to teach when it comes to teaching
00:49:04.140our children how to read as other states had quite clearly demonstrated what works and we
00:49:10.020should follow what works. So, you know, when I say effective, I guess what I mean is in the narrow
00:49:15.020sense, Sacramento is full of highly organized interests from teachers to dentists to oil and
00:49:23.180gas industry, to pick any industry, union, advocacy group. But they have such outsized
00:49:32.440influence. They're so organized, are so well-staffed, have such a strong and consistent
00:49:37.640presence, both through the legislative cycle, through the writing of laws and bills and the
00:49:44.060advocacy side, as well as the electoral side, endorsing candidates, spending money on their
00:49:50.200behalf, that they have this outsized influence. And in a narrow sense, they're actually doing
00:49:55.660exactly what they should be doing. And it's totally lawful. If you're a union or a business
00:50:00.780trade group, your job is to advocate for the narrow interest of your members. So I'm not as
00:50:07.000opposed to them doing what they do. I'm opposed structurally to a system in which there is
00:50:12.860a lack of transparency and accountability on behalf of the residents for the outcomes that
00:50:19.300matter. And there's not enough of a check and a balance against those interests. Now, I'm running
00:50:24.300because I want to take that on and do what I've done in San Jose, which is start from a premise of
00:50:31.120here's some outcome goals that we're going to commit to and we're going to hold everybody
00:50:35.260accountable. And interest be damned, if some group is advocating for something that is in the way of
00:50:42.000us achieving that outcome, I will name it publicly and we will have a public fight about it and we'll
00:50:47.360use the bully pulpit to kind of force them to align with things that work. I just want to make
00:50:54.240government work. But I do think we have a very fundamental challenge in Sacramento of special
00:50:59.780interest capture. I mean, we don't build condos in California anymore because our laws around
00:51:06.180construction defect liability are so expansive that you can be sued 10 years later after a
00:51:12.700building's been built because the paint is starting to bubble or chip. And rather than
00:51:17.540just get it fixed, that becomes a generator of excessive fees, becomes a profit center for
00:51:24.320trial lawyers. So it just, you know, there are thousands of these kinds of things in the way
00:51:28.900that the state works in the regulatory environment that create costs. That specifically, is that
00:51:34.120related to the homeownership versus renting problem in California? Well, it certainly contributes to
00:51:40.340the fact that California has the lowest home ownership rates in the country, 10% less than
00:51:44.740the national average. We are not building condos. When we build housing today, if it's not a for
00:51:51.060sale single family home or townhome, if it's multifamily, if it's denser, it's almost always
00:51:57.120for rent now. And one of the main reasons is essentially this litigation or over-litigation,
00:52:06.840a really litigious environment we've incentivized essentially means that it's harder to get
00:52:12.180financing and insurance on a for sale product. And why does that matter? I mean, condos kind
00:52:18.240of sounds like a sort of random sidebar conversation here, but that's the most accessible
00:52:23.640form of home ownership. I mean, traditionally a young person starting out in their career,
00:52:28.960if they could save a bit of money or had enough income, they could get some equity and start to
00:52:34.320own through a lower cost condo in one of our cities, essentially. That was typically the path.
00:52:41.700And then you might, over time, have enough equity in that to trade up and buy a townhome or a single
00:52:46.020family home. Maybe you'd get married and you'd combine, maybe you'd both own a condo and sell
00:52:50.680or rent them and then be able to buy a home. That has just kind of disappeared for young people.
00:52:54.860And so now, where's the entry point? If you're in your 20s, you're making $75,000 a year, maybe,
00:53:01.360and the average home price over a million dollars.
00:53:31.360fee. So there was an attempt to fix it. This is a longstanding piece of law, but it seems to have
00:53:37.320gotten worse over time. I don't know that I have the exact year when we sort of hit this inflection
00:53:42.140point, but it's only something we could improve. Other states are building a lot more condos and
00:53:46.060have a very different regulatory environment. Right, right. Well, what's your view of rent
00:53:50.240control and how much rent control is there in California? In our large cities, there's quite a
00:53:55.540bit. I mean, San Francisco, I forget, I don't want to quote an incorrect percentage, but it's a large
00:54:00.420proportion of the housing stock. So rent control is another one of these cases where if you're
00:54:06.320being intellectually honest about it, it has a short-term narrow benefit and then a long-term
00:54:12.460widespread cost. I think the research on this is fairly clear. If you expand rent control
00:54:18.500in the short run, the people who are now covered by rent control are less likely to be displaced.
00:54:24.500So there's this narrow short-term goal that matters. People are scared of displacement
00:54:31.040for good reason. Cost of housing, cost of rent is going up faster than many people's incomes.
00:54:36.340That's a legitimate problem. Now, there's not only one way to solve it. One proposal is rent
00:54:40.580control. There's also building more housing supply. We've just seen yet again in the city
00:54:45.260of Austin that as they expanded housing supply and built a lot and they build more affordably,
00:54:50.780rents have come down dramatically. So the market can work. But setting that aside for a moment,
00:54:56.320when you impose rent control and expand it, you have the, say, social benefit of fewer people
00:55:01.980being displaced because the rents go up more slowly and are more manageable based on their
00:55:07.580incomes. You have this long-term problem, though, that's even more significant and is the reason
00:55:12.780that I don't support expanding rent control in California, which is the market reacts by taking
00:55:20.640more units out of the rental stock, doesn't maintain, owners stop maintaining their properties
00:55:25.920because they can't charge the rent that is required to pay for the maintenance. And worst of all,
00:55:31.980the market underproduces, builds less because there's less expected return on the other side.
00:55:38.100So people won't, it'll be very hard, becomes harder to get financing to build more units.
00:55:43.440And over time, it's a race to the bottom in that that declining supply relative to population and
00:55:48.960job growth puts you in an impossible situation down the road where you have the lucky folks who
00:55:54.880are covered by rent control and are kind of, they can't move. There's no social mobility that you're
00:55:59.860kind of stuck in your apartment because you can't let go of this rent controlled apartment or you'll
00:56:03.340be homeless. And then you have no supply and all of society's worse off. That's a hard thing though.
00:56:08.940I mean, we know what the right public policy answer is. The research I think is quite clear.
00:56:12.920And yet it's a lot easier as a politician to go out there and just say the rent's too high. We're
00:56:18.300just going to expand rent control to every unit and you'll be better off. But in the long run,
00:56:22.320we will all be worse off. Yeah. Yeah. I mean, I think our biggest challenge around housing
00:56:27.940and homelessness is that we broke the housing market in California. It's really hard to get
00:56:32.880anyone to invest in building the housing that we need because the market isn't predictable.
00:56:38.540It's very expensive. It's very slow. I trace this back to a very positive movement around
00:56:45.860environmental protection coming out of Rachel Carson and Silent Spring. And we started with
00:56:50.780setting growth boundaries around our cities and said, we don't want to keep sprawling out.
00:56:54.500Then we added countless environmental regulations on top of that. We've really enhanced our labor
00:57:00.760standards, preservation of historical sites, respect for tribal lands and Native American
00:57:07.380remains that may be in the ground. We've added traffic impact fees. Now you build a building
00:57:14.980and you've got to have all these offsite improvements and do bike lanes and bioswales
00:57:19.120and all these, you know, really worry about all the water runoff. All of it is very well
00:57:23.380intended. The challenge, and this is what, you know, Ezra Klein famously calls the everything
00:57:28.960bagel liberalism. It's sort of, you've got 50 years now of adding process points, fees,
00:57:37.740restrictions, requirements, very complicated building code, very complicated fire code,
00:57:43.200all these environmental laws and you just add up decades of cruft of, you know, it's all,
00:57:49.240but it's all well-intended. Each one on its own is very justifiable, but the sum,
00:57:53.300the cumulative effect is that to build housing, you want to build a kind of classic apartment
00:58:00.400building, condo building that you might be able to put up in Austin or Miami. And you can do it
00:58:05.460there for literally half the cost and half the time. And at some point, California can't compete
00:58:11.800with and can't demonstrate that we have better ideas or a better quality of life than a red
00:58:17.560state because we literally just can't build housing anymore. And so this is a real public
00:58:21.900policy failure and we've got to be willing to change our approach. But if each turn of that
00:58:28.000regulatory ratchet was justified and presumably is justified if you just focus on it once again,
00:58:35.680you know as though for the first time how do you change that system there's this growing movement
00:58:42.740driven by young people who are rightly frustrated that the rent's too damn high and they have very
00:58:48.300little prospect of home ownership it's called the yimby movement yes in my backyard and they are
00:58:55.460very effectively driving a reform agenda that has many components it's you know the biggest has been
00:59:04.880initially zoning reform. I think they've largely won that battle, not entirely, but expanding
00:59:10.420zoning for housing and height limits. And that leads certainly to a lot of tough debates with
00:59:16.560neighbors. The bigger levers, in my opinion, are speed and cost of construction, speed being
00:59:23.960approvals. I think that's the simplest, which is once you've gone through a public process and
00:59:28.680decided where to put housing or how dense it can be, getting the actual entitlement and the building
00:59:34.760permit should be much faster and simpler than it is today. We're using AI to review applications
00:59:40.760for ADUs to catch errors and omissions up front and make sure the applicant comes forward prepared
00:59:47.020just to save time. There's no reason for that to sit on somebody's desk in the planning department
00:59:50.560for three weeks to just tell someone that they're missing a field in the application.
00:59:54.480So speeding up processing times is really important. And then the next frontier, the really
00:59:58.460big piece that's left is starting to tackle cost. Some of that can come through innovation. I was
01:00:03.100just down at a modular construction factory where they're building the components of apartment
01:00:08.280buildings in a factory on an assembly line, and they can deliver the overall project in half the
01:00:13.780time at about 20% lower cost by just using a different construction method. Having it in that
01:00:18.940controlled mechanistic environment is much more efficient. But we also have to, I think, and one
01:00:25.360of the things I would do as governor is cap the fees that cities are assessing. Some cities increase
01:00:30.920the cost of housing by up to 20% by assessing just a totally unreasonable number of fees that
01:00:37.300aren't really fees, in my opinion, and are maybe largely functionally there to stop housing from
01:00:42.540getting built. And I think that's wrong. Sam, I'm just curious maybe to ask you a quick question.
01:00:47.060Yeah. I have to, but as you think about the governor's race, politics in California more
01:00:52.060broadly, we have this threat, I think a threat to our democracy from Donald Trump and his
01:00:58.340administration on the one side we've gotten in. We've talked a lot about some of the failures of
01:01:03.860progressive governance in California. I think we're both interested in solving real problems
01:01:09.380from a maybe more pragmatic position, but it doesn't feel like there's much of an appetite
01:01:14.960or maybe there's a declining appetite for that kind of politics in America right now.
01:01:19.220And you've thought a lot about civic discourse and the information environment we're in.
01:01:24.280I'm curious what, if anything, gives you hope about how we get through this moment we're in.
01:01:29.100Well, I'm hopeful that eventually the spirit of pragmatism and basic sanity and intellectual
01:01:35.360honesty is going to have to win because, I mean, reality just keeps getting a vote,
01:01:40.780whether that's economic reality or epidemiological reality or conflict with genuine enemies out in
01:01:47.580the world. So, I mean, I just think you can only delude yourself for partisan reasons or
01:01:51.780self-serving reasons for so long before you bump into some hard objects. And I think we're bumping
01:01:57.120into them. I guess I would turn that back on you with a question around just the political culture
01:02:02.680and environment in which we're having this conversation, right? So you are, by all
01:02:07.520appearances, a very level-headed, not ideological, certainly not, you know, woke activist sort of
01:02:15.060politician, and yet California has been governed by, I mean, it's basically been a one-party state
01:02:22.040for as long as I've been alive, and that's had certain consequences. How do you view the political
01:02:27.380challenge now, and just in the remaining days before the primary, and should you clear that
01:02:32.340hurdle? The primary is June 2nd? That's right. Yeah, so we don't have much time messaging into
01:02:38.160this environment around just solving problems and not giving any energy to activist delusions.
01:02:45.060How are you walking that tightrope to take part of the question you just asked me?
01:02:51.140The 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.
01:03:14.080It'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.
01:03:28.420I 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.
01:03:42.200I 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.
01:03:50.800I mean, what I think most Californians who I know are desperate for is something like a hard reset on our political culture here.
01:03:59.440I 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.
01:04:11.040I 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.
01:04:35.780Well, 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,
01:05:05.660the largest city in Northern California, San Jose, setting goals that are ambitious and creating a
01:05:14.220culture of execution and accountability that actually moved the needle. We've led the state
01:05:20.220in reducing crime. San Jose has become the safest big city in California and in the country.
01:05:25.140We've reduced homelessness by about a third in just the last four years. We've dramatically
01:05:30.540cleaned up many of our public spaces. People are coming back out into their parks and trails.
01:05:36.300We're starting to get investment back into the city. We have thousands of homes under
01:05:40.480construction that had been stuck in the pipeline for years. We had to do some hard things. We had
01:05:44.700to speed up our permitting processes, still something where we can do better with. We had
01:05:49.500to reduce impact fees, but we've been problem solving. We've been going issue by issue on the
01:05:54.440big ones, the ones that matter, safety, homelessness, housing costs, economic opportunity,
01:05:59.560setting public goals and rethinking our policies and how we spend our money and our time
01:06:06.820in city hall to deliver better outcomes and i guess my my hope and maybe intuition on this
01:06:13.300is similar to what you said which is at some point people just want government to work they
01:06:18.080get even though folks are i think somewhat rightly whipped up in a in a frenzy of partisanship in
01:06:25.600reaction to the Trump administration and gross violation of civil liberties that we've seen
01:06:32.400play out in places like Minnesota. I also think people understand that we need our next governor
01:06:39.320to both fight legally and rhetorically against this abuse of power from the federal administration
01:06:47.760while also focusing on fixing our problems. Because we've actually given Trump his most
01:06:55.080powerful ammunition here in California by failing to fix our problems. And it's incumbent upon us,
01:07:03.120if we want to save the country, to demonstrate that California's values of diversity, being an
01:07:09.200inclusive place that welcomes people, investing in human capacity, as we rhetorically say,
01:07:16.720we really care about things like education and healthcare and providing people with the things
01:07:20.540that they need a respect for difference um you know the values that we have have to work in
01:07:27.820practice and if they don't we're actually aiding and abetting this authoritarian impulse that trump
01:07:35.160represents and so i just i view the project here as being vital to the future of the country and
01:07:40.400the protection of our democracy because it's not enough to be against something we have to also
01:07:44.820have to be for something. And we should be for putting our values, our progressive values into
01:07:51.860practice and proving that they work when they come into contact with reality. And if they don't,
01:07:56.620we need to at least look at the means and methods. We need to at least say, well,
01:08:00.280yes, all these layers of 50 years of good intentions that have prevented us from building
01:08:05.080housing, the values of protecting the environment, including the community and the decision,
01:08:10.960dealing with the impacts, they're all good values. And maybe the values don't need to be
01:08:14.580totally thrown out. But if in practice, they're leading us to not be able to build housing or to
01:08:18.860only be able to build a home at over a million dollars a door, something's wrong. And we've got
01:08:23.760to go back and revise how we're approaching these things. So I just, I think ultimately,
01:08:28.020a politics of pragmatism has to prevail. Are we ready for it? I don't know, but Californians are
01:08:33.180pretty frustrated. And everywhere I go across the state as part of this campaign, we're filling
01:08:36.520rooms with people who want to hear about a different approach. They don't want to throw out
01:08:40.500our democratic values but they're not happy with the outcomes we've been getting so on a different
01:08:47.320approach how would you judge newsom's tenure as governor what should he have done or not done
01:08:54.720because obviously we're not talking about a resounding success at this moment in his tenure
01:09:00.500right we're talking about all we've spent an hour talking about all the things that that al us as a
01:09:05.160state, what could he have done differently? Well, look, I think it's a fraught conversation in that
01:09:11.160I am hesitant to, with the limited information I have, say that I know with any certainty what
01:09:17.500someone else has done right or wrong. I think there are certain things the governor's done
01:09:22.020that should be applauded. He leaned in around interim housing, which is the solution in San
01:09:28.400Jose that's allowed us to reduce homelessness by a third. I think he correctly diagnosed that
01:09:34.440we don't have enough places or mechanisms for getting people into treatment. And that's what
01:09:39.560Care Court and Prop 1 were about, building treatment capacity and then having a mechanism
01:09:45.220through the courts, a mechanism that has checks and balances for getting people indoors and into
01:09:50.500treatment. I think what's been missing, and there are other places where we've disagreed. He and I
01:09:55.420disagreed over Prop 36, over recovery housing. There have been other policy disagreements we've
01:10:01.600had. Remind people what Prop 36 was. Prop 36 was a ballot measure that passed overwhelmingly a
01:10:07.420couple of years ago. In fact, it was about a 70 to 30 vote ratio in support. It passed in every
01:10:13.660county in California. And it essentially brought some accountability back to our drug courts.
01:10:20.920It did a couple of things. One, it enhanced the punishments around retail theft, organized retail
01:10:26.660theft, which is important. But the other component that I was most interested in was how we actually
01:10:33.200bring balance back to the criminal justice system when it comes to drug use. We went from a period
01:10:38.300of over-incarceration where our jails and prisons became the place where addicts and folks dealing
01:10:45.100with mental illness were being housed, not rehabilitating them and at great expense to
01:10:49.900taxpayers. Obviously, that system was broken, but we overcorrected and ended up with our streets
01:10:58.100and our emergency rooms being just kind of this revolving door and not really helping people
01:11:02.880either. And so what 36 does is it allows a DA to bring charges and a judge to ultimately sentence
01:11:09.900someone with what's called a treatment mandated felony, which simply says if you're on your
01:11:15.180third serious drug offense, like you're using meth in the park and the kids can no longer
01:11:21.340use the playground, you can be given a choice between treatment and incarceration. So it brings
01:11:26.700a consequence back, acknowledging the immense societal impacts of things like public drug use
01:11:34.960that then often lead to trespassing, vandalism, retail theft, and all of these other impacts.
01:11:41.720And look, the state has refused to fund it.
01:11:44.620It's one of the first things I would do as governor
01:11:46.200is make sure that we properly fund Prop 36
01:14:50.280But 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.
01:15:07.620And 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.
01:15:31.760and it's a gift to the lunatics on the right, as you pointed out. So, I mean, what we desperately
01:15:38.060want is to forget, we meaning, you know, every sane person I know is to forget about politics.
01:15:45.380I mean, it's to forget about, I mean, if we're talking about governance as much as we are,
01:15:50.740something's wrong with our governance. You know, we want, we want, we want you to have someone
01:15:54.900like you to have a job that you can just do so that we don't have to think about that job.
01:15:59.100Right. 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.
01:16:12.560Yeah. 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.
01:16:26.800I 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
01:16:56.700sphere of life that is our public and civic life. And so I do think there's a role. I think all of
01:17:03.020us have a responsibility for having some understanding of the issues of the day,
01:17:09.000the trade-offs that are being made, how our tax dollars are being spent. We've made it really
01:17:13.400complicated. I'm not saying we've optimized the system at all. I think it's in need of serious
01:17:18.040reform. The average American is represented by dozens of elected officials. That makes it really
01:17:22.760hard to be an informed and engaged citizen, but there are some substantive demands of citizenship
01:17:29.020and a democracy that we should all, I think, be willing to sign up for if we want to have a
01:17:34.460healthy democracy. So not that we necessarily disagree about that, but I just, I do think
01:17:38.560there's sort of this sense of like, well, I'll just vote, maybe do my jury duty, pay my taxes,
01:17:44.280and then you guys should just figure out the rest. And I just don't know how realistic that is,
01:17:47.900because I think what happens is you end up in the situation we have in Sacramento where
01:17:52.300the electeds are then responsive to the people who are participating at very high levels,
01:17:58.180the very organized interests. And they need to be hearing from and held accountable
01:18:01.580by and to the constituents, to the average, to the community. So anyway-
01:18:06.800Yeah. I think just to clarify, I think what people are most revolted by is not
01:18:11.360the need for civic engagement, but just the hyper-partisanship of our era, which just
01:18:17.120distorts everything. And it makes politics a religious preoccupation for people.
01:18:22.300Fair 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?
01:18:45.920And 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.
01:19:07.700But 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.
01:19:37.700the basics. We have somehow ended up in a situation where we're not adequately enforcing
01:19:43.500laws, maintaining and cleaning up safe, accessible public space, enabling our children to read
01:19:50.580in elementary school. I mean, these are very basic. Issuing a permit quickly and efficiently
01:19:56.380so someone can build a home. I mean, you think about the most basic things that a functioning
01:20:00.140society has to provide. We're really struggling to deliver on stuff that ought to be very
01:20:06.000simple in a way. I think in part because we're almost distracted and scared of just sort of
01:20:12.620all the ways things can go wrong or all the bigger structural things that we want to tackle. I think
01:20:18.520it actually somewhat comes out of the educations we get in our institutions of higher learning.
01:20:23.640You know, we spend so much time deconstructing everything and understanding the full history of
01:20:28.160the failures of government that we've sort of lost our ability to just act and solve basic
01:20:34.820problems yeah all right so june 2nd is the primary and uh what what's on the calendar between now and
01:20:42.260then as far as giving you more exposure is there are there a lot of interviews other debates there
01:20:47.540are debates yeah we're doing a debate or forum every few days i'm doing a lot of interviews a
01:20:53.000lot of travel going to different communities around the state and talking about the challenges
01:20:57.940people face but also offering hope saying here's here are the things we're doing that are working