Weekend Listen: Can Republicans Win California Again? Steve Hilton Thinks So

0:01What if you could make that stop? With LPL Financial, we remove the things holding you back and provide the services to help push you forward. If you're a financial advisor, what if you could have more freedom, but also more support? Ready to invest? What if you could have an advisor that really understood you? When it comes to your finances, your business, your future, at LPL Financial, we believe the only question should be, what if you could? Payton advertisement. Anna Kendrick is not a client of LPL Financial LLC and receives compensation to promote LPL. Investing involves risk, including potential loss of principal LPL Financial LLC member FINRA, SIPC.

0:32Steve Hilton:Being a small business owner isn't just a career, it's a calling. Chase for Business knows how much heart and effort go into building something of your own. Manage all your business finances, from banking to payments to credit cards, all in one place with Chase's digital tools. Plus, access online resources designed to help your business thrive. Learn more at chase.com slash business. Chase for business. Make more of what's yours. The Chase mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank N.A. Member FDIC. Copyright 2026. JPMorgan Chase and Company.

1:07So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. Bloomberg Audio Studios.

1:43Steve Hilton:Podcasts. Radio. News. Sometimes people have asked me, well, how did you end up supporting President Trump? In many ways, I think the campaign I'm running is not particularly partisan. However, there are realities about running for office in the US. But look, he's not on the ballot, and this is a point of choice for California. Steve Hilton, once a British political strategist, now the Trump-backed Republican running for governor of California. Do you agree with his decision to go to war in Iran? Well, look, I'm just focused on this race. You really don't think you need to or the voters of California deserve to hear you express a view on that?

2:24You're trying to be a leader of the state. No, I understand. But there's plenty to fix and focus on in California. From Bloomberg Weekend, this is The Michelle Hussain Show. I'm Michelle Hussain. Over the next few months, the US political climate is going to get even more intense as we get closer to the midterms. This November's set of elections will mark the halfway point between one presidential vote and the next. And while most of the attention will be on Congress, whether the Democrats can seize control of one or both houses, there are some fascinating contests elsewhere. And one of them is the race to be the next governor of California.

3:15Now, California is a notable Democratic-leaning state, but it has had Republican governors, Ronald Reagan, more recently, Arnold Schwarzenegger. And this time, a Republican is through to the final stage, one of two candidates on the ballot. in November. His name is Steve Hilton, and he is unusual, not least because he only became a US citizen five years ago. He's someone whose name I've known for about 20 years because he used to be embedded in UK politics. He worked for the Conservative leader David Cameron before and after he became Prime Minister. So when I saw Steve Hilton's advance through the California governor primary, I knew I wanted to understand it.

4:08And I reached out to him. His rival in November is Democrat Javier Becerra, someone who used to work for Joe Biden. And California is such an important place economically, in global as well as US terms, that this conversation does go beyond state matters. Above all, I hope that through it, you get a much better sense of a man who wants to be California's next leader. How are you doing? Great to see you. Thank you for saying yes to my email out of the blue. How are you, most importantly? Good, thanks. On to the next round. Well, yeah, I know. Absolutely. It doesn't stop. Next round of interviews or next round of the campaign?

4:52The campaign, the next fight. You know, like there's no break. We've got to keep going. There's not much time now. Well, look, we'll talk about all of that. And it's clearly it's been a remarkable few weeks for you. You've obviously been involved in politics for a long time. You've been a strategist. You've been a political aide. You've been a commentator on Fox News. I'm still curious about the moment when you decided to run for office yourself, because that's a very big decision to make. I don't think there was one specific moment, but there was a period of time that I can recall. As you mentioned, I'd been a host on television, a most unexpected turn in my career in media.

5:32I greatly enjoyed that. But as the years went on, I felt that I wanted to get back into actually doing things rather than just talking about things. I love California, been living here since 2012, raised my family here, started a business here. I could see that things were going off the rails pretty badly from a policy point of view. So I started a policy organization, Golden Together, started working on some of our big problems in California. I then started engaging with Sacramento, trying to advance those policy ideas through the legislature. And that was the point where I realized just how dysfunctional and broken California's system of government is.

6:13Because every single meeting I had with legislators, Democrats, Republicans, it was the same story. Yes, you're right. These policies you're advocating would make a huge difference. We'd get more housing built. We'd lower the cost. All those things are true. However, it can never happen because the unions won't allow it. The climate activists won't allow it. The system just can't make it happen. And I just realized then that something has to change. Otherwise, this state that I love is just going to continue to decline. Yeah, it's the state you've made your home in the country that you've made your home, having left the UK.

6:51And we're going to dig into all of this and the nuts and bolts of your campaign in a moment. But I just want to understand you more broadly to start with. Would you say that being on Fox, having that kind of prominence on TV, that's got to have played an important role in rising in the Republican Party, right? Donald Trump, it helped his rise because he was known from television and he was a fan of your show on Fox. I think that's right, that it gives you a platform. But I think it's that combination actually of media experience, policy and government experience and business experience that actually is a good fit for this role, not only running for governor, but as I plan to be being the next governor.

7:30But when did you actually become a Republican? Because 2017, you were very clearly saying you weren't partisan and you were neither Democrat or Republican. Well, it's interesting. in many ways, I think the campaign I'm running is not particularly partisan. It's based on some broad common sense principles that I think most people can get behind. So I've never thought of myself as a particularly partisan person. However, there are realities about running for office in the US. It's basically a two-party system. And of course, I identify very much with the with the principles that underlie the Republican Party, just as I do the Conservative Party, where I worked for some years and was part of a coalition government led by a conservative prime minister.

8:19The basic ideas that you would associate with the centre-right are ideas that I share in terms of limiting the role of government, enhancing individual freedom, those sorts of things have always been part of my political philosophy and therefore connect very much with the Republican Party here in America. I, of course, remember you from your time in the UK, working for David Cameron before he got elected, after he became prime minister. You were part of that effort to detoxify the Conservative Party to make it more electable, bring it into more of the centre ground, more socially liberal, more climate conscious.

8:58Are you still the same guy who did that? Oh, very much, very much. I understand that Some people who haven't been following the intervening years may look at that and say, well, it's very different. David Cameron's a very different personality to the president who's the leader of the Republican Party in America today. I can see that very clearly, but everyone has their own personal style. But the ideas that really drove that process of change for the Conservative Party, in particular, focusing on people who've been left behind, on dealing with poverty and inequality, on helping working people, that was a really big part of the work that we did 20 years or so ago with the Conservative Party.

9:42And that's a big driver of what I'm really arguing for here. And there's many other similarities as well. I think that perhaps the broadest one is a sense that I've always had, which is a sense that we need to put power in people's hands and enable them to fight back against establishments or systems or centralized power that benefits a small group rather than the majority of people. That's always been a really important driving force. Yeah. But what you did for David Cameron, the person who you still say you are, that is very, very far from not only Donald Trump himself, but MAGA. And I just wonder how you reconcile that because you are endorsed by President Trump himself.

10:26What you're representing yourself as is, I think, more the Arnold Schwarzenegger wing of the Republican Party in California. And he's someone who endorsed Kamala Harris in the last presidential election. I don't think the boxes are quite as neat and defined as that. I'm endorsed by many different kinds of Republicans. Of course, political parties are coalitions. And as I say, I think this campaign, everything I'm arguing for is not particularly partisan. The fact that we've got Democrats supporting the campaign is an example of that. And I think that what I've always tried to focus on is really the substance, the idea, specific things.

11:03I'm a pragmatic candidate in this race, not an ideologue. The arguments I'm making about how we need to turn California around, we've got the highest cost of living by far. I'm not sure it's appreciated around the world because you look at the headline for California with the fourth biggest economy. And there's a sense of complacency there on the part of the current leadership. They keep saying that as if that answers all questions. Underneath that, this is a state that's in real trouble, especially from an economic point of view. And the solutions there actually go across party lines. They're just practical things to make life easier for families and businesses.

11:44So I think this whole conversation around, you know, labels and whatever doesn't really get to the point about what is needed in order to help California get back on track. OK, but I don't think you can bat away being the fourth largest economy in the world quite so likely. This happened last year. It was the fifth largest. Then California overtook Japan under Gavin Newsom. It doesn't feel like a failure to many people in the state, I would suspect, and certainly to people outside. Well, I think it does to many people inside because they're struggling to even live. That's why during Gavin Newsom's tenure as governor, nearly two million Californians have actually moved out because they can't live here anymore because it's so expensive.

12:29Let's just look at that number, the fourth biggest economy in the world. That's driven by two things that don't actually tell a story of health in terms of our economy. Partly, it's driven by a very small number of tech companies, fantastic success stories, which I strongly support. I'm very proud of the fact that we're leading the AI revolution in California. They generate enormous amounts of revenue, but not very many jobs. The second part of the story in terms of the size of our economy is that it includes the size of government. They've doubled the budget of the state of California in the last 10 years or so.

13:07Meanwhile, the results on every measure, education standards, the quality of our infrastructure, the highest unemployment rate of all 50 states, the highest poverty rate of all 50 states tied with Louisiana. I think if we don't change direction this year, California really is heading for economic disaster. I've heard from so many business leaders that they're waiting to see what happens in November. And if we don't vote for change in California, they're out. And the exodus of businesses from California that you've seen in the last few years could turn into a stampede. So if California is doing that badly, I want to put two other points to you.

13:50One is whether you think there is something longer term going on that is affecting the poorest in California and elsewhere. And that is a long term decline in living standards that's happened over the course of the last 50 years. So it's not about the Democrats ruling California now. It is about something more systemic that reflects poorly on American leadership for decades. Well, I agree with you, actually. Sometimes people have asked me, well, going back to your earlier conversation, how did you end up supporting President Trump? I do remember back in 2015, I for the first time saw this chart based on US data.

14:24This is going back 10 years now, 11 years, showing the earnings of the majority of workers in California. I think the technical term was non-managerial, non-supervisory workers, roughly 80 % of the workforce after inflation. And it's basically a straight line, just flat. So through Republican and Democrat governance in 50 years since 1974, I think it was. Basically, the economic position of most people... And the state of Nobel Prize winning economist has done the seminal work on that. And I don't know if those are the figures you're referring to, but he's absolutely laid this out for the last 50 years.

15:01But that's exactly why I think the challenge is much broader than the political points you're making. It is one about choices that America's leaders have made. Right. I agree with that. And I think that there needs to be a much bigger emphasis on the gap between the very top and the super rich and so on. Of course, that's been in the news with the SpaceX IPO and so on. I think the real issue is the fact that you've got so many people in the lower end of the income scale who just feel stuck and that social mobility is gone. I within that, one of the great things about America and our system here is that you've got this experiment in policymaking through the federal system.

15:42In fact, you've got 50 states that do things a different way. And even within that overall framework, which I agree needs serious reform, some states are doing better than others. And you can see it in the fact that people and businesses are leaving California and moving to states with more welcoming policies to business and where the cost of living is much lower. Texas, Florida, Tennessee, even our neighboring states, Nevada. You've got a lot of evidence now that the high tax, high spending, progressive model of governance that you see in the blue states, as they're known, like California, like New York, is not working.

16:21We've had 16 years of one party rule in California where one party's controlled everything. There's really been no barrier to the democratic philosophy being implemented fully in California, the results are among the worst in the country. But you know, on people leaving, there's an aspect of this on which you could agree with Gavin Newsom, which is that he is trying to stop the wealth tax on billionaires that's been proposed by one of the labor unions. He's determined to try and stop it because he thinks it will drive more people away. So area of agreement, yes, between you and Governor Newsom?

16:56Although I have to say, given his close relationship with the unions, I would have hoped he would have acted sooner to stop that even becoming a consideration. For example, right now, there's a process going on in Sacramento, very typical horse trading process, where it's possible that the union itself will take it off the ballot. Now, because they're negotiating some other kind of agreements that could have been done a year ago. But he's working on this. He's working on this. That's the point. No, I agree with that. But as often with Gavin Newsom, a little bit more attention and focus earlier would have worked wonders.

17:34OK. The other point I wanted to put to you about your economic critique of California is a question really about whether the policies of the federal government are playing a role in making life more unaffordable for Californians. Well, it's certainly true that the if you which examples are you thinking of particularly? I'm wondering, well, let's take tariffs for starters and their impact on the cost of some goods. Well, I think that if you look at the detail on that, it's nothing like as significant. We have the highest grocery prices, for example, in the country. The main drivers of that are policies made in California.

18:13Energy costs the highest in the country. The labor and environmental regulations that make operating here so expensive. Can I give you others? This is Bloomberg analysis from earlier in the year that the jumps in the prices of children's clothing, tools, outdoor equipment, furniture, bedding, motor vehicle parts, all of this is linked to tariff policy and trade policy that the administration brought in last year. Yeah, but if you basically look at where we've settled on tariffs in terms of the percentage rates, and you look at the way that the international trading system has worked for a long time before the tariffs, it is a leveling of the system.

18:56And I think that the impulse that drove that policy is absolutely correct, which is that there hasn't been fairness. Most other countries, most of America's trading partners, for example, have a value added tax, which distorts the picture in terms of imports and exports. It favours. OK, so you support you do support the imposition of tariffs. Well, it's not a California state policy. So I try and avoid weighing in on policies where there aren't really the subject of this campaign. I mean, I can give you a general observation that I think it was important to try and do something to bring manufacturing back to the US.

19:34And that's happening. Unfortunately, it's not happening for California. OK. I remember, I mean, I've read you talking about global and supporting globalization. So is your view completely changed on that? Because that was the thing that you used to say you believed in. that globalization was a force for good and a force that created wealth rather than it lifted. Yeah, right. But nothing is all good or all bad. I mean, I think the point about policy generally in all sorts of areas, it's about trade-offs. And of course, it's true that over the years that we've seen the globalization of trade and so on, we've seen tremendous advances in economic opportunity in some parts of the world.

20:22And that's a good thing, obviously. I think anyone would support that. But at the same time, partly because of sometimes the speed of transition, partly sometimes because of the concentrated effects of a transition, places have really lost out and suffered. And so the policy goal is to try and keep as much of the positive while alleviating the negative. And I always bring it back because I am running now for governor of California. What does it mean in California? Going back to the AI companies, you look at NVIDIA, Anthropic, these big companies making major investments in the US, none of them in California.

20:59The job creation that's coming from the AI boom in America is happening outside of the home state of those companies. That's something I want to change. So we get the full stack, as I describe it, of AI jobs in California. So I do want to ask you about your attitude to big tech, because I remember you being really critical of these companies, Facebook, as it was then, Amazon and Google, talking about their dominant position, how you'd like the kind of framework where if they became too dominant in the market, then you'd want them to be treated as a monopoly, that you'd want maximum pay rates for senior executives.

21:38Have you changed your mind? And And at that time, you were talking about regulation of big tech being really important to you. And now I don't see that kind of thing in your set of policies. I've changed my job, which is now running for governor as I plan to be governor. My job, my responsibility. And does that mean you can't afford to take on big tech? If I just finish the point, which is that my responsibility will be to support every business in California to help them grow. So we create jobs and wealth and opportunity in our state. So regardless of my personal opinions about this or that company, I see it as the responsibility of the governor of any state to stand up for the people and the businesses, small business, medium sized, big global corporations, whatever it is, that is my responsibility.

22:31So what is your personal opinion of big tech? Well, I think that, like we were just talking about in other areas, brought tremendous advances and changed people's lives in a positive way. I'm hugely proud of the tech sector and the fact that we're leading and dominating once again in this new wave of innovation. That's fantastic. And I'm proud of that. But as with everything, there's positives and downsides. And the goal of policymakers should be to be really careful about not leaping into trying to fix things. There really is a danger of over-correcting and having unintended consequences. I think that's the skill of governance.

23:18And I think that when you look at tech, of course, it's had positive transformational effects. Remember, people are choosing to use this technology. No one's forcing it on anyone. People are using it because they find it helpful. And businesses are using it because they find it helpful. I don't want to stand in the way of that. Yeah. And I do understand, of course, that you're doing a different job now and running for office is different to being a commentator and having much more freedom when you can say. But there is also a question of belief and core principles. And you clearly felt strongly and thought a lot about tech, not least because you've spent so many years, you know, seeing it up close and living in California.

23:59So do you not have any concerns today about the dominance of these companies in our lives? They're a key part of the stock market. A lot of American wealth is wrapped up in them. They're at the forefront of AI, which will change, if not destroy many jobs. Have those concerns gone away or you just can't talk about them anymore? No, no. I think that, well, first of all, not just observed. I started and ran a tech company. I taught at Stanford University. So I absolutely agree with you that you're seeing companies with a huge transformational effect. But that's new, and it's what innovation is. We've got to be careful about what happens.

24:44That's my attitude to the whole question of the impact of technology on society is to just be very open about what's going on. but not necessarily think that we, and speaking now as someone who's running for office, has the ability to really drive a change without causing unintended consequences. Right now, for example, on AI, you've got major disagreement about what's happening, even within the leaders of the sector. No one really knows.

25:23So there's a lot of noise about AI, But time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM. Support for the show comes from public.com. If you're actively involved in your portfolio, you probably catch yourself repeating the same actions.

26:01Buying the dip, manually sweeping idle cash, putting on a hedge. On public, you can now create AI agents that handle all these tasks on your behalf. Just describe what you want to do in plain English. Like, if the VIX hits 25, buy a put option on the S &P 500. Or, if my cash balance goes above$20 ,000, move the excess into my direct index. You approve the workflow and your agent handles the risk. Monitoring the market, watching for your conditions, and executing your strategies exactly as defined. An investing platform driven by your intent, not just your clicks. You can also get full read and write access to your account via the public API.

26:41Go to public.com slash market and fund your account in five minutes or less. That's public.com slash market. Paid for by Public Investing. Brokered services by Open to the Public Investing, Inc., Member FINRA, and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor. Complete disclosures available at public.com slash disclosures.