Will California Elect a Republican Governor? Steve Hilton Thinks He Can Win

19:22Kara Swisher:By putting in the appointment system. Yeah, or even maybe the same people will, you know, will come to their sense. You just need some common sense on this stuff. So there's a lot of areas where you can really affect it directly through executive action. But getting back to your tax plan, Porter plan to make up for the drop in state revenue that would come with that by taxing wealthy people more. Your plan is to cut services and waste, as you call it. No, cut spending. That's not the same. Yeah. Okay. What are you going to cut? So I just want to put it in the context of the budget. So they've doubled the budget nearly in the last 10 years.

19:51It's especially rapidly accelerated since the pandemic. So the argument that spending more gives you better results, I think has been disproven by the facts. So I think we just got a rein in the spending. What's really happened is the pandemic spending has got baked into the baseline. If you look at the budget this year that Newsom just signed off, it's about$350 billion. The budget that he proposed in January 2020, just before the pandemic,$220 billion. That's like a massive increase. That's my target. I would like to get the budget back to pre-pandemic levels, allowing for inflation. So when you take inflation into account, that's probably a$100 billion reduction in spending.

20:33Obviously, you're not going to do that in one go. So where? Well, there's different categories. So I'll give you one example that's not cutting spending, it's just getting more value for money so you can reduce the spending. There's a contractor I spoke to, she does roads, road building, they do public works all over the country. She was explaining that in California, it costs four times as much to build the exact same equivalent piece of road as it does in Texas. Now their road quality is rated higher than ours. It's not going into that, it's going into all this unnecessary process and bureaucracy, the kind of stuff that Ezra Klein has pointed out, Derek Thompson in their book, Abundance, you know, project labor agreements, community workforce agreements, endless environmental processes.

21:13If you strip all that out, you can get the same result with less money. So that's one category, getting just a bit of value for the money that you're putting in. Secondly, there are areas where I think we shouldn't be spending the money. And here, I would say is what, you know, National Democrats, Chuck Schumer, Hakeem Jeffries, and particularly, have said is an unacceptable area of spending, and that is full scope Medi-Cal, Medicaid, as it's known across the country, for citizens of other countries. Now, that's about$13 billion a year in California. Even Gavin Newsom has said that's gone too far, and they're now reducing eligibility for that.

21:54I just think that when Californians are struggling to pay health care costs, it's just not an acceptable use of money. And national Democrats agree with that.

22:01Kara Swisher:So Democrats absolutely deserve some of the blame for California's affordability problem. There's no question about that. But also currently the Trump administration's policies are also hurting Americans. Tariffs have driven up prices, as I noted, the war in Iran. And Trump isn't helping Republicans like you by saying things like he's not even thinking about Americans' finances even a little bit. But again, since Trump is such a huge figure everywhere and is fixated on California, among other states, how would you handle a situation where you believe the president's policies are making California's cost of living worse?

22:33Kara Swisher:I've heard from so many Californians about the tariffs because there's a lot of import-export businesses here, and they directly blame Trump for this. Yeah, I think that that's a good example of, you know, I want to focus on the things that general policy direction that, you know, isn't going to affect, there's not a particular effect on California. It's just a policy position and, you know, it's not going to affect it. So I think I would not get involved in that. But where you've got specific things that affect California, I think it's going to be very important on agriculture, actually. If you look at the impact of some of the policies on beef, I was just with some beef producers, our largest beef producer actually the other week.

23:19And where there are specific things that you can say, look, are you aware that this is really hurting our producers here? Then, yeah, I would lobby very hard for that.

23:28Kara Swisher:You would advocate the White House, these things are hurting the people you represent. Yes, for sure. That would seem to be your job. You could tell them tariffs are hurting businesses. What effect could you have? Well, I wouldn't make a broad, I would say this particular thing. I think it's always good to focus on the details and something specific. I don't know, but at least I'm going into it with a good relationship, particularly on ag with Brooke Rollins, who I know very well. And I don't know, I mean, we'll see. But I think that's, I think it's a good example of where I think it's helpful to have someone who at least has a good relationship.

23:59So you can pick up the phone and say, come on, this is not, oftentimes it may just be they're not aware of the impact. And so you might win that argument because it was something that wasn't particularly an important priority for them anyway.

24:13Kara Swisher:Well, he does love those tariffs. Trump has been sowing a lot of doubt about the US election system. So I want to quickly hit a few of this and get some short answers from you. Is California's mail-in ballot system secure? Yeah, I don't know. I mean, look, the voter rolls are not. And so that part of it, I think, is the problem, where you've got millions of ballots sent out to people who have moved out of state or moved multiple addresses. And so that definitely is a problem. I think the sort of general concept of it, the operation of it, I think is secure. Yeah, I think it's the voter rolls part that's not.

24:49Kara Swisher:And you're pro-mail-in ballots. No, not really. I mean, I think they're convenient. I mean, I personally like - I mean, Donald Trump does it. Joe, personally, I love voting on election day. I love the civic ritual. I think that's great. But I absolutely understand that it's convenient. And funnily enough, I think that as a candidate, you can see that it's in many ways helpful to have mail-in voting and early voting because it helps you target your resources in terms of getting out the vote. So I don't think there's any going back on that. I think that actually people like it. And so fine, let's keep it.

25:25Kara Swisher:Do you agree with Trump's claims that there were irregularities in the state's primary election results enough so as to warrant investigation from federal prosecutors like Trump asked for? We didn't see anything. I mean, look, all I know is what we saw in our campaign. As I said at the time, I wanted to make sure to our supporters that we were on top of everything and so on. And we didn't see anything that caused us concern. So you don't think a federal investigation is necessary? Well, I think that Bill Asaley, who's the U.S. attorney, I think he was going to do it anyway. I don't know, actually.

25:58I haven't spoken to Bill about it, so I don't know.

26:00Kara Swisher:Is illegal voting of non-citizens a widespread problem in California? I don't think so. Neither does anybody else but Trump. Trump does. There's definitely controversy over extending it to local elections. I can't remember where we stand on that. I think San Francisco did it for school boards. I think it's being debated in L.A. I don't know. I think I don't agree with that. No, I think the real problem is the voter rolls being so out of date. Yeah. We'll be back in a minute.

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30:12Kara Swisher:So let's move on to tech and Silicon Valley. You mentioned it briefly, and you said the job of a governor is to grow the economy and support industries here rather than regulate them. In the past, you've been critical of corporate monopolies at the same time and concentrated power like we see in tech increasingly. So what role, if any, should the state play in regulating massive homegrown industries like tech? And how have your views evolved over time? Okay, I think that I just want to start by saying I really do see it as my job as governor to help every industry in California. I think that of all the industries in California, the one that needs the least help right now is tech, to be honest.

30:47They're doing well. I think that just, I don't want to detour into this, but I think that the two industries that I think really need emergency attention from the government is agriculture that we've mentioned, but also entertainment. I think there's a massive, you know.

31:02Kara Swisher:I'm going to ask you about that later. Yeah, so I've spent a lot of time on that. Right, let's get to tech. So I think generally speaking, it's not top of my list of priorities in terms of going to help. There's probably two issues that when I think of AI, I know it's not just AI, but obviously that's the dominant narrative in tech right now. I think that broadly speaking, I'm very nervous and cautious about unintended consequences of regulations where the people doing the regulating don't know what they're talking about. I think there's two major areas where I think we probably need more regulation urgently.

31:35One is in relation to children, and one is in relation actually connects to Hollywood and entertainment on copyright and artists' rights and the creative product and all of that. So I think those two are really important areas. Honestly, I think the main thing I'm focused on in relation to tech is actually getting, to use a tech term, the full stack of tech jobs into California. So what you've seen lately is all these California homegrown companies, really fantastic companies. NVIDIA, for example, was the big one. Last year, 2025, I think it was April, they made a huge announcement about investment in the US, even if they inflate these numbers for the press release.

32:15And they were talking about half a trillion dollars of investment, none of it in California. Later that year, Anthropic, big investment, that was all going to, I think, New York and Texas. And that's where all this is going. They have a big footprint here, though.

32:27Kara Swisher:They still, we get our fair share, I would say. Yeah, but this is the point, right? So you've got this contrast. You've got fourth biggest economy in the world. a lot of that is driven by these big tech companies and the huge revenue that they bring in, and the highest unemployment rate in the country. And also, to use a really nerdy term, the labor force participation rate is pretty historically low in California. It's about 62 point something percent. And its peak in California, it's been nearly 70%. So you take those two together, the highest unemployment rate, low labor force participation, there's probably about four or five million Californians of working age who are not working.

33:02And I think the gap is in these manufacturing blue-collar type jobs. And so I want to see the manufacturing and high-end production side of tech here as well. That's really what I'm interested in.

33:15Kara Swisher:But in an interview with Semaphore, you said government regulators are aiming at the wrong targets. The problem isn't the tech companies or their apps, it screens and children's unsupervised access to the internet. So who's responsible for that? I mean, right now there's talk that meta is going to start being heavy on the child safety thing. They're looking for anything at this point. I don't know if you've seen their recent ads where they believe in humans now, apparently, which is great. Good to know. Disclosure, your wife worked there, but I'm sure she laughed at it too. So who's responsible as sides and how can the government do that?

33:51Kara Swisher:I mean, they've had very little, as you know, very little regulation on anything. Yeah, yeah, yeah. I've been on this a long time, honestly. So you mentioned human. I wrote this book in 2015 called More Human, Designing a World Where People Come First. It was my book coming out of working in the government. And the theme of the book, the sort of argument was everything in the world has become too big and bureaucratic and centralized and distant from the human scale. And it's applying that argument to different areas of policy. And there's a whole chapter on childhood. And in it, I argued at the time, just as you referenced, that the real problem is not the apps and the websites or whatever it is, it's the device.

34:26It's the unsupervised access to the internet, specifically screens, specifically smartphones. So what I argued back then was that children should not have smartphones. Now, I didn't propose a specific policy. I just said, I don't think it's a good idea. And when you ask the question, like, who's responsible? Often the reply comes, well, it's parents who are responsible. And in an ideal world, yeah, that's generally true. I believe parents, you know, I'm a parent, you've got responsibility for your own kids. But I think it's a classic example of a kind of, you know, kind of like the pollution problem, which is, you're affected by other people's decisions.

35:04In particular, that kind of, you know, peer pressure point, which is, okay, fine, you don't want your own child to have a smartphone. And I don't meet many parents who think they should, they all just feel they have to, because all the other kids have them.

35:18Kara Swisher:Sure, again, where does the government step in? Well, my, so the, I'm just trying to work to, and I want to have more conversations on this with people like Jim Steyer at Common Sense and so on. It's been very good on all this, which is to say, look, and obviously, you know, we've had that, what's his name's book last year that had a big impact on all of this. Jonathan Haidt. Jonathan Haidt, of course. Yeah. And I think where he was going was, let's try and establish a social norm, which is not regulation. It's not making it illegal. But if we can establish a social norm that helps parents enforce a rule.

35:53I think his age was 14, actually, for smartphones.

35:57Kara Swisher:Yeah, but he's calling for regulation. I mean, there's a mountain of evidence that, say, social media companies knew their products were harmful to kids and time after time chose engagement over safety. In the design, earlier this year, a Los Angeles jury found Meta and YouTube liable in a case about whether they designed their platforms to hook kids in a landmark lawsuit. And I, of course, interviewed parents who say their children died by suicide with the encouragement of chat box. And if you read these texts between them, it's very disturbing and heartbreaking. No, it's terrible. Terrible. But I think it would be better for the federal government to step in and regulate these platforms, but it hasn't.

36:31Kara Swisher:And that means it has been up to the states. So what's happening right now is a lot of these are product liability lawsuits versus because they've been pushing against the First Amendment part of it or Section 230. Why shouldn't California follow the evidence and adopt, say, a social media ban as some countries have done? I mean, if the government isn't going to do it. Yeah, like Australia started it. And it's France, it's going to Spain, your home country. Yeah, but the early verdicts are not good on that in terms of kids being able to get it. Well, because it's ineffective. So I'd much rather have something that's effective.

37:04Kara Swisher:Well, I could argue kids drink and yet we say as a country they can't drink till they're 21 or kids smoking. Lots of kids smoke, but it does. No, that's actually my argument to when people say, well, how are you going to stop kids having phones under 16? I say, well, maybe you won't, but at least you're setting a guideline. And if most follow it, that's good news. That's progress. I think that in terms of the social media ban, I think it's so easy to evade. That's the problem. The problem is the smartphone. Except it's so easy to evade drinking. We have rules about drinking. We have rules about smoking.

37:39Kara Swisher:We have rules about driving. Why not have rules about social media if it's a product liability issue? I think it's bigger than social media. It's digital content. It's the unsupervised access to this where kids, when they're not in school, I mean, for example, one thing we can do at least is enforce the school smartphone ban. I really agree with Gavin on that, except classic California, we've passed this thing and it's not enforced at all. So let's at least do that, right? So you've got wide consensus now that you should have a smartphone ban in schools. but then in a way that puts it on to parents like the only time is is outside of school and i think that that's that's the problem which is the smartphone because you can't be supervising your kids all the time you want them to have their independence and so they will find ways around these bands and then you know like in australia for example they had a sort of specified number of apps well if there's a new one do you keep out it's like a whack-a-mole thing i think is much more effective to try and stop kids having smartphones.

38:43I think that would do much greater good.

38:45Kara Swisher:So remove the device itself, which you'll think would be much harder, I would imagine. I'm sure Apple would love to hear that from you. Well, I'm sure that actually, let's talk about that. I'm sure that actually their response to that as a fantastic, you know, innovative company would be to say, can we not invent a really attractive, like not phone that still allows kids to text each other maybe or call each other or stay in touch with their parents that just doesn't have the internet all the time. Apple spends a lot of time trying to stop doing age verification and fighting with Meta over it because Meta doesn't think it should do age verification and Apple doesn't think it should do age verification.

39:22Kara Swisher:It's a really interesting fight where nothing's happening. You could verify ages of using these devices. I mean, it's a good example. I mean, my response to that, my instinctive response to that is, in a way, that's why I want to do this. It's one of the reasons I want to do this job. I think you have a real ability as governor to get those people around the table and have a real conversation say come on guys let's figure this out where we are is not acceptable and you can't just keep blaming each other let's you know you say this you say that let's talk together and fix it do you do you have a phone now i do you didn't have a phone yeah you you have i'll show you it's right this is my phone what is it one of these it's a flip oh you have a flip phone wow i know you've really made it upwards.

40:05Kara Swisher:It's an op-ed. This is real technological progress for me. You're right. For a long time, I had no fun. You'll just go right to the glasses. AI in particular, the backlash is real though. We just did an episode about data centers that were a flashpoint across the country in the midterms. And a recent Gallup poll found Americans are becoming more skeptical of AI, not less, as they become more familiar with it. And it's especially true of young people. My both sons have great worries about it. Who's to blame for that growing enthusiasm gap then? And how would you try to bridge it as governor? Because there's all these, as you and I know, amazing things that could be done with AI, but the AI leadership feels villainous at this point, talking about babies being more energy than AI, which is not a particularly good argument, or we're all going to die.

40:50Kara Swisher:That was a nice message or get used to it. Too bad if you lose your jobs. Where do you blame the enthusiasm gap? Because it's a real thing. and data centers to me is the proxy for it, of the anger. It's a proxy. And abuses, like actual abuses by, say, Elon in Memphis. Those are real abuses of local areas and local citizens. But go ahead. So overwhelmingly, I think the blame is with probably two people, actually. The kind of, you know, double A boys, whatever you want to call them, Altman and Amadei. They've been completely insane rhetoric over the last couple of, insane in this sense, right? If they really believed that what they were working on was going to destroy humanity, going to end the human race, destroy Jock, then why would they keep working on it?

41:44I mean, what kind of pathological person would do that if you truly believe that? So why are they doing that? why I think it seems they've dialed it back, but they've done enormous damage, enormous damage, because that narrative has taken hold. And it was the first narrative about this, really. I remember, as you finally got in More Human in 2015, it was just emerging, the technology was really good. And I wrote about it and I said, look, I don't know, it's just emerging. I'm not an expert. It's laughable now in retrospect. This is what I wrote. I'm not quoting, but something like this. Well, I'm not the expert.

42:24I don't know where this technology is going. It's certainly going to have a huge impact. But the good news is that some of the smartest people on the planet who really know about this have gotten together and formed an institute called OpenAI, which will make sure that AI is developed in a way that benefits humanity and Elon and all these. So look what happened there. I think that they bear the greatest responsibility, I think, on data centers. Remember, the data centers, people use their phones all the time, and every time you fire up Google Maps or whatever, that's a data center, as well as AI.

42:57I mean, that's obviously now part of the product. So I think it is a proxy for the concerns. And I think there are so many simple practical ways that you can turn the data center thing around. And we're seeing some of that actually coming from the federal administration in terms of electricity usage. The Times had a great story about that recently. I think that's all sensible stuff that you can do. And also in terms of where you locate them and the noise. I think everything that people are concerned about in terms of data centers can and should be mitigated. And if the companies aren't doing it voluntarily, absolutely the government should make them do it because it's an essential infrastructure.

43:34Kara Swisher:I interviewed the mayor of Lansing, Michigan, and he did one of these good data centers and the citizens still didn't want it because of the anger towards it. Yeah, it's interesting. I mean, we'll see whether - I think it's going to be one of the biggest issues going forward. Yeah, I mean, I think generally on AI, I mean, I think that you've got also, there's a big potential, which hasn't really been talked about as much in terms of the bringing manufacturing back. If you can use AI to really reduce the cost of manufacturing and combine it with automation, then you could see a real reshoring of manufacturing because suddenly it becomes affordable to make things in California again.

44:08Sure. And AI could be a real part of that.

44:10Kara Swisher:Except you might not need people as much, right? I mean, you're talking about your... Yeah, but you need some people. I mean, and the scale of it could be really big. We'll be back in a minute.

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46:27Kara Swisher:Get your tickets now for the Dog Stars. It's no surprise how fast civilization can disappear. Go! Out there, just kill or be killed. Jacob Alordi. There are people out there. They need our help. Josh Brolin. Shoot first and inquire afterwards. Margaret Qualley. Ow! Okay, tough guy. And Guy Pearce. Arm up! The Dog Stars, directed by Ridley Scott. In theaters August 28th. Get tickets now. Rated R. Under 17, not a minute without parents. Speaking of people, immigration is a huge issue. In diverse states like California, Every episode, we get an expert question from outside. Here's yours. Hello, Steve Hilton.

47:07Kara Swisher:I'm Sarah Longwell, publisher of The Bulwark. And you have a lovely accent, but your story is a quintessentially American one. You're the British-born son of Hungarian immigrants. You get an Oxford education. You ascend to the heights of British politics, working for David Cameron and the British Conservative Party. You come to America. You make a name for yourself here. and you end up as the Republican nominee to run the biggest state in the union. That is a genuinely inspiring immigrant story and a tribute to the power of immigrants. Yet you're endorsed by Donald Trump, a man who calls immigrants vermin, who are poisoning the blood of our country, and whose ICE agents are killing innocent people on the streets of America right now.

47:51Kara Swisher:You are running to be governor of a state that more immigrants call home than any other, More than 11 million Californians are from someplace else. We've already seen the carnage that this administration is causing by unleashing immigration authorities on the streets of California and across America. So my question is this. How will your approach to immigration at the state level differ from Donald Trump's? And more importantly, why should California voters place their trust and the lives of their friends and neighbors in the hands of a Trump-endorsed candidate like yourself? Thank you. That's a good question.

48:30All right. Very good. I think Sarah's question is exactly, you know, I appreciate it. And it's actually how I feel. And I'm so proud to be an American. And, you know, I've renounced my UK citizenship. And I say all the time, I'm the candidate of the legal immigrant community for the legal immigrant community. But we have to be able to draw a line between legal and illegal. I think that in terms of - let's just get straight to the key part of this, which is immigration enforcement. The way I think about it is that obviously, you never want to see anything like we have seen earlier in the year in Minnesota and more recently.

49:13And also, don't want to see anything like we saw last summer in Los Angeles with the rioting prompted by immigration enforcement And if you look at the anatomy of those things, certainly the California things, which I've studied in detail, spoken to law enforcement in great detail about it, I think my approach would be to actually have the kind of immigration enforcement that, to be honest, we saw in the Obama years, which is a sort of common sense, cooperative relationship between state and local law enforcement and federal immigration enforcement.

49:46Kara Swisher:Which wasn't there. The state law enforcement did not. Right. So there's a sanctuary law in California, SB 54. It was passed in 2017. And a lot of people say, oh, that means that you can't cooperate with federal. That's not true. In fact, it was criticized at the time. Kevin DeLeon, one of the authors, I believe, was criticized by the left for making it too federal immigration enforcement friendly, as it were. There's a whole set of things, specific offenses and conditions that allow for cooperation between state and local law enforcement and federal law enforcement in California. So actually, you would just be following, never mind the precedent set by previous Democrat administrations, but California law.

50:29And that would be my attitude, to have calm, peaceful cooperation, so you don't need that kind of heavy-handed enforcement. That would be my goal.

50:37Kara Swisher:So how would you have handled the ICE raids as governor? Would you have sued the Trump administration like Newsom did when he tried to deploy them? They wouldn't have happened. They wouldn't have happened because you would have had cooperation at the local level where you say, yes, you can work with them to find the people they're looking for. And then they don't have to go into the community. Well, I think Stephen Miller has some other ideas. You know, you could hear all their rhetoric. They said the city was controlled by gangs. They made a narrative as if they had to come in, which wasn't none of which is true.

51:08Kara Swisher:And, you know, you just I don't know if you saw that Elon interview with the Economist editor. She's like, it's nothing like what you're saying is happening here. So what won't you do to help the Trump administration if they get what, if they do what? And I know you don't like hypotheticals. I don't know. I don't think. No, I'm just curious. I'm thinking about what that looks like. I want to see. How do you get it to be peaceful when I would say probably Stephen Miller doesn't want peaceful. I've not heard that out of his mouth yet. Well, he's not running it directly. Tom Homan is running it directly.

51:40Yes, I get that. And I know Tom, and I think, I don't think they want to see this. I mean, I really don't. I don't think Tom wants that. Well, he doesn't.

51:46Kara Swisher:Kristi Noem kind of did. But yes, and so did the little tiny guy who looks like Chad Bianco. That whole genre of American. Oh, I know who you mean. I don't think we'll get to that point. And if you look at the prioritization now in terms of immigration enforcement, generally speaking, it seems to me that they are very much focused on the part of this where there's wide consensus, which is criminals who've broken the law beyond just entering illegally. Sure, but they've gone beyond that. Would you acknowledge they've gone beyond that? Yes, but I think they're dialing it back. That is my sense. So you pointed out your own story as an example of doing it the right way.

52:30Kara Swisher:You and your wife moved to the U.S. in 2012 for her job, and she was a top executive at Google at the time. But we've seen the Trump administration strip legal status from close to 2 million immigrants, many of whom arrived through legal pathways like yourself, some with temporary protected status. Others come under Biden-euro programs. You may not have liked those programs, but they were legal programs. what makes your my son was asking why is your immigration story different from someone who's been stripped of their legal status or is threatened I have so many friends you know this new PhD thing they're thinking of stripping them for just four years I have many friends on green cards that are came in here legally very nervous these are all people that come in the way you say they should come in correct how should we treat these immigrants they sound like I mean I think the temporary Everything is different because of the name temporary.

53:20I mean, I think it was legally established to be temporary. When the conditions of emergency are no longer present, then that's different. Student visas, green cards, I mean, I totally disagree with taking that away. I mean, if you go through a process, you can't retroactively change the process, I think. the temporary protected status, I think that is different because the establishing law was at, I don't know the exact time limit, honestly, but I think it was supposed to be temporary.

53:53Kara Swisher:Yeah, but again, these are people who are here trying to actually, and a lot of them actually support, say, the elderly here in this country and et cetera. There's going to be a lot of issues. Would you stand up for someone from El Salvador, for example? There's a big Salvadoran population in LA who came here legally, maybe on TPS, some of them not, but now will have their legal status stripped. Did they do it the right way? Well, you've got to look at the individual case. I mean, the temporary, as I say, that is a federal program that is very specific, and it's very limited. And I think that you can't then, as it were, transfer into a general legal immigration status.

54:36If the law that set that up, I don't know what the right term is, whether it's expired or the conditions that gave rise to it are no longer there, then I think there needs to be a process to get you onto another track. Maybe that's the right way of thinking about it.

54:49Kara Swisher:Okay. And for the dreamers? Yeah, I think that's honestly unarguable. He's going for the dreamers now. Well, I disagree with that very strongly. I don't know if that's true. I mean, I haven't heard that. I haven't seen any evidence of that. I know that there may be concerns. They're looking at PhD candidates. Don't we want to keep those candidates here? Yes, for sure. When people come to this country to go to, say, a UC school, don't we want them to stay? If you're born here, yeah. Or if you're brought across as a child, yeah, I think that's exactly right. I've always been strong. I've been very – I mean, I used to talk about that on my Fox show all the time.

55:26Kara Swisher:I'm going to end with talking about Hollywood very quickly about what's going on because there's so much going on. Hollywood has been bleeding jobs in California. It's especially true in the years since the pandemic and the strikes. The state is trying to lure those jobs back with more tax incentives. You want to make those incentives even bigger. But incentives can also be a race to the bottom, as you know. What can the state do more to lure those jobs back? You've got to start with the tax incentives. That's the main reason that you've seen places like, well, actually the UK. I mean, when I was in the UK government, my friend and colleague, George Osborne, was the Treasury Secretary, Chancellor of the Exchequer, as it's called.

56:03and he devised the UK tax incentive that's been incredibly successful for the UK. But now you've got other places, you've got Hungary and other countries in Eastern Europe within the States. You've got New Mexico, you've got Georgia's long standing. Now New Jersey has a really strong incentive. So it's just highly competitive. And you can take a philosophical position and say, I don't like the kind of tax incentive raised to the bottom, et cetera. But on the other hand, my job is not to pontificate on what I think about that and say, right, we got a crisis, we got to do something about it. What can you do?

56:38And I think my attitude to this is we have to have a kind of wake up moment where anyone who's making these decisions sees a real change, a big change and notices, well, that's number one. And it's not just the size, it's what's included as in the technical term, above the line spending. So it's the whole production, not limited to certain parts. It's uncapped. That's really important. That means that what you have now is because there's a certain amount allocated. That means that every time you try and get it, you have to kind of apply and go through a bureaucratic process. And there's a lack of certainty.

57:14You don't know if you're going to get it. That puts people off. If it's uncapped, you know you're going to get it. It's automatic almost. But on top of that, you've got to make the process of production easier. The California Film Commission needs to be revamped. I've said, I want to turn it into a kind of a concierge service where you just basically get all the help you need to navigate a state and local bureaucracies in terms of permits and all of that stuff, which is just a nightmare in California, just like everything else. And then the final piece of it is actually the same cost pressures that are driving other businesses out.

57:44It's just incredibly expensive to live in Los Angeles because housing is so expensive, energy costs are high, and so on. So I think the general things that we do to bring to improve the business climate for everyone will also help. But I think the two big ones are the tax incentive and the bureaucracy.

57:59Kara Swisher:So California is leading also a group of states in a lawsuit to block Paramount's merger with Warner Brothers Discovery. You say the suit is pure politics, but many in the industry oppose the merger. And also the journey to get to the approval from the Department of Justice felt a little political too. So why is it in Hollywood and California's best interest for this merger to go through? Well, I think one of the strongest reasons is that you've got a real commitment to theatrical release, which is a lot of the industry really wants to see. And by the way, I do. I love going to the movies. I saw the Odyssey in the movie theater.

58:33You know, like, I love, of course, I know, I understand, but you know what I'm saying. I enjoy the, you know, it's an exciting, I love the fact that that's getting the films like that and getting people back into movie theaters. So I think that they've made a strong commitment to that, to a specific number of releases per year that are going to be in the movie theatres. That's new. I think also you've got to see it in the overall competitive landscape. I think they sort of, Rob Bonta, the California Attorney General, really can't defend this. I mean, I saw his interview on the town. When someone who really knows about the industry pressed him on these details, he basically fell apart.

59:09And when you really look into what he's been saying about all of this, the main driver seems to be a bit concerned about what would happen to CNN. Honestly, I think that is the main driver.

59:20Kara Swisher:Except he never mentioned it. He didn't mention it. Yeah, but it comes out in all the interviews. No, I've been following this rather closely. They bring it up to him, and that's a different thing, I think. Now, the judge seems to be agreeing with Rob Bonta because he got the TRO. He was going to get the preliminary injunction, and now the trial is not until March. So someone agrees with him. The judge certainly does. Yeah, look, I mean, it's a process. And so do many in Hollywood, the Writers Guild, the Screen Actors Guild, and a lot of theater owners, too. Look, I mean, fine. I mean, to be honest, it's like some of these other things.

1:00:00From a policy point of view, that's not where my focus is. I can give you an opinion about it. But my – Well, you can't really do anything. Right, exactly.

1:00:08Kara Swisher:The attorney general gets to do whatever he wants. Yeah. Yeah. And so what I'm focused on is all the other stuff we've been talking about. And for example, I had a really good meeting with the unions about all of that. And that was part of my policy development process, was to sit down with everyone. And so I got good relationships there. And I think that we've got to save this industry. That's really my overall view. There's also, to be fair, a little bit of anti-techness to this because of the Ellisons. And they did suck up to Trump in order to get this through, which you kind of have to. We haven't talked a lot about housing, but you did mention keeping people in housing is one of the biggest problems, and homelessness is intractable.

1:00:46Kara Swisher:What is your signature policy to deal with this? Because many people have tried. The big idea sounds really not that new of an idea, but it's enforce the law. And I think that the starting point, of course, is to acknowledge that most of the people in terms of street homelessness have some combination of severe mental health problems and addiction. And in a sense, it doesn't matter whether they became homeless because of those things or they developed those things once they were homeless. So there's a definitely, there's exactly the stress. And also you're the target for criminal drug dealing gangs, right?

1:01:27You're just in an incredibly vulnerable situation. But in a sense, that part doesn't matter. You've got to help people. And you're never going to get people helped if they are on the streets living in those conditions. So the first step -

1:01:40Kara Swisher:So we fine homeless people? We put them in jail? What's enforcing the law mean for people who are at the end of enforcement? Well, it's illegal to live on the streets. It's against the law. It's always been against the law. And so you've got to physically take people off the streets. and put them somewhere where they can get better. Well, for example, there's a really interesting proposal from down near San Diego, a disused military base to use as a shelter. We have a million and a half empty properties by one estimate in California. So the idea that we can't provide shelter, I mean, look, the numbers, what is it, 188 ,000, something like that.

1:02:19It's large, but it's not impossible to imagine that we can do that. There's another really important aspect to this, which is the mental health component, we are way short of mental health beds and capacity in California. There's a really technocratic reason for this that is completely avoidable. When the whole Medicare system was set up in the 60s, there was a rule put in place that states that there is no federal Medicaid reimbursement for any mental health care delivered in a facility with more than 16 beds. It's very specific. It's a 16-bed limit. Now, that inevitably means that the money doesn't go very far.

1:02:55Imagine if hospitals couldn't be more than 16 beds, it'd be crazy. That's what happened with mental health. And so the first Trump administration created a way if states can exempt themselves from this. That's a very practical thing. We haven't done that in California, a practical way of getting more money into the system. I don't think it really is intractable. I think you just need a sort of practical approach where you work through these problems.

1:03:20Kara Swisher:So last question, you're saying will a lot when I am governor. and you've argued that California's problems are the result of political choices and voters want change. But if voters choose to stick with democratic leadership and you are behind, will you stay in California to help and do that or decamp to Texas or Florida like other wealthy Republicans? No, no, no. I love California. I wouldn't want to live anywhere. No, I love California. Completely love it. I'm in love with it still. I get really excited driving around as I do and just seeing all these incredible things that we have. the beauty of everything.

1:03:51It's just amazing. And it's not just the physical beauty and the weather and all these things. There's a sort of spirit. I call it the rebel spirit. That's why we've created these amazing industries. And that's kind of rebelliousness that is very much, I don't know, I feel in tune with. I couldn't imagine being anywhere else.

1:04:11Kara Swisher:All right. You know why they hate us because they ain't us. That's why. Exactly. Anyway, Steve, thank you so much. I really appreciated you coming on. And I hope, I don't think it was too hard to, I want to illuminate voters rather than just getting fights. No, no, I appreciate it. It was real. It was real. It was a good conversation. I appreciate it. Thank you. Today's show was produced by Nishat Kerwa, Michelle Alloy, Catherine Millsop, Madeline LaPlante-Duby, Megan Burney, and Kaylin Lynch. Special thanks to Eamon Whelan, Dave Shaw, Lissa Soap, and Julia Sharp-Levine. This episode was engineered by Aaliyah Jackson-Perez, and our theme music is by Trackademics.

1:04:49Kara Swisher:If you're already following the show, you're living the California dream. If not, you're paying$6 for gas. Go wherever you listen to podcasts, search for On with Kara Swisher, and hit follow. Thanks for listening to On with Kara Swisher from Podium Media, New York Magazine, the Vox Media Podcast Network, and us. We'll be back on Thursday with more.

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