473: Will Swaim—Don't Follow California

What do you say, Will Swain, are you up for an ad hoc public service announcement that

just might change and save America?

And change the trajectory of the entire planet?

Yes, sir.

Let's do it.

Folks, I've invited Will Swain on because I don't know of anybody who understands what's

going on in California better on a policy level than you.

Maybe your old boss, Ed Ring, he seems to be still plugged in.

But as a resident here, I just feel like something is tipped, and I have no desire to open

a big political can of worms, but I do think it's really important, in part because I just

watched a video from Farid Zakaria, who talked, you know, and not a Republican, not even

a conservative, but he spoke very plainly about what's happening in New York City.

And I just was taken by it because all the way out here in California, it struck me as

as a kind of public service announcement because our cities are in trouble, Will, and the

trouble our cities are in, sure seems to be a direct result of the policies that have

been put in place.

So I don't, I don't just want to make it a big dog pile, I don't have any personal animus

toward Gavin Newsom, but at every front, at every angle, I see something that just feels

more and more worrisome with every passing day about the present and the future of California.

So to the extent you're comfortable doing it, I just, A, I want to make sure I'm not

hallucinating.

And B, B, for the rest of the country, can you, by way of example, talk about how this

state got to where it is and what the consequences might be for the rest of the country, if we

adopt and adapt the policies that got us here?

Yeah, absolutely.

I think I can't help you on the problem of your hallucinations, but I can tell you that

what we're seeing here and what Gavin Newsom represents, I think, unfortunately, for

the rest of the country is the impact of bad governance on a really wealthy state.

You know, Gavin Newsom loves to talk about the fact that California is the fourth largest

economy in the world, if it were its own nation.

But the fact is, A, that's not true, you know, especially when you're figuring the cost

of national defense, but B, what's really important is that Gavin Newsom is what's

that old saying, born on third base and thinks he hit a triple.

He became governor of a state that was already reasonably well run, even when he took office.

He wins in 2018.

He comes into the governor's office in 2019 and in the five years, six years now, since

he took office, he has doubled the state's budget.

And I want to put this into context for people.

We had the largest state budget to begin with in 2019, it was about $140 billion.

That's larger than all, that is larger than every other state in the union.

Now it's twice that.

And so we are spending 100% more today as a state than we were when he took office.

And yet the results are simply not there.

It's almost like a, there's an inverse relationship.

The more we spend, the worse things get.

And part of that is really owing to the fact that the more we spend, the more we have

to tax in order to get that money.

And so we are driving people out of this state.

And not only for political reasons, you know, Gavin Newsom loves to say, oh, good riddance

to people who are leaving or just a bunch of angry Republicans, that's not true.

You know, in my own family, I'll just give you an example.

We have four children, all adults, not one of them lives in California.

It is not a political decision.

They didn't leave and say, oh gosh, I hate Democrats, I don't like Gavin Newsom.

We left because the price of energy here is the highest in the country, gasoline prices

higher than Hawaii, which has to import every thimbleful of gasoline.

We have the highest gasoline prices.

We also have the best oil reserves in the nation right outside of Texas and Alaska.

We're right up there with those guys, massive oil reserves, but we're not allowed to drill

any of it because we still haven't, I mean, tell me if I'm wrong, but have we yet felt

the impact of Chevron and Valero leaving?

No, no, we have not, except in terms of like futures oil trades in Chicago or New York.

But no, you're absolutely right to point that out that our oil policies are so restrictive

on terms, you know, in terms of exploration and drilling, refining and then actual retail

sale of gasoline.

They are so restrictive that as you point out oil companies are simply leaving the state.

And Gavin Newsom, who in 2018, 2019 was talking about how oil companies are gouging California.

We need to punish them.

They're the guys perpetrating climate change all over the world.

The climate has changed because of these oil companies.

When those oil companies started packing up their offices and moving back to Houston, Gavin

Newsom realized what was coming next.

We're going to have a gasoline shortage.

The prices will spike and whether he's concerned about the impact on the poorest of the

poor in California, who are going to be punished by that rise in gas prices.

He certainly wants to be elected president and can't have that on his resume, that, you

know, highest gasoline prices in the nation.

And so now he's got all these people studying in his office.

He says how to bring oil companies back.

He is doing a 180 on energy policy, in other words.

And the whole reason is he now understands that when you limit the supply of gasoline,

you are going to increase the cost.

I don't know if you saw the story last week, guys, that California is so desperate now

for refineries, oil to refineries, that it last week had to import emergency supplies

from the Bahamas, that famous oil kingdom in the Caribbean.

Last year, the petroleum.

That's right.

So it's that bad.

And there's just tremendous irony.

I want to point out in, you know, the climate change rhetoric of we've got to stop using fossil

fuels and then having to use massive cargo containers to bring oil into the state.

All those ships on all those oceans, pumping out the exhaust from bunker fuel, this really

toxic form of fuel that ships have to use to bring oil.

There was that old saying taking, it was that shipping cold and you castle, you castle

being a famous cold, famous cold center in England and the irony or selling ice to

Eskimos when we were kids, we, we sit atop these vast reserves, water, water everywhere.

If you will, and not a drop to drink, we cannot touch this oil.

It has been locked under the ground by the, by the environmentalists, led by their

spokesperson, Gavin Newsom, who is just now starting to understand that the, the debt

has come due and he's going to have to start figuring out how to quickly recruit these

oil companies back into the state before he actually launches, officially launches his

run for the White House.

So just using the same thing's going to happen with timber, right?

I mean, we've got the timber reserves here in California are extraordinary.

And what I think, I think this states the leading importer of timber or lumber.

Yeah.

Yes, indeed.

You've talked about this an awful lot on the show, I know that, you know, we used to

have this massive industry in California for harvesting and replanting our forests.

And we were legendary at one point in California in the early 20th century.

We were the largest wood producer, finished wood producer in the world, flash forward

just 60 years from that point into the 1980s.

And we were in a net importer as you point out.

And now the cost of getting that again, think about the climate charges of trying to get

wood products, you know, typically now cultivated in the third world and ship over the oceans

to California, more climate change, of course.

And meanwhile, what's happening in the forest that we're trying to preserve?

You know this as well as anybody you've had my colleague Ed ring on the show.

What's happening to those forests is they're like locked in amber.

There is no natural harvesting going on anymore.

We're not seeing guys go up there and pull wood out of that forest.

And as they say in the forestry business, you can either, you can only remove dead trees

by either harvesting or burning.

So we get a choice in California we've chosen the latter ironically, you know, most of our

state seems to burn down annually in a carbon explosion that is unparalleled by anything

produced by cars or factories.

So we have shut down our forests, eliminated all the jobs and all the jobs associated

in Nashville forestry, but they depended on those lumber towns in California.

They have dried up.

Anybody who has visited the really lovely Northwest in California, Oregon and Washington, you

can drive through these towns that were thriving in our childhood.

That's not that long ago, but in the 60s, 70s and 80s, these towns started to dry up.

Because environmentalists succeeded in persuading the state lawmakers to shut these things down

in order they said to preserve flora and fauna.

We're paying the price for that.

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So the cautionary tail, Ben, for the rest of the country, because here's the thing,

like the reason I wanted to have this conversation with you is because I'm lucky because I get

to travel a lot and I've been to every state half a dozen times and I realize most people

don't get to experience the singular transformative feeling of pulling into a gas station outside

of Tulsa and paying $2.05 a gallon.

But they're simply because there are plenty of people now who are enjoying record low gas

prices.

No one in California knows what I'm talking about.

I don't think we believe it because we're used to paying $4.50, $4.85 a gallon.

I mean, I know the answer, but in simple terms, what should people under what will happen

to the price of gas if the person in the Oval Office hangs on to the same orthodoxy?

Am I overstating it?

Is it going to be that expensive everywhere?

That is going to be the big question.

How much federal authority would a guy like Gavin Newsom be tempted to exercise on behalf

of the, I'll call them the climate change activists because that's what it is in California.

It's going to be a lot harder, you know?

This is not a red or a blue nation.

It is a very diverse place and there are people in some very big and powerful states that

are going to resist that.

Oil companies have a lot more pull in those states than they do out here.

That's why they've simply abandoned the oil companies of abandoned California.

There's just no hope really of honest regulatory change.

I think that, you know, to pull the camera back, if we can for a moment, I would say that

a lot of this is owing to a unique feature of California politics and governance.

That is the role of government unions.

And if you don't mind, I'll just explain real quickly.

We have about 11 or 12% of the nation's population here in California.

So let's call it 11 or 12%.

We have 25% of all the state and local government union members in the country.

So more that we are disproportionately represented by 100% the number of state employees and

local employees who are members of government unions.

So we have about 1.6 million people who pay dues to unions and those unions bankroll

they finance the campaigns of politicians and they only have one concern these unions

typically.

And it's a really simple concern.

We want to make more money and we want to have more control over the workplace.

So for example, right now, the governor is trying desperately to get government workers

to go back to the office after COVID.

Remember COVID?

Remember that thing that happened?

When Gavin Newsom locked down the state for the longest period of time of any other

state in the nation, workers got used to working at home.

Their unions made that an integral part of all of their collective bargaining agreements

and now they don't want to go back to the office.

Newsom is pounding the podium and saying you got to go back and they're saying, we brought

you into this world.

We can take you out, governor.

And that's exactly what happens.

These guys bankroll the campaigns of candidates who get into office as governor Newsom did

and they return the favor in terms of higher paying benefits.

But that's all really the unions care about.

After that, any candidate they elect, they don't care what that person does other than

giving them higher paying benefits in their particular niche of jobs.

And so you get people who in order to cobble together a coalition during their campaign,

start talking to people about climate change is really critical and we're going to have

to stop oil drilling.

They never look at the unintended consequence of that or if shutting down the forests,

which now have dried up and burst into flame almost annually, we talked, you know, the

price of wood is so expensive that housing costs are through the roof.

That's one of the many reasons for that we could talk about that problem.

But the bottom line is these government unions spend about a billion and a half dollars

every election cycle, 1.5 billion dollars.

That is the most of any other state and there is no other state that comes close to this.

And it has just distorted our politics in such a way that you get a guy who's the governor

and he claims, you know, I'm sort of a global leader on all these issues.

But the fact that he's led by the nose, by the service employees, international union,

the California Teachers Association and others.

So that is a unique feature of California that, you know, in office, Newsom has already

pledged that, you know, in the White House, part of his ambition would be to extend worker

rights.

What does he mean by worker rights?

The right to work in any job they want to do any, to start any business they want.

No, no, no.

It's going to be, you gotta go to a work, you gotta go to work in corporations that are

managed by federal government labor law, especially unionization.

So that could be coming to a nice state near you, wherever your listeners are.

That is a kind of a brass ring the Democrats have been aiming for for about 20 years.

To what extent are the unions driving the current push for a wealth tax, a billionaire tax?

Because I see, I see the governor, you know, kind of pushing with one hand away and waving

closer, closer with the other.

He seems to be in an odd spot with that, but that's very much on the menu in New York

as well.

Yeah, just so that your listeners know if they haven't been following the show, we have

in California a proposal to put a statewide ballot, gosh pardon me guys, a ballot initiative

on the statewide ballot here in November that would impose they say a one time 5% tax on wealth.

That means not just like your income or the value of your house or something like that,

it literally means like somebody goes through your house and calculates that painting is worth

X, that automobile is worth Y, that jet you have for your corporation, that's part of your

private assets, we're going to tax you on that.

And what immediately happened was that billionaire started packing up and leaving.

The other weird and creepy feature about this is that it's retroactive.

So even if it passes in November, it's effective backward to January 1st of 2026.

So billionaire started leaving.

Newsom already has seen this, we have lost more population than the combined populations

of several states in the last, you know, under Newsom's term.

I mentioned he comes in in 2019, he's elected 2018 comes in in 2019, we've lost nearly

two million people in that time.

And why have they been leaving?

Again, it's not a political decision for many of them.

It's a tax situation, it's a cost of living situation, cost of housing, cost of gasoline,

cost of electricity, cost of regulation to run a business.

A lot of companies left right around the COVID lockdown and just said, yeah, I'm moving

to Tennessee, moving to Florida, moving to Texas.

Famously, you might remember this guys that Newsom was debating Ron DeSantis, Florida

governor with was a Sean Hannity, I think, on Fox and good old Ron DeSantis came loaded

for bear and said, you know, there's a lot of folks in California who are moving here

now.

And gosh, some of them are you're in laws.

And so his wife's parents have moved to Florida.

Why?

Again, is because they hate their son-in-law.

That's possible.

I doubt it.

I think what's really going on is it is simply cheaper to live someplace else.

So Californians are voting with their feet.

What do you do if all of the policies that these people are trying to escape now become

federalized under a Newsom administration or somebody like Gavin Newsom?

What do you do in that event?

Where do you escape to?

Do you go to Canada?

I'm not sure.

I don't know what you do at that point to escape policies that have really driven California

into the economic ditch.

We haven't, we've only begun to scrape the surface on how difficult it is to live here.

But what happens if there's no alternative?

There's just nowhere to go.

If this is it, it's now game over in the United States of America because these policies

will limit growth and drive people into poverty.

And the worst effects will be felt precisely by the people that Gavin Newsom says he's

here to help.

I'm here to help the poor.

So I'm going to raise taxes on the rich.

The rich, therefore, raise the taxes on the product or the price on the product.

They sell to account for that.

Everything gets more expensive.

Everything including, say, a high-speed rail.

How important is it for Joe Blow and Salinas to understand the totality of that debacle and

how such a thing can happen?

How important is it homelessness as well?

I don't know if it makes sense to conflate those two things.

But all of it will just seems to come back to where we sure are taxed a lot and everybody

I know pays their taxes and I don't know anybody who cheats on their taxes, including me.

And we just have a front row seat to seeing our money squandered.

That's right.

Yeah, we were just talking about transportation, high-speed rail.

We pay the most in gasoline taxes of any state in the union.

It's about $1.18 in additional taxes over what the other states pay.

And you would think for that that we would have the best roads because that's what the

taxes for.

But in fact, by every available metric, state auditors in California, I mean government

auditors in California or national highway safety transportation board, you pick your

poison.

Literally, California has among the worst roads in the nation.

And yet we have the highest gasoline taxes.

There is something in between, it's a South Park underpants-nome problem.

You know, we get all this money pouring in and at the end of the day, we still have

lousy roads.

Where is the money going?

There is a level of fraud here and you point to high-speed rail where the governor recently

celebrated laying that first mile of track, which turned out not to be high-speed rail

track, but a rail road spur to get supplies from one rail road system to another closer

to where the track will actually be laid one day.

We are now six years past the deadline.

It was supposed to be completed in 2020, was supposed to connect San Francisco with Los Angeles

and now it connects two farm towns in the Central Valley.

That's their big goal now.

High-speed rail between two towns, it almost nobody moves between or around or goes to.

I mean, I love the Central Valley.

I think it's absolutely mystical, magical and wonderful.

It is one of the greatest producers of agricultural goods in the world.

We don't need high-speed rail through there.

It wasn't suffering from a lack of transportation options.

That's correct.

But they have just simply do what they do frequently in Sacramento.

They just simply move the goalposts, so now it's not going to be San Francisco and LA.

It's going to be two farm towns connected.

It's not going to be high-speed rail for most of that distance.

It's going to actually be like sort of standard train service.

It's going to cost.

It was supposed to cost $33 billion when completed six years ago.

Not only not completed, it's now projected to cost over $120 billion for that much-reduced

high-speed rail plan.

But again, the unintended consequences, I'm not saying these people set out to run a

bogus train system.

I'm saying they're incompetent to govern.

And therefore, the unintended consequence was perfectly predictable.

These are people who love to sort of blue sky utopian solutions to problems.

How are we going to be climate change?

We're going to get everybody out of their automobiles.

What are they going to drive?

We're going to take a high-speed rail.

Now we don't have the high-speed rail anymore, and our gasoline is more expensive than

anywhere else in the country.

We are stuck between rocks and hard places in almost every policy debate.

There's almost nothing in California that couldn't be made better by less government,

sincerely.

I mean, almost nothing.

You mentioned you asked if you were conflating or confusing a mention of the high-speed rail

debacle with the problem in homelessness.

Not at all.

They both bear these similar hallmarks.

Just as we were talking about high-speed rail and homelessness, the problem is Governor

Newsom said, I'm going to do something really amazing, record spending $24 billion in

four years.

And then he couldn't account for where the money went.

Very embarrassing.

So state auditors couldn't track the money.

They said, most of it will never know what happened to it.

And is homelessness reduced?

No, but actually grew in that period of time.

We have more homelessness now, not less, even though we spent $24 billion we can no longer

find an account for.

So in any other context, that would be called what it is.

It's outright fraud.

We do the same thing in public education where we spend more per student than any other state

in the union and we have, we rank 48th.

Mississippi, which used to be the laughing stock of public education in America, is now

number nine.

A few years ago, Mississippi decided they were going to teach math and reading, and they

were going to insist that kids learn it.

We don't insist.

We just pretend.

Our kids right now are being trained as one local education leader of the teacher's

union in LA said, our kids may not know their multiplication tables, but they know insurrection

and revolution.

Yes, they do.

They are training for a different kind of employment in class warfare.

So we pretend to educate our children.

We continue to pay the teachers.

We do not allow any teacher to be fired without having it run through the union filters.

So that means we have a lot of teachers who do not belong in the teaching profession.

Those who do are stuck carrying the burden of ill-educated kids who are under-educated

by their own peers and their own schools.

They're carrying the burden.

I would say give those people raises of 100 or 200 or 300 percent if they're good, but

we don't measure teacher quality by that kind of a metric.

We say that we can't.

It's impossible.

And the result is we're handing out high school diplomas to kids who absolutely fail on

first contact with community college.

They are not educated.

We have lied to them.

It is another fraud.

When you spend that much money to quote unquote educate a kid and they can't get through

a semester at a community college, we had a great report come out, Mike.

You guys may have seen this, Chuck.

Did you see the story coming out of University of California, San Diego about a month ago?

They have, they say, about 20 percent of their students coming in who can't do math at

the eighth grade level, 40 percent can't do math at the 12th grade level.

And they're being admitted to one of the most prestigious University of California

assistant state campuses.

It's just an amazing school.

So what are they doing?

They're saying we have to fire the high end math professors if we can and replace them

with remedial people who can teach addition subtraction, multiplication and division to college

students who are led into the University of California.

We just pretend to educate our kids in California.

Now imagine that miracle imposed on every state in the country.

Now think about what that portends for our economy.

What does it pretend for systems like social security or Medicare if you love these social

welfare programs that are absolutely essential for a lot of people.

What do you do when nobody's working and paying the taxes that fund those programs?

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Well, I'll tell you what you do.

You give the producers of idiocracy a long overdue academy award because that's the answer.

I mean, I think.

I mean, how, so really, like, we've talked a lot about this before and I know that, again,

I don't want to answer.

I don't want to ask questions.

I think I know the answers too, but how much of what ails us is a result of just the

lowering of standards where they ought to be raised and the raising of standards where

they ought to be lowered.

Like, when does it feel like we're just over-regulated in areas that make no sense and under-regulated

in areas like, where's the standard for rooting out fraud?

Well, for a minute, it was called doge, I guess, and then we clutched our pearls because

that looked mean or capricious or something, but now in the wake of Minnesota and what

it looks like, I just, I don't know, well, I mean, it's just standards and expectations

must play a role in this ramp.

It's true.

But for that, I hold us responsible.

And by us, I mean, every single California voting age, we do this.

I, you know, I'm banging on the drum here about how much money the government unions spend

to finance political campaigns.

The fact is we're the boneheads who vote for the people who are representing those kinds

of claims on our money and our government power.

We vote for this.

We vote for it all the time.

We prefer, apparently, based on results.

We prefer performative theatrical politics to actual getting stuff done.

This is why the night in 2025, when LA burst into flame and, you know, significant portions

of the city of LA and LA County burned down in the space of about a week, this is why

that happened.

Where was our, where was the mayor of LA?

Not that she'd be carrying a fire hose, but symbolism is important.

She was in Ghana, Ghana in Africa, attending the inauguration of the president there.

Where does that fit into fighting crime, reducing homelessness, preparing your city to handle

massive fires, because they do happen here, wildfires, a regular feature of the West.

And knowing that, we might have been, and we might have made better preparation to fight

that.

And though she was off.

And I think, again, this is symbolically important.

I'm not saying she could have picked up our hose.

Also really important.

The reservoir, run by our own appointed Department of Water and Power, pointed by the

mayor, was empty in the West side of the city.

I mean, you know all this.

I don't have to go through the catalog of data there.

But this was not as the media and Karen Bass mayor of Los Angeles and other elected officials

tried to say, this was not evidence, these fires of climate change.

This was evidence of government incompetence.

And the fact that we as Californians elect incompetent people, people who tell us about

a dream that we want to live where we don't have to work and we get stuff for free and we're

going to have a perfect utopian society, we vote for that.

All of us.

And I'm sparing individual, shaming and blaming here.

I did not vote for these people, but I apparently did not do a good job of communicating the disasters

that would unfold if we continue to elect these kinds of people.

That's my responsibility.

Nor did you stomp your feet, take your marbles and leave.

Maybe you should have.

Maybe I should.

Maybe Chuck should.

It's just so, I think I said this off mic, but I'll say it out loud.

If you're trying to start a business in this state, if you're trying to expand a business,

if you're trying to hire, it just feels as though there's some, you mentioned the invisible

hand earlier, there's an invisible force that seems to be double dog daring me to

do everything that I feel like, I feel like a good government and I feel like wise policies

would encourage people to invest, would encourage people to hire.

I mean, talk maybe a little bit since you've invoked unions, so the rest of the country

understands, what does it mean for an entrepreneur or a small business person to hire someone,

the most basic deal, like how complicated and fraught has that become in the golden

state?

Well, it's very easy to hire a person, it is very difficult to fire a person in California.

You could talk about the teacher's unions as an example, it costs about a quarter of a

million dollars to fire a teacher and I know you asked about the private sector and a business

will come to that in a second, but where unions exercise that level of control over the

workplace as teachers do in schools, it's almost impossible to get rid of a bad teacher.

And the result is, you know, we have all kinds of research that shows that if you got rid

of about the bottom 5% of teachers in California, our outcomes, our student achievement outcomes

would skyrocket, but you're really asking about how difficult it is to run a business

in the state of California, and I'll give you a couple of quick examples, just anecdotal

for the moment, but one of them is, you know, I'm involved in a lawsuit right now because

the governor signed off on a bill a year ago, which prohibits employers from speaking

about religion or politics in the workplace.

They call this a captive audience.

Your workers are forced to sit there and listen to you opine about politics and religion.

Now I can't say how other employers run their shops, but in mine, talking about politics

and religion are important, you know, I run a small policy organization.

Of course, we talk about policy and politics and religion occasionally, and that is apparently

illegal under this law.

Now, take that out to any other business enterprise, I'll give you an example of the fast

food industry, which got hit with a massive spike in pay hikes.

It was demanded by the service employees, international union, and signed off by Gavin Newsom.

It raised salaries in the fast food industry from $15, roughly $15 bucks to $20 per hour.

Now they're looking for $25 per hour.

So the next thing that happens is restaurants started raising their menu prices, number one,

number two, they started laying off workers, number three, replacing those workers with

kiosk, which are increasingly run by AI, so that you have a lower labor cost, and that's

how almost everybody I've spoken with in California who runs a business, they do a lot

of reporting, and almost every one of the businesses I've talked to have said, I have

simply had to reduce my labor costs by shrinking the number of workers I have.

So we have laid people off, you know, the unintended consequence again, right, of, oh, we're

going to raise people's salary, so they're going to afford to raise a family by working

the counter to McDonald's, and the next thing they know, they have no job, no job at all.

So running a business is hard here because the government wants to control your speech

on your property, and if you're on a fast food restaurant and you want to explain to your

employees why suddenly some of the workers are no longer here, and why there's a kiosk

now in the, you know, at the counter where a worker used to be, how do you explain that

except as an act of political homicide effectively, that the governor signed a bill that raised

labor costs so high I had to lay off your friends, your colleagues, and you might be next.

But I can't talk yet, right, thank you for pointing out, once you tell the story, that

was a good one.

Well, I don't know the details of it, but it sure seems like, and this goes under the

fraud category again, but it feels like there were exemptions that were made for that

whole fast food, minimum wage thing, and it feels like Panera Bread got a pass, and it

looks like the governor had a relationship with the owner.

That's right.

And it's, it's the oldest damn story in the world, but in these times, it just feels

writ large, and how, how, how do we gloss over it?

Well, why, I know what you're going to say, because we're fat and happy and soft, and

we're citizens, and so far, yes, it's annoying, and it's troubling, but our house isn't the

one on fire yet.

It hasn't gone splat to the point where Will Swame, Chuck Klausmeyer and Mike Roe will

go, that, that's it.

Now I've had enough.

Yeah.

I'm following Joe Rogan.

Well, you asked just a moment ago about this wealth tax, and it is backed by the service

employee's international union, and only one arm of it is backing at the health service

workers, and their claim, their claims are, boy, they're just untrue.

I mean, they, they say that the reason they need this is because tax revenue is down, and

I pointed out a moment ago, tax revenue is way up in California.

We have a budget that's twice what it was six years ago, where we have, our problem is

not revenue.

It's spending.

It is the effectiveness of our spending.

But unions never miss a chance to get more cash.

So all of this money will be poured into an area where SEIU has a special interest in

growing its membership, that is in hospitals and home health care.

What's fascinating about this, again, I think this is a really important thing to talk

about.

You and I, you know, Chuck and you, Mike, and I, we're not, we're not making these observations

in a vacuum.

It's not just like conservatives, perhaps like me, who object to this.

So other Democrats, California has become the poster child because of all the dysfunction

we've talked about.

California has become the poster child of why you can't trust Democrats.

I'm not saying that other Democrats are.

You mentioned Fareed Zakaria talking about, you know, New York City.

But we've also got the famous kind of lefty liberal guy right out of Southern California,

Ezra Klein, Washington Post columnist, who with his colleague, Derek Thompson, I think

Derek's at the Atlantic, they wrote a book called Abundance.

And the book is almost a total takedown on California.

Ezra has written numerous columns and again, I disagree with them and Ezra's policy

pronouncements, most of them, but we both agree, California has a problem for the Democrats.

You know, soon as Gavin Newsom starts running, you can count on his opponents, even inside

the Democratic Party to say, here's a picture of San Francisco.

You want more of that?

But you know, I say that and then I reflect on the fact that, you know, I like told people

in 2018 when Newsom was running was, we don't have to guess what he would do.

Look at San Francisco and what he did do.

So how do we raise awareness about this?

I think, you know, Mike, you and you and Chuck do an awesome job of warning people, I think

about what government regulation can do, however unintentionally.

But I really do believe that this is a problem of an American cultural problem of people

who want to be rescued by a man on a white horse, primarily a man.

We'll take a woman, I think, in America now.

But it's, you know, we want some hero to come writing in and deliver utopia.

We want a king as much as our friends on the left love to hold no kings rallies.

They also want an imperial president.

They want a president who's going to be unbridled, you know, unchecked by the constitutional

power.

And we've got a president right now who's sort of pushing in that direction anyway.

There is a kind of bipartisan charge at the idea that we just should have whatever we

want.

The rule book, the Constitution of the United States can be safely ignored.

We can trample people's speech rights in the workplace.

We can trample people's property rights at home and in the workplace.

We can screw up the cost of living dramatically and still claim that we're the guys who can

fix it all.

I think there's just, you know, again, I would ask you guys, what do you say to people

who are in the middle wondering, who should I vote for?

I would just ask, sorry, please go ahead.

I was just going to say, do not vote for people who tell you they can deliver utopia.

The fixes here are going to be very, very painful.

We did not get into this mess in the last couple of years, even the last six years, give

you one other example here.

California for 40 years has flouted, has violated federal immigration law.

And so when Donald Trump decided he was going to finally shut down the border and end the

kind of lawlessness around immigration in California, by the time those federal agents

came here, undocumented people were really built right into our communities.

You know, we all know or suspect we know somebody who's here illegally.

They're frequently going to our churches, their kids go to our schools.

We shop in the same stores quite frequently.

And then all of a sudden this whole thing is disrupted by a president who is, I would

argue, legitimately and reasonably concerned about the problem of this lawlessness.

It took 40 years to get here and look what the blowback was as soon as Donald Trump announced

he was going to really stick to be faithful to federal immigration law.

People burned down LA.

They held up traffic in San Francisco, blocked bridges.

It is a really tragic thing.

It is going to be hard to break and reset these bones that have been badly broken for decades

now, I think.

Chuck, you lived here longer than I have.

Yeah.

That's true.

I mean, what would it take to send you back to Baltimore or someplace else?

Yeah, I think I would go someplace else.

I mean, I feel like I'm this close, you know, but my job is here now.

And yeah, if my job left, I'd be inclined to follow, Mike.

Yeah.

I think it's an interesting question because, you know, famously Joe Rogan, right, heads

off and goes to Austin and Ben Shapiro was in LA and I think he's in Florida now, perhaps.

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But look, how about this, since it's on everybody's mind and by everybody's, I mean mine.

Talk about what we're talking about in the context of half the Congress losing the

ability to stand.

Simply stand up, I get it, they were trolled, I get it, they were put in a corner.

But you know what, they're 10 cameras pointed at you and you knew it.

When you walked into that chamber, it's like Disneyland, you must be this tall to get

on the ride.

Well, you are.

And now you're sitting there and now you must know the country is watching.

And man, when you just talk, how are we to think about the inability to stand up in

agreements with the simple statement that the duty of the government, first and foremost,

is to protect its citizens?

We're in a world where half of our Congress doesn't agree with that or maybe they do,

but they couldn't show it.

Your thoughts on that?

Yeah, I think you said roughly what I would.

We're in this period where theatrical to performances flying to Ghana right before a massive

wildfire breaks out or not standing up when the president asks a trolling question to which

there's an easy answer.

You know, I don't feel trolled when I stand up under my own volition and say, yeah, I believe

I was elected to the Congress to protect the American people.

That is incontrovertible.

That is the purpose.

It's sworn oath to protect and defend the Constitution of the United States of America

when you got into the Congress.

And if you can't stand up and reaffirm that oath, then you've got a problem.

And if it's because you're embarrassed and afraid that you might be trapped by folks on

your left, you've got a problem.

There is a real lack of courage.

You know, I would just say the Congress has become like a vestigial third nipple.

It's just calm us an afterthought.

Now, it's fascinating that when the Constitution was written, it starts with article

one.

And that is, you know, just symbolically, it is therefore the most important thing.

The framers thought to erect first.

What's the most powerful body?

It's not the president.

It's not the Supreme Court.

It's the Congress that is supposed to have all this power.

And yet because it is divided into two houses and selected from people in all 50 states

at present, it's going to be a very diverse body.

It's going to be a lot of arguing.

The Senate is supposed to cool off the debate and actually make sober decisions over a period

of six year terms.

But they've all just checked out.

And that's a Democrat and Republican problem.

A lot of our Congress people have just decided it's a lot easier to let the president, whether

that's, you know, Barack Obama or Joe Biden or Donald Trump.

It doesn't matter to them.

It's let that guy take the heat.

I'm going to go back and sit in the living rooms of the rich and raise cash and run another

campaign so I can keep this awesome job.

Or I really don't have to take a whole lot of risks.

So again, I would just ask, you know, I ask all of my friends, are you willing to sit down

with people and really explain that a kind and sober way?

What's at stake here?

What's at stake in California is the emisoration of entire families.

What's at stake here in California is a defunct and dysfunctional economy that not only can't

sustain itself, but will come increasingly to depend upon all other states.

One example on that, by the way, before I slip out of here and we forget about it, we're

talking about fraud and homelessness, fraud in the high speed rail system, fraud in our

public education system.

The other one that's, you know, really fascinating to me is during COVID, almost every

one of the U.S. states got a federal loan to back up its unemployment insurance fund.

Because as you shut down the economies during COVID, lots of people went to the unemployment

department metaphorically and, you know, asked for that weekly, large s of like 400 bucks

a week or something and we ran out of money really quickly.

Every state was running out of money, teetering on insolvency with not enough cash and first

Trump and then Joe Biden dutifully poured hundreds of millions of dollars, billions of

dollars into these systems.

With the promise that the state recipients would return the money as soon as they were able.

Well, we were able to return that cash in 2022 in California.

We had a hundred billion dollar surplus, which sounds great until you realize it was just

because a lot of tech firms during COVID had just exploded in terms of value and repaying

huge dividends and therefore huge tax revenue.

So a hundred billion dollar budget surplus on a three hundred billion dollar budget, a lot

of money left over and what did Newsom do with it?

It was like Oprah, you're going to get a gift, you're going to get a car, you're going

to get some and it was just pouring the money out and all these kinds of, we gave Medicaid

subsidies or payments, we gave free Medicaid to illegal immigrants in that period.

Newsom did.

That's when that catastrophe started because we had all this state money, but it was a

one time deal.

As soon as that money was gone, we not only didn't have a Medicaid system, we could fully

fund anymore, but we're going to blame Donald Trump for that.

We also had this problem of not being able to pay back our federal loan of 20 billion dollars.

Oh, and by the way, we lost 55 billion of that money to international fraud gangs and

prisoners in our own state prison system.

Just petty fraudsters, international crime gangs associated with the Chinese government,

the Russian government, the North Korean government.

Everybody knew where the suckers were, California, 55 billion dollars, just evaporated and

Newsom will not pay back the loan.

So he may think he's really clever, we're the only state that didn't pay back its loan.

It's a very complicated issue and I would imagine a lot of your listeners are now trying

to switch off and have me stop talking about unemployment insurance trust fund.

But here's the real kicker in the story.

What happened is the IRS said, oh, you're not going to pay us back.

We have ways of making you pay us back.

They attached an escalating series of payroll deductions that will be taken out of employer

payments to their employees.

So every California employer right now who pays federal employment payroll taxes will

now have a higher tax this year and they did last year, it was higher last year than

year before that, et cetera.

And for the foreseeable future, our state auditor say, we're a dog chasing its financial

tail.

We will not be able to repay this loan.

This tax is high and rising.

It's another curve, another break, another impediment to hiring people you asked earlier,

you know, how difficult it is to run a business.

It gets more and more expensive because of that kind of government, I wouldn't even call

it incompetence, that's like giving Newsom a pass.

He refused to pay this back knowing that the IRS, his creditor would come back and get

the cash anyhow.

So California's been from employers, they would not get it out of the general revenue

system because he's too busy paying off all of his allies through, you know, grants

of large S.

So it's a really troubling circumstance.

I used to say, thank God he's running for governor because he's become more moderate,

but his form of moderation is still so radical and devastating to the economy that I don't

know how else to say this for your listeners outside of California.

Please don't do this to yourselves.

This is not the exit door that you thought it might be.

This is not the off ramp.

These are not the droids you're looking for.

You are looking for.

It struck me when you were talking about the decision not to stand.

Even if what bothered me so much watching it, I was, in fact, Chuck, you and I and our

whole crew stayed late and watched this thing.

And the thing that troubled me and it didn't occur to me later, it wasn't that they were

affirmatively saying we don't agree that the American people are our first duty of care.

It wasn't that.

That was too obvious and too.

That's what bothered me was I would bet big.

I bet my life that many Democrats who sat would have preferred to stand, but they didn't.

They felt like they couldn't.

They were in their bubble and the prime directive, of course, the real prime directive is if he

tells you to do it, don't do it.

Right?

If he's for it, we have to be against it.

Even reduced to that seemingly very, very simple choice.

The thing that bothered me more was the lack of imagination.

Like why didn't that guy who fell asleep and then got caught picking his teeth?

I don't even know who that was.

But it's such a man in a double image.

He could have stood and not clapped.

He could have stood and put his hands in his pockets and continued scowling.

He could have stood and given him the finger, which was basically what that button, that

what's her name to leave was wearing, right?

F ice.

So there's no decorum.

There's no manners.

There's nothing stopping these guys in other words from not blowing themselves up and

falling in line like a good Democratic lemming, but doing something creative and individualistic,

I think.

I would have respected it and they should and flipped them off.

Thereby telling their constituents, I'm still with you, but I don't like being put in

a corner like this.

I don't like the do you still beat your wife question, but they don't.

They don't.

And that makes me think they're not that smart or creative.

And that's a different insult than, oh, I don't believe, you know, I don't agree with

your policies.

I just, I'm, I just despair of the lack of imagination and, and, and that lack of imagination,

I think mutates into the governor we're discussing and a great many other governors too, they're,

they're just not being creative, they're just not, they're in their box, they're in their

bubble.

Well, I wonder, Mike, I wonder, so sorry to cut you off, um, I was done anyway, I was just

making sounds at that point, you know, there's the, uh, saying often attributed to Andrew

Breitbart that all politics is downstream from culture and our culture has become one

in which people will not attend public events, social events if they know that somebody

with whom they disagree politically is going to be there and it gets down to the level

of family, it could be a neighborhood party, um, I talked to a neighbor who said, oh,

we don't play, um, ay, you soccer anymore because, uh, all the people are extraordinarily

liberal.

And one of the other neighbors who is extraordinarily liberal said, oh, I don't attend ay, so soccer,

you soccer anymore because everybody there's a trumper.

And it was like, oh my gosh, I wish I could get the two of you together so you could both

have a fight someplace else and leave these civic institutions to be this, this other

thing, which is, you know, you, I go to a church, there are people there, including one of

my priests with whom I have vigorous political debates and differences.

None of it means I don't go to the church or I hate these people or I wish them ill or

I'm going to stop going or they shouldn't get to go.

All it means is I am compelled every single day to rub up against, if you will, that sounds

wrong, um, to interact with all kinds of people with whom I might disagree.

And there's a kiss boy, but it's just a handshake before we start with all the rubbing

up against each other, hey, you know, it's funny, man, I, um, and this literally just happened

yesterday, uh, I, I, I don't think there's anybody I've had on the podcast so far with

whom I would disagree politically more than my friend Evan, who came on yesterday.

Evan, uh, makes the neon signs that we have in our space now.

Chuck, turn your thing around, show, show Will if you haven't seen this thing.

It's so bad.

Oh, I love that.

Yeah.

It's not lit, but show him the micro work sign, man, this is, this guy will, I met him, uh,

in, in Austin 10 years ago, we shot a segment of somebody's got to do it.

And um, he runs a company called the neon jungle and he's been doing this for his whole

life.

And you know, he's a, he's an English major who went into architecture and left it all

behind and then became an antique collector and then fell in love with neon and then

just started bending glass and using paint and argon and neon.

And so I've finally called him and asked him to make me these signs and he did and he,

and he sent them out and then we sat down.

I had him on the podcast, um, and with respect to the scintillating conversation that we're

about to conclude, um, I've never had a better conversation on the podcast.

We talked for an hour and a half about everything, um, but politics.

And it just, it was, Chuck, tell me if you didn't, I mean, you felt the same way.

100, 100%.

Yeah.

It was, it was absolutely great.

It was the two of you talked about all sorts of different things that you agreed upon,

that you disagreed upon, but you, it was a conversation that I was just hanging on

every word.

It was art, literature, commerce, losing everything, parapetia, building it back, being

curious, looking after your neighbor, raising your own standards, given a damn about things

that maybe other people wouldn't.

It was just, it was about humanity, you know, it was about imagination.

And that's what I mean to say before.

The thing that makes me not despair because I'm still fundamentally an optimist.

I'm worried for this state and I'm deeply suspicious of the policies that have gotten

us where we are.

But the thing that I, that I find myself most sad about is the lack of imagination that

I saw in the Democrats during that, that there was a way to make your point without sitting

there and sticking your lip out.

And I, it just made me just a good grief, man.

That, when someone says, why don't you get into politics?

That's, that's the real reason.

Right.

It's not the money.

It's not the machine of it.

It's just that somehow or another, a lack of imagination isn't punished and it should

be punished.

It should be unacceptable to be that boring and that uninspired and hold that much power.

I, I love this and I love the conversation as you guys describe it with Evan.

In part because that's my experience too.

I have a son whom I love deeply and whose politics are very different from mine.

He's a very progressive kid.

Do I love him less because of that?

Absolutely not.

He's still my child.

And he and I have found a way to miracle of miracles, not talk about politics.

And that's not the only thing in this complicated, beautiful, crazy world and to use a hammer

in an anvil to try to pound every single conversation and every relationship into a one-size-fits-all.

But it's got to fit me.

Has to meet these political metrics first before I can have a conversation with you.

Chuck and I were talking yesterday about the fact that yeah, it is, it is difficult sometimes.

It is, some of these relationships can be very fraught with people.

But my son and I talk, what do we talk about?

We talk about the fact that he actually bends glass.

He has made neon.

He is an interior design guy.

He's a graphic designer, lives in New York.

He's living that kind of a crazy, wonderful life.

And we talk about books and film and parks and hiking and dog care and his brothers and

sister.

We talk about his trip up to Montreal driving through October leafiness all the way north.

You can find other things to talk about.

And I don't say that this is just a way to avoid the difficult political decisions.

It creates, I think, the space and the permission for imagination and humanity and recognizing

that other people are more complicated than the person they've, for whom they voted to

become president.

It's not that hard, right?

I mean, to, to be able to say, OK, I want what the proponents of minimum wage want.

I want a satisfied, engaged worker who's able to make ends meet.

I want, I want a workplace that's informed by a sense of fairness, right?

We want the same thing.

I want the same thing.

The proponents of rent control want.

I don't want people thrown out into the street.

I, I don't want the market to suddenly make it impossible for a hard working young family

to have, to have the shelter that, you know, we want the same basic stuff.

We disagree on execution, we disagree on philosophy and the reason you're here and

have become a friend to this thing is because we, we disagree on policy, but, but policies,

it's just a tool to an end.

And it just seems like if you can start with, look, we want the same basic thing.

But I object to what you're doing because in my view, there's almost always going to

be an unintended consequence that you're not thinking about.

Short cuts lead to long delays.

That's why I'm a conservative, not a Republican, a conservative.

I'm suspicious of short cuts in general, you know, and, you know, it's, it's hard not

to like me because of that.

There are other reasons you might not like me, but you can't really hate somebody because

they're suspicious of short cuts, you know.

So yeah, you don't have to talk about politics, but more to the point, you got to find something

else that you can both get fired up about, even if it's the foliage on the way up 95

or something, you know, it doesn't matter what it is.

But anyway, that's not why I invited John for this conversation.

I'm afraid that while I do believe everything I just said, I'm also worried for this state

and I'm also worried for this country because the way we're doing it, the way we're on

a road and it leads to something, it leads to a place I don't want to go, Will.

Yeah.

No, I'm with you.

And I love your assessment that the question is more about means than ends.

And there are some people with whom I even disagree about the ends, you know, so a

mandami character, for example, there's a guy who believes you can actually achieve

equality of outcome and that problem of believing that everybody has the same talents and

therefore should have the same income.

And there's the same demand for everybody's talent.

I'm an acquired taste.

I don't expect everybody to want what I've got.

I'm lucky, frankly, to a found a woman who can tolerate me.

How amazing is that?

Congratulations.

A consummation devoutly to be with you.

So my point is that other than that, it really is the means to the ends.

And I think the data has been in for about a hundred years.

We know that less government regulation, typically, and I'm not saying, I'm not an anarchist,

but I am saying less government tends to produce a more prosperous people.

People who know that it's on them, there's both the burden, the responsibility of having

your life turn out the way you want it and no fair blaming other people.

You don't get to do that, but it's also true that we have a greater opportunity of individual

fulfillment.

I'm not being told, you know, like in some Soviet society that no matter what I want

to do, no matter what I think I'm good at, I'm going to do what the mayor or the Politburo

leader wants me to do.

So I really do believe fundamentally in that principle that the greatest gift we have

in America is our individual freedom, as defined and protected by the Constitution

of the United States.

These are inalienable rights and the government is constantly trying to alienate them from us.

That's what government does.

And I would like to see a lot less of that.

I'd like to see greater freedom.

And if I could persuade my friends in California about anything, it would be trust freedom,

trust other people, believe in goodness in other people.

That doesn't mean yet to be crazy about them.

It just means most people are probably going to do the thing that is right for them.

And if the incentive structure is in the right place, people are going to do good things

for everybody else without even being aware they're doing that.

Yeah, the most important word in all that was persuade, but we just spent an hour.

I don't know if we were persuasive or not.

I hope we were, but as I've said to you before, nobody wants a lecture and nobody wants

to sermon, but reasonable people, I think, are open to changing their mind.

I just did a podcast, not to be.

You know those guys?

The Babylonians?

Yeah.

They do a thing called Beyond Parity.

And they showed a picture of a girl with blue hair who was basically saying the constitution

is nothing but toilet paper.

We need to redo it.

And the founders were old men who never could have known who she was.

And so easy target, right?

And I asked them, I said, well, what do we do?

I mean, what do we do with her?

Like is she salvageable?

Can she be persuaded to reconsider?

And knowing that she's not going to respond to a lecture or a sermon or anybody on this

call telling her the way it should be, like what do we do?

And the answer that came out from both the host was excellent.

One of them, Dan Dylan, said, well, we have to re-incorporate consequences

into our social contract.

There must be a price to be paid for being that indulgent.

Like her opinions are said, she's being supported in a way.

She's not working.

She's doing all sorts of things are allowing her to be propped up and form an opinion that

she feels deeply about because so she's not living in a world of consequence.

And the other host pointed out, and Chuck, I used your example, you know, you don't flip

a switch.

You don't persuade somebody by going, hey, look at this, you see this?

And now, oh, I hadn't thought of it that way, you know, I guess I'll vote this way instead.

You spent five years listening to Larry Elder and Dennis Prager, drip, drip, a little

here, a little there.

You and I talked endlessly, all your, you know, it's your friends, it's your family,

it's being engaged.

And then maybe, maybe you're persuaded to reconsider, rethink a thing.

But man, it takes time and it's virtually impossible to happen in a, in a world with

no consequence where you can, where, where, where fraud is acceptable, right?

Like we can't, how can we be persuasive if we violate the immutable laws of consequential

nature?

Well, I love that.

You know, one of the things I would say is that one of the consequences of bad governance

in California is that, you know, nearly two million people have left, right?

There is a freedom there.

There is a consequence.

And Gavin Newsom, to your earlier point, don't want to, you know, be at the door saying

goodbye to you and then reopen the conversation.

But I will say that that wealth tax is a signal challenge for Gavin Newsom.

No other labor union has signed on to that thing because at least every other labor union

recognizes something of that chapter of SEIU does not, which is these people leave

they're taking their jobs, their wealth, their future business ideas, they're taking

all of that with them and you can chase them as long as you want, but they're not coming

back from Texas or Miami or whatever.

They're gone.

And when they're gone, the state tax revenue is going to take a hit.

And when that, when that hit comes, there's going to be a big fight in Sacramento about

what to do with all that's left, which may not be very much one day, 151,000 people in

California pay 70% of our income taxes.

Just 100, you could put that in the Coliseum in LA, 150,000, maybe a little more than

the LA Coliseum.

But you get my point, small number of people are paying a disproportionate number of value

of the taxes in our state and they're being chased away every day by bad, bad policy.

That's a consequence and it has a way of curbing, I think, the ambitions of some presidential

candidates, including perhaps Gavin Newsom, who, as you point out, opposes this thing.

Sorry about that, PS.

No, not at all.

I'll just conclude by saying I will see you both at the Coliseum.

And as for the rest of you still listening, thank you.

Will Swame, as always, where do people go to bask in the deep end of your wisdom?

It's a shallow end, but I am at the, I am CEO of the California Policy Center.

You can find us at CaliforniaPolicyCenter.org.

I do a podcast.

It's available everywhere, fine, fine podcasts are given away for free.

It's called Radio Free California.

I do this for the National Review Magazine, so it's Radio Free California and California

Policy Center.

And of course, on micro occasionally.

Thanks.

Yes.

Well, you know, you get what you pay for.

Always a pleasure.

Appreciate your time.

Thanks Jack.

Thank you.

I feel.

I feel like what you heard.

And even if you don't, won't you please, please, please, please, please, please, please,

When I hate the beg and I hate to leave, but please,

Freddy, breaking please, please!

Please, are, oh please,

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