California Update: Harris Goes Up, California Gets Its Close-Up

Jonathan Movroydis:

It's Tuesday, July 30th, 2024, and you are listening to Matters of Policy & Politics, a Hoover Institution podcast devoted to governance and balance of power here in America and around the free world.

I'm Jonathan Movroydis, senior product manager at the Hoover Institution, and I'm sitting in the chair of Bill Whalen, the Virginia Hobbs Carpenter Distinguished Policy Fellow in Journalism, so that he can answer questions and provide commentary about California policy and politics, in which he's well versed. Bill Whalen, in addition to being a Washington Post columnist, writes weekly for Hoover's California on Your Mind web channel.

Whalen is joined today by Lee Ohanian, a Hoover Institution senior fellow and professor of economics and director of the Ettinger Family Program in Macroeconomic Research at the University of California, Los Angeles. Ohanian also writes weekly about the policy environment of the Golden State for California on Your Mind.

Good day, gentlemen, let's talk about the latest developments in policy and politics in the Golden State. Let's turn our attention to Vice President Kamala Harris, the presumptive nominee of the Democratic Party for president of the United States. Bill, let's talk about your column that's coming out on Thursday on this subject. You note that the Trump campaign's decision to highlight Kamala Harris' record as district attorney of San Francisco. You recall that in 1984, Jeane Kirkpatrick, speaking at the Republican National Convention, introduced the term San Francisco Democrats into America's political lexicon. The Reagan campaign that year would go on to trounce Walter Mondale in a 49-state landslide.

"Harris' record as district attorney is complicated," you write. In 2004, she pitted herself against the police union, and US Senators Barbara Boxer and Dianne Feinstein, after pursuing a life sentence rather than death penalty, for the murderer of San Francisco police officer, Isaac Espinoza. To make matters worse, she didn't reach out to Espinoza's family in the course of these events. That's just one line of attack of Harris' record that the Trump campaign may pursue. Bill, what else is there? And do you think the label of San Francisco liberal still sticks like it did 40 years ago?

Bill Whalen:

Well, hi, Lee, hi, Jonathan. I think if the Trump campaign loses, it won't be for failing to introduce the phrase San Francisco liberal. You hear it just time and again coming out of either the president, his running mate, J.D. Vance, or surrogates, all wanting to tarnish her, or tar her, I should say, with the brush of San Francisco. It's interesting in this regard. So you mentioned Jeane Kirkpatrick 40 years ago. Also 40 years ago since we last had a native son, or in this case, a native daughter, as a major party's presidential nominee.

So the question is, if you're the Trump campaign and you want to score points at the expense of Kamala Harris, what do you do with her record? Do you focus on the vice presidency? Do you go back into her time as a United States Senator? She was a senator for four years before becoming vice president. Or do you go further back in the wayback machine, two or six years as state attorney general, and then what you mentioned before that, Jonathan, her eight years of San Francisco DA? And so far it looks like the Trump campaign has landed on San Francisco and crime in this regard.

The Espinoza case was a bad moment for Kamala Harris. She was new to the job. She did not seek the death penalty, which was not a surprise necessarily because she was never a death penalty opponent. But the murder of this policeman, Isaac Espinoza, was a visceral moment in San Francisco. He was murdered with an AK-47. It's a sad story. He had married his childhood sweetheart and just yeah, it was really gut-wrenching. And what happened was at a funeral service, Diane Feinstein, then the US Senator from California, and also a death penalty proponent at the time... she later changed her mind on the death penalty... she got up in the funeral, gave a speech and said words to the effect that no justice, no death penalty means no justice. The police and the audience stood up and applauded, and it was a very embarrassing thing to happen to Kamala Harris, compounded by what you mentioned, Jonathan, that she held a press conference announcing her decision not to seek the death penalty, and didn't have the courtesy of reaching out to the officer's widow beforehand.

So it may come back to haunt her in this election, if assuming the widow is around and willing to do this, she might appear in an ad. She was very vocal about this in 2019. You could kind of do with Isaac Espinoza what Republicans did with Willie Horton back in 1988, and kind of make him the face of a crime issue, if you will.

But it leads to a larger question, and I want to get Lee's thoughts on this, how do you run against California in this day and age? You have just ample things you could get into. You can talk about crime with Harris, because she was California's top cop. Or Lee, perhaps you want to broaden the conversation into say simply as California goes, so goes the nation under Kamala Harris, welcome to a world of higher taxes, higher regulation, wokeism, blah, blah, blah. What do you think, Lee?

Lee Ohanian:

Well, San Francisco provides such powerful visuals in terms of running against her. I mean, we've all seen those. I think many voters have seen those. They're on media all the time. So there's a visceral reaction to you see what has happened in the Tenderloin and South of Market. And it may not be entirely fair to pin that on her, but they will, and I think that will be effective.

And then more recently, she has run into some issues regarding border. So last week her campaign issued some talking points that were picked up by Karine Jean-Pierre, who is the White House press secretary, and Hakeem Jeffries, who's the minority house leader. And those talking points are really out there to distance Harris from border issues. Border encounters under Biden and Harris have rose about three and a half times as high as they were under Biden and Pence. And surveys show among voters that the border is now about the most important issue that they look at right now.

So when you look at that vulnerability for Harris, so it's probably not surprising that the campaign has been pushing this idea that, well, the border issues really aren't Kamala's fault. Now, this has been a little bit hard to sustain because the Trump campaign is saying she was Biden's border czar and the Harris campaign is pushing back and saying, no, she wasn't the border czar. Now, the term border czar was never used by Biden, but in March 2021, he gave a press conference in which he gave her the lead responsibilities in terms of dealing with Mexico and Central America in stemming the flow of illegal migrants into California. So it's a little rich to say, "Oh, no, no. Her responsibilities were just cubbyholed into an academic issue of trying to identify why people are coming to the United States."

Bill Whalen:

Right. So yeah, right. So look, she was not the border czar. We're not a Slavic monarchy. We don't call people's czars and she'd be the czarina, I guess, if you'd really want to be technical about it. But if you look at the media at the time, she was called the point person on this and point person on looking at the core reasons why people migrate from Central America and the United States. So she may say she's not the czar, but unfortunately she owns it.

This is the challenge of running as an incumbent vice president. It's worth noting that she is running against the current of history here. George H.W. Bush managed to be elected as Ronald Reagan's incumbent vice president in 1988. Otherwise, you look at Al Gore in 2000, you look at Hubert Humphrey in 1968 and Richard M. Nixon, who we'll talk about later in the show, all running as incumbent vice presidents in the past 65 plus years, and each one loses. And that's because they cannot detach themselves from an administration that is either tired or unpopular.

Now, is the Biden administration tired? I wouldn't quite use that word because it's only been around for four years. The president is not popular and a lot of his policies are not popular, starting with immigration. So again, Lee, we get into this question of if you can take California and pick it up and use state policy as a bludgeon in other states, because California is what? It's a sanctuary state. Francisco is a sanctuary city, that doesn't play too well in swing states across America that have a much different view when it comes to border security.

Lee Ohanian:

No, I mean border security in California, with California being a sanctuary state, and in particular San Francisco having very strong sanctuary laws, I mean it's really shining a spotlight on that. And Bill, what's interesting to me is that it wasn't just Democratic Party leaders who were picking up on these talking points about, oh, she was never the border czar, her role was very narrowly focused on identifying the root causes of migration. It wasn't just Democratic Party leadership who was repeating those talking points. It's the press. The press has been running with that.

And what I find really intriguing about that is that there is a report that was produced by Harris in 2021, just a few months after Biden tapped her to do this, on the root causes of migration from Latin America to the United States. And Bill, when I read that report, and this is detailed in my California on Your Mind column that is coming out today, I was really surprised by this. Because the report reached some really strange conclusions about why people are coming from Latin America to the United States. Bill, do you know what the number one reason is according to the Harris report? Government corruption is the number one reason why people are leaving Latin America and coming to the United States. Government corruption.

Bill Whalen:

Really?

Lee Ohanian:

Yes. Really. That was the number one reason why people are leaving Latin America to come to the United States.

Bill Whalen:

Not economic opportunity, not personal safety, not family unity, but government corruption?

Lee Ohanian:

Government corruption. And now, there have been a lot of surveys and polls done of immigrants to the United States, and when asked why they are here, they say, okay, you hit the nail on the head. Economic opportunity. When a migrant comes to the United States, typically their wage rises between 100% to 200% immediately entering the US labor market. And after that, it grows very rapidly and rises up to the point in which it's about the same as those workers in the same demographic group, but who were born in the United States. So there's just an enormous attraction to come to the United States and it's economic opportunity.

In the Harris tent, there's a lot of discussion about, well, it's climate change and its sexual violence and it's gender issues. These never come up in these surveys. The surveys are really all about joining family and economic opportunity. So it's not at all surprising that border encounters went up. They simply miss the most obvious reason why people come to the United States. Life is better here. Life is just much more economically gratifying in the United States.

Bill Whalen:

I know Jonathan wants to circle back to Kamala Harris and crime and Proposition 47. But firstly, I want to give you another thought on California here that I've been playing with the past few days. As I mentioned, it's 40 years since Ronald Reagan last ran for office, last Californian to be a presidential nominee. And it's interesting, Lee, if you and I got into a car in Brentwood and started at where Doug Emhoff and Kamala Harris live, they live in a very nice home in Brentwood, which is a very nice community on the west side of Los Angeles. Lee, 10 minutes later we would go down, after driving down Sunset Boulevard, we would be at Ronald and Nancy Reagan's old home in the Pacific Palisades. You might remember it was the GE Home of the Future, everything was electric and they had a hard time selling it later as a result of that.

But the point is, you're kind of traveling back in time going from 2024 Los Angeles, to 1984 Los Angeles, California, a much more Republican state back then. If you look at just the celebrities piling behind Harris right now versus Ronald Reagan's Hollywood connections, which would've been, I would've argued, like Jimmy Stewart and much more old Hollywood. But in this regard, it's a hundred years since Calvin Coolidge ran in 2024, in 1924, excuse me. And the phrase Keep Cool with Coolidge.

Now, I don't know if Democrats are going to try out Keep Cool with Kamala, but they're certainly going to sell you on the idea that Kamala is cool. It's how you have to push back against a lot of the social media she's done, when she's out dancing and cackling and kind of looking kind of frivolous. And I think that's one of the important narratives of this campaign. She is really one of our first social media candidate in that regard with this big long record on social media.

But Lee, would there be anything in the Trump campaign and her opponents to go after her simply on life in Los Angeles? I mean, if I were a Republican opposition researcher, I'd be looking high and low for footage of her coming out of Erewhon or saying that Erewhon is the place to go to, and just kind of ridicule her for $18 smoothies and just ridiculous cost of living where she is in Los Angeles. Do you think there's potency there?

Lee Ohanian:

There might be. I mean, the home she lives in is in one of the most expensive neighborhoods in Los Angeles. And the lifestyle that she and Mr. Emhoff lead is remarkably different than what's led by 99.5% of the rest of the population. So there's no doubt you can paint a picture of her as an elite. I mean she is. And there is the sense... I would think there would be material there within the Trump campaign to paint her as the old school, the missing liberal, and that the way she lives is not the way the rest of the people live, and she can afford some of the luxuries of the trappings that she has, whereas most people can't.

Bill Whalen:

I have, by the way, good friends who live in the Palisades and they just really don't like this candidacy. It's something personal against her. They just need to drive to and from work and go places. And when she is now a presidential nominee, she gets a huge entourage with Secret Service and just... it complicates things. It's the world of living in an area like this where you have a lot of Democratic fundraisers and a lot of high-level Democrats coming and going. Just traffic gets tied up.

Lee Ohanian:

It does. There's one way in, it's Sunset Boulevard. And I shouldn't say just one way in, but that's really the direct way. And yeah, it's a two-lane road going both sides, and there's an awful lot of people who live there and work there. So yeah, I can imagine that that's an hours long tie-up.

Bill Whalen:

And speaking of Sunset Boulevard, Lee, I have gone this far on the podcast and not mentioned Nora Desmond, the movie, and California's ready for its close up.

Jonathan Movroydis:

Bill, in your upcoming piece for California on Your Mind, you mention Proposition 47 as a potential vulnerability for Vice President Harris and this campaign. Specifically, Proposition 47, it was a 2014 measure, which reduces felony thefts to misdemeanors for stolen property valued under $950. You write, "That initiative, some argue, triggered shoplifting sprees in California's cities." She didn't take a formal position on Prop 47, so how could that be a vulnerability for her?

Bill Whalen:

Jonathan, state attorney generals write the title and summary for California ballot initiatives, so they have the power to determine what you see as a voter. And this is highly problematic because we have partisan attorney generals who have their leanings. Years and years ago, I think, it was the 2000 election, there was a school choice matter, it was a school voucher matter, that was on the ballot. Tim Draper, the venture capitalist, put it on the ballot, it was a universal school choice. And Bill Lockyer, who was the attorney general at the time and just a longtime Democratic player, he thought out the title. I think the title was Public Funding for Religious Schools, which is just really a good way to kind of chum the waters when it comes to the school choice debate.

Harris in 2014, as you mentioned, did not take a stand on Proposition 47, which was championed by one Jerry Brown, and I think Gavin Newsom endorsed it as well. So she took a pass on it, which is kind of curious that she was the top state attorney general, but she did write the title in the summary. And in the summary there's very explicit language saying that if the Prop 47 passes, it will reduce crime in California.

Now we fast-forward a decade to 2024, after several years of this spectacle we've see in towns like Los Angeles and San Francisco of looting of pharmacies and so forth. And it would seem there's a direct corollary between Prop 47 and the idea of making theft not a felony crime. Police just don't chase down the bad guys anymore. But Lee, I think you've written about this for California on Your Mind several times, just the effect that Prop 47 has had on Californian communities.

Lee Ohanian:

Yes. So it was 10 years ago that California voters approved 47 and it was known as the Safe Neighborhoods and Schools Act, and it passed with, I think, close to 60% approval. And it essentially reclassified a bunch of felonies, theft, fraud, forgery for amounts under $950, possession of a lot of illegal drugs for personal use as misdemeanors. And the theory was that this would free up money by not having these people go to jail. This would free up money for other types of programs because California is notoriously expensive for keeping prisoners. Right now, our annual cost of a prisoner in California, I think, it's about $135,000 per year, believe it or not. So people bought into that, but it really just hasn't really worked out that way, particularly in places such as San Francisco and LA where theft has risen substantially.

And so now, this fall, we're going to be looking at, California, the Homelessness Drug Addiction and Theft Reduction Act, which qualified for the ballot. And Bill, I know that you followed the backstory on this and all the intricacies and the details. But our governor and the super majority in the assembly and the Senate tried very hard, they did not want this ballot proposition to be coming in front of voters. But try as they might, in many different ways, and guys, it is going to be up there in November and it's going to reclassify classify a lot of those misdemeanors back to felonies.

It does add the interesting proviso, and I think it's one that is well-thought-out, that those on drugs can have these charges expunged from their record if they complete a drug rehabilitation program. So I think that's very sensible. But the law hasn't worked out. Certainly hasn't worked out the way it was presented. Yes, the state saves some dollars in having fewer prisoners, but there's trade-offs. In economics, we always say it's about trade-offs and the trade-offs is fewer dollars spent in the prison system, but quality of life has declined substantially in a lot of our cities and urban areas.

Bill Whalen:

Essentially, Lee, so the governor was caught up in this effort in Sacramento by Democratic lawmakers to put an alternative on the ballot to undermine this initiative. And then he pulled the rug out from under it at the last hour, just walked away from it, and he literally got on a plane and went to... I think he went to the, did he go to the Biden debate in Atlanta? He just did not participate. He just walked away from it and left people wondering, gee, thanks for letting us hanging. But also got into this uncomfortable question of where's the governor's head these days? Is he really kind of interested in Sacramento? Is he more involved in national politics?

And if I may spend a minute on that, one thing about Kamala Harris' presumptive nomination is that she's upset the apple cart, the order of things, here in California in this regard. Before Biden announced that he would not seek reelection, we would've assumed what? Biden-Harris ticket runs in 2024. They win or they lose. Either way, Gavin Newsom maybe looks at running for president in 2028. If Kamala Harris loses in 2024, he probably has a better shot at the nomination because she's damaged goods. If she's an incumbent vice president in 2028, she has a pretty good shot at the nomination as we just saw, because I saw she just nearly locked it up. Now for Newsom, you have to be thinking otherwise. You have to be thinking, "Okay, maybe I now have to wait until 2028, so I have to go back and look at my record." But what if he wants to step up before 2028?

And here, let me throw an idea at you. I'm going to take credit for this if it actually pans out. She gets elected president, in 2027 Gavin Newsom joins her cabinet as transportation secretary. Now why would he do this? A lot of California politicians have died to get the job of transportation secretary. You might remember back in 2012, Antonio Villaraigosa, the mayor of Los Angeles, just tried like crazy to become the transportation secretary in the second term of Obama. Tried so hard, in fact, he kind of wore out his welcome. They didn't give him the job, if you will.

But if you're Newsom and you are perhaps bored with the job right now because there is a question really of his interest in it, I think. But secondly, you're looking for something different. And thirdly, something that politically could be advantageous. Transportation secretary's a pretty good job in DC because you get to travel around the country, hand out money, get involved in the lifeblood of communities. Not a bad way to go. So maybe Gavin does end up in Washington in 2027, in 2025, just not in the way we anticipated.

Lee Ohanian:

Bill, the way you described those job responsibilities, get out and travel, talk to people, that's Gavin. He does that about as well as anyone.

Bill Whalen:

Right. Now the question is would he want to be a cabinet secretary? Having been... being an executive is a very heady experience. Maybe you don't want to report to the president. We don't know if he and she gets along very well together, he and Kamala, so a lot of ifs, but I'm just throwing it out there. But again, it does get back to this question of what Newsom does with the remaining time in his office, which I think leads us into the issue now of his homeless executive order.

Jonathan Movroydis:

Last week, Governor Newsom issued an executive order, which Bill has just mentioned, for state agencies to begin the removal of homelessness encampments from California streets, following a US Supreme Court decision in June that permitted an Oregon city to ticket homeless people for sleeping outside. The executive order, quote, "Directs agencies to move urgently to address dangerous encampments while supporting and assisting the individuals living in them and provides guidance for cities and counties to do the same." And then Newsom continues, "There are simply no more excuses. It's time for everyone to do their part."

He does have that right, Lee, as you write in your California on Your Mind piece last week, "The Golden State managed to blaze through $19 billion to cure homelessness over the past five years. And in that time it increased its homelessness population by 20%." Bill, why is Newsom doing something about this now? Is it the fact that SCOTUS has given him the green light? Or turning back to your earlier question, are there bigger politics at play down the road?

Bill Whalen:

We'll let Lee take the high road and talk about the policy here. I'll take the low road and talk about the politics in this regard. I do think now that he is out of any 2024 scenario, he needs to be looking at how he finishes the rest of his time in office, the last two years. And he's probably thinking ahead, Lee and Jonathan, in this regard, "If I go out in the great beyond and start talking about California and my record, what are they going to hang around my neck?" And I think the first thing they hang around his neck, and I'll defer to Lee after this, is homelessness. So Lee, has Gavin Newsom now solved our homeless problem by sweeping up the streets? Is it as simple as that?

Lee Ohanian:

I wish. I really wish. I don't think it's really going to do much of anything. I view it as really more like window dressing at this point. I think it shows him being very proactive after the grant ruling by the Supreme Court, which essentially... so what the Supreme Court argued is that the prior policy was you can't clear encampments unless you have an open bed available for the individual. The Supreme Court now says, "Nope, you can clear the encampment whether you have an open bed or not." So that's essentially what has happened.

And so Newsom took the press conference and said, as Gavin can be, he was very, very vocal, very hand wavy, "There's no more excuses. We are going to do this and we're going to get it done. And I'm issuing an executive order." But Bill, as far as I understand, this executive order is largely window dressing. It doesn't compel cities or counties to do this. I don't even think that he's provided really many incentives or carrots. So it sounds great. I wish it would work, but I don't think it's really going to make much of a difference.

Bill Whalen:

Who actually was curiously here in the Bay Area, I'm just south of San Francisco, London Breed, thanked the governor. "Great idea," she said. Well, it's worth noting she's up for reelection this year and she owns the homeless issue in San Francisco, so I think she is in favor of most anything that looks bold. But Lee, you go down to you in Los Angeles and what was the reaction down there? Basically told the governor to buzz off.

Lee Ohanian:

They did. Over one-third of the state's homeless, that we know of, are in LA County. And LA County says they're really not going to do much of anything about that. Bill, what's just particularly grim about the homeless situation in California is that we've spent 24 billion between 2019 when Newsom entered office and 2023. And for years, Republicans had been pushing for an audit of homeless programs because we've seen this increase in the number of homeless over time, despite spending more and more and more.

So last year, finally, when there was just so much pushback from voters, and not just Republican districts but Democratic districts, there was a bipartisan advance to the state auditor that provided an audit of homelessness suspending between 2019 up through 2023. The report was issued earlier this year, and that report ended up saying, "Well, so little data is collected and analyzed that we tried to carefully study several programs, but we really couldn't because the data's just not there." The auditor's report is very, very damaging. It simply says, "You've spent $24 billion on this and you don't even collect any data to provide us with the ability to track spending to see what's working, to see what's not working." It was really an embarrassment.

And when this report was issued, Newsom pushed the blame onto counties and cities, that Sacramento's fingerprints weren't on this whatsoever. Now, the governor had been... according to Kevin Kylie, formerly in the state assembly... the governor had been stonewalling this audit for a long, long time. And you now have at least 180,000 people in the state who are homeless, it's probably closer to 200,000 because just it's hard to find them. And sometimes there's just guesses that are made.

And Bill, a couple of weeks ago, I did a public event in Los Altos, not too far from Stanford, where the other speaker was Newsom's senior policy advisor on homelessness, a woman named Hafsa Kaka, who's a former social worker, and she's now advising the government on homelessness policies. And Bill, I have to tell you, when I walked away from that meeting, it was remarkably depressing because the state just doesn't have any kind of handle on what the economics of what's going on with homelessness are, of what the sensible initiatives would be. And I suggested to her some really simple statistics, such as, there are about two and a half million people who live in households that pay over 50% of their pre-tax income on rent. If one little thing goes wrong in these households, they're not going to be able to make their payment. If that's just 1% of those households have something bad happen, that's an additional 25,000 people every year into homelessness.

We're simply never going to get out from under this. And what the state needs to understand is, we're never going to get out from under this, and they need to start spending money much more wisely and keep track of that. But I also asked her, I said, "Why are we spending a million dollars per apartment unit on homelessness housing?" You see this throughout the state, in San Francisco and Los Angeles and Santa Monica. Santa Monica just approved a 120-unit apartment complex, just three blocks from the beach, that's going to cost about $125 million to build, over a million dollars per unit, and you're three blocks from Santa Monica Beach. And I asked her, I said, "Why are we doing this? Shouldn't we be asking local governments to have some accountability over this because we're building housing for the homeless at a cost about 14 times greater than the median home in the United States?" I didn't get an answer from that. So, I mean, this could bankrupt the state, going into the future.

Bill Whalen:

So, Lee, $24 billion over a period of time and the homeless population, by my math, has increased about 20% in California at least. So throwing dollars at the problem clearly is not the solution. Is anybody out there offering a creative alternative here in terms of just re-channeling money or just coming up with a policy that is non-fiscal? In other words, is there a way to address this other than just blasting billions and billions of dollars at it?

Lee Ohanian:

Yeah. Well, as I've studied the issue, there's really... if you want to make progress, there are two things you have to do. One, is you have to increase psychiatric bed capacity enormously within the state. Newsom's policy advisor, she didn't know that about 1 out of 8 homeless are paranoid schizophrenic. About 1 out of 10 are bipolar. About 1 out of 8 are severely depressed. This comes down to about 65 to 70,000 people within the state who simply need to be in in-person psychiatric treatment. And again, we talked about San Francisco, these are the people you see in the Tenderloin and South of Market near Civic Center. They need substantial psychiatric treatment. So you have to confront that fact that there's about 60 to 70,000 people who are in dire need of psychiatric treatment.

And the other thing is that you can't just expect everybody who wants to live in California has a right to live in California. There's a lot of low income households in California that simply have no realistic chance of living anywhere in the Los Angeles area, in San Francisco, San Diego along the coast. We need to build housing in more affordable areas. I did a couple of back of the envelope calculations that I suggested to her, which is, if you build in the Inland Empire or in the San Joaquin Valley, Central Valley, and you use, say, manufactured housing, which is homes that are built in the factory from start to finish. You ship out a home that's ready to live in, you put it in Modesto, that's about $150,000. Not a million dollars, that's about $150,000 for up to a family of three. That's a home that people in those income classes could afford.

But the state of California is going to sink very quickly if we continue to spend 800,000, a million, a million dollars plus on a single apartment unit, and yet there's no one in Sacramento that's asking questions about this. The rest of the country is throwing up their hands and saying, "What are the people of California doing?" And so if I was advising the Trump campaign, that's another thing I would take a look at, not only just the homeless, but just look how money is being wasted on that.

Bill Whalen:

Gavin Newsom's a smart politician, guys, and he understands that if he is going to be buried by the issue of California, it's going to be the jarring images of encampments, homeless encampments, across California. Let me briefly tell you about an encounter I had with homelessness the other day, then we can move on.

I'm in my local Safeway, shopping. It's a very nice Safeway, a large one, one of these places where if you come from another country, you marvel at what America offers. And I'm in there mindlessly going about my business. And this woman is walking down the main row, the one that runs parallel to all the check-outs. And I look at her and I notice something rather intriguing about her. She is wearing what appears to be a leotard or a unitard or some sort of surfing outfit, only she's pulled the top off it. She's walking around the Safeway, topless, barefoot, talking to herself, kind of mumbling in a strange language. And everyone's just kind of looking at her. She's just walking about the store. She's headed to the ice cream place to get some ice cream, if you will.

And I was just thinking to myself, somebody just takes a video footage, photo, of this crazed person walking around topless in Safeway, welcome to California. And I think that's part of the image that the governor has to push at, and that's why he is out there so boldly cleaning the streets.

But I think with all things with Newsom, it always starts with a very bold pronouncement, a very bold plan, a very bold plan of attack. But then the question is, how does it get executed? So I'm just saying, if six months or a year from now we're doing this podcast, it'd be very interesting to see what kind of progress you can point to.

Jonathan Movroydis:

Another bold plan that has been dogging Newsom, is the $20 an hour fast food employee minimum wage law that was put into effect earlier this year. A recent survey, of 182 limited service restaurant operators in the state, found that 98% have raised their prices, 89% have reduced employee hours, and 78% have conducted layoffs. Lee, can Newsom dig himself out of this hole and peel off potential labeling as a San Francisco liberal should he decide to seek higher office in the future.

Lee Ohanian:

Well, Jonathan, he's put out factoids in which he's made claims, such as higher wages are great for everybody, fast food jobs are rising, and this is misleading. What we know is that the survey, that you just referred to, which was done of over a hundred franchises, nearly all of them are raising prices, which is something the governor doesn't talk about. And year over year, California fast food prices are up about 8% compared to a little over 3% in the rest of the country. So no, it's not good for everyone. Just the simple economics is if you raise a business' cost, they pass it on to consumers. And that's exactly what we're seeing. So consumers are paying the price for this.

Profit margins in fast food are really small, 7%. McDonald's, maybe 9%, they have a very effective formula for how they do this. But that's the cost to capital. You really can't squeeze those margins much thinner. So all that happens is that just prices go up to consumers. So simply a transfer of income from those who buy fast food to those who produce fast food.

And jobs are going down, shift lengths are going down, overtime is less. The latest data showed that there's about a thousand fewer jobs in restaurants in California. Now this is really all restaurants in California, not just fast food. I have not been able to find a data series that's just fast food for California. Down about a thousand. It may be much more than that because fast food is about 57% of restaurant jobs in California.

So again, I think this will be pinned on him. And again, he is a master at turning numbers around. His latest pronouncement was, he was very upset with the Wall Street Journal, he's very upset with Fox for reporting these types of statistics that are negative about the law. But the numbers are what the numbers are. Prices are up, jobs are down.

And the franchisees, many of them own just one franchise. It's an entrepreneurial model, those people are feeling squeezed. And it's an entrepreneurial model that's more proportionally represented by those in the Latino community, Asian community, Black community, what people would call underrepresented minorities. So they're being squeezed as well. It's certainly not the win-win-win that Newsom has been advertising.

Bill Whalen:

But Lee, this caught my attention because governors get attacked from all sides and they have to decide where they push back and how hard they push back. And anytime he gets attacked on this topic, he pushes back very, very hard. He goes online, he throws data, as you mentioned, he wants to really undermine his critics on this. And I suspect that's because, to get to the politics of this, he understands this is just a very bad thing to be tarred with, to be seen as the enemy of fast food, if you will.

Personal anecdote, I was in South Carolina in July, hanging out with my sister and her four grandsons, and I took them to lunch at Chick-fil-A one afternoon. Cost me about 80 bucks because these little guys just like to order a la carte, off the menu, and before you know it, you blaze through a lot of money. So I think people who associate fast food with cheap times out, they don't see that in this age of inflation. And so if you're the governor who's in favor of the $20 minimum wage, you can be linked to higher food prices, you got a problem [inaudible 00:39:31]. And I think that just simply explains why he pushes back so hard on this narrative. And it's just gum on the shoe, Lee, it just will not leave.

Lee Ohanian:

No, Bill. And he pushed back very, very hard on the allegation that the fast food law was providing an exemption for one of his political supporters, who owns a lot of Panera Bread franchises. There was a carve out for Panera within the law, and then Newsom said, "Well, no, it's not a carve out." Well, then why was it in there in the first place? And he did an interview with old time NBC reporter in LA, Conan Nolan, where he just was absolutely not giving an inch just about how ridiculous and outrageous this suggestion was that there was any kind of pay for play.

And yet, those who were involved in the negotiations of the final stages of the fast food bill say absolutely that's what was involved, that there is this carve out for Panera Bread and it was for a politically important donor for the governor.

Bill Whalen:

Yeah. Well, he'll keep fighting it, Lee, but it's what he says versus what people see when people see higher prices, they linked it to.

Jonathan Movroydis:

Gentlemen, this coming month, August, marks two large milestones for presidents who have California and Quaker, religious Quaker, roots. And that is Herbert Hoover, whose name our institution bears, whose 150th birthday anniversary is commemorated on August 10th. And the other is Richard Nixon, whose resignation will have taken place 50 years ago on August 8th, following the Watergate affair. The Hoover Institution Library and Archives has been commemorating both milestones with exhibitions and events series. Bill, I understand that you'll be talking about Hoover's life and legacy in an upcoming podcast.

Bill Whalen:

Yes. I did a podcast yesterday with George Nash who has written multiple biographies on Hoover. And I wanted to do so because, as you mentioned, the 150th birthday is coming up. There'll be a celebration at the Hoover Library in West Branch, Iowa, where he was born and where he now rest in peace. But what I wanted to talk about with George was just kind of the totality of this man's life. He was on the planet for 90 years. To the extent most people know about Herbert Hoover, it's two negative consequences, one is the Great Depression, the other one is the market crash. But they don't understand the life he led. It's just a fantastic American life story of a kid who was born into a Quaker household in Iowa, as you mentioned, his parents... he was orphaned when he's 10 years old, he has to move to Oregon.

He then ends up at this new university, it's experiment in education called Stanford University. He's a member of the pioneer class of 1895. His wife, Lou Henry Hoover, graduates three years later. For the first 40 years of his life, he is a man of the world. He's a geology major at Stanford. He goes off and he makes a fortune in gold mining in Australia. He's involved in mining operations in China. He works out of London. So up to 1914, he is very wealthy and very successful and in the world.

Then you go into a second phase of his life, which has to do with humanitarian efforts. This is a relief for famine in Belgium, and later relief in the Soviet Union, starvation there. So you see kind of a personal side of him, one who wants to help people. Let's skip past the year as Washington, the presidency, that's another topic for another day.

But what George Nash and I got into was his post-presidency, which was in part a very big pushback against collectivism. He was just very alarmed by the New Deal. What you see with Hoover is at all times a lot of intellectual thought. He's a very prodigious writer. He's very busy for his whole nine years. And oh, by the way, I forgot to mention 1919, he forms the Hoover Institution of War, Revolution and Peace. Anyway, it's a very large, very colorful life and it just doesn't get its due because you associate him, again, with the market crash and the depression.

Jonathan Movroydis:

Before this podcast, going into Richard Nixon a little bit, I spent more than a decade at the Richard Nixon Library, and I was thinking about some parallels between our time and the Nixon era. And just a few facts, Nixon, and the vice presidential nominee, J.D. Vance, roughly the same age when campaigning for the presidency. Both Kamala Harris and Richard Nixon both campaigned for president, after having served as US Senator of the Golden State, and vice president of the United States. And for Nixon that year was 1960 against JFK.

Donald Trump and Richard Nixon both have been nominated by their party three separate times, Republican Party, three separate times. And for Nixon, those years were 1960, '68 and '72. Richard Nixon, like Donald Trump, both won and lost closely contested elections. 1960, for Nixon, it was 1960 and 1968, which he won in '68. And then both men made improbable political comebacks. Like 2024, Nixon was elected during a year that saw a president decline to seek another term. You saw anti-war protests at a Democratic convention in Chicago. And like Trump, Nixon had faced impeachment and legal issues following his time as president. And like Biden, Nixon's political life ended after having lost support of his own political party back in 1974, which is 50 years on.

Bill Whalen:

Can I add a couple of notes there, Jonathan? Unlike Donald Trump, Richard Nixon handled the 1960 results gracefully. He could have easily challenged Illinois and turned the country into a real crisis, but he said, "No, it's not worth doing at the expense of the nation." One other parallel that we can go back to Nixon here, Herbert Hoover died on October 20th, 1964. Do you know who was born on October 20th, 1964? Kamala Harris.

Jonathan Movroydis:

So interesting, Bill.

Bill Whalen:

But no, Jonathan, I'm curious as to how the Nixon Library handles the resignation because again, with Nixon, you have this very rich life. I think Nixon lived 81 years, I believe, and you can go into what has led him to Duke and then what led him into public service. You can talk about his time in Congress and the House and the Senate. You can talk about the vice presidency. You could talk about being banished in the early 1960s and having this really unlikely comeback in 1968. You could talk about the innovative presidency and you could focus on Watergate [inaudible 00:45:40]. But how does the Library segregate this one moment in time, this resignation? I mean, it's not something you celebrate, obviously, but then again, it's such a large event, you can't ignore it either.

Jonathan Movroydis:

Yeah, it's interesting. In 1990 when the Nixon Library was founded, it was founded as a private presidential library. It wasn't a presidential library. It wasn't part of the national archive system of libraries. So for various legal issues relating to Nixon's resignation in '74. But then in 2007, there was an original Watergate exhibit there back in 1990, that was actually co-written by Richard Nixon and one of his post-presidential aides at the time. So the Watergate exhibit was really written from Nixon's perspective on the whole issue. He does admit to making mistakes, but his viewpoint is that his enemies were out to destroy his presidency.

Fast-forward to 2007, the National Archives assumes control, and they don't redo the whole library, but they redo just one of the exhibits, and that's the Watergate exhibit. So that was a source of tension between the National Archives and the private Nixon Foundation. And the family didn't like the way Nixon was overall portrayed.

But in 2016, something interesting happened. There was a change of leadership at the library and there was more of a coming together between the National Archives and the foundation, and there was a campaign to redo the Nixon library. So the idea was is to show a really interesting portrayal of Nixon's times. It's not a hagiography, it shows the president's tenure, warts and all, but it really focuses on the success of the administration. Things like the All-Volunteer Force and Title IX and all the other stuff.

But it focuses Watergate. That one Watergate exhibit that didn't change, it focuses it within the context of the political events at the time. So as soon as visitors come in to see the library, the first exhibit they come into is the tumultuous decade of the 1960s and the Vietnam War. So they get to see what exactly, the events that led to the political context of Nixon's presidency. I don't think they'll be commemorating the 50th anniversary this year. I know they'll be debuting a book there written about Pat Nixon. First Lady Pat Nixon suffered a stroke after the administration ended. That book is called The Mysterious Mrs. Nixon. That'll actually be an event. Heath Lee will actually be at Hoover on August 8th to talk about that book as well.

Bill Whalen:

But [inaudible 00:48:25]. I grew up in Washington DC and when I was 14 years old, that's the year that Nixon resigned and my father, who was really good about understanding what was going on in history and making sure that his idiot son saw these things as they unfolded. I remember when I was nine years old, he put me in the car and he drove me over to the Pentagon so we could see the peace protest, the Earth Day protests that were going on. I remember he took a photo of a GI who was waving the peace sign, just a great photo.

But on the night before Nixon resigned, my father told me to get in the car and we drove down to Lafayette Park, Lafayette Square, and you would not believe what a [inaudible 00:48:58] was that night, just Nixon haters were out in force and they had oil drums above their heads and they were banging drums and celebrating and dancing around because Nixon was out the next day. And my father said to me, "I want you to see this because you may not see it in your lifetime."

But Lee, we do see the Nixon resignation pop up in a couple of regards. When Biden went on the air the other day to supposedly explain why he was not running, though he never got around to it, I was half expecting him to announce that he was resigning from the presidency altogether. But the other thing which kind of persists, Lee, is the notion that when Biden was going through his struggles, you had this conversation about who's going to do what happened to Nixon. Remember a couple of Republican senators and a Republican congressman go to him in the White House and say that, "Sir, basically you're out of options." So the question was, would the Democrats do the same with Biden? Would there be a delegation of government say, "Joe, we love you, but you got to go." It seems to me that even though things are 50 years in the past, they're still relevant in this day and age, Lee.

Lee Ohanian:

Yeah, Bill, they are. And interestingly, last month when I was spending some time at Hoover, Jonathan and I bumped into each other at a Hoover event. That was a historian's presentation about Nixon. And it was both live at Stauffer, at the Stauffer auditorium, and it was also on Zoom. And at the end of the presentation when the historian was taking questions, guess who calls in by phone? Former White House counsel, John Dean, calls in. And I think he was under the age of 40 when he was White House counsel. I think now he's in his mid-80s, maybe mid to late 80s. But sure enough, John Dean calls in with an excellent question as well.

Bill Whalen:

Jonathan, John Dean's probably not the most welcome guy at the Nixon Library, I'm guessing.

Jonathan Movroydis:

Well, it's an interesting... the whole context of Watergate, as I talked about earlier, is really interestingly portrayed, as is the presidency of Richard Nixon in general. And one thing I'd like to note about Richard Nixon is the post-presidency, you'd mentioned the post-presidency of Herbert Hoover. The post-presidency of Richard Nixon is really interesting because he wrote eight books in his post-presidency, but serious books. And the presidents, from George W. Bush to Bill Clinton, really sought his counsel. So before he died in 1994, his advice was especially on foreign policy. And he'd go on fact-finding trips to Russia and China and things like that, was really invaluable too, as a successor. But that's taught up all at the Nixon Library. And I suggest our listeners go down to Yorba Linda and check it out.

Bill Whalen:

Good thing and a follow-up before we end this podcast, if I can add one more Nixon story. I worked for Pete Wilson when he was governor of California, and Pete Wilson is tied into Richard Nixon in this regard. Wilson graduated from the Berkeley Law School in 1962. He actually was a driver on the Nixon gubernatorial campaign. And a few years later, as a young lawyer in San Diego, he was approached by the Nixon world to work for then Vice President Nixon, who was thinking about running in 1968. It was about 1965 or so, Lee and Jonathan. And a meeting was arranged, and Wilson goes in and he sits down with the great man, and Nixon starts talking just about ambitions and what he wants to do. And this is how Nixon met Pat Buchanan, by the way. He was just going around the country looking for talented young men to come work for him.

So as the governor has told me the story, they're having a conversation about national politics. And then Nixon finally turns into him and says, "Well, Pete, what are you thinking?" And the governor says, "Well, to be honest with you, Mr. Vice President, I'm thinking about running for an assembly seat." And then, as he says, you could literally see a light bulb go off over Nixon's head and it's like, "Well, Pete, tell me about the district. What's the registration right now? What are the issues?" And he quickly goes into this campaign, political move. And I think that's an important thing to know about Nixon, for all the people who want to focus on White House and the character flaws, this is a man with just a brilliant mind in so many ways. Just a brilliant policy, brilliant foreign policy [inaudible 00:53:08], a man who is very innovative on the domestic front, but also a man who really reveled in politics in that regard.

So go figure, you go sit down with a former vice president and a very serious world figure, and the next thing you know, he wants to get caught up in the intricacies of California assembly seat. And by the way, then that story Nixon said, words to the effect of, "If that's what you want to do, you got to go seek your dream and run." And the governor of course half-jokingly says, "I'm glad he did that because who knows where I would've been a decade later if I'd stayed with him." So end of story.

Lee Ohanian:

You know what gets lost in Nixon's Watergate legacy is just what a remarkably intelligent person he was. And it harkens back to a time of politics when extremely intelligent people did run at the national level. Not that long ago, I was looking at a YouTube video of the Nixon-Kennedy debates. It is an eyeopener, particularly when it's juxtaposed against the debate we most recently saw. I mean, two extremely intelligent people who were discussing foreign policy issues, nuclear warfare issues, national policy issues, to an electorate in 1960, that was, on average, much less educated than today. I encourage people to take a look at that. Google Nixon-Kennedy debates, and it's an eyeopener.

Bill Whalen:

And about that debate, John Kennedy was about 43 years old at the time, and Richard Nixon was born four years before John Kennedy. So these are very young men, the post-war generation, and it really is a generational election. Whereas, I think, if you look at this, even though Biden has talked about being a transitional president, Kamala Harris is at the end of the baby boom years, 1964. So she may be different from the president in terms of style and presentation, but policy change, we really don't shift much. Anyway, to be continued, gentlemen.

Jonathan Movroydis:

As always, this has been an interesting hour of timely analysis, gentlemen. Thank you for your time.

Bill Whalen:

Thank you, Lee. Thanks, fellas.

Jonathan Movroydis:

You've been listening to Matters of Policy & Politics, a Hoover Institution podcast devoted to governance and balance of power here in America and around the free world. Please don't forget to rate, review, and subscribe to this podcast wherever you might hear it. And if you don't mind, please spread the word. Get your friends to have a listen. The Hoover Institution has Facebook, Instagram, and X feeds. Our X handle is @HooverInst, that's @HooverI-N-S-T. Bill Whalen is on X, his handle is @billwhalenCA. And Lee Ohanian is also on X, his handle is @lee_ohanian.

Please visit the Hoover website at hoover.org and sign up for the Hoover Daily Report where you can access the latest scholarship and analysis from our fellows. Also, check out California on Your Mind, where Bill Whalen and Lee Ohanian write every week.

Again, this is Jonathan Movroydis sitting in Bill Whalen's chair this week. He'll be back for another episode of Matters of Policy & Politics. Thank you for listening.

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