How They Ruined California - Steve Hilton

In this podcast episode, Steve Hilton, a Republican candidate leading the California gubernatorial race, discusses the state's deep-rooted problems under 15 years of one-party Democratic rule. He explores California's economic decline, soaring homelessness, crime surge, regulatory overreach, broken immigration policies, judicial reforms that have softened crime penalties, and the challenges of governance amid entrenched bureaucracy and special interests. Hilton also details how executive actions can drive immediate change despite legislative deadlock and outlines his vision for putting California back on track.

California's Decline Under One-Party Rule

Steve Hilton portrays California as a ruin of its former self, devastated by decades of Democratic control. He cites persistent leadership by one party across the state legislature, governor's office, attorney general, and others as a root cause of systemic failure. Once the most beautiful and promising state, California now suffers from the highest unemployment and poverty rates nationwide. Business climate rankings place California dead last for a decade, driven by exorbitant costs in housing, energy, water, and insurance. The state's baseline quality of life for average working people has become a nightmare, with spiraling homelessness, rising crime, and widespread urban squalor. Wealthy residents and businesses are fleeing, exemplified by a 40% price drop in luxury housing over ten years. Despite its natural advantages and abundant opportunities, rampant mismanagement has resulted in a crisis of governance and public trust.

Burdensome Regulation and Bureaucracy

Hilton describes an overwhelmingly complex and bloated government operating behind California's woes. The state's budget has doubled in ten years, yet outcomes have worsened. Regulations intended to protect workers and the environment have instead become tools for lawyers, unions, and bureaucracies to extract high costs and obstruct growth. Laws like the Private Attorneys General Act have spawned a lucrative litigation racket targeting businesses with trivial infractions, forcing expensive settlements. Environmental rules, such as California's Air Resources Board and Vehicle Miles Traveled (VMT) policies, effectively block new housing and business expansion under the guise of climate activism. Unions wield lawsuits through the California Environmental Quality Act to demand union-only labor and inflated prevailing wages, dramatically driving up construction costs. These forces combine to make daily life and doing business prohibitively expensive.

Homelessness and Mental Health Crisis

The homelessness epidemic is vivid, with encampments and drug overdoses commonplace on streets, including near schools. Hilton highlights that homelessness is illegal and persistent only because local governments refuse to enforce the laws, citing court rulings like the Boise decision which prevents removing homeless individuals without adequate shelter options. However, permanent supportive housing units cost upwards of $700,000 to $1 million each, embodying inefficiency and corruption tied to union deals. Despite billions spent annually—$24 billion spent on homelessness in California with no measurable improvement—the crisis worsens. Hilton argues California must realign spending priorities, cut wasteful bureaucratic bloat, and focus heavily on targeted mental health care. He notes that the state has yet to adopt federal waivers that would allow building larger mental health institutions, hindered by outdated rules limiting Medicaid reimbursement to facilities with 16 beds or fewer.

Crime and Criminal Justice "Reform"

Hilton strongly condemns California's criminal justice "reforms" as ideological blunders that legalized significant amounts of crime. Starting with the Supreme Court's early 2010s ruling on prison overcrowding, the state opted to release inmates rather than build more facilities. Ballot initiatives like Proposition 47 downgraded theft under $950 to misdemeanors, enabling rampant retail theft and property crime. Proposition 57 further reclassified many severe crimes—including domestic violence, rape of unconscious women, and child sex trafficking—as nonviolent offenses with no automatic prison sentencing, an approach heavily pushed by figures like former Attorney General Kamala Harris. Legislative attempts to reclassify and toughen penalties for heinous crimes have been blocked repeatedly by Democrats until recently when political embarrassment forced intervention. This has fostered an environment where victims struggle to find justice and crime rates have soared, undermining public safety and social order.

Economic and Employment Challenges

California's famed economy, the fourth largest globally by GDP, masks deep dysfunction. The prosperity is concentrated within a few dominant tech companies that employ relatively few people, while widespread unemployment and poverty afflict regular workers and Latino communities disproportionately. Hilton shares stories from constituents unable to find jobs in industries like construction due to employers hiring illegal immigrants at lower cost without providing benefits. Welfare disincentives exacerbate labor shortages by offering payments that outstrip many working-class salaries, creating perverse incentives for some to avoid work. He critiques the common argument that illegal immigration is necessary due to labor shortages by illustrating that higher wages and better conditions would fill jobs with local workers if the system operated normally.

Immigration and Border Enforcement

Hilton supports strong border enforcement as achieved by the Trump administration's policies, which dramatically curtailed illegal immigration. He emphasizes the dysfunction caused by California's sanctuary laws, specifically SB54, which prohibit local authorities from cooperating with federal immigration enforcement, allowing criminal illegal immigrants to avoid detention and reoffend. The administration's "worst first" deportation approach targets dangerous criminals but faces blockade from local governments refusing to inform ICE of their presence. Hilton stresses the importance of cooperation between state and federal authorities. He also highlights abuses of welfare systems by some immigrants who avoid employment to retain benefits, pointing to incentives that need reform. While acknowledging critiques of immigration enforcement's harshness, Hilton contends the numbers of U.S. citizen family members affected by deportations are minimal.

Governance Challenges and Executive Power

Hilton elaborates on the limitations and opportunities inherent in California's political structure. The Democratic supermajority legislature—partly a product of gerrymandered maps—passes an overwhelming volume of laws annually that swamp the government with regulations, most sponsored by special interests and lobbyists. As governor, Hilton cannot simply overturn laws but can influence how the sprawling bureaucracy enforces or suspends them. He plans to appoint agency heads and regulators who will reverse damaging policies such as shutting down in-state oil production while importing dirtier foreign oil, and slow the environmental overreach strangling housing and business development. The governor's executive authority can streamline permitting, improve law enforcement, reverse closures of prisons, and promote performance-based contracts to reduce recidivism. Hilton acknowledges a formidable institutional resistance from entrenched civil servants, unions, and lawsuits, but emphasizes careful preparation and a clear implementation plan are crucial for breakthrough governance.

Fiscal Responsibility and Budget Reform

Despite California's enormous budget of over $320 billion, Hilton highlights chronic deficits, inefficient spending, and budget gimmicks. Governor Newsom's administration increased bureaucratic payroll and pension obligations by $7 billion even amid a $12 billion deficit, siphoning money from reserves designed for emergencies. Hilton contends that more spending is not the answer; rather, the state needs drastic budget cuts to reduce taxes and redirect funds efficiently. Examples abound where massive sums yield no progress, especially on homelessness. He advocates for accountability through outcomes-based spending and dismantling corrupt union monopolies that inflate construction and service costs. By slashing bureaucratic waste and streamlining government functions, necessary investments in prisons, mental health, and infrastructure become financially viable without raising taxes.

Political Landscape and Outlook

Hilton recognizes that no Republican has held the California governorship in decades, and many assume a Democrat win is inevitable. However, he insists public sentiment has shifted due to widespread dissatisfaction with the status quo and worsening conditions under Democratic governance. He notes that majority polls show a strong perception that California is moving in the wrong direction, creating an opening for political change. He contrasts himself with incumbent Governor Gavin Newsom, labeling him the "worst governor in America" despite his political skill and ambition. Hilton believes the accumulated failures under Newsom and his predecessors have made the election competitive and could produce a political earthquake. He stresses that practical, well-organized governance focused on results rather than ideology is what Californians demand.

Steve Hilton's Personal Background and Commitment

The podcast briefly touches on Hilton's background as a first-generation American originally from the UK. After moving to California in 2012, he taught at Stanford, founded businesses, and became naturalized in 2021, even renouncing his UK citizenship to fully commit to his adopted home. His outsider perspective informs his critique of entrenched political dysfunction and fuels his determination to bring real change to California's governance. Hilton positions himself as a "man of the people," emphasizing positive populism built on practical solutions rather than partisan rhetoric.

Resources and Immediate Executive Policy Impact

California's greatest resources include its diverse economy, natural beauty, entrepreneurial spirit, and workforce potential. Hilton highlights how executive action can immediately leverage these assets through strategic appointments, regulatory reform, and better enforcement without waiting for legislative cooperation. By appointing leaders aligned with his vision in key regulatory agencies, he aims to dismantle the restrictive bureaucracy stifling development and innovation. Streamlining permitting, halting counterproductive policies like oil restrictions, enforcing existing laws on homelessness and crime, and cutting wasteful spending are all tools available to the governor's office to effect visible improvements independent of the legislature's gridlock. This approach prioritizes actionable, measurable changes to restore California's prosperity and quality of life.