Yesterday Neel Kashkari of Laguna Beach formally entered the race for Governor of California. Kashkari, a Republican, served as Assistant Treasury Secretary in Washington, D.C., and as an executive with PIMCO. He enters the Republican field at a time when the only other GOP candidate of note is Assemblyman Tim Donnelly. For the past year (it seemed) former appointed Lt. Governor Abel Maldonado had been engaged in a seemingly quixotic quest for relevance in the form of his own bid for Governor — one which he abruptly terminated last week.
No doubt over the coming months I will pen more than a view commentary and analysis pieces on the race for Governor. But with Kashkari’s entrance into the race, I wanted to open my coverage with an interview with Kashkari, who enters the race relatively unknown to California politicos and voters alike. The gubernatorial aspirant has sat down for many interviews in advance of his announcement, resulting in a number of articles and columns (like this one by my friend Steve Greenhut who writes for the Union Tribune San Diego).
I thought that instead of summarizing my interview into a column, I would actually have the entire thirty minute interview transcribed. It appears below for your reading pleasure. Be advised that our sit down occurred before Maldonado’s dropping out of the race. Enjoy!
FLASHREPORT PUBLISHER JON FLEISCHMAN INTERVIEW WITH REPUBLICAN GUBERNATORIAL CANDIDATE NEEL KASHKARI
Flash: So congratulations on your decision to run for Governor of California.
NK: Thank you Jon. I’m really excited about the decision.
Flash: That’s a pretty big decision to make. So a whole slew of questions come to my mind of things I would ask somebody who decides to run for Governor of California. I’m going to skip the one about psychiatrists and all that kind of stuff but my first question would be fairly obvious. Why do you want to be Governor of California? What do you think you can bring to this state?
NK: I want to run for Governor of California because…millions of Californians don’t have a good opportunity at an education or a job. I think back to my own childhood. My parents were immigrants. They came to America 50 years ago from India. My family wasn’t wealthy but I had a huge advantage because my parents were highly educated and they insisted that my sister and me get a good education. Because I got a good education all of the opportunities of this great country have been open to me but you look at California, our schools are ranked 46th in the country. Almost one in five Californians either has no job or stuck in a part-time in a job and together that has led to California having the highest poverty rate in America. Millions of Californians are being left behind and Sacramento is not doing anything to help them and if they’re not going to fight for all Californians than I will and that’s why I’m running for Governor.
Flash: So Jerry Brown is the incumbent. He’s obviously been in office for three years. He’s heading into this fourth year—this go around. What are your thoughts about his job as Governor and…why is he not doing the job that you think he should be doing?
NK: I think Jerry Brown is a good man. I think he’s well-intentioned but he’s either incapable or unwilling to tackle the major problems in our state. You know the analogy that I thought of recently was that when I was a kid, my mom would make me clean my room and so…even though I knew I couldn’t get away with this what I would do is go shove all my junk under my bed and my room looked clean. That worked for about two minutes until she came into my room and said no, clean your room. That’s Governor Brown’s approach to problem solving in California. He nibbles around the edges, makes minor tweaks, pats himself on the back and says look, we fixed all the problems.
Whether it’s the budget, which he’s going around the country giving press interviews saying look, I solved all the problems. Meanwhile we have 500 billion dollars of unfunded pension liabilities that he’s completely ignoring. Whether it’s education, tinkering around the edges with his local control funding formula, go down the line. Whether it’s crime and his realignment plan, in all of these cases Governor Brown is just…putting lipstick on the pig. He’s not actually addressing the root problems of our state and that’s why I want to run and that’s why he’s not doing a good enough job.
Flash: Okay. So you’re not the first Republican to say that they want to be in the top job and obviously in the last go around Steve Poizner and Meg Whitman both made their case. Obviously Meg went to the general election and spent a record amount of money — and obviously that didn’t work out so well. So have you studied her campaign? Ever looked at it to see where maybe she went wrong or how you would do things differently as a candidate?
NK: The campaign I’m going to run is going to be an authentic campaign where people really get to know me. I’m really reaching out to the people in a very genuine way. You know I’ve spent the last year traveling all around California meeting with families and teachers and cops in communities all across the state. Two things have shocked me, Jon…in a good way. Number one, I go into some of the poorest neighborhoods in California. People could care less that I’m a Republican. They’re just shocked that I’m there. That anyone is there to really learn what their lives are like and to see how we can give them and their kids a better shot at life. Most candidates don’t do that, number one. Certainly the recent candidates we’ve had in California have not done that. Number two, the vast majority of people that I meet…they don’t want welfare. They don’t want food stamps. They want a job. They want their kids to get a good education and so the issues and we’re going to talk about this later, but the issues I’m focused on entirely are jobs and education. Together empowering all Californians so that they have fair chance at a better life. So to me the kind of campaign I’m going to run is going to be completely open, embrace the press, let people know who I am and then focus on the issues. I don’t think anyone has done that in recent years.
Flash: Yeah I would concur with that. Obviously before you get an opportunity to go head-on-head with Jerry Brown there’s the inconvenient fact of a first election in June. Obviously former appointed Lieutenant Governor, Abel Maldonado and Assemblyman Tim Donnelly are running right now. You’ll be joining that field. So how would you size up your competition and what would your strategy be given the fact that both of those gentlemen are probably more well-known than you in the political circles anyway.
NK: Sure. That’s absolutely true. I respect both of them. They’re both dedicated to public service. They both want to make California better and I’m glad they’re in the race and I want to see more Republicans running across the ticket for all our statewide offices. We need to be fighting to fix the Republican Party in California. Put us at the table again. Make us relevant and then on and win and make the big changes in the state. So I’m glad that Abel and Tim Donnelly are in the race but if you look at what they’ve done for the past year, they both have been running for basically a year now…they haven’t been able to generate much support. Unfortunately, California is an incredibly expensive state. It’s going to take tens of millions of dollars to able to run a credible statewide campaign against Governor Brown. Whether it’s Tim, it’s Abel or it’s me. Together they’ve raised about half a million dollars in a year and so for and spent it. So far they have not raised anywhere close to the amount of money it will take for them to be credible against Governor Brown. In the last year, not only have I been meeting with republican leaders around the state and community leaders across the state, I’ve also been meeting with donors. I’ve met with some 700 donors around the state and frankly around the country and my ideas and my background is really resonating with them. The feedback that I’m getting is that we will be able to raise the money to run a credible campaign against Governor Brown. If we can and I believe we can, than I think we’re going to have a big advantage.
Flash: So if you’re elected governor it would not be your first time in government service. You played in a role in the Bush Administration with some overlap into the Obama Administration helping to run the Troubled Assets Relief Program. Say that ten times fast. So talk to us—I guess I have a two-part question. One, what’s the program? How did that work and I guess as a followup would be what should be some lesions learned or after action that you would recommend so that it doesn’t have to happen again?
NK: Sure. Well we were a free market Republican administration and we deeply believed in letting the markets deal with their own messes. So for a year I’d been at Treasury and banks had been calling us saying that they’re in trouble. Our message to the banks was flush the toilet. You made a bunch of bad investments you own it. Nobody’s going to help you. But it was when we realized the entire financial system was on the brink of collapsing and literally ATM’s wouldn’t work. People wouldn’t get their paychecks, that we are actually looking at a Great Depression scenario. That’s when we realized we had to act and so we said look if we’re going to act and we hate that we have to do this, it makes us sick, let’s do it in a way that protects the taxpayer and we can get the money back. So I ran the 700 billion dollar TARP Program. We ended up deploying 425 billion dollars but importantly we stabilized the economy and then we got all the money back and as of last month, actually it just came out that the latest numbers are that we actually made an 11 billion dollar profit for the American people for the taxpayers for the money that we deployed. So I hated that we had to do but we felt like we did it the best possible way. In contrast, if you think about the Obama Stimulus Plan, that was 800 billion dollars out the door. You never get a dollar of it back. That was just pure slush fund spending. So very different programs but my experience taught me that you can battle a crisis. We got Republicans and Democrats to work together. We battled the crisis. We protected the taxpayers even though everyone told us it would be impossible…and so when people tell me that Sacramento’s impossible to fix and I say no way I’ve heard that before. We did it in Washington we can do it in Sacramento.
Flash: That’s kind of funny because usually it’s other the way around. Everybody says you can’t fix Washington, you can try to fix things locally. So this is a bit of field from a gubernatorial campaign but because you have such an expertise in this area, if you could wave a magic wand and have Congress and the President change a few laws to change the way things operate in the finance market, without getting too wonk…in order to try not to see a repeat of the kind of TARP situation or the situation that necessitated TARP, what would some of those be?
NK: Well a couple of things. One, some of this has been done. So some stuff has been good where the banks are now forced to hold more capital, which is reserves against bad things from happening. Banks don’t like it because they become less profitable but it’s good for the rest of us and they should hold more reserves against bad things, number one. Number two, frankly, the Department of Justice needs to be way more aggressive in prosecuting the fraudsters and the people doing insider trading. You know there’s a case that just happened where a big hedge fund manager got off, basically, scot free even though all his underlings were found guilty because the Department of Justice is only prosecuting the easy cases. They need to take some risks and go prosecute the hard to win cases too and not let these guys get off with just a slap on the wrist and unfortunately that’s happening right now.
Flash: What about Freddie, Fannie, some of these very aggressive programs to put the government in the position of financing a lot of the…the paper that’s out there.
NK: Yeah there’s no question that—well intentioned but ultimately misguided government polices contributed to this mess both with Fannie Mae, Freddie Mac, FHA home loans, they were pushing mortgages, mortgages, mortgages, mortgages not really considering whether or not people could ever afford to pay them back and so we need to reign them in and we need to wind them down so that they’re not dominating the mortgage market like they are today. I could argue that you could have a safety net, so to speak, where they’re there only in extreme circumstances if the markets completely breakdown but they were pushed pedal to the metal so they were dominating the market and pushing the private sector out and that’s a huge problem.
Flash: Let’s talk about the process that you went through, as it were, as you decided to do this. So I guess my question would be at what point—what caused you to first say to yourself, I’d like to run for public office? I mean that’s not a small decision.
NK: Well the three years I spent in Washington as a Bush appointee and then, as you know, briefly the Obama Administration asked me to stay because we’re still in a financial crisis, it was a really tough three years. I mean we felt like we were at war. Obviously no one was shooting at us, you know this is not truly a war the way or soldiers face but trying to battle the financial crisis and keep the U.S. Economy together. It felt like we were at war but it was also a deeply fulfilling experience. Right. We did things that were controversial. People said Republicans and Democrats will never work together. We got them to work together. We tackled the worse economic crisis since the Great Depression and we got all our money back. We protected the taxpayers. We even made a ten billion, eleven billion profit for the taxpayers, for the American people. So I looked at that experience and I look at California today and I just don’t see a bench. Where’s our republican bench of creditable candidates who’s going to go charge up to Sacramento and challenge Governor Brown and turn the state around. If I saw a deep bench of quality Republicans taking that fight on I’d be helping them. But I don’t see that bench and so I look at this and I think if a guy like me who is young, a lot of energy, experienced in government, if I’m not willing to try to turn the thing around, to turn the state around and remake the Republican Party in California so that we have real relevance again, if I’m not willing to try who is? So I feel a sense of duty and obligation to go try to turn the state around and remake and rebuild the Republican Party to where we know it can be.
Flash: So when you took this kind of call, feeling of a call to action and actually than said well I’m going to look into this more, what’s that been like? I know that you’ve shared with me that you’ve traveled around the country meeting with people and you’ve traveled around the state, kind of getting hands so…that may be two different questions… about some of the people you’ve been seeing around the country and then some of the exploring you’ve done here in the vast state of California.
NK: Sure. Well there’s been three parallel tracks. Track number one meeting with leaders across the state, Republican leaders, as well as, community leaders to learn firsthand what the challenges are the people are facing and again, I’ve been pleasantly surprised how well received I have been both with the republican leaders, as well as, with the community leaders across the state. Again, when I go into poor neighborhoods I got to tell you, people couldn’t care less that I’m a republican and that’s been really—that’s been comforting and positive for me to see that, number one. Number two, I’ve been talking to and working with some of the best policy minds around the nation. So we’ve been looking at all 50 states. What are the best jobs ideas that other governors are implementing? What are the best education ideas? What can we bring to California? So some of the folks who have been helping Governor Jeb Bush, they’ve done amazing things in Florida to transform the schools in Florida and it’s given me great hope. We know how to do this. We know how to fix schools. Governor Mitch Daniels talked about economic reforms broadly. Governor Mike Pence current Governor of Indiana, again looking at what other states have done. We know how to grow the economy. We know how to unlock the potential of the private sector to create jobs. So that’s track two. Can we really find solutions that we can bring to California and the answer is a resounding yes, absolutely. Then three, I mentioned earlier, meeting with donors around the state and around the country. Meeting with some of the top donors in the Bush network, in the Romney networks. You know people around the country care about California because either we’re going to be an engine for growth for America or we’re going to be an anchor. They want us to be an engine and that’s what also gives me confidence that we can raise the resources we need to run a credible campaign against Governor Brown.
Flash: Let’s talk about guns, babies and taxes! So Second Amendment issues. How would you characterize yourself on Second Amendment issues?
NK: I’m a gun owner. I deeply believe in the Second Amendment. I’ve owned guns for years. I actually own four guns. Two handguns, a shotgun and a hunting rifle. All the guns that I purchased I’ve purchased at a gun store. I went through a background check. I went through a waiting period. It didn’t inconvenience me at all but I also look at this and think I’m a responsible gun owner. My guns are locked in a gun safe and I know where they are and they are under my control at all times. Adding more gun laws onto me is not going to make us any safer. It’s not going to make our kids any safer and so to me I deeply believe in the Second Amendment and the right to bear arms. I practice it. I want us to be smart. I want us to protect our kids in schools and if you look at the tragedies that are happening nationally they’re much more rooted in mental health breakdowns than they are in responsible gun owners who need to more laws policing them.
Flash: Okay… I don’t want to extend this first interview into a long back and forth on these issues so…let’s move over to the abortion issue, which is obviously one that’s very passionate because people have heart felt beliefs…
NK: First of all…I really respect the fact that people have passionate views on both sides of this issue and their passionate views are rooted in deep heart felt beliefs. They’re real deep beliefs that drive people and I respect both sides of the issue. Overall I consider myself to be a social libertarian, which is I just want the government out of our lives and I want you to decide what’s right for you and your family and if someone has a different view let them decide what’s right for them and for their family. You know I had a recent experience where I visited a Priest, a Catholic Priest in South Central Los Angeles. I went to meet him to learn about his community and when we sat down in his office, I remember this vividly because there was a picture of Jesus on one wall and Pope Francis on the other wall, and the Priest sits down and says Neel before we begin I want you to know I’m a single issue voter. I only vote on abortion… He said he used to be a Democrat but the Democratic Party left him over abortion and we wanted to know how passionate he was about this before we began our discussion. I said Father I really appreciate your views and I appreciate that you’re a single issue voter and that you told me this. You know we have something in common because you’re a single issue voter, I want to be a single issue candidate, which is the only reason why I want to run for governor is to create opportunity for every single kid in California so they have a fair chance at life. What’s so great, Father, is that your single issue and my single issue are in no way in conflict with one another and I would argue that if we can accomplish what I want to accomplish, which is fixing the schools and growing the economy so people can work, we’re going to have less crime, we’re going to have fewer kids on drugs, I would argue that we are going to have fewer abortions cause you’re going to have fewer kids getting pregnant etcetera. So many of our problems in our society become smaller if we get people real economic opportunity. We ended up having a wonderful discussion for the next 45 minutes and we found a lot that we agreed on and so to me I think just keeping the government out of our lives is the approach that I take on these issues.
Flash: Let’s talk about taxes. Obviously Prop 13 is a big issue in California. What’s your opinion on Prop 13?
NK: I think—first of all let’s just take taxes generally. I think our taxes are too high, number one. Number two, they’re poorly designed so they’re destroying jobs instead of incentivizing investment and maybe worst of all, we’re not getting our monies worth for the taxes that we’re collecting. So I don’t want to touch Prop 13, this notion of split roll, I think makes no sense. If somebody wants to touch Prop 13 then I say okay, let’s put all our taxes back on the table. Let’s do a comprehensive review of all of the tax system in California because California’s tax code is screwed up in a lot of ways in addition to the fact that it’s too high so I don’t think we should touch Prop 13 and our taxes are too high and I don’t think raising them makes any economic sense.
Flash: So how did you vote on Prop 30, which was the tax increase on the ballot last November?
NK: I voted against it.
Flash: So that’s a temporary tax that’s conveniently set to expire right about the time that you would sworn in to your second term…
NK: It’s another example. You and I can agree that Prop 30 was not good economics but even if you believed it was this was Governor Brown shoving something under his bed and then at the end of his second term all the sudden the dirty clothes are going to come crawling back out again.
Flash: All right that makes sense. Gay marriage. Obviously is a big issue in California. Where do your plant your flag on that?
NK: Once again, I respect the fact that people have passionate views on both sides of the issue and, once again, I consider myself to be social libertarian, which is I just want the government out of our lives and let people decide for themselves what’s right for them.
Flash: On the immigration issue, which of course, deeply impacts state policy and politics?
NK: I have a few principles that govern my views on this. This is a federal issue. It affects every state, some states more than others, but we need to come up with a federal solution. It doesn’t make sense, in my opinion, for each state to do it’s own thing. The current system is a disaster and so while I want us to aim for perfection, if we can come up with a new system that is a lot better than the current disaster than we have now than I think we ought to do that. Let’s not let the perfect be the enemy of the good. Here the few principles. Number one…immigration is a huge competitive edge for America. The fact that people want to come here so we should reform our immigration laws to prioritize those workers that we need in our economy.
As I traveled around the state farmers tell me we need workers to work the farms. Okay well than let’s prioritize them and techs said we need more engineers and scientists, okay let’s prioritize them as well to feed our economy, number one. Number two there are 12 or 13 million people here today illegally. They’re never going to be deported. Whether you want to or not they’re never going to be deported and so I want them all paying taxes here. I want 12 or 13 million more gainful taxpayers here in America contributing to our society. That means they need some form of legal status so that they can file their taxes, they can pay them and they can contribute to our overall society. So that’s important to me. Then number three, we have to enforce the law. There’s no point in having any set of policies no matter how thoughtful they are if they’re totally un-enforced they way they are today. So we need to enforce the law and the border and we need to enforce the law in our societies, in our businesses so that we’re not letting the current system just continue the way it has for the last 30 years.
Flash: So…in that regard than you would support more legislation to penalize employers that hire people that are here illegally?
NK: I think if we come up with an efficient system so employers that actually works. Something that actually works. Yeah. We ought to be enforcing the laws at the border and in our society but we got make the E-Verify system work.
Flash: Okay so lets talk about some fun stuff to finish off this interview. My first question would be…movie, what movie have you seen most recently that you would recommend to our readers that they should see? Or is this where you say I’ve been involved in…
NK: …I’ll tell you. The movie that I’ve recommended the most in the past couple of years has been Lincoln. It was fantastic. I saw it twice in the theatre and once on a airplane. It’s funny, obviously, I’ve been a Republican my whole life, my whole adult life, I knew Lincoln freed the slaves and of course knew Lincoln was Republican but after I saw that movie and I went and said I need to read a book about Abraham Lincoln because—since I was a kid I have not read a book about Abraham Lincoln—so I went, after I saw the movie, and read a book about Abraham Lincoln. I didn’t know, shame of me, I didn’t know that the Republican Party was literally founded with the express purpose of abolishing slavery. Like the Whig—the abolitionists among the Whig’s and Democrats got together, formed their own party, the Republican Party and drafted this former Congressman Abe Lincoln to be their presidential candidate. That’s wonderful history that I would argue most Americans don’t know and I was one of them.
Flash: So…how about, well besides the Lincoln book, are they any books that you’ve read, I guess political books that you’ve read that you would recommend to people or that you feel were special to you? Besides the Constitution, which I’m sure you carry in your pocket.
NK: I just finished Double Down, I just finished it literally yesterday, which was on the Romney-Obama 2012 election, which was interesting. I thought that the authors have a real Obama love that they tried to mask but they couldn’t mask the real bias toward Obama.
Flash: All right we’ll go to—favorite president? You just talked about Abraham Lincoln and I don’t know if the—this movie coming to light makes him your favorite president or if you have a another…
NK: I’ll tell you the one—honestly the one that is my favorite because I was young enough to watch him and admire him really, obviously I admire Regan but I’m a little young for Reagan, George H. W. Bush. My first time, I remember this, I think it was 60 Minutes interview in around 1986 or 87, I watched that interview and I said oh my gosh this guy’s brilliant. George H. W. Bush, he was vice president at the time, I said he should be President. So then when I was in college and he was running for re-election in 92 I would go to football games and pass out fliers to try to get President Bush, I was in Illinois at the time, to get him re-elected. I always will remember his Thousand Points of Light speech. When he gave that speech I said oh my gosh that’s the man that I saw in that interview that I was so impressed with. I just saw him as so thoughtful, so smart, so experienced, always focused on okay how do we bring people together and find the right thing to do so I really admired him as a president and really admired him after he was president, you know, the way he’s conducted himself for the past 20 years has been fantastic. I don’t know if he’s the best president ever but he’s somebody that I really admired and I felt like I could watch him and I was old enough to really understand what he was doing.
Flash: So for our readers who are reading this interview, if they want to find out more about you…and figure how to meet you and all that good stuff…
NK: Well we have a website, NeelKashkari.com where there’s a lot of information and there’s the ability for people to sign up and volunteer and get our updates and hopefully donate, that’d be a great way.
Flash: Perfect. Than obviously you’re going to be on the—pretty aggressively on the stump for the next—ideally 11 months right…
NK: Ideally 11 months. Absolutely…constant state of motion.
Flash: Well I appreciate you taking the time to sit down with me and good luck to you and I’m sure we’ll be talking a lot more between now and primary day.
NK: Absolutely Jon. Thanks for the opportunity this has been great.