Tom Steyer Is Trying Politics
PALM SPRINGS, CALIFORNIA – “I’m not saying we should run government like a business,” Tom Steyer told a questioner at the latest in a series of question-and-answer sessions he’s been holding around the state as he campaigns for governor of California. “There’s a big fight right now between working people and rich companies who want to control our government and rip people off.”
If I didn’t tell you that Steyer was himself a billionaire business titan until he left the hedge fund he founded, Farallon Capital Management, in 2012, you might have assumed from the above exchange that he was a Bernie Sanders acolyte who camped overnight at Occupy Wall Street. He’s running for governor, even more so than in his unsuccessful 2020 presidential run, as a traitor to his class, someone who has turned against the billionaires and corporate interests he thinks are at fault in tarnishing the California dream, and who must be fought if Californians are to regain it.
He’s spent more than $66 million of that accumulated fortune so far on a candidacy that foregrounds breaking up utility monopolies, closing property tax loopholes, funding education, slapping a windfall profits tax on domestic oil producers benefiting from the Iran war, building a million homes, and establishing single-payer health care. He wants to use the governor’s podium to take on a presidency that has run amok. “We should be organizing and in the streets, and the governor should be leading it,” Steyer told me in an interview.
The atrocity of extreme inequality has taught liberals to treat rich self-funding candidates with inherent skepticism, no matter what message they present, no matter that the most well-known Democratic traitor to his class worked out pretty well for the country. Indeed, at both town hall events I attended in Southern California this month, Steyer fielded questions about his former hedge fund’s investment in private prison duopolist Corrections Corporation of America (now CoreCivic), something that also came up in conversations with several friends and acquaintances.
“I made a mistake 22 years ago and we sold it,” he told questioners in both Culver City and Palm Springs, in comments that were clearly prepared. “It was a mistake, but more than a mistake, it was a wake-up call for where I was … I felt like I had to leave the business to live my values.” He then talked about Saul’s conversion on the road to Damascus, from a skeptic to Jesus’s most dedicated follower. “People can change and do the right thing.”
There’s reason to question even this narrative: Steyer kept investing for six more years at Farallon after selling the CCA stock in 2006. But Steyer is at least taking the most elemental step in being a politician: talking to voters about their concerns. That this is so exceedingly rare in California is a large reason why Democrats are hurtling toward disaster in the June 2 gubernatorial primary election, despite having an iron grip on the electorate.
The most recent poll released has two Republicans sharing just one-third of the overall vote, yet advancing unopposed to the general election. A cliquish, insider political culture that asks nothing of voters, including what they want out of government, bears much of the blame.
Steyer’s challenge is to restore a sense of possibility to a state that has not been ill-governed, but governed in a sealed bubble, making it impossible for an already apathetic public to understand what anyone stands for or why governing matters. “If you don’t get out and talk to people face-to-face, then you know what you know? You know what the other people in Sacramento know,” he told me. “And you know what that means? You don’t know anything.”
IT’S ABOUT SIX WEEKS UNTIL ballots hit mailboxes in this primarily vote-by-mail state. The more than five dozen names on that ballot are now set, regardless of whether anyone drops out. Putting aside random candidates like “Barack D. Obama Shaw,” the main contenders are eight Democrats and two Republicans. As my colleague Harold Meyerson has explained, because California primaries send the top two primary vote-getters regardless of party to a November runoff, simple math dictates that the current situation makes it at least possible that Democrats get shut out of the general election, despite having the overwhelming support of the electorate.
It took a while for Democratic Party leaders to even broach the subject of winnowing the field to avoid an all-Republican runoff; state chair Rusty Hicks gently called for candidates without a path to victory to get out on March 4. But nobody has, and this has now intersected with the volatile subject of race.
It so happens that four Democrats at or near the bottom of all polls—former state Controller Betty Yee, state Superintendent of Public Instruction Tony Thurmond, former Los Angeles Mayor Antonio Villaraigosa, and former state Attorney General and federal Secretary of Health and Human Services Xavier Becerra—are all Black, Hispanic, or Asian American, while three of the front-runners—Steyer, Rep. Eric Swalwell, and former Rep. Katie Porter—are white. Matt Mahan, the white mayor of San Jose and the favored choice of tech billionaires, is also languishing in polls but has a fortune to draw from. (This is not solely a question of people of color lacking the networks to raise money: Villaraigosa and Becerra have raised substantial amounts, but that hasn’t shown up in the polls.)
Steyer’s challenge is to restore a sense of possibility to a state that has not been ill-governed, but governed in a sealed bubble.
The University of Southern California finalized the lineup for a debate scheduled to take place tonight with a formula based on polling and fundraising. They chose the two Republicans—Fox News personality Steve Hilton and Riverside County Sheriff Chad Bianco—and then the four white Democrats. The four Democrats of color immediately cried foul and demanded that their party colleagues boycott the debate.
Mahan in particular got in the debate because of his fundraising haul, which Becerra and Villaraigosa said was unfair. Mike Murphy, who works for the USC Dornsife Center that is co-sponsoring the debate, is advising an independent expenditure campaign for Mahan, and Rick Caruso, a Mahan supporter, has given millions to USC, his alma mater. After days on the defensive, late Monday night USC cancelled the debate, after Democratic legislative leaders pushed for a boycott. In other words, more leverage was used to demand a subjective notion of fairness for a debate scheduled at 5:00 p.m. on a weekday than to ensure Democrats do not squander a layup election.
The racial angle has made it difficult for anyone with clout—and there isn’t anyone, really, in a country with weak political parties where Tammany Hall is now a building that houses a Petco—to nudge the stragglers to drop out. But another reason for this mess is the brand of un-politics that has characterized the Golden State for the last quarter-century.
After Arnold Schwarzenegger terminated Gray Davis in the 2003 recall election, the small clan of consultants who control state Democratic politics decided on the star system: only choosing candidates with national profiles and slotting them into particular races. Jerry Brown got the governor’s slot, Gavin Newsom became his lieutenant and heir apparent, and Kamala Harris split off by taking an open Senate seat. Earning votes through compelling policy ideas and voter dialogue was not part of the equation: In a big state like California, you won on name ID and name ID alone, according to this theory.
But when Harris declined to run for governor this year, the star wattage ran out. Lt. Gov. Eleni Kounalakis, who didn’t have that kind of profile anyway, also declined to run, leaving a scattered field where nobody could scare opponents out. Porter, with residual name ID from a Senate campaign, led until a combative exchange with a journalist led to long-rumored examples of her being awful to staff leaking out. An attempted comeback with a gimmicky plan to eliminate taxes on any Californian making under $100,000, about 50 percent of the entire tax base, has not endeared her to the few wonks willing to keep giving her a chance.
The establishment latched onto Swalwell late, with close Nancy Pelosi ally Adam Schiff’s endorsement being a key tell. But Swalwell, a cable news sound-bite machine with no history in state issues, couldn’t drive anyone out of the race, either. He’s taken shots for not living in the state (though a court dismissed this), and founding an AI company as a side hustle to his congressional gig. He’s been reduced to bragging about leading in a poll that would show him and all other Democrats vanquished from the race.
Villaraigosa and Becerra have literally been running against one another for 25 years, since the 2001 Los Angeles mayor’s race, and it feels like they’re in it mostly to beat one another. Thurmond and Yee (literally the former vice chair of the state party who only got 17 percent of the vote at the state convention) just haven’t taken off, and Mahan is clearly the candidate of a billionaire class trying to take over the policy apparatus in the state. That leaves Steyer, himself a billionaire, but someone who is approaching the campaign the way an actual politician would, by coming up with policies and speaking to voters.
THE CONVENTIONAL WISDOM IS THAT such trifles like “asking for people’s votes” is simply too parochial to work in a state with roughly the population of Canada. But as Steyer told me, that further isolates politics and keeps leaders in the dark about what voters actually want. He gave me a number of examples based on his travels across the state: staff at University of California campuses living in their cars, farmworkers struggling with no water in the fields, a 35-year-old working at Apple and living at home with his mom 90 minutes away in Salinas, health care workers running on fumes and still at it only because of their desire to heal people.
“If you’re not going around the state and meeting people and asking them, ‘What’s up dude,’ then you’re just making it up,” he said. “And don’t we have enough of a problem of that in Washington, D.C.? We have to import it to California?”
Of course, Steyer has that luxury. He doesn’t have to spend hours on the phone asking rich people like him for cash or going to fundraisers. He isn’t just doing a listening tour, he’s bombarding the airwaves with millions of dollars in ads, just as he did for successful campaigns to defend the state’s climate change law, close corporate tax loopholes, add a tobacco tax to fund health care programs, and last year pass Proposition 50 to redistrict congressional seats to nullify an effort by Donald Trump to rig the midterm elections.
But if you drill down into all those campaigns and his campaign for governor, there is at least an undercurrent of solutions that try to address problems that actually affect Californians.
Steyer says he’s the only candidate with an AI policy, rooted in protecting workers from being replaced by AI, rather than using it as a tool for productivity. He’s also endorsed a state sovereign wealth fund based on a fractional tax on Big Tech data, a big swing that makes sense in a state at the heart of a technology boom.
On climate change, where he’s been a national leader, Steyer’s for increasing accessibility for renewables, including home batteries and plug-in solar, while making polluters pay for their externalities. He wants ICE agents to be prosecuted if they violate state law. He supports a single-payer health care system as essential to relieving families and businesses of the growing burden of medical expenses, though he thinks “it will take us at least three years” to get there.
But he also recognizes that the affordability conversation is the primary concern for voters and has foregrounded measures to alleviate the cost-of-living crisis. For instance, he has vowed to break up electricity monopolies responsible for the second-highest power rates of any state, with prices up almost 50 percent since 2019. His version of “breaking up” involves decentralizing power lines and allowing lower-cost energy providers, including residents with rooftops and batteries, access. He also wants to stop approving rate hikes that allow oversized return on equity for investor-owned utilities.
Steyer’s lead policy is to build a million affordable homes in his first term, through a combination of increasing denser zoning, speeding up construction, and making construction cheaper by expanding manufactured homes that can be built in assembly-line fashion. He has floated state purchasing of building materials in bulk, using surplus state land to build on, streamlining housing finance options to fill the funding gap, modeling risk better to lower home insurance rates, and preventing additional housing loss through rent stabilization. It’s a smorgasbord of ideas across the ideological spectrum. “There’s no silver bullet, it’s silver buckshot,” he told the crowd in Palm Springs.
But he also set this in the context of how California actually operates, something that can only come from understanding the state. Proposition 13 in 1978 limited property taxes for residences and business properties, creating a structural revenue gap that devastated local revenues, forcing them to beg for funding from the state. “Cities and counties haven’t wanted housing since Prop 13,” Steyer explained at the Palm Springs town hall. “They see it as an unfunded mandate to provide services.” In addition, local permitting and transfer fees have risen to backfill that revenue well beyond other states, blocking the construction pipeline and increasing building costs passed on to homebuyers and renters.
Steyer is proposing a reform known as “split roll,” which would assess business properties on their current value, rather than Disneyland paying a property tax rate based on its value in 1978. This would add $20 billion annually for local community and school budgets (Steyer points out that California is 31st in per-pupil K-12 spending), while pushing permitting and transfer fees lower.
Split roll narrowly failed at the ballot a few years ago, amid fearmongering that it would lead to grandmothers paying higher tax rates for their homes. To subvert this, Steyer has come up with a clever reframing: He calls it the “Trump tax loophole,” because some of the properties that have benefited from low property taxes are owned by the Trump family.
By calling a high-profile special election to close the Trump tax loophole, Steyer is actually addressing a specific problem unique to the state. Other candidates have been reluctant to go there. He asked everyone to join him in taking on Prop 13, which has been seen as a third rail of California politics, and he says they all declined. I asked him why. He replied, “I guess people don’t like to take on moneyed interests, do they?”
He called other tax plans, like Porter’s base-destroying exemptions, or Mahan and Villaraigosa’s proposal to suspend the gas tax amid spiking oil prices during the Iran war, as “freebies … conjuring money out of nothing. Oh, we’ll just have no money! That works!” His relief for high gas prices would come in the form of a windfall profits tax on domestic drillers who have seen no change in their net costs, rebated entirely to the public. With a gas tax suspension, which would deprive the fund that fixes potholes, “the people paying are California taxpayers,” he said. With a windfall profits tax, “they are Texas oilmen. It’s a fairer way to deal with this problem.”
THE TOWN HALLS THAT STEYER has put on are quite unusual for California. He is introduced, sometimes by his wife Kat, sometimes by a local endorser like Assemblymember Isaac Bryan (D-CA). He gives very brief remarks and then just answers unscripted questions from the crowd (there were a couple hundred people at each stop I attended). At the end, there’s even a version of the “selfie line” Elizabeth Warren adopted in her 2020 presidential campaign.
Steyer took questions on topics as diverse as sickle cell anemia, runaway film production, K-12 curriculum, the status of state mental hospitals, appointees for the University of California Board of Regents, and data center installations, to name a few. It was a sometimes idiosyncratic but mostly faithful cross section of issues that Californians care about. Most of all, it wasn’t polished, just someone trying to represent citizens hearing from citizens. “We’re here to look people in the eye and find out what they need,” he said.
The cynics are right in one respect: With 200 voters at a time, Steyer would have to do town halls like this in rolling fashion for a couple of years to reach enough to make a dent. The sheer size of the state frustrates retail politics. But it may pay dividends beyond that.
The state’s dominant Democratic Party became cloistered from voters, and immune to the building blocks of politics that make it a force in people’s lives. Since achieving a two-thirds majority last decade, the party has been content to let politicians retreat to Sacramento in relative obscurity, helped along by the near-absence of local media coverage of state issues and politics. The only time voters are brought into the fold is when they must decipher a maddening array of ballot initiatives with little help from the outside, other than dueling TV commercials. The alien nature of politics in the state sets up anomalies like what could happen in the governor’s race, and while the idiotic top-two primary without a ranked-choice element is to blame, the bigger problem is how small politics has become so that something like this can happen in the first place.
I asked Steyer if he was ready to say that unviable candidates should drop out. “That’s not my job,” he replied. “I’m just a candidate. My job is to do so well that it’s moot.”
His surrogates weren’t so kind. “I think several of the candidates who are still in the race should have stepped aside,” said Assemblymember Bryan, “and truly put California first.”
The post Tom Steyer Is Trying Politics appeared first on The American Prospect.