WTF Happened To California?! | Newsom Failures, Insurance Cancellations, & Water Shortages

SelectQuote: Get the RIGHT life insurance for YOU, for LESS, at https://selectquote.com/ich ZocDoc: Go to https://www.zocdoc.com/ICED and download the Zocdoc App for FREE Ramp: Now get $250 when you join Ramp at https://ramp.com/ich MagicMind: Get 45% off the Magic Mind bundle with with my link: https://www.magicmind.com/ichjan DONATIONS: We've found this to be a comprehensive list of all resources you can donate to: https://la2050.org/blog/la-wildfires-volunteer-and-support-guide Subscribe To @MeetKevin Here Add us on Instagram: https://www.instagram.com/jlsselby https://www.instagram.com/gpstephan Official Clips Channel: https://www.youtube.com/channel/UCeBQ24VfikOriqSdKtomh0w For sponsorships or business inquiries reach out to: [email protected] For Podcast Inquiries, please DM @icedcoffeehour on Instagram! Timestamps: 0:00:00 - Intro 00:03:15 - Is California a good place to live? 00:05:15 - Political fallout of wildfires 00:13:22 - Why are the wildfires so politicized? 00:17:04 - Wildfires: natural or man-made? 00:20:36 - Controlled burns in CA 00:23:51 - Sponsor - Select Quote 00:25:09 - Sponsor - ZocDoc 00:27:10 - Evacuation notices in LA 00:29:29 - Wildfire risks in Palisades 00:34:59 - Insurance and wildfire impact 00:36:01 - Dealing with being underinsurance 00:40:53 - Misconceptions about victims 00:41:40 - Rebuilding after wildfires 00:44:38 - Landlords profiting from fires 00:45:49 - Sponsor - Ramp 00:46:49 - Will property values crash? 00:48:44 - Why insurers avoid fire zones 00:50:11 - No insurance? What happens 00:51:56 - Insurance companies struggling 00:56:59 - Water shortages in CA 00:59:41 - Removing fire hydrants? 01:03:48 - Third Street Promenade 01:06:27 - What holds CA back? 01:09:30 - Running for governor challenges 01:11:21 - Delta Smelt 01:13:14 - Graham’s Delta Smelt story 01:18:10 - Fishing laws and environment 01:20:03 - Jack’s bad luck 01:22:17 - Kevin quits drinking 01:24:43 - Why quit drinking? 01:27:22 - Why Rick Caruso lost 01:28:54 - Wildfire conspiracy theories 01:30:00 - Pacific Palisades future 01:31:39 - Clearing brush in fire zones 01:32:58 - Housing solutions in CA 01:33:55 - Rent control debate 01:35:11 - Wildlife crossings 01:39:33 - Dealing with lobbyists *Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.

• 0:36Speaker 01

  When the sun came up, we could finally see the scope of the devastation. The Palisades fire alone, the most destructive fire in LA history.

• 0:46Speaker 02

  So why has this fire become so politicized? I don't know how you can't blame the existing government.

• 0:52Speaker 03

  I'm literally talking to the president right now.

• 0:55Speaker 04

  Can I hear? Can I hear your call? Because I don't believe it.

• 0:59Speaker 02

  The entire state is a disaster. Crime is completely out of control. The water crisis is a literal unmitigated hell.

• 1:08Speaker 05

  Because Karen Bass didn't fill the reservoirs, so the fire trucks in there, they couldn't pump water.

• 1:13Speaker 02

  Insurance is a complete ripoff, heavily in part because of our politicians.

• 1:20Jack Selby?

  Some number of private insurance companies have been non-renewing policies in the Pacific Palisades area.

• 1:25Speaker 02

  It's going to take a massive political shift away from this super majority of Democrats that we have right now in this current leadership. I'm not saying Democrats are bad. I'm not saying Republicans are good. I'm just saying that the current people that are in office all need to go because they've all failed California.

• 1:45Speaker 02

  Kevin, thank you so much for coming on the Ice Coffee. I really appreciate it. My pleasure. I feel like I've been here before. I think so. A few times. You've probably been our most recurring guest. That's amazing. Well, thanks for having me back. I appreciate it. Well, thank you for putting this together last minute. This is one of the episodes that we were not planning on posting at all. And I think with everything going on, it's really important to talk about what's happening. We wanted to call you in particular because you actually ran against Newsom.

• 2:10Graham Stephan?

  His recall in California, he had a lot of insights into the political system, what actually goes on behind the scenes. You're in real estate and we've all been affected by the fires in one way or another. Not a lot of people know this, but my mom actually lost her house in the 2018 fires. Jack, you lost your home.

• 2:28Jack Selby?

  Lost my home in the Thomas fire, which was like late 2017, early 2018.

• 2:33Graham Stephan?

  Yeah. And, uh, yeah. And you were in the same location basically is, is Jack.

• 2:38Speaker 02

  We opened our window. Well, I mean, Lauren, I had like four hours of sleep that night and Lauren's like, Kevin, there's, there's an evacuation order and, and this is the fire. I'm like, ah, fake news, fake news. This was back in 2017. I didn't believe it. We opened the blinds above our bathtub and we could basically see where your house was and the fires coming in. That close. We were in the flatlands under it, but yes, that was a terrible, terrible day.

• 3:01Jack Selby?

  It was pretty brutal. Uh, we all have experiences we can share, obviously, and how it pertains to the fires that are currently going on in California. So I think we all have a few unique insights and, uh, I think it'd be an important thing to discuss. So that's why we're recording the podcast.

• 3:14Speaker 02

  Absolutely. Well, I'm excited to talk about it and the solutions that hopefully California can implement. And we'll see if the new Trump administration can help with those as well, because Newsom can't get anything done.

• 3:23Graham Stephan?

  Yeah. Well, this is one of the things I found very interesting. Uh, technically now this is the most destructive natural disaster in the history of Los Angeles. The fire was moving five football fields a minute. It's one of the worst wildfire episodes in California history with an economic loss of 135 billion to 150 billion dollars. A question I want to ask you, do you think California is still a good place to live for the average person?

• 3:48Speaker 02

  Oh, great question. Well, I think there are a lot of opportunities in California outside of the political spectrum, just because we have a lot of jobs. San Francisco Bay area, San Francisco obviously has turned into a disaster under the leadership of people like London Breed, the mayor of, uh, San Francisco and, uh, Gavin Newsom, who was the mayor before that and is now the governor. But a lot of jobs, a lot of jobs in the East Bay, a lot of jobs in, uh, you know, farming, the San, uh, San Joaquin Valley, a lot of jobs in Los Angeles, San Diego. So I think there's a lot of opportunity. The problem is the politics have made it so prohibitive to advance in certain types of businesses, to grow your business, to try to grow your investments in California.

• 4:33Speaker 02

  Simply make it, make a simple comparison to taxation. What out here in Vegas, your top tax bracket is 38%. Your Fed plus your, maybe Obamacare tax 3%. Look at that same thing in California and you're at 54%. More than half of your money is going away to the government. So I think California is a great place to live if you can spend all of your money and not pay the taxes by expensing it all. Great way to do it because then you get the benefits of California without paying the taxes. Or you probably want to live somewhere else. It's, it's just gotten so challenging, especially with what you guys had to deal with in Santa Monica. It's, it's so sad seeing what, you had such a great video on what happened

• 5:18Speaker 02

  to Third Street Promenade, the before and after businesses leaving because you can't do business. How are you supposed to start as an entrepreneur in California with the regulation, the red tape, the permitting, the fees that they want to take? I think Lyft is now suing San Francisco for overcharging them in taxes as a percentage of the revenues they were collecting. It's just, it's a cost prohibitive place to do business, but it is a great state and one day it'll be fixed politically. It's just not there right now.

• 5:43Jack Selby?

  And in terms of the regulatory environment, I remember when we were rebuilding on the lot that obviously our original house burned down on, it was so complicated and dragged out so long to rebuild the house that was burned down because of a lot of the failures of the city. Like same thing happened where we had the Santa Ana winds. We had over a thousand structures burned down in the Thomas fire. And on top of that, water pressure was basically gone. A lot of the fire hydrants stopped working. People couldn't defend their homes. And so it was kind of a failure on that behalf as well. So it's like continually over time, California has consistently struggled. And it's hard to know who's to blame for all of this stuff. And Graham has actually done a ton of research. So he's pretty well educated in that. We're going to get into a lot of the misinformation, which I think should be pretty interesting. What we'd like to know from you is what do you think the

• 6:27Jack Selby?

  outcome of something like this will be? The massive California wildfires that are going on right now?

• 6:31Speaker 02

  Yeah, well, a lot to unpackage there. So I think it's worth starting with the regulatory because that's going to build into what the answer is. In some sense, you were not lucky to have your house burned down, but lucky to have the rebuilding process happen in Ventura. Because even though Ventura is bad, Los Angeles and Palisades is going to be way worse. I mean, there are now rumors, we don't know if they're true, circulating about potential attempts to rezone, and we can talk about that in the future, rezoning to more multifamily for the Palisades, we'll talk about that. But I do believe that between now and the long-term future, it'll be probably five years out, the Palisades will probably be one of the most beautiful places again, just

• 7:15Speaker 02

  like it was when you had the Palisades Village, which actually survived this fire. All of that will be rebuilt. All the homes, instead of being 60s, 70s, 80s homes, will be brand-new homes. All the infrastructure will be brand-new, and hopefully we'll be able to learn from the mistakes that helped contribute to this fire and prevent those in the future. But that's where we get into that regulation side, where I don't know if California can pull it off and prevent it again. Because let's talk about that Thomas Fire and those fire hydrants not working. Why is it that in 2017, the state of California gets a heads-up that, hey, when you have properties at elevation on a hillside, which we have a lot of hillside in California, fire hydrants might stop working. They might stop working because you don't have adequate water supply, or because the

• 7:57Speaker 02

  power goes off and the pumps stop working to pump water to those fire hydrants. Why is it that that 2017 lesson, where hydrants were going dry, didn't teach California that, oh my gosh, we should make sure hydrants never go dry again? If that could have been prevented for the Palisades Fire, and we actually would have had fire hydrants, maybe fewer homes would have been lost, maybe fewer people would have died. We're at 10 deaths, but we expect that number to rise substantially. I mean, you just can't find all the people who have died yet, which is horrible. So that's where, in order to know where we go in the future and to sort of answer your question, it comes down to what do you think Newsom can do and what do you think the super majority of Democrats can do in California?

• 8:41Speaker 02

  Well, I think the best answer is what they have been able to do over the last 10 years. Well, 10 years, we passed SB, I believe it was 148 or 149, to fund about $7.5 billion for six new reservoirs in California for water reservoirs. So we'd have enough water, keep hydrants full and keep tanks full. As of 2021, not a single dime was spent on actually building them. And over the last three years, we finally got into where we have engineering approvals to build one of the reservoirs, and they might start construction in 2026 on it, and maybe it'll be done by 2032. So if you look at that, the answer to your question of what do I think will be done

• 9:23Speaker 02

  is more 20, what is that, 2014, you funded it, to 2032, it's built, 18-year projects to maybe get more water and things done better. I don't think it'll be that bad for people rebuilding their homes, but the point is, will California ever get around to fixing regulation, to fixing how our infrastructures handle, preventing hydrants from going dry and reservoirs from emptying out? It's going to take a massive political shift away from this super majority of Democrats that we have right now in this current leadership. I'm not saying Democrats are bad, I'm not saying Republicans are good, I'm just saying that the current people that are in office all need to go because they've all failed California.

• 10:04Graham Stephan?

  Some of that seems like a bit of a policy issue, that it takes that long to get something done. My worry is it's a bit like the LA freeways, where they build just enough for demand. So they'll anticipate demand 10 years from now, but it takes 20 years to get done, and then by the time it's done and they expand the freeways, it's still too small because the population has outpaced it. Could it be the same way with something like this, where they're anticipating something, but it's not going to be enough, given that the fires are getting worse?

• 10:28Speaker 02

  Well, the problem is what's preventing these things from getting done right now? And a lot of that has to do with SEQA, the California Environmental Equality Act. Now Reagan passed this in 1970, which is really interesting because Reagan was deemed to be a hero that people loved. I mean, I think he got the most electoral votes when he ran for president ever against Jimmy Carter. He had over, I think it was over 450 electoral votes, which is a crazy landslide. People say Trump won with a landslide in the low 300s of electoral votes, I think it was. But that was a landslide back then in 1980. And he was the governor of California first. But anyway, I think SEQA is a disaster because it allows anybody with any beneficial claim, either pro or con, to sue any developer of

• 11:12Speaker 02

  solar infrastructure, housing infrastructure, fire infrastructure, water infrastructure, schooling infrastructure, anything, transportation infrastructure, anything. You could sue and basically tie up any project in court until it's litigated. Which, let's put it this way. Right now, in certain counties, if you evict somebody, you win. Okay, you slam dunk an eviction against a tenant. You could sit in court waiting for your eviction notice, basically, to get signed off on for months because the courts are so backlogged. So you could win, the tenant is still there, but the courts sit on it for months, signing the final order because they're so backlogged. That's for what should be a slam dunk case,

• 11:57Speaker 02

  an eviction which is supposed to take three weeks. Yeah. Turns into three months, four months because they're so backlogged. Now try that with environmental litigation where you have experts from all angles on fish, on wildlife, on salmon, on trout, on the delta smelt, on noise, on air pollution, on air quality, on environmental rights, on that person's legacy shed that's historic. All of that comes into play. Now, Newsom and Democrats signed a law, again, it was either SB 149 or 148, one of us, that allows the SEQA litigation process to be shortened to no more than 270 days. Only for projects that Newsom signs off on.

• 12:42Speaker 02

  So now what you've actually done is you've made the governor of California even more powerful, where he has control of the whole Democratic legislature. And now his signature can approve which projects get the shortcut for SEQA. So the amount of power that the Democratic machine has, I don't even get me started with the media control they have out here, but the power that they have is unmatched. They are the most powerful political body, I would argue, in the world because there's just, there is no counterbalancing force. And it's ironic, and I'll stop talking for a moment, but it's ironic that now you have this media talk about Democrats saying, well, you know, if Republicans weren't standing in the way of climate change, we could have done something.

• 13:24Speaker 02

  There is no Republican standing in your way in California because you have a supermajority of votes in the legislature. Even Arnold Schwarzenegger didn't, you know, have that problem when he was governor as a Republican in California. Supermajority means literally a Republican can't do anything. They've got over 70% of the legislature. You've got the Democratic governor. So Democrats are 100% and entirely at fault for whatever happens in the political process because there is nothing a Republican can do to balance it out in California.

• 13:52Graham Stephan?

  So why has this fire become so politicized? Why has it become a left versus right issue?

• 13:57Speaker 02

  Well, I mean, everything becomes a left versus right issue, right? I mean, look, do I think that if tomorrow we had all Republicans in charge, this would flip? Not necessarily, unless they actually fulfilled the promises. I mean, every politician makes promises, but you know, when I ran for governor against Newsom, one of mine was that we were going to build a water pipeline to make sure that our rivers, like the Colorado River especially, were always full of water. So our reservoirs don't go dry. Like the Santa Ynez reservoir, which is vertically and physically north, north and up, the Palisades, 117 million gallon reservoir, that's bone dry because of a crack in the concrete that politically, nobody was able to get around to fix.

• 14:41Speaker 02

  Which again, is sad and there should be no excuse for because you have full control of the process. So it blows my mind because the Palisades were fed with three tanks of water, 1 million gallons each. Yeah, there was so much demand which drained those tanks, but they could have been replenished by a reservoir with 117 million gallons, 30 to 40 times the capacity of those tanks. But it was bone dry before this fire because of, again, mismanagement by a political atmosphere. So why does an issue become politicized? Well, I mean, social media helps, but I actually think it's a good thing because the more politicized this becomes, the more attention comes to the problem. And hopefully it drives change. But mass shootings get politicized too.

• 15:26Speaker 02

  And then the question is, what, what ends up happening? Do we ever spend a dime more on mental health?

• 15:33Graham Stephan?

  It worries me that it seems like politicians are really just trying to sling crap at each other.

• 15:37Speaker 02

  Of course.

• 15:37Graham Stephan?

  And they're using this as a way to make themselves look better.

• 15:40Speaker 02

  Absolutely. I mean, that's like the, the, see, the job of a politician is just to get reelected, in my opinion. I, I feel like so much of me is like, every politician should only be allowed, forget about term limits. You get one term. And then, once you're in office, you never have to worry about having another election. Well, now all of a sudden, stuff could get done. So Gavin Newsom in 2021, when Biden took over, said, oh, this is great. Biden has taken over. He's on video saying this at a press conference. Biden has taken over. We can now work in coordination with the Biden administration and finally conduct land management, forest management, wildfire prevention work. We could do it all because we're all working in unison.

• 16:26Speaker 02

  We have a democratic legislature and, you know, in California, we've got the democratic governorship. But now we've got a democratic Congress and presidency at the federal level. Nothing can stand in our way of solving wildfires in California. Except they did nothing. Except cut the budget for Cal Fire, for the LA County Fire Department. Because when budget complaints come up, their pet projects don't get killed, like the high-speed rail to nowhere, or homeless prevention, which we spend, you know, $6 for every $1 on homeless prevention that we spend for fires. So again, to clarify that, $6 goes to homelessness, $1 goes to fires. Yet the homeless problem is, people would argue worse than ever before, but a different topic. So I, I don't know how you can't blame.

• 17:12Speaker 02

  The existing government. I don't care who they are. Democrats, Green Party, Liberals, Republicans. I don't care who it is. Whoever's in office right now sucks. That's my

• 17:23Speaker 00

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• 17:52Speaker 02

  Opinion. The fact that, who's it? The Department of Water and Power lady earns $751,000 as a salary? $751,000 salary to a tractor from private work, yet can't keep the reservoir filled?

• 18:03Graham Stephan?

  Now, what do you see to people who say that this was simply a perfect storm where you have brush that broke out after 15 years of a drought, you had two years of excessive rain. A lot of shrubbery grew from that. And indeed, you had after that, another two years of drought. A lot of that shrubbery died off. You have a perfect storm of record Santa Ana winds happening at the same time as something sparks up in somebody's backyard, starts a fire that like, even if the reservoir were filled, a lot of people say that that wouldn't have made a difference. That even if we had the water that we needed, when it's moving five football fields, what was it? Was it?

• 18:42Jack Selby?

  Some amount of football fields per, yes. It's crazy.

• 18:45Graham Stephan?

  Those are in the high gusts. Yes.

• 18:47Jack Selby?

  And on top of that also, it wins that speed. I heard that you also can't have the air support.

• 18:51Graham Stephan?

  No.

• 18:51Jack Selby?

  Because they would just go, it would be way too dangerous. And on top of that, you see videos of people with their hoses trying to put out fires. And it's like,

• 18:58Graham Stephan?

  Yeah, exactly. Five football fields a minute.

• 19:01Jack Selby?

  At what point can you say, and this is a super unpopular opinion, because it's a nuanced opinion and people on the left want to point at people on the right and people on the right want to point at people on the left.

• 19:09Graham Stephan?

  And I have the answer for you.

• 19:10Jack Selby?

  But at what point can you just be like, look, like this was a crazy calamity, a natural disaster in the same way that Florida has them on occasion. It's like, you can't really stop a hurricane that well, like you're like.

• 19:22Graham Stephan?

  Or a massive earthquake.

• 19:24Jack Selby?

  Or a massive earthquake. It's just something that happens.

• 19:27Graham Stephan?

  Sure.

• 19:27Jack Selby?

  What do you think?

• 19:28Graham Stephan?

  Well, let's break it down. So.

• 19:29Speaker 02

  California has always had fires for thousands of years to where plants in California, like California lilacs, manzanitas, these plants have evolved to thrive through fires. That's how we know California has just always been on fire, right? And the way they really work is that the plants expect to burn down. They've evolutionarily, you know, evolved to survive in their root systems and they sprout back up. And now they can actually flourish because there's no competition for resources on top of now all burned land. It was actually kind of brilliant. These plants, like, yes, burn everything down, kill all my friends and enemies.

• 20:11Jack Selby?

  They start the fire.

• 20:12Speaker 02

  Exactly. Yeah, they start the fire. It's the lilacs. So, um, okay, so, so we know that fires have always occurred. Okay, so what's different? Well, uh, obviously we're going to talk climate change as well, but one of the things to think about is when fires always happen, what do they do? Well, they destroy all of the dry brush that's there. And in history, fires have always occurred. They burn the brush, the fires go away. Well, people are going to lose their lives because there are no humans yet at this point, right? Okay, so what's different now? Well, every low wind fire that we have is just a brush fire and we put it out. So we actually firefight the vast majority of the natural fires that occur that would

• 20:56Speaker 02

  do the land clearing for us. So now what's happening is all of that unburned fuel, the dead brush that you're talking about, stays all over California because nobody's doing nature's job of the smaller burns, which we, as humans now, we call controlled burns. So, uh, you know, Berkeley, I love using them as a reference. I got into Berkeley. I never went to Berkeley though, but Berkeley, obviously a left-leaning institution, they are big fans of controlled burns because they work. You, low wind days, when you have the water and the staff in place, you pick an area, you torch all the brush and you burn it all down to the ground. You do what nature used to do naturally.

• 21:36Jack Selby?

  Where do we practice that? Like in California? And do they just like completely avoid or ignore that in Southern California, like in LA area?

• 21:43Speaker 02

  Oh, yeah, well, it's not, it's not, nobody, nobody likes controlled burns in their areas. But it's, oh, it's going to affect the air quality. This is why you want to do it on low wind days. They don't fund for it. That's probably the biggest factor is they don't fund for it because the fire, a cal fire does controlled burns. And we also want to remember that the vast majority of land in California is owned by the federal government, the federal parks. But again, these, these controlled burns need to happen in the Palisades, but you have to have the political appetite as well to actually do that. And you don't want to go to the Palisades village and, oh, what's that? There's a fire over there. It's a controlled burn. We kind of have to get used to that. But this all leads to your question of why do we have these mega fires? Well, in part, it's because of all the fuel that's there. Yes, California's fire season has gotten longer.

• 22:28Speaker 02

  California has gotten drier and the east winds, Santa Ana winds, the Diablo winds. They have gotten stronger over time. So whether we can attribute that to just the natural evolution of climate or human caused climate change, it could be either of them. We don't know the answer with certainty. But to say that, oh, climate change is absolutely what is making the fires worse, confuses that, well, we have actually interrupted the natural clearing process and by not clearing out dead brush or doing what the Getty did, we increased the likelihood of worse fires. In fact, you mentioned that your house that was rebuilt was built much better than, you

• 23:08Speaker 02

  know, before the podcast here, than the 1960s homes because it's built with, you know, stucco or concrete tiles. It's fire hardened. You don't actually build as much brush around them anymore.

• 23:20Speaker 02

  That is useful, but also what the Getty did is useful. So the Getty's historic museum, how did they not burn down? Few little things. One, they trimmed their brush so much that they were interviewed and they said, the brush that caught fire by the Getty was like rosemary on top of a hot pizza in an oven. It burned and it looked like a large fire, but it was more like a flash. So it burned up and then it was gone. There was no more fuel. The rosemary was burned. They had their shrubs trimmed so far down that when their shrubs caught fire, they basically Self extinguished. There was nothing to catch fire. Their tree canopies were higher. They, again, they cleared any of the dead mulch or debris along the floor.

• 24:04Speaker 02

  And of course, it helps that firefighters are there as well. Who have water, which is why it's important that our fire hydrants work. But all of these things together actually saved the Getty despite those 200 mile an hour gusts. Which are really bad. You're right. You're not aerial dropping in those winds. Some luck probably plays into that as well. But when you put those things together, it goes, huh. Okay, interesting. Maybe we should be conducting controlled burns. Maybe we should pre-deploy firefighters when we're expecting 200 mile an hour gusts. And maybe we should crisis test our water infrastructure and actually spend the money to make sure our hydrants don't go empty, that we have backup generators to pump fire hydrants.

• 24:48Graham Stephan?

  How much do you think that would have mattered in this case, though, with the Palisades fire?

• 24:51Jack Selby?

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• 25:35Jack Selby?

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• 26:03Jack Selby?

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• 26:35Graham Stephan?

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• 27:18Speaker 02

  How much do you think that would have mattered in this case, though, with the Palisades fire? A lot. So, look, once you have a massive fire and you've got these five football fields, 200-mile winds, yes, obviously, to some extent, there's nothing you can do, right? To some extent, it's a moving inferno, there's nothing you can do. But if every home is built the way you said, fire-hardened, and you have fire crews deployed, and you have land that's being irrigated because people have enough water, and it's in, you know, people are building in drought-tolerant manners, you reduce those risks. So, the Getty irrigated all of their landscaping the same morning of the fire. They purposely drenched everything because they had the availability of water.

• 28:02Speaker 02

  They were trained in how to prevent a fire from burning down the Getty. And it goes to show that you can prevent, even in those winds. Destruction.

• 28:10Graham Stephan?

  Do you think LA did the proper thing by notifying residents enough ahead of time?

• 28:15Speaker 02

  Oh, God.

• 28:15Graham Stephan?

  To warn them for stuff like this? Because I feel like if a lot of people had maybe a little more insight into what might happen, or maybe the risks associated with this, they would be watering their plants more. They would have taken more precaution ahead of time. Because to me, this seemed like it almost came out of nowhere.

• 28:31Speaker 02

  Yeah.

• 28:32Graham Stephan?

  Where we kind of heard about this maybe like the day-ish before. As like, hey, there's a high wind advisory.

• 28:38Speaker 02

  Yes.

• 28:39Graham Stephan?

  High chance of fire, just be prepared. And that was about it.

• 28:43Speaker 02

  Well, there, I mean, a few things. So, yes, number one, I honestly, I don't think, I would argue that 99% of people don't know the best way to fire harden their home. And that's, that's an education failure by the government, by the state, right? We have, it's sort of like, do you recycle styrofoam or not? Okay, well, the answer is no, but people still throw styrofoam in their recycling bins all the time.

• 29:05Graham Stephan?

  Guilty of it.

• 29:06Speaker 02

  Yeah, it does. Because, yeah, especially when, when the shippers stick the styrofoam to the side of the packages. Like, this is freaking annoying. Right? But anyway, so, yeah, I mean, like, you, you, you can only blame the government. A failure of education, same thing like with shootings, a failure of mental health education. It's, it's, it all, the buck stops with the government. So, education helps, building codes help. But as far as notice, education around what high wind advisories mean would be useful as well. Because, first of all, I mean, it shows you how stupid, I mean, the, the mayor of Los Angeles, Karen Bass, is in Ghana to celebrate the inauguration of the president of Ghana.

• 29:51Speaker 02

  The reason I bring that up is because even the mayor of LA didn't take those wind advisories seriously. Because if, Lauren, I just became a pilot, by the way.

• 29:58Graham Stephan?

  Mm-hmm.

• 29:59Speaker 02

  My wife.

• 29:59Graham Stephan?

  Congrats.

• 30:00Speaker 02

  Thank you. My wife is like, yeah, and I never thought I would do it. My wife is like, please do not go fly Sunday, Monday, Tuesday, Wednesday, Thursday, Friday of this week. Because A, she's deathly afraid of me flying, and B, she's like, it's gonna be windy. So, like, people have known that the winds are coming, but apparently, nobody cared enough to work, again, even the point of the mayor of LA deciding, oh, yeah, let's go on a trip to Africa and be Ghana in Ghana.

• 30:30Graham Stephan?

  Well, I'll tell you my perspective, I never thought that area was that big of a risk. It's not that.

• 30:37Speaker 02

  State Farm knew.

• 30:39Graham Stephan?

  But it's not that hillside-y. I like a lot of the residential area. I'll give you this, the Highlands, when you go up the mountain, I understand that. But when you go to the residential parts down below, I would never think that those were a significant risk.

• 30:53Speaker 02

  Sure. Yeah. It's, it's tough because, so I like to use this app, it's called Windy. And I've only ever started using it since I became a pilot. But it's really cool because you can sort of for, not sponsored, you could sort of forecast what's going on with winds and where they're moving at different elevations, different locations, different wind speeds. You see it all. It's really cool. And when you play around with it, you, you actually end up seeing how the wind funnels between all of the mountains and the ranges we have. And as I was looking over the last few days of the fire, the Palisades were the perfect funnel for, for all of that wind. And I would venture to say, I mean, I'm not an insurance actuary. It's one of the licenses I don't have, actually, insurance out of all the licenses.

• 31:40Speaker 02

  But I would imagine the reason State Farm canceled 70% of their, their policies in, in certain regions in California, specifically the Palisades, was because they knew the wind patterns. And could basically paint on a map and say, okay, this is where the funnels are. This is where a risk is. This is where we don't want to be. Now, I'm not here to defend insurance companies at all, okay? Insurance companies have a lot of problems. But I can tell you what the Wall Street Journal just said today, which is that insurance companies in California spend $1.09 per $1 they collect in California on just claims, which doesn't account for all their operating expenses, which could be another 30, 40 cents, 50 cents, who knows, maybe a dollar, I don't know.

• 32:19Jack Selby?

  So they're net losing in California?

• 32:21Speaker 02

  Yeah.

• 32:21Jack Selby?

  So why do they continue to operate?

• 32:22Speaker 02

  They don't. That's exactly why, they leave.

• 32:24Graham Stephan?

  I'll tell you an insurance comment here, but about a year ago, I wanted to bundle all of my insurances together between all the properties in California, the place here in Vegas, all the horrors under one policy.

• 32:35Speaker 02

  Sure.

• 32:35Graham Stephan?

  And I went to so many places and they say, oh, we'll insure everything, but we're not touching California. And I was like, okay, because this had never happened before. So I started calling other companies just to shop around, just to get an idea. Am I paying a fair rate? No one is writing new policies. And so I talked to my guy with my current insurance company. He's like, yeah, man, you grandfathered in. You got in at like, you know, because I started working with him in like 2011. When I bought my first property, the same company.

• 33:06Speaker 02

  Wow.

• 33:06Graham Stephan?

  And because I have a longstanding history with them and just keep adding to policies, never filed a claim, no nothing, they're keeping it for now.

• 33:14Speaker 02

  Yeah.

• 33:14Graham Stephan?

  But yeah, you can't find a new insurance policy.

• 33:18Speaker 02

  Yeah, you know, part of that too is just so the it goes back to this political thing too of politicians want their votes again to get reelected. And so, well, what's been unpopular last three years? Well, inflation, okay? So the costs of things have gone up. We all know the cost of things have gone up. So of course the cost of insurance is going to go up. But when the insurance premiums go up because they have higher costs to pay, that's very politically ugly for politicians. And so politicians try to fight it. So they put caps on it. And what happens anytime, and this is macro economics 101, what happens every single time we put a price ceiling on something? Shortages. And so that's what we have, a shortage of insurance options in California.

• 34:03Speaker 02

  And so California decided, okay, okay, okay. Well, we'll solve that problem by creating the California Fair Plan. So the California Fair Plan gives you temporary insurance for a catastrophe. It gives you no liability protection. So it's like a scam of insurance because now if somebody trips and falls on your property, they're like, oh, no, no, we don't cover that. They've got about 700, uh, you got about $750 million in the California Fair Insurance Fund right now. That'll cover about 350 homes in the Palisades and then you're out. Well, we just lost 9,000 structures. They're not all under California Fair Plan. But a lot of them are because State Farm just canceled a bunch of policies.

• 34:41Graham Stephan?

  Fair Plan does have a 2.5 billion reinsurance on top of that.

• 34:46Speaker 02

  Okay, so here's the funny thing about reinsurance is reinsurance is coming from the private sector. But reinsurance, uh, up until December of 2024, insurance companies were not allowed to add to the premiums that they collected, the fees for reinsurance. So put it a different way.

• 35:02Graham Stephan?

  Yeah.

• 35:03Speaker 02

  If let's say it costs $100, you know, in calculated risk for an insurance company to insure your asset, whatever it is, $100. And then they go to the marketplace and say, okay, we're going to take this, we're going to sell that and basic or get insurance on this bundle of properties that we're insuring, reinsurance. We'll keep a portion of the risk. We'll keep 25% of the risk, but we want to sell 75% of the risk. Well, if it costs them $100 to sell that, now they're taking 25% of the risk, but zero of the money. They keep $0, which is obviously bad. Again, why they're losing money. So normally, insurance companies say, okay, well, we need to sell this for more. So we add to the premium the cost of reinsurance. That has not been a possibility in California

• 35:44Speaker 02

  until December of 2024, when so many insurance companies were threatening to leave that California Insurance Commissioner finally U-turned and said, okay, okay, okay, we will let you add reinsurance costs to premiums so you can actually survive in California. So again, politics.

• 36:00Graham Stephan?

  So what's the impact going to be on the average person with home insurance in California?

• 36:04Speaker 02

  Terrible, terrible. Like, rates are gonna go up. Because, I mean, the way I look at it is, it's, nobody thinks that the politicians are going to change. Nobody thinks that how now magically California is going to build more reservoirs, have more water, have working fire hydrants. So like, you have to ask yourself, if Gavin Newsom tells you for 10 years, we're gonna be better at fires, we're gonna be better at fires, we're gonna be better at fires. And let's say he runs an island called the Smith Island, okay? And you're like, yeah, I want to consider doing insurance for the Smith Island. And Gavin Newsom runs it. It's a town of 30 people, an island of 30 people. You want to offer insurance there. Are you gonna trust Newsom to actually have water in the fire hydrants? Or the people that,

• 36:47Speaker 02

  you know, operate under him, fire chiefs, whatever it is? Well, the answer for most insurance companies is no. They can't trust them because for, for not just years, decades, they've been told, oh, we'll be better at water infrastructure. And it just never happens.

• 37:00Graham Stephan?

  What happens if someone's underinsured? I'm really curious what's gonna happen with a lot of these properties, because 2/3 of people in California are underinsured. The average person is underinsured by 20 to 60%.

• 37:12Speaker 02

  Wow, that's what I thought.

• 37:13Graham Stephan?

  It's really bad. Because I did a whole video about this about a year ago, and it forced me to actually call my insurance company and up the limits.

• 37:21Speaker 02

  Up your limits, yeah.

• 37:22Graham Stephan?

  Because I realized, like, wait a second, I'm covered like 800 grand rebuild.

• 37:25Speaker 02

  Yes.

• 37:25Graham Stephan?

  For a property that I'm gonna have to probably spend 1.3 on, maybe? So I got the limits increased a little bit.

• 37:33Speaker 02

  Yeah.

• 37:34Graham Stephan?

  But it's wild. And it's not gonna keep up.

• 37:38Speaker 02

  No, it doesn't.

• 37:39Graham Stephan?

  An insurance company is never gonna remind you, like, hey, man, you might be a little underinsured here. They're gonna keep it as low as possible.

• 37:44Speaker 02

  Right, exactly. Well...

• 37:48Speaker 02

  One of the reasons homes are typically underinsured is because codes evolve over time. A, fire codes, naturally, this is fair, but also because of the fragmentation of codes in California. So when I ran for governor of California, I said, we should have one building code for the entire state. So that way, a furnace that's approved in the San Joaquin Valley is also approved for Ventura County. Now, you could have little modifications, because I understand climates are different. But let's be real, 90% of buildings should have the same building codes throughout the entire state. We could have little different paint schemes and designs or whatever, but simplify the building code. Let's just simplify the building code. It's easier for contractors to bid and actuaries to evaluate their risk, because they're not

• 38:30Speaker 02

  dealing with, you know, oh, this has to meet this city, and then that county's overlay, and blah, blah, blah. It's a disaster. So, fire codes are one. Also, earthquake codes. You know, a lot of the homes that were rebuilt in California, or in Ventura County, they had to build in expensive earthquake retrofit pylons for new construction, especially on fill lots that were rebuilt after the fires. And people spent 400 grand on pylons for a $1 million build that they were only insured on up to 600K, because now they have $400,000 of pylons that they have to build, which was never underwritten in the first place. Again, because the standards change for every city and every county, and nobody tells you,

• 39:13Speaker 02

  hey, by the way, if you ever have to rebuild your house, these codes just all changed. And it's going to be a lot more expensive. So, that's one of the reasons people are underinsured. A second factor is really just usually, the bump in insured value is, you know, maybe 1% a year or whatever, but appreciation and inflation in building materials is much more than the 1%. And labor, too. Oh, my gosh, yeah, especially in California. So, that's also funny you mention that, because if you look at, if you want to get through the SEQA exemptions, you have to use prevailing wage labor, which is like, instead of market rate labor, you're paying maybe two times market rate labor for contractors to actually do work on your properties. And I'm not saying that people shouldn't be paid what they're worth, especially with their skillsets and all that.

• 39:56Speaker 02

  Just saying, insurance companies, look at that, oh, my gosh, we have to get through SEQA, and the prevailing wages, and all these scattered building codes. Of course, it doesn't make sense to do business in California. Now, I'm not saying insurance companies don't suck. They definitely suck because they leave a lot of people hanging at the worst times in their lives. But frankly, I think a lot of that starts with the political environment and the failures of Gavin Newsom, local county officials, local political appointees, and so on.

• 40:24Graham Stephan?

  So what does someone do if their home is underinsured, though? Let's say they lose their home in this sort of case. What happens if they have a lot that's valued at $2.5 million, but they have 600 grand worth of structure?

• 40:35Speaker 02

  Coverage. Yeah, they can't rebuild. Unfortunately, most of them sell. Most of them will sell their lots to then developers who come in and they build. So they sell to spec builders. What I've found that lot owners will do is they'll kind of get together and like consortiums almost, they'll be like, "None of us are gonna sell unless we all sell for a higher price." So you see that? And so usually what happens is land developers, they try to get in early before people start connecting with each other, and developers, I guarantee you, developers are already calling everybody, every address.

• 41:04Graham Stephan?

  Oh, people on Twitter are posting already. They've already got offers on the lots.

• 41:08Speaker 02

  Oh, yeah. Oh, for sure. Oh, yeah. Because the earlier they start this process to buy these lots, the better deal they're gonna get. Because let's be real, this real estate, and I'm talking about the land, not the structures, this is some of the most valuable real estate in the world. Understand, fires suck and they can happen again, but people want to live there. It's the best weather in the world, you have the best proximity to jobs, you have the Los Angeles International Airport, minutes away from the Palisades. Like, that, all the celebrities live there. You know, that is the place for wealth and living. And so it will get rebuilt and it will be beautiful. So that land is very, very valuable, but it's just gonna suck because a lot of people who live there now, they might get forced out because they're underinsured, they can't

• 41:51Speaker 02

  afford the difference, and they'll end up having to move.

• 41:54Graham Stephan?

  Yeah, that's a nuance that I think a lot of people are missing when it comes to exactly that, is they think, "Oh, it's all these rich people. They have the money. Like, let's not feel sorry for them."

• 42:03Speaker 02

  Not everyone.

• 42:03Graham Stephan?

  I know so many people whose parents have bought their house there in like, the 1980s.

• 42:09Speaker 02

  Generational.

• 42:09Graham Stephan?

  And they spent maybe $300,000, $200,000 on the house, but they've kept it ever since. They've owned it. Owned it the entire time. So now it's paid off. Sure, it might be worth $4 million on paper, but they didn't have that money. I mean, it never existed. They're living in the home. They never expected that.

• 42:29Speaker 02

  Right. Right. So now they get their underinsured payout of, say, 600K to rebuild their home. And then they've got a $2 million lot. They've got to pay off whatever loans that they have.

• 42:39Speaker 02

  They might never live in the Palisades again. It's really sad.

• 42:41Jack Selby?

  How long do you think it's going to take to actually rebuild all of that area in LA? Because I know specifically with the Thomas Fire in Ventura, our house took about three and a half years to build.

• 42:50Speaker 02

  Yep.

• 42:50Jack Selby?

  And a lot of the insurance companies, the kind of standard rate is that they'll float you for temporary rent.

• 42:56Speaker 02

  Not that long.

• 42:56Jack Selby?

  For two years.

• 42:57Speaker 02

  Yeah, exactly.

• 42:57Jack Selby?

  Yeah, two years is how much they'll do. And, and very, very few people, especially if 10,000 plus structures are burned down. Every contractor is going to be spread thin.

• 43:07Speaker 02

  Yep.

• 43:07Jack Selby?

  They're going to be like trying to work multiple sites at one, one time. You have all these subcontractors that are going to be busy. All of the permitting process, like that's going to be super, super busy. I have no idea how this is going to get resolved. How do you, how long do you think it's going to take for it to get back to normal?

• 43:21Speaker 02

  2030.

• 43:22Jack Selby?

  2030?

• 43:23Speaker 02

  Yeah. Yeah. Because LA is notoriously slow with everything. And the magnitude of this damage is so much that I think probably what will happen is they're going to try to rewrite building codes first before they get anyone through to try, hopefully, to mitigate the issues of these, these, the way hydrants are built, the way reservoirs are built. And hopefully they figure all of that out.

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• 44:46Speaker 02

  Right this time, correctly this time. But yeah, I mean, I think to what you're saying, the market demand is going to be insane. Not yet for contractors, but in two years, it's gonna be good business to be a contractor there.

• 44:58Jack Selby?

  And on top of that, we noticed during our rebuild process that it probably cost between 35 and 50% more.

• 45:05Speaker 02

  Sure.

• 45:05Jack Selby?

  During the fire rebuild because in the Thomas fire, it was like a thousand structures, I think, burnt down. But in this, so far, it's 10,000, 10 times the amount. And I just think overwhelmingly, people are gonna really struggle unless if Biden says, or I guess eventually Trump, helps and bails him out. Because there have been, you know, I mean, he did say that he was gonna help and float for like six months.

• 45:28Speaker 02

  It's not gonna do anything. Yeah, it's, I mean, I wish the Biden administration was already doing more. It seems like Trump is talking more about what's going on in California than Biden is. I mean, I think a lot of people, I'm not trying to sound anti-Biden. I know it already does sound that way, or I definitely anti-Newsom. I will say that, definitely anti-Newsom. That's why I ran against him for governor. But yeah, the government can help, but unfortunately, I don't know that government will be able to muster it. Just because trying to take this, what's gonna be a five or six-year process and try to streamline it, align it, it's gonna get tied up in all of the red tape that people like Gavin Newsom say they can solve, and they just never do.

• 46:12Speaker 02

  So it's unfortunate, but... I want to talk about another byproduct that you just brought up. It's not just contracting prices that are going to go up. It's rents that are going to skyrocket. For all the normal people in LA, now there are fewer apartments available. There are fewer single family homes available. So anybody who wants to renew their lease now or move into LA because they got a job, I wouldn't be surprised if you see rents go up 20% in all of LA. Heck, that could hurt our international or our nationwide inflation numbers.

• 46:39Graham Stephan?

  It was interesting. Jason Oppenheimer shared a story on Instagram that a client showed up to a rental listing, just an average listing, nothing special. There are 20 people outside.

• 46:49Speaker 02

  Oh, yeah.

• 46:50Graham Stephan?

  20 people are outside.

• 46:51Speaker 02

  Yeah.

• 46:52Graham Stephan?

  Every one of his listings, he has a listing for $13,350, you know, $13,500 a month.

• 46:59Speaker 02

  Wow.

• 46:59Graham Stephan?

  Got offered $20,000 a month for it. Six months upfront, the owner wants more.

• 47:05Speaker 02

  There you go. Yeah, so, and that's, that's gonna, well, every single person who's like, okay, my house is either burning down, going to burn down, or burned down over the last two or three days. The first thing they do is, okay, where am I going to live? I'm not going to live out of a hotel on a suitcase. So zillow.com, look at the rentals or Redfin, whatever, right? And exactly what you're saying is what you would expect. Now then, this is where things get interesting because then the political idea is, okay, well, all those people are price gouging, they're being greedy. Or then the flip side of the argument is, well, there's a shortage of available housing. What does that go back to? Oh, well, it goes back again to politics. We just don't build enough. So, yeah, prices will skyrocket.

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• 48:51Graham Stephan?

  Now, this is interesting. The Senate Budget Committee recently said, "This is predicted to cascade into plunging property values in communities where insurance becomes impossible to find or prohibitively expensive, a collapse in property values with the potential to trigger a full-scale financial crisis, similar to what happened in 2008." What are your thoughts on this? It might be a bit extreme.

• 49:13Jack Selby?

  So which Republican wrote that?

• 49:17Speaker 02

  Yeah, that's, um, that, I would say that is, is far-fetched. Mostly because at some point, when, when insurance becomes impossible to get, at some point, the political leash, if you will, will loosen and people will enter the insurance market. It's always how it works. The price goes up high enough for insurance that insurability becomes a fact, like, an option again. I mean, look, you could literally start an insurance company today. Hey, we'll do all the insurance in LA. Whoever's having trouble getting insurance, we'll do an insurance company. And you just securitize the risk by selling it on the market. Hey, who wants a 10% yield on a bond for this high-risk insurance company? People will buy it as part of their portfolio.

• 50:02Graham Stephan?

  Yeah, they're calling them catastrophe bonds. Have you seen these?

• 50:05Speaker 02

  There you go.

• 50:05Graham Stephan?

  Yeah. It's already, it's already a thing now.

• 50:07Speaker 02

  There you go. Exactly. So is, and, and that, so people will get, people will be able, people will always be able to diversify away their risk. So I don't see property values plunging. In fact, and this is, this-

• 50:22Graham Stephan?

  But this is in areas that you can't get insurance or insurance is so expensive.

• 50:25Speaker 02

  Yeah. Well, I mean, some of those areas, like the coastline of Malibu, those are, you know, 10, 20 million dollar homes, sometimes even more. Of course, insurance is going to be prohibitively expensive there because they're either going to fall into the ocean or going to burn down again, potentially, right? But people want to live there. So somebody will pay those exorbitant fees. And then again, people will risk it.

• 50:45Graham Stephan?

  Yeah. Well, this also says, many residents of the Pacific Palisades are reporting that they had no property insurance because insurance companies no longer provide coverage for real estate in the highly priced and high risk areas.

• 50:55Speaker 02

  Right. Yeah. Because even the California Fair Plan has a limit of how much they'll cover. I think it's $3 million per home is the limit that they'll cover. Some of those homes are $8 million homes. So yeah, that's possible that people have just entirely dropped their coverage. State Farm announced their non-renewals in March.

• 51:11Graham Stephan?

  Correct.

• 51:12Speaker 02

  Which means March is 10 months ago, which means 10 out of 12, uh, probably, what is that? Over 80%, 85% of insurance policies have probably lapsed, assuming, you know, an equal amount of dispersion there, that not everybody's renewing in lumps. So in English, most of those policies the State Farm wants have lapsed. If they couldn't find other coverage, they've gone to California Fair or have been uninsured.

• 51:35Graham Stephan?

  Yeah.

• 51:36Speaker 02

  They're screwed.

• 51:36Graham Stephan?

  In this case, it was 69.4% of the Pacific Palisades-

• 51:40Speaker 02

  69?

• 51:41Graham Stephan?

  Got dropped.

• 51:42Speaker 02

  Yeah.

• 51:42Graham Stephan?

  Point four. It would be funny, 69.42.

• 51:44Speaker 02

  Yeah, yeah, yeah. Exactly. That's State Farm.

• 51:46Graham Stephan?

  Was, was dropped.

• 51:47Speaker 02

  Yeah. Yeah. So exactly. So their choices are you either go to a different carrier, uh, if you can get it, uh, pay the higher fees, or you go to California Fair, or you self-insure. Self-insure obviously would be catastrophic at this point.

• 52:02Graham Stephan?

  Oh, absolutely. Allstate too, announced plans, uh, this was in November of 2022, paused new homeowners condo and commercial insurance policies in California to protect current customers.

• 52:12Speaker 02

  Yeah. What about tens of millions of dollars homes that that are not insured at all? Like, I saw there was like a $30 million home listed on Zillow that burnt down in the fire. All of these crazy expensive homes that are not insured at all. What is there?

• 52:26Graham Stephan?

  They're probably insured. At that level-

• 52:28Speaker 02

  At that level, you have to, you think?

• 52:30Graham Stephan?

  It's not like you have to. It's like, when you have a $30 million home, your net worth is probably-

• 52:36Speaker 02

  So you're self-insured?

• 52:37Graham Stephan?

  $250 million plus. They're having insurance. There's no way those people wouldn't have insurance. My understanding is if you're that high net worth, you could basically have anything underwritten. Because the insurance companies can cater to what you want. Like, very customizable policies because you're spending so much money. They might spend $200,000 a year on insurance. And insurance company will make that happen.

• 53:01Speaker 02

  Well, I'll give an example, just to make an insurance comparison. So, you know, I own a plane. The cost to insure my plane is $30,000 a year

• 53:14Speaker 02

  with two professional phenom-rated pilots. I am a brand-new pilot. I've got 100 hours. I've landed a plane, you know, 300 times, a little single-engine Cirrus with a parachute.

• 53:29Speaker 02

  In order to be the second pilot with a professional pilot who's flown for 2,000 hours or whatever, my insurance policy goes from $30,000 a year and 10 companies want to offer us insurance, to one company wants to offer us insurance, and that'll be $130,000 a year.

• 53:49Graham Stephan?

  Wow.

• 53:50Speaker 02

  Yeah. So, like you say, and like, you can insure anything. How much you want to pay? And what about the insurance companies? Are any of them going to, like, go bankrupt over something like this?

• 54:03Graham Stephan?

  Maybe.

• 54:04Speaker 02

  Or what's the, and what's the ripple effect from something like that?

• 54:07Graham Stephan?

  Oh, yeah. I mean, that's good. I mean, there are massive insurance funds, like, I think, there was just a headline on it. I wish I read up on this one. This was, I think it was BlackRock or Blackson. One of their insurance funds just tanked in the stock market today after these fires. Because, yeah, I mean, there's loss. But that's-

• 54:22Speaker 02

  Why a lot of these insurance companies want to trade publicly because what you're really doing is diversifying the risk to the public. You know, to retail traders, oh yeah, I have all state insurance. Let me swipe up on Robin Hood, buy some shares. They're the ones holding the bag. So yeah, it's, it's, it's all been thought of, but can they go bankrupt? Yeah, totally. Because when California fare plan fails, and as you said, they send that reinsurance risk back to the private market. Absolutely, there could be bankruptcies, but bankruptcies just turn into some other insurance company buying the dip on that and, and taking over those companies. Like Spirit Airlines, somebody's going to buy those planes and somebody's going to buy those routes, some other airline as they're in bankruptcy now. I mean, JetBlue tried to, you know, and then got stopped by Lisa Khan and people like, oh, Trump's going to replace her.

• 55:06Speaker 02

  And who knows, maybe then the merger will go through and maybe Spirit will be alive.

• 55:09Graham Stephan?

  Yeah. Now, a lot of this for insurance companies really caused by Prop 103. Now, this was passed in November of 1988. And according to this, insurance companies must get approval from the California Department of Insurance before implementing any rate change. They have to argue why they need to charge more money. This, this process could take more than a year, so rapid increases can't happen. California is one of the only states that allows outside groups to participate in the rate review process. That is why insurance companies are unable to go and say, well, our risk went up from last month. We need to raise our rates.

• 55:48Speaker 02

  Yeah, this, again, it always seems to come back to politics. And again, I want to just be clear that insurance companies are no angel. And so many people get left hanging because, you know, I do think it should be incumbent upon insurance companies to say, like we talked about earlier, hey, you know, their new building codes, you're underinsured. Hey, here's how you should fire Harden. Whatever. Hey, maybe you should have an extra policy for all the insurables inside your home. Whatever.

• 56:17Speaker 02

  So communication and the service they provide, insurance claims, processes, they're all designed to be a pain in the ass. It's kind of like what happened with Luigi, what were on the shell casings? Deny, defer. Defend. Defend and decline. Depose. Okay, perfect. You know it better than me. There's so many of these D phrases. Dick. Insurance companies suck, okay? So, and that was inspired by the book that was written, I think in 2010 or so, on how insurance companies basically try to make your life miserable. Like, why is it so hard to get a customer service rep on the phone? Because maybe you won't put the claim in if we make it hard for you, right? It totally makes sense that insurance companies are scummy in doing this because it props their bottom line.

• 57:00Speaker 02

  When their bottom line gets propped up, all the people who get stock-based compensation make more money and they get to go buy bigger homes and cars or whatever they want. The game is obvious, like it reads like a book. It's obvious why they do it and it's scummy. But again, a lot of the problems do also point at politicians. Funny, I was walking, I was on a walk with Lauren yesterday and there was a guy walking around, I've never seen the shirt before, walking around, and I told Lauren, I go, "That's a great shirt." "Defund politicians." I'm like, "That's a good one. That's a great one." That's why I'm saying, if, if you can never get re-elected as a politician, you, you can't, you don't really get all the outside funding anymore because you have an expiration. So that's why I thought it was so funny when I was running for governor of California.

• 57:45Speaker 02

  I'm like, "Look, I'm not trying to pull a Newsom where he's trying to do his eight years of damage here and then try to go on to the presidency." Because I was born in Germany, I can't be the president. So it's like, "Let me just do the governorship and that's it." There's no, it's not like I'm gonna, "Now I'm gonna fundraise for the presidency," right? Let me actually take, because this is what I would do, emergency control. I mean, look, Newsom declared a state of emergency, but he doesn't build with a state of emergency. Deploy the National Guard not to protect against looters, you could do that as well. But also the Army Corps of Avengers to start building. Start building the reservoirs that we need or repairing the Santa Ynez reservoir under emergency powers. Build now.

• 58:25Graham Stephan?

  Yeah. Terms of insurance companies, Allstate made the statement that they would resume selling new policies in the Golden State should regulators adopt proposed regulatory changes to make it easier for insurers to raise rates.

• 58:37Speaker 02

  Right. Which- It sounds also very unpopular because again, nobody wants to hear that rates are gonna go up. So it's like, oh, all states greedy, they just want, they just leave and then prices go up anyway, because there's so little competition. So it's hard. I think it's not just the regulation, though. It really comes down to if you built out infrastructure better, the reservoirs, the, you dealt with the delta smelt, you know, and the fish.

• 59:01Jack Selby?

  Yeah, let's talk about that.

• 59:01Speaker 02

  Yeah.

• 59:02Jack Selby?

  Is there a water shortage in California and what's causing it?

• 59:05Speaker 02

  Okay, so this is an interesting one to answer. At any given moment in time, there is usually a water shortage. But of the amount of water that goes into California, there is a massive excess of water. That's because when the snow melts, or when it rains off the Sierra Nevadas, the snow melts and the water comes down, or when it rains, most of it just washes into the ocean. This is why Donald Trump argues, oh, California is diverting all their water into the ocean. Well, not quite Donald. The water naturally flows into the ocean because if you look at a topography map, we have a lot of mountains and it just makes sense. Water goes downhill and into the ocean. That's just the natural flow of it. So it's not California on purpose dumping it into the ocean.

• 59:49Speaker 02

  It just naturally all goes into the ocean. It follows the San Joaquin River, the Sacramento River. They come together in a delta and they just flush out into the ocean. That's just geography. Okay, but what is California not doing? Well, they're not building dams or reservoirs that could actually divert this water down to SoCal, keep the Colorado River filled up, build more reservoirs so that we have enough water pressure for our fire hydrants. California, specifically Gavin Newsom, have actually bragged about closing down dams and bragged about how yay, now we have more of a salmon population. And so really what they've done is they've bowed to environmentalists who say, well, you know, the steelhead trout population, or the delta smelt, or the salmon populations have declined

• 1:00:34Speaker 02

  because of damming or rivers. And the byproduct of this, because every action has a reaction, the byproduct of this, the externality is houses burned down in SoCal because we don't have enough water in fire hydrants. It's also partly because people actually steal water from our fire hydrants and California doesn't do anything about it.

• 1:00:52Graham Stephan?

  What do you mean that people steal water?

• 1:00:54Speaker 02

  Oh, have you heard about the marijuana farms?

• 1:00:55Graham Stephan?

  Oh, yeah, they pop up and they just take water from the fire hydrants.

• 1:00:59Speaker 02

  No, explain to me this. Yeah, so they're, they're, basically you could just drive up to a fire hydrant with a water truck. People have private water trucks and they just steal water, they fill up their water trucks and then they drive them to their illegal marijuana farms often. And they irrigate all their crop with the water they stole from the fire hydrants. That became such a problem, you can Google this, that became such a problem that instead of California enforcing these problems, because when they tried to, they would raid the farms and they'd be like, oh, no, no, no, okay, they wouldn't prosecute them and they would just set up shop again the next day and just get back to illegal marijuana farming.

• 1:01:36Speaker 02

  California's solution to this rapid issue was not penalizing people stealing the water, it was removing fire hydrants. So they just removed more fire hydrants in California, which has fire problems. So that's California's government for you. And, you know, if you had somebody who was in power, who also had full legislative control, they probably would be able to do something about it if they had the willpower to do it, but Newsom doesn't.

• 1:02:02Graham Stephan?

  How do you go after those people? What were they doing, just letting them off? The people that are growing the plants or?

• 1:02:08Speaker 02

  It's, it's, that gets pretty complicated. And I don't know every detail about it, but from what I've heard, as with any almost crime in California, the district attorney is so buried that they just have to choose the highlighter of what they want to go through, they're so underfunded, the police have essentially been underfunded, defunded almost. And so you just don't have the money to prosecute all these crimes. So you have to come up with plea deals or just don't do it again, pay a little fines, whatever. And you just never get through the process. So to where it actually just becomes a cost of doing business. So these farms would pay the legal fines, you know, after prosecution lasting for, you know, usually they defer their prosecution, waive their right to a speedy

• 1:02:50Speaker 02

  trial, and then they just litigate this for, you know, a year, maybe. And then they come up with a settlement. Okay, we'll pay a $5,000 fine. We won't do it again. That's a, if you're running an illegal marrow on a farm, you're making a whole lot more than that. It's just a cost of doing business at that point.

• 1:03:02Jack Selby?

  Why do you think California citizens are so divorced, let's say, like on the ballot, from the reality of their environment?

• 1:03:10Speaker 02

  Ugh.

• 1:03:11Jack Selby?

  Like, as their environment continues to get worse. I mean, I grew up in Ventura, which is a California city. I mean, you, you know, you live there. Graham grew up in California. I have watched the state continue to get worse. Every single time I go back to visit Ventura and see my family, I'm so excited. I'm like, I love this. I love going back to visit Ventura. Two times ago, I saw someone get, I'm gonna bleep this out, and outside of a bar, downtown Ventura, saw it happen. Yeah. Right there, it was gang-

• 1:03:40Speaker 02

  Did you tell me about this?

• 1:03:42Jack Selby?

  I don't know if I told you about it.

• 1:03:43Speaker 02

  You didn't tell, you did not tell me about this.

• 1:03:44Jack Selby?

  Yeah, well, I mean, I, you know, I don't particularly love talking about it. It was pretty, it was pretty, uh-

• 1:03:49Speaker 02

  You saw it?

• 1:03:50Jack Selby?

  Yeah, it was pretty gnarly. It was gnarly.

• 1:03:52Speaker 02

  Wow.

• 1:03:52Jack Selby?

  Yeah, so, I mean, he basically, there was like a scuffle outside of a bar, and I think it was either gang-related, it's most likely gang-related behavior from a neighboring city. And yeah, he got one insertion right into his heart.

• 1:04:06Speaker 02

  Oh.

• 1:04:07Jack Selby?

  Yeah. And he was like a 20, 24, 25-year-old guy.

• 1:04:10Speaker 02

  That's terr- that's, you know, I don't feel safe out anymore in California either. Like, I feel, I, I feel like, and then I do, I won't go outside without a gun sometimes because I'm just like, I don't feel safe in California more. Now I'm licensed, so it's okay, but it's gotten to that point.

• 1:04:25Jack Selby?

  There, there is definitely a strong difference between what it was like when I grew up there and what it's like now. I'm continually, every single time I go back, I'm like, yikes.

• 1:04:34Speaker 02

  It's their approach on crime, I feel like.

• 1:04:37Jack Selby?

  Oh, yeah.

• 1:04:38Speaker 02

  Even it's, because I got a camera in the back of one of my properties, which is facing the alley.

• 1:04:42Jack Selby?

  Okay.

• 1:04:43Speaker 02

  The amount of things that I've seen back there.

• 1:04:45Jack Selby?

  You can make a TikTok channel out of that.

• 1:04:46Speaker 02

  I have someone sending me, sending me, go to this timestamp right here. And I go, and it's awful. Like, because he doesn't prepare me usually for what I'm looking at, but I saw a guy come up on the bicycle.

• 1:04:59Graham Stephan?

  And injected stuff in his leg. And you just see him just nodding out there. And, uh, yeah.

• 1:05:07Speaker 02

  It's so sad.

• 1:05:08Graham Stephan?

  Or just passing out in the middle there. I've seen so many times, uh, like urination, defecation on the camera.

• 1:05:16Jack Selby?

  Syringes also just on the ground sometimes. Like they'll be walking around and it just exists.

• 1:05:20Graham Stephan?

  So sad.

• 1:05:20Jack Selby?

  It's not being picked up. You don't know if that's infected with something, especially when you're walking on the beach. That's the scariest thing. When I'm walking on the sand and I'm like going out surfing. Imagine just stepping on something.

• 1:05:31Graham Stephan?

  A needle.

• 1:05:31Jack Selby?

  And getting some sort of disease or God knows what.

• 1:05:35Speaker 02

  Yeah, HIV, whatever, you know, that's terrible.

• 1:05:37Graham Stephan?

  Now, I will say, police presence has stepped up. And that, yeah, recently.

• 1:05:41Speaker 02

  Yeah.

• 1:05:42Graham Stephan?

  Uh, we had to make a call for something and they came within like two minutes.

• 1:05:45Speaker 02

  Wow.

• 1:05:46Graham Stephan?

  Yeah.

• 1:05:47Speaker 02

  Yeah, I think, uh, Santa Monica is really trying because I think they've seen the devastation that happened, especially on Third Street Parmanon. And there is also this shift away from the defund the police and progressive movement that we had in, during the COVID era, really. Uh, and this is happening around the world. I mean, you're seeing this with the AfD in Germany. You're seeing this in Canada, you know, Trudeau is now resigning, right? Who would have thought Trudeau is going to resign three or four years ago, right? So you're seeing this shift a, a, away from, uh, Democrat voting, basically, in part because of inflation, because of the lack of enforcement of crime.

• 1:06:24Speaker 02

  And, uh, and, uh, to some extent, uh, people have become very upset over prioritization of diversity, equity and inclusion funds or priorities. Like, take, uh, LA County, for example, or the LA Fire Department. Adam, have you seen the Adam Carolla clip?

• 1:06:41Graham Stephan?

  Yes.

• 1:06:42Speaker 02

  Okay, that was great.

• 1:06:42Graham Stephan?

  Incredible.

• 1:06:43Speaker 02

  Seven year wait to become a firefighter because he's a white dude. And a, a woman applied the Wednesday before and in the same place. Crazy, crazy. This was obviously wrapping up, uh, his, his, uh, story on that. But, but basically, a lot of companies are now you turning away from that. John Deere was one of the first. Meta just announced yesterday, uh, maybe even today, that they're ending their DEI program. Amazon's ending their DEI. Program, they're all getting rid of these DEI programs now because I think they're realizing, like Elon Musk says, that diversity, equity and inclusion is not getting the best out of us. It's getting potentially inferior candidates into positions of being doctors or being leaders,

• 1:07:26Speaker 02

  simply because either they're black or they're Hispanic or they're a woman, when potentially their scores are worse than others. Now, I talked to Lauren about this and she's like, well, you know, the reason they do this is because, you know, if let's say you grew up underprivileged or you were discriminated against in an inner city or whatever as a young black person in a school that was underfunded, it's hard for you to compete with somebody who's going to a, you know, prestigious high school in a very expensive area. So it makes sense why they do it. But the resolution we came to, which is the same one that I ran on when I ran for governor, is well then fix those schools. The problem is, how is that politically popular?

• 1:08:07Speaker 02

  To fund and make all the schools great and actually prioritize our funding for schools, when it's going to take 20 years for those benefits to come out, or longer.

• 1:08:15Jack Selby?

  Yeah.

• 1:08:16Speaker 02

  You know, you fix elementary schools in inner cities now, or any underprivileged schools throughout the entire state. The politicians might not even be alive anymore who funded those schools and improved the schools of the state. So they don't care.

• 1:08:30Jack Selby?

  So what do you think are some of the main things that are holding California back right now?

• 1:08:35Speaker 02

  Water, crime, development, the impedance to being able to build in California, and schooling, mental health. These should be no-brainer, apolitical issues that a government with all the power in the world should be able to solve, yet they don't.

• 1:08:57Jack Selby?

  And why do you think that people still continue to vote a certain way in the environment that is continually getting worse?

• 1:09:06Speaker 02

  Well, part of it is the existing government's power over the media in California. Most Californians.

• 1:09:18Speaker 02

  I would argue, aren't on X every day. They're turning on their local news, their KTLA, their Fox LA, or whatever. Their KCRA in Sacramento, whatever. They're turning on their local news stations. And who knows? This could be wrong, but this is what I was told by an anchor who's still on TV today in California. He asked me never to tell who he is, which is fair. And he sat down with me at a coffee shop during the election. He said, Kevin, there are times that we look at what we are told to say and we want to scream at the script because we know it's a lie. But we have to do it because otherwise our reporters won't get invited back into the

• 1:10:01Speaker 02

  Newsom press briefing and we have to be there to cover it. Otherwise, people will go to a different news station. If we don't get invited in, we don't get the coverage of their grand new plan. So really, you don't get exposure to the problems in California through the mainstream television. And I'm not talking about nationwide, CNN, Fox, MSNBC, all of the local stations. I think it's bad, the censorship we saw with the Twitter files or at Meta. The same thing is happening at every single news station throughout the entire state. I mean, Mark Zuckerberg was just talking on Joe Rogan about how as soon as they started saying no to the Biden administration, that they weren't going to remove certain posts,

• 1:10:41Speaker 02

  they started getting a bunch of agency inquiries and lawsuits against Meta. Well, imagine getting sued if you're a small local TV or radio station in California by the governor. You're screwed. You know, after I ran for governor, I, you know, we joke that the Department of Financial Protection and Innovation came after me conveniently right after the election for a fundraising video that I made when I was running for governor, saying, oh, you were collecting donations while talking about stocks. You were giving unlicensed financial advice. Basically extorted me for $5,000. Just fine, their settlement number or whatever.

• 1:11:23Speaker 02

  But we think that specific election video was targeted to send a message that we will come after you if you are a political noise or a fly in our ointment, if you will.

• 1:11:34Jack Selby?

  What other impediments did you come across when you were running for the opposition?

• 1:11:39Speaker 02

  Oh, yeah. Well, I mean, a lot. I think the most interesting was that the Democratic regime during the recall election, which was a very unique election, it's an election where you have a two-parted ballot. One is, do you want to recall Gavin Newsom? Yes or no? If Gavin Newsom is recalled, whom should be the replacement? Who should be the replacement? And the Democratic strategy was, we are not going to allow any candidate to get any airtime in pretty much any debates or coverage, whatever, although I was in one debate, thanks, Casey Harry. But we will give no credence to any other Democrat.

• 1:12:22Speaker 02

  The Democratic Party would not support any other potential contender against Newsom. Because their thesis was, we're going to defeat the recall, vote no on the recall, literally leave the second part of the ballot blank. So the thesis, the democracy aspect of the Democratic Party of California is, leave half the ballot blank because we're going to win anyway. That's, that's a huge impediment right there. So what does that mean? Well, that meant when I was running for governor, I couldn't get any Democratic campaign staff. So even though I was running as a Democrat, to replace Newsom, and my pitch was a JFK-style, like, reasonable Democrat, even though that was my pitch, I couldn't

• 1:13:02Speaker 02

  get any Democratic campaign staff. Lawyers, you know, donation platforms, marketing platforms, couldn't get anything. I'd hire Republicans who wanted to fight Newsom to help staff my campaign because I couldn't get Democrats, because they all said, well, we will never be able to get another Democratic job if, if we work for you. So that's an example.

• 1:13:24Graham Stephan?

  Wow. What about the Delta smelt?

• 1:13:26Speaker 02

  Back to, back to the water issue.

• 1:13:29Graham Stephan?

  Back to the fish.

• 1:13:30Speaker 02

  Yeah. Well, Berkeley has a piece on this. You know, I don't know so much about the Delta smelt, but I do know that Berkeley says you can conduct what's called hatch and release, not to be confused with catch and release, like, catch and release illegal immigrants, or catch and release fish, fishing. This is hatch and release, where you, you actually just, in a lab, or whatever, you, you hatch a bunch of Delta smelt, and you're like... There you go, and you replenish the populations. What happens with the Delta Smelt is when you build a dam, or you divert water and there's not enough water flow coming into the Delta, the argument is that you're killing fish populations. But look, every action has a reaction. So yes, in nature, when something changes, or even when a geography naturally shifts,

• 1:14:15Speaker 02

  when there's an earthquake and a new river is formed, well duh, some habitats are going to get destroyed, but others will be created. It's not like the new rivers, or canals, or whatever that are formed are all of a sudden going to be devoid of fish, or wildlife, or whatever. But because a species that is deemed endangered, the Delta Smelt, or a protected species, environmentalists have been able to fight and drag on litigation that prevents the establishment of basins, canals, or dams to enable more water flow to Southern California, which then enhances wildfire risk in Southern California, or reduces wildfire mitigation.

• 1:14:59Speaker 02

  And hence, we get Los Angeles basically burning down because of a fish that we could hatch and release, but because of that fish, I honestly don't even think the environmentalists care about the fish, because of that, they are able to fight in courts and prevent it.

• 1:15:18Graham Stephan?

  So let me tell you my understanding with this, because I love fish.

• 1:15:22Speaker 02

  Yeah, yeah. You have a beautiful fish tank, by the way.

• 1:15:24Graham Stephan?

  I really appreciate that. So the Delta Smelt has a lifespan of about one year, and because of that, it's seen as a bit of a canary in a coal mine, so to speak. If there's an issue with the ecological habitat in that area, you see it first in the Delta Smelt. There's about seven or eight different species of fish that live there, where environmentalists say, hey, if it's not the Delta Smelt, it's going to be any one of these other things. It just happens to be the Delta Smelt, because that's a very short lifespan, so we look to that. What's interesting about the Delta Smelt is that it thrives with a salinity of 0.2, basically. So it's when the freshwater- Mixes it mixes with salt water. It's got to be just the right combination for this fish to live.

• 1:16:07Graham Stephan?

  And so if you drain too much water from that, there's too much salt that goes in. But now, in a way, it almost helps farmers to make sure there's not too much salt that's going into their crops. So there needs to be that area in between where this fish could live. So they're saying that they could tie this up as long as they want to, not because of the smelts, but because there's a whole bunch of endangered species. But that even if the delta smelt weren't there, that wouldn't have prevented anything going on. Los Angeles still gets the vast majority of its water from the Sierra Nevada and from groundwater. And that this delta smelt water mostly goes to help farmers in central California. That's my understanding of it.

• 1:16:52Speaker 02

  Yeah, so let's break that down first. The the argument specifically on the delta smelt is a perfect example of what we call the slippery slope fallacy, which is, let's start with the smallest problem. And then let's assume that problem continues five iterations further. And then let's argue the worst case scenario, all the fish are dead. Okay, so let's go through the thought experiment. Kill every living animal in the San Joaquin Sacramento River Delta. Just kill all of them. Okay, they're all dead now. So what do you do? Well, now you can divert as much water as you want. There's no risk to life anymore because you've killed them all. Okay, so what do you have now?

• 1:17:37Speaker 02

  Well, now you have a Colorado River that's potentially filled up, canals that are filled up, dams and reservoirs that are filled up. And then you have to ask yourself, at what point are you investing in protecting Southern California from losing, as you mentioned earlier, $120 billion potentially in economic damage, which is like 0.4% of the entire United States GDP that you just literally lit on fire, which is bad. That's a loss. It's a net loss to society. At what point do you say, wow, you know what? Kill all the living organisms in that delta to prevent even half of that from happening. Because if you prevent half of it from happening, then you have 60 extra billion dollars. So what if now we take a slice of that?

• 1:18:21Speaker 02

  And now you build new estuaries or, you know, larger pools or ponds or lakes or whatever.

• 1:18:29Speaker 02

  And you let this fish that would have been endangered or died there or whatever, live there, right? So basically relocate the fish or the animal and animals. That can all be done with money. And that's to say that a small investment into water infrastructure can save hundreds of billions of dollars as we're seeing now, but it could also save human lives. That's really important, too. So unfortunately, the desire for saving these fish, which we can save in another way, as the liberal institution Berkeley says, we can save the Delta smelt in another way. There is no shortage, by the way, of salmon. Okay? We can save salmon in another way.

• 1:19:12Speaker 02

  Then we should really start thinking about bettering California's infrastructure and saving lives and saving hundreds of billions of dollars.

• 1:19:18Graham Stephan?

  Now, with the Delta smelt, separate from that, I do find it interesting that they do surveys and they see how many smelter in this area. The last time they did the survey, they could only find one.

• 1:19:28Speaker 02

  Oh, wow. Yeah.

• 1:19:29Graham Stephan?

  And so regardless of this, it seems like rising temperatures are killing them off. And so either way, it's kind of like.

• 1:19:35Speaker 02

  Feeble, you know?

• 1:19:37Graham Stephan?

  Well, that's the thing.

• 1:19:37Speaker 02

  If I was gonna say they live one year, they die.

• 1:19:40Graham Stephan?

  But that's.

• 1:19:41Speaker 02

  Good point. That's a really good point.

• 1:19:42Graham Stephan?

  But that's how, but that's how they become an indicator species for the entire area because of such a short lifespan.

• 1:19:48Speaker 02

  Yeah.

• 1:19:48Graham Stephan?

  You know very quickly if something's up and that affects everything else. So it could balloon from that to other fish, to other salmon, to other birds, to eat the fish, to like this.

• 1:19:58Speaker 02

  Which is where the argument is that at some point you have to make the decision at what point is hundreds of billions of dollars of harm to GDP, which we could reinvest to saving more fish lives and human lives and property, right?

• 1:20:12Graham Stephan?

  Yeah.

• 1:20:12Speaker 02

  At what, where's the balance there?

• 1:20:14Jack Selby?

  It's just a prioritization.

• 1:20:16Graham Stephan?

  Well, so far it seems like for California, the balance is if something goes extinct because of human life.

• 1:20:22Speaker 02

  Yes.

• 1:20:22Graham Stephan?

  It's California's responsibility to at least keep the lineage going. And so you do have some of these fish and some of these insects and things like this that are still going in captivity.

• 1:20:33Speaker 02

  Sure. And fine, great. If that could save lives, give them, give them a paradise. Give them the, the, the bigliest, largest paradise pool reservoir ever, all for the Delta smelt. They could have the greatest population ever in the world.

• 1:20:51Speaker 02

  Build a museum around the Delta smelt. There's so much that money can do to solve these issues. But unfortunately, I mean, look with regarding indicator species. It's very interesting. There's a reason we use mice for drug discovery and research because obviously they if, if a rat is going to get cancer from pumping them up with 10x the normal human dose of a certain drug, well, then maybe there's a risk of cancer in a human. Or at least once you spread it out over population, a higher incidence of cancer by using a certain drug. So, so yeah, the idea of something being an indicator species exists. It's again, same reason we use mice, but that doesn't mean that we're necessarily going

• 1:21:31Speaker 02

  to see all of the externalities of all humans getting cancer if some of the small indicators come up in mice. Same thing with the smelt. Doesn't mean that all of the other ones are going to die. Save the smelt, put them in captivity, captivity, save Southern California.

• 1:21:46Graham Stephan?

  Jackson indicator species, actually.

• 1:21:48Speaker 02

  Oh, for what?

• 1:21:50Jack Selby?

  For plenty of things.

• 1:21:51Speaker 02

  Different stocks?

• 1:21:52Graham Stephan?

  Yeah.

• 1:21:52Speaker 02

  Jack's the indicator. Okay.

• 1:21:54Jack Selby?

  I am an indicator.

• 1:21:54Speaker 02

  Like the, like the pro indicator or the inverse indicator?

• 1:21:57Graham Stephan?

  Inverse.

• 1:21:57Jack Selby?

  Yeah. Just let me know if you want something to go up or down and I'll just do the opposite.

• 1:22:01Speaker 02

  Yeah, there, okay, well, there you go. The Jim Cramer effect. I've had my Jim Cramer moments.

• 1:22:06Jack Selby?

  We have actually had, you know, not the greatest market recently, and I did increase my auto invest pretty heavily.

• 1:22:11Graham Stephan?

  It was the day Jack was like, I invested a lump sum in the market. That day it went down. But there was also a very specific stock, I'm not going to name it, Jack, that Jack bought into because it was like on the up and up.

• 1:22:25Speaker 02

  Quantum.

• 1:22:26Graham Stephan?

  How's that doing? No, no.

• 1:22:28Jack Selby?

  Yeah, it's a, it completely plummeted. And this was maybe within the past few weeks.

• 1:22:33Graham Stephan?

  And this is a random.

• 1:22:33Jack Selby?

  It wasn't, it wasn't a lot. Usually the heavier I buy, the more it, you know, goes down. But this one, fortunately, I didn't put in a lot. It's still going down pretty heavily, though.

• 1:22:41Graham Stephan?

  Oh, yeah.

• 1:22:41Jack Selby?

  It's okay. I mean.

• 1:22:42Speaker 02

  Jack, could you pass me a magic mind?

• 1:22:44Jack Selby?

  You may.

• 1:22:44Speaker 02

  Yeah. Kevin, have you tried these before? Oh, no. You don't, you don't. That's why you got three. I am not an indicator. Have you had these? Is there alcohol in it? I don't drink anymore. Did you hear that? There's a. I'm at like three months of no drinking. You don't drink, period? I haven't had a single drink since September 20th.

• 1:23:03Speaker 00

  This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.

• 1:23:32Speaker 04

  Now at Kroger, your points add up to more ways to save every trip. Use them your way to take dollars off groceries at checkout or save at the pump. You can even save up to $35 on your next fill up. Same points, more choices. And with low prices on fresh, quality food, plus digital and personalized offers tailored to how you shop, your dollar goes further. Redeem your points online or in the app. Kroger, fresh for everyone. Restrictions apply. See site or store for details.

• 1:24:03Speaker 02

  Yeah, I knew this.

• 1:24:04Jack Selby?

  I didn't know that.

• 1:24:05Speaker 02

  Yeah, I think it's fantastic.

• 1:24:06Jack Selby?

  How, how, how do you?

• 1:24:07Speaker 02

  No, there's no, there's no alcohol. It's just, it's like a.

• 1:24:12Jack Selby?

  And Graham loves these. They have like a tiny, tiny little, teeny, tiny little burst of caffeine.

• 1:24:18Speaker 02

  I worked at John, but these people come in for these matcha shots. I always thought it was so disgusting, but I'll take it.

• 1:24:23Jack Selby?

  No.

• 1:24:23Speaker 02

  I'll take your mystery magic mind.

• 1:24:25Graham Stephan?

  They sent us a whole bunch of these. They sponsored the podcast and I honestly, I like them a lot. They help with focus, attention.

• 1:24:33Jack Selby?

  Fine. Cheers to your sponsor.

• 1:24:34Speaker 02

  I already.

• 1:24:36Graham Stephan?

  I love, some people will say the taste is not their favorite. I love it. No, I sip on it.

• 1:24:41Jack Selby?

  Yeah, Graham, when he, when we go on our like work trips, he always likes a little caffeine burst like midday.

• 1:24:46Graham Stephan?

  I take these on trips.

• 1:24:47Jack Selby?

  He'll bring them and like try to slide me magic minds like throughout the day. It'll be like four, 5pm. We'll be like on some random flight going somewhere. He's like, hey, man, take a magic mind.

• 1:24:56Speaker 02

  Yeah. They're local. I mean, yeah.

• 1:24:58Graham Stephan?

  I, I love them. Yeah. I take them with me on trips because I could put them in my backpack and TSA doesn't give me any issues with them because it's under the liquid limit.

• 1:25:06Jack Selby?

  Nice. Yeah. Two fluid ounces. That's hilarious.

• 1:25:08Graham Stephan?

  Yeah. So sometimes if I like, I can't get a coffee in the morning or something like this, I'll drink a magic mind.

• 1:25:12Speaker 02

  Yeah. Organic olive oil in there too. See, that's brilliant.

• 1:25:14Graham Stephan?

  It's really good.

• 1:25:15Jack Selby?

  It's actually not that bad.

• 1:25:15Graham Stephan?

  But yeah, I mean, you were, you were. And they sponsored the podcast. So thank you, magic mind.

• 1:25:20Speaker 02

  Yeah, man. I mean, I'd rather have this than shots of tequila. I always used to be two shots of tequila. Uh, always. It was crazy. It was like, it was like daily. Uh, and I thought that was normal.

• 1:25:31Jack Selby?

  When?

• 1:25:32Speaker 02

  When?

• 1:25:32Jack Selby?

  Yeah.

• 1:25:32Speaker 02

  Like, time of the day?

• 1:25:33Jack Selby?

  Throughout the day.

• 1:25:33Speaker 02

  Four. Four o'clock.

• 1:25:35Jack Selby?

  And what would that do for you?

• 1:25:36Speaker 02

  All my anxiety would go away.

• 1:25:38Jack Selby?

  What were you anxious about?

• 1:25:40Speaker 02

  Don't know. But it turns out when I stopped drinking, all my anxiety went away.

• 1:25:45Speaker 02

  Yeah. People told me it was coffee or caffeine that was creating anxiety. But I think what happened was I got used to using alcohol as the medicine. So that way, like every day around four o'clock, I'd get anxious because I was waiting for my medicine. I don't know if that's true, but that's, that's what it felt like for me.

• 1:26:02Jack Selby?

  And you'd do two shots of tequila? You'd just go back to back and then you'd feel better?

• 1:26:05Speaker 02

  Back to back, man. That's like one little swig.

• 1:26:10Jack Selby?

  So, okay, this is-

• 1:26:11Graham Stephan?

  So, would you enjoy it or is it more just like-

• 1:26:14Speaker 02

  Oh, no. I looked forward to it.

• 1:26:15Jack Selby?

  Do you like the flavor?

• 1:26:16Speaker 02

  No, it tastes like ass. No, tequila sucks, but I didn't care because to me, it was like my medicine. Was what I thought.

• 1:26:24Jack Selby?

  And it just made you feel like emotionally, like more mental clarity?

• 1:26:28Speaker 02

  No, I just, uh, it just took the anxiety away. Uh, less mental clarity, actually.

• 1:26:32Jack Selby?

  Yeah.

• 1:26:32Speaker 02

  Because you've become an idiot.

• 1:26:34Graham Stephan?

  Two shots for you wouldn't like, like two shots for me, I'd be on the floor. But I'm guessing for you is just like, just enough to take the edge off.

• 1:26:42Speaker 02

  So I could do two shots, uh, and then, uh, we would, we would always play games like, oh, who would breathalyze the most? It'd be like 2.5 or, you know, what was it? .025. Yeah, yeah, yeah, yeah, two, yeah, yeah, two. Yeah, dead. That's dead. Yeah. See, I don't even remember the measures anymore.

• 1:27:01Jack Selby?

  Who can breathalyze them?

• 1:27:02Speaker 02

  Yeah. No, it was, I'm telling you, it was bad. It would probably be like, I think to hit the limit, I'd probably be five or six. I mean, then, then you're pooped. It's just, it was just bad, but it, it became so normal for me. It was normalized for me. And it all started with anxiety, which I started having anxiety when I went to college. I'd get like, like lumps in my throat and pain in my chest. And, um, went to cardiologist, ear, nose and throat specialist. Like, I thought I was dying of cancer. And like, it's like, no, man, you're just, you're just stressed out. You're anxious. I'm like, okay, got it. Stressed, anxious. Oh, alcohol. Grr.

• 1:27:37Jack Selby?

  And it started as early as that, as early as college where you'd start maybe taking like a shot or two per day.

• 1:27:43Speaker 02

  It was wine back then, but yeah, kind of gross over time. Wine was the A wage.

• 1:27:47Jack Selby?

  So then what made you then realize that you should wean off of alcohol and that that could actually like be the solution?

• 1:27:53Speaker 02

  I, well, I didn't. I was just, I think what happened is you, you get enough point, you hit enough occasions in your life where you're like, man, I don't remember what happened last night. What did I say? Did I offend someone? Did I do something stupid? And then like you're going around to the people you were with, like, was, was I okay last night? Did I say something stupid? You get enough moments like that where you're like, oh, man, this is dumb. And, and so then, um, yeah, the, the last one that did it for me was going to Napa. When you go to Napa for drinking, you go drink all day.

• 1:28:31Jack Selby?

  What happened to Napa?

• 1:28:33Speaker 02

  I don't remember.

• 1:28:35Jack Selby?

  Really?

• 1:28:36Speaker 02

  No. So, um, but yeah, the whole, the whole trip? I mean, I, it like, I guess the, what, what I remember of it is like, uh, you know, those memes where people like, uh, they're like, oh, look at my kids. And they, they open up this like book of it and all the, the pictures come out of their wallet, the dad wallet, which I have a dad wallet now too, which is kind of funny. But, uh, that's kind of what it feels like for like somebody's playing a slideshow. That's kind of the slideshow of the trip.

• 1:29:01Jack Selby?

  Well, I appreciate your transparency. That's cool to, it's cool to hear. I'm, I'm happy that, that it's been working out well for you. I've been seeing a lot of stuff online, tons of different people, like Brian Johnson, the guy who's optimizing for like longevity.

• 1:29:11Speaker 02

  Oh yeah. He says he's never gonna die.

• 1:29:12Jack Selby?

  Well, as long, like, you know, he's a smart guy. Like I'll, I'll lend him some credit there. But a lot of other people that are like the fitness health guys, like I think Huberman also might agree with this, that you should never have alcohol.

• 1:29:23Speaker 02

  Oh, I didn't know that.

• 1:29:24Jack Selby?

  They just say like, it only ever does bad things. And some people argue that one glass of red wine per night is like, you know?

• 1:29:30Speaker 02

  It's a good thing.

• 1:29:31Jack Selby?

  Uh, I think the data now shows that it's not, you know, don't quote me on it, but my general sentiment is it's not a good thing to be drinking a whole lot.

• 1:29:39Speaker 02

  Yeah, there's a, there's a new study every day tells you something's good, something's bad, you know? But you're right. That is the sentiment lately and. You know, people are like, oh, there's resveratrol, antioxidants in it. Yeah, well, there's antioxidants in a handful of blueberries, too. But yeah, I think it's a personal thing. Like, I don't blame anybody for drinking. I wish I could just have one or two drinks and feel good. But for me, I don't feel anything for one or two drinks. So I'm like, ah, let me just see how long I can go without drinking. So that's where I am right now.

• 1:30:07Graham Stephan?

  Interesting.

• 1:30:08Speaker 02

  Yeah, I'm not saying I'm never going to drink again, but for right now, I've seen good benefits from it. And I feel more productive, too, because I'm not like crashing with anxiety at four anymore. I actually feel like I can get more stuff done. So I'm kind of crazy.

• 1:30:21Speaker 02

  I could learn more about Delta Smelt.

• 1:30:23Graham Stephan?

  And how to beat Gavin Newsom. In terms of Rick Caruso, why do you think he lost?

• 1:30:30Speaker 02

  Republican.

• 1:30:32Graham Stephan?

  You think that was the only reason? You don't think people were just like anti-rich guy?

• 1:30:36Speaker 02

  Oh, sure, they were that, too, but Republican. California is, it just votes Democrat. That's just the way it is.

• 1:30:46Graham Stephan?

  Why is that?

• 1:30:48Speaker 02

  California has just, after the seventies, it's, you know, California went through the seventies and eighties, this golden era. It just had so much money. So it just had so much to give. And it actually ran a good budget in the past. So what's happened is after generations of having basically the riches, they just got really bad with managing everything from infrastructure to water to, I mean, think about the 1960s. They're like, we need dams. State Water Project, boom, they built 10 dams in 10 years.

• 1:31:24Speaker 02

  10 dams in 10 years. We've been trying to build six reservoirs since we funded it in 2014, and we've done nothing in 10 years. So it just shows you that like how different things are now from then, when, wow, California could actually get things done.

• 1:31:39Graham Stephan?

  So I don't know if it's like entitlement or what has occurred, but eventually there will be a shift either to a more conservative democratic platform or just Republicans entirely. Yeah, I do find it interesting. All of his buildings were intact. Yes. Okay. So yeah, which does that sort of like enhances this. The conspiracies that I've seen. Tell me about it. Facebook. Oh gosh. There's one that this entire thing was was the doings of Rick Caruso to be able to buy up land. I've also heard the same thing that BlackRock was behind this. That it was a satanic ritual. I hear a lot of stuff. The most plausible thing is that

• 1:32:19Graham Stephan?

  simply his buildings were brand new construction. I believe metal roofs. He didn't have shrubbery that was touching his buildings either. Everything is very well manicured, very well watered. It's like Disneyland. Right. And now other people were saying too, that that his buildings were like sprayed down the day of or something like this, which is possible. I don't know. He's got staff there. Exactly. But it's not surprising to me that a new construction like that would be much more resistant to fire. Right. Because right across the street Starbucks in a hundred year old building burned down, whereas the newer construction. Right. Right. I mean, and this goes to like what you were saying, which is, hey, we're building our homes much better now. So hopefully, hopefully that's what it is because then that gives you hope about the future that you don't have.

• 1:33:04Graham Stephan?

  Oh, yeah. I think in the future for any homes that are going to be constructed in that area, probably have to have metal roofs. Oh, yeah. They're going to be really strict on plant life and which plants are able to like overhang across something. And then all the roofs should have that sprinkler system that will come up in the event of a fire, the sprinklers come out. Any new construction here in Vegas, they have that now. That's interesting. Oh, wow. Yeah. I think probably plant life is the biggest, which is unfortunate because plants make everything kind of lush and pretty, right? I mean, I think at your Santa Monica, one of your Santa Monica properties, you've got one of the most beautiful lush gardens, right? Dreading tearing that up. Yeah. Because I have a feeling, I don't want to put it out there, but I have a feeling

• 1:33:47Graham Stephan?

  that's not going to be there forever because of how dense that plant life is. It's gorgeous. It sucks because that's what attracted me to that home is walking in and just like it felt like a tropical forest.

• 1:33:59Speaker 02

  Beautiful.

• 1:34:00Graham Stephan?

  Yeah, that that is the definition of prob- a problem for fire.

• 1:34:04Speaker 02

  I know.

• 1:34:07Graham Stephan?

  They should just put your house up. This is what we don't want.

• 1:34:10Speaker 02

  But it's beautiful.

• 1:34:11Jack Selby?

  It was built in like the 20s.

• 1:34:13Speaker 02

  Yes, it was so beautiful.

• 1:34:15Jack Selby?

  It's very picturesque. Sitting pretty, you're sitting duck.

• 1:34:18Speaker 02

  Yeah, you know, just in a 1920s Spanish.

• 1:34:20Graham Stephan?

  So nice, man.

• 1:34:21Speaker 02

  Foam surrounded by greenery.

• 1:34:22Graham Stephan?

  Still have the Sotio tile inside.

• 1:34:24Speaker 02

  Everything.

• 1:34:24Graham Stephan?

  Yeah, it's nice.

• 1:34:26Speaker 02

  I loved it. I loved it. But yeah, in terms of that or a fire, I mean, it's.

• 1:34:30Graham Stephan?

  Fire's dream.

• 1:34:31Speaker 02

  Yeah.

• 1:34:31Graham Stephan?

  That's what it is.

• 1:34:32Speaker 02

  Well, I mean, I think you could look at a lot of actually look at newer construction in Vegas. It's a lot of glass and metal and stucco and they look good. But they're much more fire resistant.

• 1:34:43Graham Stephan?

  Yeah.

• 1:34:43Speaker 02

  Yeah.

• 1:34:44Graham Stephan?

  Yeah, the other thing that I am shocked about is that LA is not as strict about plants touching fire lines. Like when they, when they really look at the cause of this thing, they say it's a, you know, from a person's backyard. Now, we have no idea if that means that someone was barbecuing, if a homeless person snuck in and made a fire, if it was vandalism. Or what I think is probably most likely is that in a lot of those areas, you have these power lines, trees growing over the power lines and in the wind, when you have that much wind, it sparks.

• 1:35:17Speaker 02

  Probably.

• 1:35:17Graham Stephan?

  That's what's most likely to happen.

• 1:35:19Speaker 02

  I agree with that.

• 1:35:20Graham Stephan?

  Power line snaps, falls down, sure. And I've seen a lot of real estate in Los Angeles where, I mean, this is obviously overgrown over the power line for like 10 years.

• 1:35:29Speaker 02

  Oh, yeah.

• 1:35:30Graham Stephan?

  No one ever trims it back and no one ever forces you to trim it back. No one mentions anything. It just is what it is.

• 1:35:36Speaker 02

  Again, infrastructure.

• 1:35:37Graham Stephan?

  And that's one of the things. And it's very expensive to put the power lines underground.

• 1:35:42Speaker 02

  Oh, God.

• 1:35:42Graham Stephan?

  I think it was like $4 million a mile.

• 1:35:45Speaker 02

  Well, yeah, and that's where it comes to like, well, if the brush were cleared, maybe you don't have to worry about putting the lines underground. But then again, how often do we get 200 mile an hour gusts, which is crazy too. So in fairness, that's crazy. But hey, you know, at least somebody's being paid a $751,000 salary to think about those things over at the Department of Water and Power.

• 1:36:02Graham Stephan?

  Now, Karen Bass, Karen Bass promised affordable housing.

• 1:36:05Speaker 02

  Oh, God.

• 1:36:06Graham Stephan?

  How could you promise cheaper housing?

• 1:36:09Speaker 02

  That's the most political, that's the biggest political lie. The only way you can increase housing affordability is by building much more housing. This idea that you're going to come into a very expensive area and say, "We will have affordable housing here," is very stupid because it simply exacerbates the housing shortage. So I'm a big fan of just build more and let the market decide. But the idea of affordable housing restrictions, they're complicated to get through planning, they become a negotiation contention for developers, they slow down the building process. And quite frankly, from an economic point of view, they do the opposite. Affordable housing actually makes housing less affordable because you have massive wait lists for those affordable

• 1:36:52Speaker 02

  housing units, so very few people actually benefit from them. And everybody else is left now enjoying less real estate to pay higher prices for.

• 1:37:00Graham Stephan?

  Do you think it's ever a possibility California could enact a price control on landlords right now from gouging rent?

• 1:37:07Speaker 02

  Oh, yeah, sure. Well, I mean, price gouging already exists, policies for that. So those are probably, you don't even need to pass a law for that, that probably already exists. This would be a perfect case where that, those sort of laws will come into effect. Like, hey, like, your place is listed for 13,000, you're getting an offer for 20K. No, you're not going to rent it out for 30K. But let's not even talk about those numbers. Let's use like a townhouse, for example. The townhouse was renting for, it's a two-bedroom, one-bath a townhouse, let's just say. Let's say it's renting for 3,500 bucks a month. Hey, look, you can't raise the rent more than 20% or whatever. I imagine those sort of policies already exist, but it's probably going to happen anyway. And people will be willing to pay it because they want to live somewhere. People want the certainty that they can sign a lease right now for the next two years while they go rebuild. I would,

• 1:37:51Speaker 02

  I would. I mean, anybody who is capable of will. Who gets screwed are, like you mentioned earlier, the people who've been there since the 80s. They can't pay above market rents. They can't afford to rebuild their homes. What happens? They get squeezed out of California. That's, that's the real loss, is that sort of culture and diversity that, that once was and the character or whatever, that, that's gone. It all gets exported.

• 1:38:14Speaker 00

  This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed Sponsored Jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed Sponsored Jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed Sponsored Jobs.

• 1:38:45Speaker 04

  Now at Kroger, your points add up to more ways to save every trip. Use them your way to take dollars off groceries at checkout or save at the pump. You can even save up to $35 on your next fill-up. Same points, more choices. And with low prices on fresh, quality food, plus digital and personalized offers tailored to how you shop, your dollar goes further. Redeem your points online or in the app. Kroger, fresh for everyone. Restrictions apply. See site or store for details.

• 1:39:16Jack Selby?

  What do you think about that wildlife crossing in Thousand Oaks?

• 1:39:19Graham Stephan?

  Oh, I don't know about this. Oh, you pass by it all the time. Wildlife, what? Yeah. It's built an overpass over the freeway.

• 1:39:25Jack Selby?

  It's for, I think, mountain lions, right? It's for mountain lions and deer to be able to cross from one side to the other.

• 1:39:32Graham Stephan?

  Beautiful looking.

• 1:39:33Jack Selby?

  If I'm not mistaken, it brings it from like the mountainous region.

• 1:39:37Graham Stephan?

  Yeah.

• 1:39:37Jack Selby?

  To a residential reason. So it also, it makes me wonder like, okay, why do the mountain lions need to be over in the residential region?

• 1:39:44Graham Stephan?

  Well, my understanding, they're crossing anyway. So it's like, either they get hit by a car. Right. And somebody maybe crashes into them, or they just pass safely.

• 1:39:52Jack Selby?

  I'm pretty sure the budget, though, for this is like $100 million.

• 1:39:56Graham Stephan?

  Did you hear about that? No, I didn't know about the budget. It's a, it's a beautiful overpass. You pass by it, and it looks like you're going underneath.

• 1:40:04Jack Selby?

  Well, they haven't finished it yet. It says online that the budget is $90 million for the bridge, and 60 million is publicly funded and 30 million is privately funded.

• 1:40:14Graham Stephan?

  Yeah, that's dumb.

• 1:40:14Jack Selby?

  So $90 million to make something for a golden eagle to be able to cross a freeway. I'm joking, that's obviously being a little bit exaggerating right there. But there is, you know, bobcats and other things. But still, I mean, that is $90 million, which is...

• 1:40:27Graham Stephan?

  Would you rather be spent on that or homeless?

• 1:40:30Jack Selby?

  Well, the, like, if it actually went to solve the homeless issue, that. But the problem is, they have a long track record of allocating funds to that and nothing being done.

• 1:40:39Graham Stephan?

  Right.

• 1:40:40Jack Selby?

  And I know you know a lot about this because you talk about like these shelters that are built and they're just sitting vacant.

• 1:40:44Graham Stephan?

  It's a disaster.

• 1:40:45Jack Selby?

  While they're still paying like the, the lease.

• 1:40:47Graham Stephan?

  I think one of the things that you find in California is, California is very much about feel-good policies. In fact...

• 1:40:54Speaker 02

  Germany did this as well. Germany was building, you can look this up, Germans spent over $20 million building bike paths in Ecuador for climate change. So these are, I just call them like the feel-good pet projects that politicians get to put their names on. But again, they do that so they could get re-elected. The whole premise of, "Look at this beautiful park I built," or whatever. This is why when you see those 1,500-page bills and they have all the pet projects in them, politicians put their names on it so they can get re-elected. It's always to get re-elected. You need Doge in California. You need somebody to implement Doge C. You know, Doge California, or the California Doge. And just rip this budget to shreds and start over. You know, Vivek always tells us, he says, "Start at the bottom and add in what you need,

• 1:41:39Speaker 02

  as opposed to starting at the top and cutting what you don't need." Reverse the order. Like, this might sound unpopular, but I was looking at the budget of San Francisco. And if I remember correctly, the budget of the libraries alone in San Francisco could probably solve the entire homeless problem in San Francisco. And I'm not saying we don't need libraries and books, but we are also in a digital age where it makes me wonder how much we could reallocate resources and actually solve real problems that are killing people, needles on the ground, people getting stabbed, crime, safety, like actual life issues,

• 1:42:20Speaker 02

  while not losing the context of books and research and reading, which we can do digitally now. And so, the prioritization of the government budget in California is what the ultimate problem is of all of it.

• 1:42:33Jack Selby?

  But it's not even the prioritization, but it's also just how effective they use their dollar. Like, $1 for that library. I'm sure they could do both at the same time. If they just like were a little bit more conservative with their, tight with their wallet.

• 1:42:45Speaker 02

  Sure, I mean, it's the, it's the argument of the, oh, what was it? It was the 100, this just came up, it was the $150 Boeing military contractor soap dispenser.

• 1:42:56Speaker 02

  Why, you know, why is the US military paying $150 for a commercial soap dispenser in a Boeing plane for the military when it's available in the commercial market for $5?

• 1:43:09Jack Selby?

  Or the $2 million public bathroom that was put, I think, in like San Francisco, New York, something like that?

• 1:43:13Speaker 02

  It's endless. It is endless waste and spending and usually, usually it's because the person making the purchasing decisions gets taken to dinner by a lobbyist, gets handshake, gets gifts, you know, they get a new toaster that shows up at their door, you know, whatever, their wife gets tickets to whatever, the Broadway show or whatever, and we're gonna write them in because we're gonna do them a favor.

• 1:43:38Jack Selby?

  Did you get approached by any lobbyists when you were running for governor?

• 1:43:41Speaker 02

  Oh, no.

• 1:43:42Jack Selby?

  No. And why is that? Because they didn't want to like seem like traitors to the incumbent?

• 1:43:47Speaker 02

  Well, I think there are a few potential reasons. I think that's probably the biggest reason is like, okay, nobody support the competing Dems against Newsom. That's probably the biggest reason. But there's also a chance that they're like, oh, man, if we go talk to Kevin, he's gonna make a YouTube video about us.

• 1:44:03Jack Selby?

  Oh, that's funny. That's funny.

• 1:44:05Speaker 02

  Yeah. Which I would do.

• 1:44:08Jack Selby?

  They were right.

• 1:44:09Speaker 02

  They were right.

• 1:44:12Jack Selby?

  Got it. Okay. I think that's, I think that's pretty good. I mean,

• 1:44:15Speaker 02

  We, we kinda hit everything.

• 1:44:16Jack Selby?

  Yeah, we were kinda spitballing with this one, guys, so forgive us, obviously, if, you know, any of the information's inaccurate. I'm gonna do my best in fact checking. This episode is also incredibly fast turnover, so I'm basically gonna devote my entire life tomorrow to editing this entire thing, making it look good for you guys. We're doing our best out here, trying to report the news. Yeah. Thank you, Kevin.

• 1:44:37Speaker 02

  Yeah, we appreciate it. We'll have community notes in the comment section where people can community know everything we said. I'm curious to read it because I profess to know everything and I don't think anybody knows everything. But it's healthy to have that discussion about it. And so the comment section will be very entertaining.

• 1:44:53Jack Selby?

  Yeah. Well, thank you guys so much. Comment about the Delta's melt. Please.

• 1:44:55Speaker 02

  Let us know what you think.

• 1:44:56Jack Selby?

  Let us know.

• 1:44:57Speaker 02

  Down below. Make sure to hit the like button, subscribe. Kevin will link to your info down below in the description.

• 1:45:01Jack Selby?

  Also, I'm going to do some research and find some really good funds that you guys can contribute to for victims of the California wildfires. We will be leaving those links down below, top lines of the description. If you're interested in helping, that would be absolutely incredible. Thank you, guys, for watching. Till next time.

• 1:45:23Speaker 04

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