ICYMI: Fixing the Golden State
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This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead with insight on the people, companies, and trends shaping today's complex economy. Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Masser and Tim Stenevek on Bloomberg Radio.

Now, U.S. states are warning of significant revenue losses due to President Trump's administration's government cuts and trade policies. The cuts coming at a time when states are already facing flat revenue growth, rising costs from inflation and the end of pandemic aid with governors and lawmakers saying

debating how indeed to make up for those losses. So what might any or all of this mean for the U.S. state that is the biggest in the United States, the economy, and it is now the fourth largest economy in the world? I was corrected before we came on air. And next year, of course, is host to a governor's race. We're talking about California. We want to talk to someone who's looking to be the next governor in the state of California. Joining us is

Steven J. Klubeck, he is 2026 Democratic candidate for governor of California, founder and former CEO of Diamond Resorts International. He's an investor in the publicly held microcap and online gaming company Play Studios. He's been on Undercover Boss. He's rumored at one time to maybe run for governor of Nevada. This is what happens when you do a little bit of a search.

He also served as a Nevada State Athletic Commission. And he's got a new book out. It is entitled Facing Hard Truths, How Americans Can Get Real, Pull Together, and Turn Our Country Around. It's published just earlier this month. He joins us in our Bloomberg Interactive Broker Studio. A long lead up, but I want people to know kind of a little bit about who you are. But you forgot about something very important. What did I leave out?

The first chairman of Brand USA, the head of tourism and travel of the United States of America under President Obama. I don't know how I left that out. I don't know. OK, maybe my editors got in there. How's how's the U.S. brand looking right now? You know, it's very good. That's a very good point, because I was I was at a meeting with the Treasury secretary and he was explaining what the philosophy was.

of the president, who I know very well. I was going to do a deal with him in Las Vegas. Yeah. The Trump Tower. And I passed. We had the same architect because I have values. I have integrity and he doesn't have that. I pay my contractors and he doesn't. But look, for a brand guy who licenses his brand, you know, it takes decades to build a brand. He sure killed ours within minutes. And I asked the secretary of treasury, I'm like, how could you upset the

the largest buyers of our bonds, the Chinese and Japanese. How could you have them lose face? The concept of face. And he says, well, you know, the guy likes to live in chaos and he likes to play the game crazy Ivan. I said, did you just say crazy Ivan? You're killing me, right? I said, look. And Scott Besson said that to you. Of course, he did in front of me in 200. And it was reported by Puck. And I got to tell you,

dropping the bomb in the bar and playing reality TV with the best brand in the world. The United States of America is beyond any comprehension of anyone that understands brand marketing sales. I don't get it. What do you make of a...

A treasury secretary who understands financial markets, considering his background, right? He understands how it works and that the understanding of having kind of full faith in the U.S. government, right? And there needs to be some calm and consistency rather than volatility. Stability. Stability, exactly. So what do you make of what some might say is a U.S. treasury secretary who should know better? Well,

Well, you know, I know very well because my first partner at Diamond Resorts was Soros. George Soros. George Soros for a hot minute. And then, you know, Guggenheim became my equity partner because Soros at that time, too, was betting against the consumer. And I said, I can't have, you know, that philosophy at that time. And I said, so I know Scott. He was the CIO. And I'm like, what's going on here? I don't know why everyone around President Trump...

sells their soul. Why they sell their soul. Because I've been involved in powered politics, you know, trained by Bill Clinton and my adopted father, Harry Reid.

look we all have a soul and conscious conscience and i just would never sell my soul never pander and these folks they get sucked into the the vortex and i don't get it but to play devil's advocate maybe a little bit here is that some would say listen president trump is is is dealing with some issues that need to be dealt with and whether it's immigration including china illegal immigration china even when president biden came in a lot of those tariffs stayed in place right like

So there were issues that he is tackling. I love this, and forgive me, I repeat it. I don't remember the source, whether it was somebody at the Times, but it was like...

um donald trump being the right question he's just not the right answer meaning and that's not my view it's just how some say that he's asking the right questions but maybe i ask the right questions too i have warmth and compassion okay i am also a guy of performance and results in california i'm going to create the department of california performance and results known as cpr which the state needs

Well, let's talk about California. Let's do. Because, you know. It's a crowded field. It is a crowded field. And, you know, there's some veteran politicians, too. So how do you stand out? How do you maybe take California to the next, you know, it's next 10, 20, 30 years? The good news is if they were good at what they did, we wouldn't have the problems in California that we do.

Okay. Such as? They have failed. Well, affordability, number one. Homelessness, number two. The lack of transparency. The lack of execution. The lack of enforcement. Well, take me to affordability. Because Matt and I have been around the block a few times. And I think it's safe to say I'm not looking to age you. Because you never age. Minus the hair. Oh, my God. I'm pretty old. No. But I think...

My point is that we've been talking about housing affordability, particularly to California, for decades. And yet here we are. So how do we fix? And we have the same issue here. That's right. So how would you fix that? Great question. So I was a builder in the 80s and 90s in California. And I was able to pull my approvals without the onset of CEQA. CEQA is a highly regulated...

in California and the Species Act and the Coastal Commission. Okay. So California has over 380,000 regulations unto itself. And over the last 10 years, the FTEs, the full-time employees in government have increased by 45,000.

Because these laws beget regulations which beget FTEs. California is not open for business. It's not affordable, livable, or workable. And I just, as a builder, tried to get something permitted over the last year and a half.

And it is almost impossible. You're saying if those regulations are rolled back, that that will lead to affordable housing? Yeah, so let me finish. Go ahead. Because I'm about solutions where the other career is. You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto.

So, as Governor Newsom just did for the LA Fire, he paused CEQA and the Coastal Commission and the Species Act. So I'm going to declare an affordability emergency in the state of California until the legislature creates new laws for affordability that will allow

to be constructed properly, okay? Without having NIMBY or NIMBY Not In My Backyard weaponized along with the unions weaponized to hold up permits because that seems to be the major issue. Stephen, I want to ask about this because I also have been frustrated by red tape and clearly it's a problem, especially in a place like California. On the other hand, without regulations...

You will have disasters like the wildfires that end up burning down, you know, so much of residential L.A. So how do you. So that's a very good question. Yeah.

And, you know, what's great about this campaign that I'm running is I've got solutions where the other candidates don't. Now, if you did your homework, you know, I was a regulator with indictment power. And, you know, I was also a judge. And I've changed laws in many states, too. So I understand not only how to fix broken, broken businesses, broken institutions, but I know how to create laws, regulate, and adjudicate. So I bring this full to the table. And I'll tell you this. Regulations are good to keep bad actors out.

but too many regulations inhibit good business from doing good business.

But what's the guarantee that good business means that you are building affordable housing in the places that are needed? A lot of folks will say, especially where there's major cities, it's not that we need affordable housing out in the suburbs where people have to commute another hour and a half to get in for workers who maybe can't afford to even do that, that you need to do it in the cities where the jobs are and where they have those jobs. How do we get that done? So you really have to have three types of regulations with regard to

affordability and housing, you need rural, suburban and urban. Okay. And that's the way it was done decades ago. And there is something to be looked at with regard to going back to what worked before. So it's almost as if California has been putting band-aids on band-aids on band-aids and they're all bleeding.

And they need to be repaired. So the only way to repair a wound is to rip the Band-Aid off and get to the heart of the issue. And in the interim, pause these regulations. Okay. Still making sure bad actors don't exist and get to a solution that allows us to grow and have aspiration in California. Remember, I grew up in the aspiration of California.

And today there is no aspiration because we're closed for business. Is housing affordability your key policy platform or what is? Oh, one of many. And the other is insurance. What's your key? Yeah, go ahead. It's affordable, livable, workable, and all the subcomponent parts of that. So insurance, for example, I have a fix for the insurance crisis in California. If you go to my website, you'll see it.

You've got to really talk about the great exports of California. Okay. We have five great exports, not in any order, innovation, manufacturing, agriculture, tourism, and travel. Okay. You've got entertainment and you've got education. Education used to be an export of the state also. Okay. When I was growing up there. So you've got our UC system and our Cal state system and our Cal state system needs to be reinvented. Okay. To talk about education.

allowing people to do good work in the real world so people are prepared for the real world and more trade-oriented behavior. So it's as if California has not been run by an executive in many decades. And that's what we need to look forward to. And I'm the only candidate that has that experience. I'm qualified where the others are not qualified. It's

Stephen, how do you, though, run against someone like Gavin Newsom, who is a nationally recognized name and has been for many election cycles? You know, that's a good question, because Gavin Newsom has an expiration date and that's my birth date. It's it's expensive, though. I know. But how much? How much did you have to spend to win this joke? But yeah, it turned out.

OK, how do you how do you run against other candidates, though, within with real name recognition it without putting down millions of dollars or how much are you prepared to spend to win the race? I guess what I'm asking. Well, you didn't see my undercover boss episodes. I'm the number one undercover boss in the history of that television show. Sixteen million plus ratings. So when you say I don't have name recognition, I beg to differ.

I guess I don't watch Undercover Boss. You should. It's a good show. I'm sure it's fantastic. Do you have to spend, how much do you have to spend to win? Well, I'll be a lot more efficient than the other candidates. So, you know, we just did a lunch sextant poll and my bio has 27% already.

name recognition and interest one thing i want to ask you because one of the things that any governor the next governor of california will have to deal with is you have to deal with president trump so how would you deal with him um as governor of the largest state because we know it's tricky well i've sat across the table from him numerous times many people have sat elon musk has sat across the table from him several times i understand their relationship has evolved no question about it and uh

I do have respect for him, and I believe he has respect for me. We know each other pretty well. I have his cell phone number. He's got mine. And there's no other candidate that will fight for California, nor has California values like me, kindergarten through first year of college. And I'm not afraid. I mean, I come from the rough and tumble business world that also has been trained in ledge, reg, and adjudication by

By some very, very good talents. And if you want to underestimate me, God bless you at your own risk. Well, we look forward to watching the race. We go from race to race. Thank you for your time today. Yeah, Stephen, thank you so much for your time. I appreciate it. He's 2026 Democratic candidate for governor of California. And as we mentioned, founder, former CEO of Diamond Resorts International. And so much more as we laid out. Undercover boss. I'm going to go back and watch apparently the most explosive boss in series history. And most generous.

That's which is nice. That's what I want to have. It's actually really important. Unapologetically authentic and warm and compassionate. All right. Come back soon. Thanks. Good luck. Thrivent can help you plan your finances for the people, causes and community you love. What makes Thrivent different? Financial services and generosity programs are combined to help you build a financial roadmap for the future while also creating opportunities to give back along the way. Visit Thrivent.com to learn more. Thrivent.

Thrivent, where money means more. At GSK, we believe that to get ahead of disease, you need to understand its root cause. And that's why we combine our deep understanding of immune science with cutting-edge technology. It helps us to create targeted therapies that match the right treatment to the right patient, transforming the lives of millions. By uniting science, technology, and talent, we work tirelessly to get ahead of disease together.

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