Arnold Revs Up The People’s Machine

Joe Mathews Chronicles the Ups and Downs of Governor Schwarzenegger’s First Term


photographs by Paul Wellman

Gregarious and solidly built, Joe Mathews — a reporter for the Los Angeles Times — has spent the past three-and-a-half years as a fly on Governor Arnold Schwarzenegger’s wall. With California’s gubernatorial election just seven weeks away, Mathews’s book — The People’s Machine: Arnold Schwarzenegger and the Rise of Blockbuster Democracy — is just now hitting bookstores. Mathews gives readers an enormously engaging blow-by-blow account of the recall campaign that propelled Schwarzenegger to political power and what he’s done with it in the years since. Those looking for a zesty diatribe demonizing the action-hero-turned-governor will no doubt be disappointed by Mathews’s scrupulous sense of balance. But it is Mathews’s portrait of the current California political system that leaves the reader chilled to the bone. Schwarzenegger rode the recall from Hollywood to the Statehouse and since being there, he’s used the initiative — or the threat of one — to rule.

arnold.gifThe recall and the initiative, as everyone who attended California elementary schools knows, are supposed to be the people’s tools to counter the power of special interests in Sacramento. The problem, as Mathews demonstrates, is that initiatives cost millions to qualify for the ballot and many millions more to win. Only the special interests have the kind of cash available to wage such campaigns. While initiatives may make for good politics, they rarely make for good government. But as Mathews argues, anyone who hopes to govern must be willing, at least, to threaten to launch an initiative or two at a moment’s notice.

Last year, Governor Schwarzenegger — bankrolled by California’s powerful business interests — took the initiative to new extremes. He put a package of four propositions before state voters in a costly special election. Schwarzenegger’s foes — led by the politically powerful teachers’ union — denounced the governor’s initiatives as an overreaching power grab by a power-hungry executive. Enough voters agreed that the measures Schwarzenegger backed were resoundingly defeated.

For mere mortals, such an overwhelming repudiation would have proven fatal. But Schwarzenegger managed not merely to bounce back, but to enjoy one of his most collaborative legislative sessions this past year. In fact, his relations with many of the same Democratic leaders — including Assembly leader Fabian Núñez — who last year were calling for his blood, have never been better. Mathews attributes this amazing rebound, in part, to Schwarzenegger’s personality and celebrity. But mostly he suggests that the governor and Núñez are committed to reforming some of the key structural problems thwarting the good governing of California. Mathews was in town Sunday signing books at Chaucer’s Bookstore. What follows is a highly abridged version of the conversation I had with Mathews on his way to the book-signing.

joe_mathews.gifWhen Arnold’s not governing directly through initiative, he’s using the initiative as a club. You describe in your book how he got the Legislature to approve a workers compensation package using the threat of an initiative. At the end of the day the Legislature voted to approve something that they hadn’t even read. How can this be good government? Or democratic government? That’s a great question. We have a Legislature that essentially is an auction house. It’s a place of buying and selling. It’s run by interest groups because the legislators are chosen by interest groups of the left and right. Have you been to a legislative hearing in California lately? It’s not full of probing questions about the issues. When was the last time you heard of a great legislative hearing? It doesn’t happen. Everything is transactional. Everything is controlled by leadership and by interest groups. If you want to do something, if you want to advance the ball in a way that isn’t merely negotiating terms with interest groups, with them paying whatever their ransom is, then you’re going to have to go to the ballot. It’s hard to get action if you don’t go on the ballot. I think a lot of the reason people put stuff on the ballot is so people know you’re serious.

Is this the way California will be run from now on or is this unique to the Arnold Show? Governors will behave like Schwarzenegger from now on. I’m not sure there’ll be a smoking tent, but on this tactic, they have to. Angelides, the anti-Arnold, has nevertheless said he was going to use the Arnold tactic when it comes to his priorities. He wants to raise taxes to make important investments in education and healthcare. If the Legislature won’t do it — and they probably won’t because it takes a two-thirds majority to raise taxes and the Republicans will defeat any such bill — then Angelides says he’ll take it to the people. Until you see a big bargain that changes the two-thirds majority requirement, then there is not going to be an Angelides tax increase without the threat of an initiative.

Excerpt from The People’s Machine

Arnold Schwarzenegger and the Rise of Blockbuster Democracy by Joe Mathews Epilogue “The Reality of It” On a chilly Sacramento evening in March 2006, four months after the special election debacle, Governor Schwarzenegger took a seat by an outdoor fireplace in a dark hotel patio. Before starting our interview, he lit a cigar, the flash of light illuminating new lines in his face and hands. His hair looked more natural and far less orange than when he’d been running for the office. A few gray hairs were visible.

He appeared to be a different governor. After the defeat of his four ballot initiatives, Schwarzenegger spent weeks privately seeking advice from friends and critics, Democrats and Republicans, on where he’d gone wrong. This self-examination spurred Schwarzenegger, usually reluctant to let employees go, to replace much of his divided staff. The governor had a new communications director, a new cabinet secretary, a new finance director, and new consultants for a re-election campaign that appeared far more daunting than it did a year before. [His wife, Maria] Shriver, who had privately opposed the special election, helped with the reshuffling. The new chief of staff, Susan Kennedy (no relation to the First Lady’s extended family), was a Democrat who had been cabinet secretary in the administration of Gray Davis. Shriver’s own new chief of staff was a former Davis policy advisor and close friend of Kennedy’s. Their appointments made it official: The recall was finally over.

When Republicans protested Schwarzenegger’s decision to hire Kennedy, the governor didn’t budge. In a meeting to soothe leading Republicans, he suggested conservatives didn’t like Kennedy because she is gay.

Schwarzenegger was more concerned with satisfying his larger audience, the voters. He interpreted the special election results as a message from the public to cool the rhetoric. He knew better than anyone how his own persona had been used against him, and he began using public appearances to present himself as a slightly more conventional governor. Instead of mall rallies and junkyard stunts, he gave policy speeches in and around public buildings. Rather than challenge the establishment again, Schwarzenegger sought accommodations as he fought for political survival. In public, Schwarzenegger talked less of ballot initiatives and more of compromise. He would move more slowly, more deliberately. He would not repeat the mistakes of 2005.

“At the end when the dust is settled and done, the only one that I blame for this is myself,” he told me. … “The reality of it was that you can’t go and say, ‘This year, this has to be done,’ when in fact, it might take two or three years to do it. Reform was a huge undertaking. And I feel responsible for the whole thing.”

That sounded like a sober concession to the power of the status quo. But when he talked about old friends from Austria … and his years of unorthodox preparation for his current job, his old bonhomie returned. … And even in the shadow of popular rejection of his proposals, he couldn’t stop talking about the people. He wanted to go to the people again, this time in pursuit of a giant, history-making … project to rebuild the state. His plan called for 1,200 miles of new highways, 600 miles of mass transit, more than 2,000 new schools, two new prisons, a new crime lab, 40,000 new classrooms, 101 new courts, and new levees to protect the Central Valley from floods. He envisioned voters approving $70 billion in infrastructure bonds over five election cycles to leverage $222 billion in projects. …

For all his talk about learning the lesson of patience, Schwarzenegger was in a hurry again. … “I made mistakes,” he said of 2005, “but there was no mistake on policy, because we were right on the money with the policy. We have to take more time, do it a different way.”

His political standing was different.

His advisors were different. He was the same governor.

Published by PublicAffairs.

That was kind of my disappointment with Arnold. I was hoping to see him take that on more directly — this two-thirds requirement. There are really two big things that govern our direct democracy and voters will have to ultimately make these changes; they’ll have to undo these things. The two big things out there are Prop 13 [the property tax cap approved in 1978] and the two-thirds requirement. There are these two things that keep revenues down. The people on the right are not willing to give up Prop 13 and would fight tooth and nail and probably would win that fight. But people on the left would also have to give up things like Prop 98, the education funding formula. I don’t think either side is willing to trade away these two things.

I was against the recall and I was against Arnold when it happened. But at the same time, the state was so screwed up that I wondered if maybe we needed someone like Arnold — a weird independent outsider — to fix things. He’s deeply weird, but politically, he’s a pretty cautious centrist, which is why I think he has some problems on the political right. I think the best argument for him is that by getting into government he has brought way more attention to state politics. People still don’t know a lot about state politics and government but they know a lot more than they did, and it’s largely because of him.

And you think that’s sustained. We’ll see how long the public’s interest in [state government] will last. No one wants it the way it is. The polls show that 80 percent of the people know that it’s bad. But what we don’t have is successful consensus-building. Can he, or can Angelides, or can any political leadership in the state build consensus? I think there’s probably still a good argument to be made that Schwarzenegger is the best person to build that consensus, not just because of the position he holds but because of the type of person he really is and the way he manages, which I think is underappreciated. People don’t understand how he manages because they think someone’s running him.

What’s he like to work for? He’s good to people. He’s decent. He’s sort of a jokester and he teases people. He seems to be pretty good-spirited. He’s kind, but the way he manages where there are multiple channels, it can be hard and confusing, and it can create internal tension and competition. In part because of his insistence on having lots of Democrats and lots of Republicans, all these people with different backgrounds and views, because he likes that. He likes disagreement. This isn’t Bush. He doesn’t want to have his own views reinforced. He wants to see all the different views. … When people have gone up and gotten into heated discussions in front of him, he could not be more delighted.

What about disagreements with him? Oh, he likes it. I found that the best way to get his attention is to ask him the most obnoxious, doubting question I can think of and immediately he’ll call you afterward, because he can’t stomach the idea that you don’t understand. This is a guy who fundamentally sees the world as divided between two kinds of people: those who understand how great and fabulous he is and those who just don’t yet have enough information to understand that truth. That’s the view. He’s utterly confident in that way.

A lot of people say, “He’s just a regurgitated Pete Wilson.” He’s not. He’s in charge. He’s a very unpredictable governor and that’s partly because he doesn’t come in with strong ideological beliefs, which is fine. Most Californians don’t have strong ideological beliefs, but he also doesn’t have a clear sense of direction. On one hand he wants to be the ultimate pro-business governor and yet, on the environment, he has some of his most liberal views.

He certainly is unpredictable. This year after he had his great defeat at the ballot box, when all four of his initiatives were defeated, he began acting as a head of state, not the governor of a state. He met with British Prime Minister Tony Blair in Los Angeles, took a position in clear defiance of the federal government — a Republican federal government — and declared global warming a clear and present danger. Recently he signed a global warming bill into law. The bill written by state legislator Fran Pavley [D-L.A./Ventura] calls for green gas emission standards considerably higher than any federal standards.

How did he finesse that? He just did it. He also put himself in a corner. He talked so much about global warming and emissions that I think he sort of had to do it. I think he wanted to do it; it was just the businesspeople who were upset. But he’s given business a lot too.

And up until now, mostly his tilt was to the business community. It’s funny: He’s much more pro-business in public than he is in some of the conversations I’ve seen. He’s not a big fan of quarterly-earnings thinking. He’s a very long-term thinker. When he was thinking of signing Pavley’s bill on global warming she asked him if he was concerned by what the reaction would be of some business folks and oil company people and he said, “Those guys have made enough money already this year.”

In your book you talked about how some businesspeople were trying to move the Republicans from the far right to the middle, and they were hoping to use Arnold in some degree to help do that. Do you think he’s had any success there? It looks like he’s arguing with the Republicans more than he is with the Democrats. He’s gotten more control over the party itself. The activists, the real muscle in the county Republican committees, like him — and that counts for a lot — but they don’t agree with him on most things and routinely dismiss him as a liberal. The Republican legislators are really to the right, and they haven’t given him many votes. They didn’t vote for his budget. Many of them were grudging even about workers comp. That was an issue where he did everything he could to bring them to the table. He did an end-zone dance on that one, and yet that wasn’t enough for some of these conservative Republicans. You almost thought that if injured workers weren’t being thrown into the street, it wouldn’t have been enough. It’s remarkable. And at the same time, he likes the Democratic leadership. He spent a lot of time with John Burton, who was the state Senate Pro Tem during Arnold’s first year in Sacramento, and also with the Assembly leader Fabian Núñez. Given last year’s rout — where all of his special election ballot initiatives got creamed — I’m amazed at the cordial relationships he has with the Democratic leadership this year. And it’s been productive, too. First off, he accepted responsibility immediately. And he went and talked to a lot of people. He would go around to people, literally, to friends and foes, and say, “Tell me where I f-ed up. What could I have done better?” And he talked to Núñez, really sat down with him, and said, “Help me understand you. What is it you want? If there are things you want that I agree with or can get part of the way there, let’s do them.”

Is Schwarzenegger a good deal-maker? He’s not actually a great negotiator, I would argue. He’s a great manipulator and a very smart guy. He’s very good at finding where the audience is, but I don’t think he’s actually a terrific negotiator. This year, when he’s made deals, the people who’ve been doing the deals with him have done better than he’s done in a lot of ways. The Democrats have gotten most of what they wanted. If I were still writing this book, I’d go back to what the tribes got. In the first couple of years, he had a really coherent policy there — he had protections for [casino] workers. But that was too much for Republicans. This year he’s worried about the big, more Republican-leaning tribes, the Agua Caliente, the desert L.A. tribes coming after him with all that money they’ve got. So he gives them a deal that doesn’t protect the workers. He just completely, without explanation, went back on his policy.

In your judgment, what was his biggest mistake? When you look at his list of mistakes — and there are many — for my list of his top 10 mistakes, breaking his word on education funding are numbers one to five. If he’d honored his promise on education funding [to the California Teachers Association] I think he’d maybe [have gotten] some of those reforms passed in the special election. The California Teachers Association really has control of the budget because of Prop 98 [which requires that 40 percent of the budget be spent on education]. Schwarzenegger tried to pacify the union, and then he couldn’t live up to his deal. What was the biggest surprise that you found in getting to know the governor? I think at first I didn’t get how smart he was. I got the sense he wasn’t a dummy, but when he’s sitting in that Capitol, he may be the smartest guy there. I didn’t get that. That won’t get you far in Sacramento, of course. I think the real issues with him have to do with ego and his fetish for big things. He always wants the big reform, the big change. A lot of government is incremental and small. I think he’s learning that. He understands that intellectually because he’s smart, but it’s hard for him, because his life is about being bigger, about making the big turn. He’s definitely willing to hear criticism, but he wants it to be constructive. He wants this air of positivity. He constantly talks like that about people. “What are your dreams?” I think even hard-bitten reporters who just cover him have been affected by that. This is a guy who’s always talking about, “You should just go for it.”

Isn’t that what Schwarzenegger promised — that he would be the ass-kicking outsider who would knock heads to get big things to happen? It’s true he didn’t knock any heads. But you can’t get anything done in Sacramento like that anyway. And he’s not a knocking-head type. He’s a conciliatory person. He thought that when he won in the recall election people would want to do the right thing at such an extraordinary moment. He tried to make deals; he tried to conciliate. And he didn’t get very far on the budget stuff that way. Initiatives are really just negotiating tools to get to a deal on compromise measures, and last year was his attempt to get that grand compromise — to get these concessions from both sides. When you consider the negotiations he had through Bob Hertzberg [the former Democratic Assembly Speaker] with the current Assembly leader, Núñez, you realize that they were looking at all this big stuff — at two-thirds, at Prop 98 — but they couldn’t get to that deal. This year they have a better relationship — forged through those failed negotiations last year — but they still have not gotten to a deal on the big issues.

You have a chapter about the Enchilada Deal. Do you think Schwarzenegger and the Democratic-controlled Legislature will be able to tackle the big reforms if the governor gets a second term? Can they get a deal? That’s the million-dollar question. I think the answer to that is yes. I think he will try to make that big deal if there’s a second term. I think one of the indications of that is how Núñez is behaving this election. While he’s a co-chairman of Angelides’ campaign, he’s almost talking like a Schwarzenegger supporter. He’s all but officially endorsed him, saying great things about him in public, making these deals that help him look better to independent voters. That strongly suggests that Núñez, who wants to tackle these big things, and Arnold, who wants to tackle these big things, have an understanding.

What would this big Enchilada Deal look like? I think it would have to be the entire political leadership of the state, both parties, getting into a mega-deal. Two-thirds would have to be part of it — the part that the right would have to give on, because now the problem is that a minority can block tax increases and certain fiscal things. But the left would have to give on a lot of governance stuff, such as the ability to draw districts. And on Prop 98. That’s part of a mega-deal. But even then, some of these reforms must be voter-approved. Ultimately you’re looking at a slate of ballot measures, maybe in 2008. That is when the whole political leadership of California would have to walk to the cliff and jump off, hoping that the public will be there at the bottom with a big net to catch them. Do you think Phil Angelides has got a chance in his race against Schwarzenegger? I do think he has a chance. He has a very strong chance. He’s a Democrat in a very Democratic state in a Democratic year. Of course he’s got a chance. But it’s shocking, particularly in such a bad a year for Republicans, how far ahead Arnold is.

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