Neel Kashkari doesn’t have an obvious resume to run for California governor. He distributed hundreds of billions of dollars to the very banks that created the 2008 economic crisis. He did it working for a president with record-low approval ratings.
Not exactly popular stuff.
But the first-time Republican candidate says his tenure running the federal government’s Troubled Asset Relief Program, or TARP, is proof he can handle tough, unpleasant jobs. And he’s set his sights on another one, this time in Sacramento.
First, though, comes the tough and at times unpleasant job of actually running for governor. Kashkari traveled from Southern California to suburban Sacramento on a recent weekend to speak to the California Federation of Republican Women. The Sunday morning candidate forum was the type of grassroots outreach event that he’ll repeat hundreds of times over the coming months.
As Kashkari walked to the front of the room to begin his speech, the moderator informed him he had just four minutes to talk. That wasn’t a problem for Kashkari, who launched right into his pitch. “I’m running for governor to challenge Gov. Brown, to beat Gov. Brown,” he told the crowd. “To fix our schools so kids get a good education. To put Californians back to work, and to break the cycle of poverty. “
“The most controversial program … in American history”
Kashkari has been practicing and honing his very focused message for more than a month now. His answers are near-identical from interview to interview. So, he was also ready when someone in the audience asked the question everyone following the Kashkari campaign is wondering: “How are we going to keep you electable with the TARP bailout?”
Kashkari doesn’t deny that TARP isn’t too popular. “So, I ran the most controversial program in economic policy in American history,” he responded. “I was the guy in charge of stabilizing the U.S. economy.”
As an assistant Treasury secretary, he helped save the financial sector after the banks’ risky lending put the country on the verge of a depression. Injecting hundreds of billions of dollars into the very institutions that caused the crisis wasn’t a feel-good policy. But Kashkari told his audience that — believe it or not — TARP is a success story. “I’m proud to tell you we got every dollar back, and we made a $13 billion profit for the taxpayers. There’s no program in American history that ever did that.”
During our interview, I pointed out that most of his public appearances involved being screamed at for hours by congressmen. “That’s true,” he said. “Look, it was very controversial. Sometimes when you have to make big changes, you have to do things that upset people.”
Kashkari said that experience makes him the right man to implement big, tough changes here in California.
But how many big changes do Californians want? There’s no question the state’s finances are better off than when Gov. Jerry Brown took office. California has gone from a catastrophic $25 billion deficit to a $4 billion surplus.
“The budget being balanced? (Brown is) claiming credit for the fact that the stock market went up last year. He had nothing to do with that,” Kashkari responded. “And the major structural problems with our budget are completely unchanged. We still have over $500 billion in unfunded liabilities.”
Brown has paid off billions in long-term debt and repeatedly warned about California’s looming liability problems, like pension obligations. But the governor has yet to offer a concrete solution for how to fix them.
Kashkari’s main attack against Brown so far is on one of the governor’s top priorities: the $68 billion high-speed rail line that would run between San Francisco and Los Angeles. As the rail project has run into legal hurdle after legal hurdle, Kashkari has taken to channeling Ozzy Osbourne and calling it “the crazy train.”
“The crazy train is not what the voters voted for in the ballot measure,” he said. “They voted for something that cost a lot less and went a lot faster. … And in light of our other priorities, it makes no sense today.”
Beyond that, though, many of the proposals Kashkari is putting forward aren’t too much of a radical departure from Brown’s agenda. On his “jobs” plank, Kashkari wants to expand oil and gas drilling in California. “If we pursued oil and gas development while protecting the environment, we’re literally talking about creating hundreds of thousands of jobs,” he said. “What is Gov. Brown doing? He’s looking at it.”
But California is already one of the top oil-producing states in the country (it’s No.3). The state could be on the verge of an even bigger oil boom due to hydraulic fracturing – or fracking – technology. And Brown has voiced support for the practice, opposing new taxes and moratoriums.
The fracking regulation law Brown signed last year requires much more public disclosure from drillers on when, where and how they’re injecting water and chemicals deep underground. But it didn’t do anything to slow the practice down, to the point where environmental activists now regularly picket Brown’s public events to heckle him for signing it. “This is not about just saying ideologically yay or nay,” Brown said last year. “It’s about looking at what could be a fabulous opportunity.”
On education, Kashkari wants to let local school districts make more decisions, as opposed to the state. Again, Brown agrees. During his State of the State address, he touted a landmark law he signed last year eliminating many of the Sacramento mandates for how money gets spent. “This puts the responsibility where it has to be: in the classroom and at the local district.” Brown said. “With 6 million students, there’s no way the state can micromanage teaching and learning.”
Kashkari isn’t impressed. “If we were ranked top 10, wanting to get to top five, Gov. Brown’s tinkering would be fine. We’re 46th. I’m not going to sit here and take the 50-year plan Gov. Brown has come up with.” (Kashkari’s rankings come from a federal study.)
‘I didn’t see a bench’
In Washington, Kashkari had one of the most thankless, high-pressure jobs you could ever imagine. After he stepped down, he spent a year unwinding in the mountains. So why does Kashkari want to run for governor in a heavily Democratic state?
Kashkari said he began thinking about it after Democrats picked up super-majorities in 2012. “The Republican Party was really suffering, nationally and in the state. Someone had to work and someone had to fight to turn it around,” he said. I started looking around and saying, ‘Who’s going to lead that fight?’ And I didn’t see a bench. I didn’t see people who I thought could go credibly challenge Gov. Brown.”
Kashkari may not see any credible candidates, but in grassroots groups like the California Federation of Republican Women, many love the other Republican in the race. Tea Party favorite, Assemblyman Tim Donnelly, from San Bernardino County, has made his name protesting illegal immigration and sticking up for gun rights.
Donnelly, R-Hesperia, spoke before Kashkari at the recent Sunday morning forum. “As your governor, the very first thing I will do is put a moratorium on all new restrictions on your business,” he told the applauding crowd. “On your freedom and on your constitutional civil rights.”
Several people gave Donnelly a standing ovation as he finished his pitch. As for Kashkari, it was clear he had some work to do. Many of the women I interviewed weren’t aware he was running. Another called him “Kim Kashberg.”
Still, Kashkari did make a good first impression on the group — many said they wanted to hear more from him. And what he may lack in grassroots energy, he makes up for in establishment support: Kashkari banked nearly $1 million during his first few weeks of fundraising. Donnelly, on the other hand, has less than $20,000 in cash on hand.