We raised money aggressively too. We spent from the war chest for my possible reelection campaign in 2006, and I even donated $8 million of my own. But while we raised $80 million, we couldn’t compete with the labor money. The two sides ended up spending more than $250 million, making the election the most expensive in California history.
I’ve had good defeats, and I’ve had bad defeats. A good defeat is a loss that nevertheless brings you a step closer to your ultimate goal. Losing my first Mr. Olympia competition to Sergio Oliva in 1969 was like that, because in preparing for that contest, I could honestly say I’d left no stone unturned. I’d eaten the right foods, I’d taken the right supplements, I’d trained five hours a day, I’d practiced my posing, I’d gotten properly psyched, and I was in the best condition I’d ever been. I even had my best-ever tan. When Sergio won, I knew I’d done my utmost and that I would come back even stronger the following year.
This defeat, however, did not feel that way. It really hurt. It was like losing to Frank Zane in Miami when I first came to America, when I’d gone into a major competition overconfident and underprepared. That time when I lost, I had only myself to blame. This time I had told voters I would fix their problems, and instead I had exhausted their patience by forcing them, just twenty-four months after a trying recall election, to go back to the polls and digest all kinds of big ideas. I had put the burden of solving problems on them, when they wanted me to take care of it. Even Maria complained that she couldn’t possibly do all the reading necessary to make informed decisions on the initiatives. The voters thought they were getting a diet pill when they elected me. Instead, I had turned around and asked them to meet me at the gym at five in the morning for five hundred push-ups.
I didn’t wait until the actual election to analyze what I’d done wrong. One night in late October, I sat in the Jacuzzi on our patio, smoking a stogie, staring into the fire, and thinking. I remembered back to the transition, and meeting the father of a firefighter who had died in the line of duty. I told him, “This is a terrible tragedy. If there is anything I can do, let me know.” And his answer was, “If you want to do something for me, do it in honor of my son. Please, when you go to Sacramento, stop the fighting. Get along.” Those words came back to me now.
I forced myself to face the fact that the failure of the initiatives was not simply a matter of the unions digging in their heels. I’d taken too confrontational an approach, I’d been in too much of a hurry, and I hadn’t really listened to the people. We overreached. And it had backfired.
What’s more, I’d allowed my reform crusade to threaten the other major commitment I’d made in becoming governor: to revitalize California’s economy and rebuild our state. I’d led my staff into a losing battle, and you could see the effects on them. They were a good team, especially considering that we’d pulled them together in the mad scramble of the recall. They’d helped me rack up the important successes of our first year. But with the impending defeat of the reform agenda, there was growing dysfunction and dissent. Morale was low. People were insecure about their jobs. There were leaks to the press. They were working at cross-purposes with one another and sometimes at cross-purposes with me.
We’d been making mistakes not only behind the scenes but also in public. At a press conference called to promote redistricting reform, the staff had me stand in the wrong location. The event was supposed to be at the border of two gerrymandered districts, which we tried to dramatize by laying down bright orange tape right through the middle of a neighborhood—except that the real border turned out to be blocks away.
All this put a strain on Pat. She was tired of the fighting. “When the time comes, I’ll move on,” she said. “I want to go back to the private sector, and you should get someone else to come in.”
Now I said to her, “Whatever happens in this vote happens. We’ll wait a little while for people to catch their breath, but then it’s time. I have to bring in new people.” She agreed.
The opinion polls weren’t wrong: November 8, 2005, was a total disaster. All four of my ballot measures lost, with the voters rejecting the most important one, the budget reform, by a huge margin of 24 percentage points. At a gathering that night, Maria stood by my side as I struck a conciliatory note. I thanked the voters for coming to the polls, including those who had voted against my reforms. I promised to meet with the Democratic leaders and find common ground. Soon afterward, I told a televised news conference at the capitol that I did not want the staff to be blamed for my mistakes: “The buck stops with me. I take full responsibility for this election. I take full responsibility for its failure.”
I promised that the fighting was over. Next year would begin with a different tone.
AT THE END OF2005, I was happy to leave Sacramento thousands of miles behind by climbing on an airplane and embarking on a long-planned trade mission to China. I led a delegation of seventy-five California employers—including high-tech entrepreneurs, strawberry growers, construction engineers, and merchants—and for six days, we traversed the world’s fastest-growing economy promoting the strengths of our state. For me, it was an important trip, not just because it provided a welcome change of scenery after having lost the special election but also because seeing China transforming itself helped put things back into perspective. The Chinese were building on such a vast scale. I felt I was witnessing a modern power taking shape before my eyes and felt the challenge and opportunity this posed for Americans. And, of course, for a pitchman like me, it was also a thrill to be out in the world again, selling California products in Asia. That trade mission brought California a nice little symbolic success. For the first time, we were able to export California strawberries legally to Beijing, just in time for the 2008 Summer Olympics there.
When I got back to California, my staffing issues took center stage. It was a hard time to make big changes, with the 2006 gubernatorial election less than a year away. But it was right to make them. I now knew far more about California politics, and I knew more of the players. I needed not just smart, experienced people but also a cohesive team. After the special election, only 27 percent of voters in public-opinion surveys thought that California was headed in the right direction, and my own approval rating was only 38 percent. I also needed ballsy people who weren’t going to be paralyzed by that, and who could even see the black humor in the fact that my approval rating was almost as low as the legislature’s.
I already knew who I wanted as my new chief of staff: Susan P. Kennedy. She was, as the press quickly began to describe her, a small, tough, blonde, cigar-smoking lesbian—and the least conventional choice I could have made. Not only was she a lifelong Democrat and a former abortion-rights activist, but also she had served as cabinet secretary and deputy chief of staff for Gray Davis. She’d quit that job out of disgust with the paralysis in the capitol building.
I had come to respect Susan when she was a Public Utilities Commissioner, because even though she was a Democrat, she was always pushing to eliminate regulations that got in the way of business growth. She would occasionally send memos with dead-on, crystal-clear commentaries about the challenges my administration faced. She was frustrated because she thought we were in danger of squandering a historic opportunity for change.
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