Podcast Summary: Victor Davis Hanson: In His Own Words
Episode Title: California’s ‘Futureland’ High-Speed Rail Is Still Stuck at the Station | Lee Ohanian
Date: January 24, 2026
Host: Jack Fowler (filling in for Victor Davis Hanson, who is recuperating)
Guest: Lee Ohanian, Professor of Economics at UCLA and Senior Fellow at the Hoover Institution

Episode Overview

This episode examines the persistent governance failures and policy missteps in California, focusing on five major areas highlighted in Lee Ohanian’s recent article, “California in 2025: Another Bad Year of Governance.” From the ongoing high-speed rail saga to issues of water management, energy policy, transportation spending, and wildfire response, Ohanian and Fowler explore why California’s decisions matter nationally and how chronic mismanagement impacts both the state and the country.

Why California’s Policies Matter Outside California

[05:42] – [06:35]

• Lee Ohanian explains why California’s actions have national impacts:
  • As the most populous state, California is the 4th or 5th largest economy globally.
  • State-level policy and technological changes in California often spread to the rest of the U.S.
  • Quote: “What sometimes happens in California can auger what comes to the rest of the country.” – Lee Ohanian [06:17]

Discussion Point 1: The High-Speed Rail Fiasco

[06:35] – [13:15]

Background

• Proposition 1A (2008): Approved for almost $10 billion in bonds for a high-speed rail meant to connect Los Angeles and San Francisco.
• Initial promises: Service by 2020 for $35 billion, backed by private and federal funding.

Current State

• Costs have ballooned: Now cited as potentially $135 billion.
• Only the Bakersfield–Merced segment is under active construction; could cost $38.5 billion alone and isn’t projected for completion until possibly 2035.
• Lack of private investment and substantial federal withdrawal of funding.
• Governor Newsom acknowledged in 2019 that the LA–SF phase is unaffordable, yet continued with the Central Valley segment.

Key Quotes & Analysis

• “This is the bad infrastructure project. That’s California’s bad penny. It just won’t go away.” – Lee Ohanian [08:05]
• “It’s become indefensible.” – Lee Ohanian [10:55]
• Legislative Analyst Office found the project’s business plan deficient even before launch: no contingencies, no sensible operating plan, no detailed revenue forecasts.
• The state missed a prime opportunity in 2019 to suspend or terminate the project with minimal sunk costs.

Discussion Point 2: Water Management and Infrastructure

[16:22] – [19:22]

State of Water Infrastructure

• California’s semi-arid climate makes water storage and conveyance a critical issue, especially for its vast agricultural sector.
• 70% of the state’s dams are 50+ years old; 42 dams identified as needing repair; state’s repair budget was cut in half despite a massive $320 billion state budget.
• Billions approved by voters for water bonds haven’t yielded increased storage.

Memorable Moments

• Story of a major dam breach that forced the evacuation of 180,000 people due to deferred maintenance—reports had warned of deficiencies for years.
• Quote: “The need for water storage, water conveyance ... is fundamentally important for our economy. And yet ... it just made no sense whatsoever.” – Lee Ohanian [16:40]
• “It was a case where many people could have lost their lives ... We can never get those [large infrastructure projects from the past] done today in the state.” – Lee Ohanian [18:40]

Discussion Point 3: Gasoline, Refineries, and Energy Policy

[21:18] – [26:09]

Economic Self-Sabotage

• California lost over a third of its refinery capacity since the 1980s.
• Unique, extra-low carbon gasoline blend makes it hard to import or produce.
• Result: California’s gas prices hover 50% above the national average; risk rising to $8/gallon if more refinery closures occur.

Regulatory Environment

• Heavy regulatory burdens and uncertainty drive refiners out, raising both production costs and retail prices.
• Even the governor’s task force (Division of Petroleum Market Oversight) found no evidence of gouging—just high regulatory and operational costs.

Key Quotes

• “There’s really no economic sense for us to be pursuing these types of policies.” – Lee Ohanian [21:55]
• “It's incredibly expensive to Californians, and in particular California's with low or moderate household incomes ... It's a shame it doesn't make economic sense, but there's an awful lot in California that doesn't make economic sense.” [25:18]

Discussion Point 4: Infrastructure Waste – The $1 Billion Bike Lane

[26:59] – [30:01]

Fiscal Calamity in Transportation

• LA County approved a hike in sales tax (for 30 years) to improve transportation.
• Instead of major transit improvements, LA plans a $1 billion, 8-mile bike/walk path (part of a 51-mile river corridor project).
• Environmental reviews remain incomplete, and the path is not built; meanwhile, LA roads are among the worst in the country.

Notable Quotes

• “Everybody should have a hard time wrapping their head around a billion dollars for eight miles of a bike lane.” – Lee Ohanian [27:08]
• “If I was the one pulling the treasure strings, I would just cut this right now. Nobody's gonna lose sleep over and miss any 8 mile bike path. And I'd improve LA roads with that billion dollars because this is what people thought was gonna happen with that tax money.” – Lee Ohanian [28:19]
• LA drivers pay an average of $920/year in additional vehicle costs due to poor roads; fixing this would have tangible daily impact, unlike an expensive bike lane.

Discussion Point 5: Wildfire Response – The Palisades Fire

[31:30] – [36:42]

Event & Aftermath

• On New Year’s Eve 2024/2025, an arsonist set fire in Pacific Palisades. A subsequent reignition six days later destroyed ~7,400 structures and caused at least 12 fatalities.
• Despite rapid debris cleanup by the Army Corps (due in part to toxic EV battery fires), nearly no rebuilding has been completed a year later.
• Multiple lawsuits ongoing; responsibility debated between local and state authorities, with suggestions that both failed through either firefighting response or restricting firefighting measures.

Personal Story & Reflection

• “One good friend of mine texted me... a photo of a fireplace and nothing else. And that was the site of his former home. And he's a very funny guy. He sent it to me with the caption of 'for sale, one fireplace, very good condition, fire tested.'” – Lee Ohanian [32:35]
• “There’s really no rebuilding going on in that area ... seven completed rebuilds after one year, 7,400 structures destroyed or impacted.” – Lee Ohanian [33:23]
• After-action reports were “watered down,” and texted warnings by firefighters about remaining hotspots were apparently ignored.
• “If only that fire had been completely put out, we wouldn’t be having this conversation. My former home would still be there. Those 12 people wouldn’t have died. It is tragic and it was preventable.” – Lee Ohanian [35:07]

Final Thoughts & Takeaways

• California’s governance missteps persist and compound, affecting millions in-state—but also setting misguided precedents for the rest of the US.
• Common themes: chronic cost overruns, poor planning, misplaced priorities, insufficient maintenance, and regulatory overload.
• “None of these issues we’re talking about here are partisan in any way—it’s just common sense governance and common sense use of tax dollars.” – Lee Ohanian [18:22]

Key Timestamps

• [05:42] Why California's policies have national impact
• [06:35] High-Speed Rail debacle
• [16:22] Water infrastructure failure
• [21:18] Gasoline/refinery crisis
• [26:59] The LA $1 billion bike lane
• [31:30] Palisades Fire tragedy and aftermath

Guest Links:

• Lee Ohanian’s work at Hoover Institution: “California on Your Mind”
• Book (forthcoming): Macroeconomics: A Neoclassical Perspective

Host Reminders:

• Victor Davis Hanson is recuperating but will return
• Jack Fowler writes “Civil Thoughts” (www.civlthoughts.com)

Tone:
Engaging, critical, and unapologetically direct about government mismanagement; personal, with poignant anecdotes and grounded economic analysis. The episode emphasizes practical consequences, not political tribalism.