Total Recall: My Unbelievably True Life Story

CHAPTER 28 The Real Life of a Governator

BESIDES BEING GOLDEN AND prosperous, California is disaster prone. Our geography and climate make us unusually vulnerable to fires, floods, mudslides, droughts, and, of course, earthquakes.

Given the frequency of such events, I had to assume that some kind of natural disaster would happen on my watch. Our firefighters, police forces, and other first responders were among the best in the world, but for me it wasn’t enough just to meet their commanders or read the disaster plans. I drove our excellent secretary for Health and Human Services, Kim Belshé, crazy with my questions.

What if we had a pandemic in LA, and ten thousand people needed to be hospitalized? How would the hospitals respond? What was their ability to set up tents, with beds, oxygen tanks, and a clean environment? Where were the tents? Where were the beds? Where would they get doctors and nurses? Did they have lists of retired doctors and nurses who could be called back in? Had we tested these lists ourselves?

After the Hurricane Katrina disaster in 2005, everyone was painfully aware of the failure of the government’s response, and I was determined that no such thing would happen here. I knew that the action-hero governor would not get away with failure on this front. This meant that we had to step up our drills and exercises. Even when acting in a movie, I would not shoot a stunt if I hadn’t rehearsed it a minimum of ten times. So how could I expect an emergency response to succeed if we haven’t rehearsed the scenarios of fires, floods, and earthquakes? And what if you have an earthquake that triggers a major fire? Now you’re in a situation where people can’t get around, and you have the fires, and the fire station is hit too, and the doors are jammed so the truck can’t come out. The communication systems are disrupted. What now?

This was so ingrained in me that even before Katrina, in 2004, I started a statewide exercise we called Golden Guardian. It was a massive preparedness test for every possible disaster and terrorist attack. We tested everything: planning, procedures, communications, evacuation routes, hospital readiness, and federal, state, and local cooperation. Each year we planned for a different type of emergency. The first year, it was a terrorist attack using “dirty” bombs designed to contaminate multiple ports and airports up and down the state with radioactivity. Other years, we tested for massive earthquakes, floods, and more terrorist attacks. These were the largest, most comprehensive emergency response exercises in the country, involving literally thousands of participants statewide. Each took years to plan. Matt Bettenhausen, our emergency services chief, appreciated this fixation of mine. “How great is it to have a boss who says practice, practice, practice?” he said.

One year, I was getting briefed on the next Golden Guardian, which was to focus on a massive 7.8 magnitude earthquake in Southern California. The briefer explained that a California Highway Patrol helicopter was supposed to pick me up and take me to a situation room down in Orange County, where the senior people would converge. “The earthquake will happen at five forty-five, and we’ll pick you up at six,” he said. This got me thinking. I asked, “How do you know that the earthquake is going to happen at five forty-five?”

“That’s the schedule. They want everyone together down south.”

I didn’t say anything more. I thought, “This is bogus. How do I know we’re really prepared, when we ‘prepare’ for a preparedness drill?” So that morning I got up at four o’clock and called the Highway Patrol. “The earthquake just happened,” I said. “The clock is running on this exercise.”

You have no idea what an explosion this caused. The CHP and the US Department of Homeland Security freaked out. Everybody had to scramble. They ended up doing a great job, and the exercise exposed some ways the system could break down, but the senior Homeland Security guy was pretty irritated. “I can’t believe you didn’t give me a heads-up,” he told me later when we had a chance to talk.

“We’re not out to embarrass anybody,” I said. “But we’ve got to know where we fall short when we have no notice.” We agreed in the future to gradually tighten the lead time on exercises and to tell participants, “Last time we gave you twelve hours’ notice; this time we’ll give you six.”

All our preparation paid off in late 2007, when particularly severe wildfires broke out up and down the state. The worst were in the south, near San Diego, where despite the firefighters’ best efforts, the blazes were spreading, and there were predictions of hurricane-force winds. On the third day of the fires, Monday, October 22, I called my staff for a briefing, as I usually did at six in the morning. They told me that large areas of San Diego were now in danger, and the order had gone out to evacuate a half million people. A half million people! That’s a population the size of New Orleans before Katrina and probably the largest one ever forced out of their homes in California history. Already, thousands were headed toward Qualcomm Stadium, which we’d designated as the main gathering point for evacuees with no place else to stay.

“We’re going down there,” I said. Instead of leaving that morning for Sacramento, I used my office in Santa Monica as a jumping-off point and started making phone calls while my team assembled there. I called San Diego mayor Jerry Sanders, a former police chief, and made plans to meet at the stadium later in the day. Bettenhausen, talking to commanders on the ground, reported that residents were responding to our evacuation message as we’d hoped. The order was designed to convey the two things you needed to know most if your home was in a fire’s path: first, when the police tell you to leave, grab your stuff and go, because a wildfire can spread faster than a person can run; second, not only would we fight to protect your home from the fires, but also the police would patrol your neighborhoods to keep looters away.

We expected ten thousand or more people at Qualcomm Stadium. I figured that under the circumstances, no one would be thinking about things such as diapers and baby formula and dog food. So I made a list and called the head of the California Grocers Association to ask if stores in the region could deliver those items to Qualcomm immediately. He was eager to pitch in.

Then I called the White House and briefed President Bush. Up until this point, we’d had a professional but guarded relationship. President Bush was always available to talk, and while we did not always agree on what the federal government could do for California, I learned quickly that if I raised only one issue at a time, I would get a fair hearing. It wasn’t surprising that I had a warmer relationship with his father. With George H. W. Bush, I was more of an admiring protégé, soaking up everything I could learn. George W. and I were almost exactly the same age, and we both had to represent interests that were sometimes at odds.

But when the fires raged, President Bush was incredibly impressive. He’d learned lessons about emergency responsiveness the hard way during Katrina, and he asked the kinds of questions that only someone who’d been through a disaster would know to ask. He understood that the federal government might not initially move quickly enough, out of a natural need to save responders for other emergencies throughout the country. President Bush told me that his chief of staff would get us everything we needed and that I should call him, the president, directly if there was anything I wanted him to know. I was skeptical, so I called him back forty-five minutes later to ask a question, and he picked up the phone again.

Within three days, President Bush was on the scene. He shook hands with firefighters, visited homes, held press conferences, and peppered me and the fire chiefs with questions. He showed real leadership.

My own chief of staff, meanwhile, reported that the National Guard was on its way. Susan was staying in Sacramento to coordinate the governor’s office response with Dan Dunmoyer, the cabinet secretary, and I’d directed her to have one thousand National Guard troops pulled off a border-security operation and sent to Qualcomm Stadium. She called the adjutant general to say we needed the troops. The guy had obviously never encountered Susan in commando mode before, and he made the mistake of insisting on paperwork. “Okay,” he told her. “We need a mission order.”

“The mission order is to get one thousand men off the border and get them to Qualcomm stat,” she repeated.

“But I need a mission order. It has to say—”

“Here’s your fucking mission order!” she exploded. “Get a thousand troops to Qualcomm. I want them on the move within the hour.” The general got us the troops.

Then she turned to the cots that people would obviously need that night. Thousands of cots, pillows, and blankets had been stockpiled in the region for emergencies. “They’re on their way,” officials kept saying. But she and Dan kept calling and discovered the supplies hadn’t arrived.

“That’s not good enough,” she said, “We need to know they are on the trucks. I want to know exactly where they are en route right now. Give me the cell phone numbers for the drivers.” Hours went by, and the cots couldn’t be found. Rather than wait, we called Walmart and other giant retailers in the state. Later that day, a California National Guard C-130 cargo plane crammed with thousands of donated cots flew out of Moffett Field in Mountain View to San Diego.

Moves like these are not in any disaster response manuals. I saw what happened during Katrina when officials at every level waited for someone else to take action—because that’s what the manuals say you’re supposed to do. “Every disaster is local,” the experts told me. State officials are supposed to wait until local officials ask for assistance; federal officials wait until state officials ask for help, and so on. “Bullshit,” I said. “That’s how thousands of people were left stranded on rooftops in New Orleans. That is not going to happen here.” My rule was simple: “I want action. If you need to do something that’s not in the manual, throw the manual out. Do whatever you have to do. Just get it done.”

Once my team was assembled, we headed for San Diego. We could see the gray haze from the fires over one hundred miles away as soon as the plane took off. That afternoon, I would fly in a helicopter to visit the fire bases and see the blazes firsthand. But communicating with the public was the first concern. I met Mayor Sanders and other local leaders outside Qualcomm, and we went around as a team: first, walking through the hallways and the parking lot to greet the evacuees, emergency workers, and volunteers streaming in, and then talking to the media.

Fortunately, I’d been well prepared on how to communicate during a fire emergency by my predecessor. During the transition period, Gray Davis had graciously contacted me in the midst of a significant but much smaller fire. He asked if I wanted to accompany him while he met firefighters, visited homes, talked to families, and addressed the media. I saw how he absorbed a briefing, and the way he thanked firefighters for their service, while trying not to distract them from their mission. He even served them breakfast as they were coming off the night shift. He would go from home to home, comforting victims, asking them if there was anything the state needed to do. He was a source of strength.

That time we spent together smoothed the transition and proved that we could work together, even though we had battled during the campaign. More importantly, Gray showed me how a governor takes action rather than just phoning in from Sacramento.

In San Diego we started holding regular press conferences so that people would understand that there were no secrets. We spelled out everything step-by-step, saying things like, “We have sixty-mile-per-hour winds, and the flames can jump a mile and a half at a time. But we are going to get this under control.” We sent a clear signal that federal, state, and local responders were all working together, but we were also quick to admit mistakes. Our rule was, “Never bullshit.” When cots got lost, we acknowledged it. It was great to have a guy with Bettenhausen’s experience and sense of humor on hand. He stayed glued by my side, keeping us in touch with the fire chiefs and commanders at the fires. Although the news often wasn’t good, their voices were never frantic, only disciplined and firm: “Governor, we have a major problem. We just lost fifty more homes. We’ve got three firefighters injured, and we’re repositioning our men. We’re evacuating this other area, and CHP and the sheriff are involved, to close off the roads and protect people’s homes …”

We kept open communications with the commanders and always asked what more they needed, and we used their information to give regular public updates.

We heard that the winds had shifted and that the residents of a nursing home in the fire’s path were being evacuated to a makeshift shelter at the Del Mar racetrack. Del Mar was set up as a shelter for horses, not people. It was already evening, but my instincts told me to see it for myself; that it could be a particularly dangerous situation for the elderly residents.

It was sunset by the time we arrived. Close to three hundred patients had been evacuated. I hated what we found there: old folks parked in wheelchairs with IV bags, propped up against walls, lying on mats on cold cement. A few people were crying, but most were silent and still. I felt like I was walking through a morgue. I put a blanket on one old fellow and folded up a jacket to use as a pillow under a lady’s head. None of these people had their medication; some needed kidney dialysis. A nurse-practitioner and Navy Reserve commander named Paul Russo had bravely taken charge of the scene and, with the help of fellow volunteers, was struggling to find hospital beds. It was clear we had to get help or some of the elderly people weren’t going to make it. Immediately, Daniel Zingale and I and a couple of others got on the phone and started calling ambulance companies and hospitals to move the sickest people right away. We stayed a few hours until we were sure progress was being made, and that night we came back twice to check on Paul and his volunteers and the patients who remained. By the next day, we were able to get the National Guard to set up a military field hospital nearby.

Fortunately, failures like the one at Del Mar were rare. The wildfires in San Diego burned for another three weeks, but those first few days set the tone for our disaster response. We evacuated more than a half million people, the largest evacuation in the history of the state. Nine people died and eighty-five, mostly firefighters, were injured. A half million acres burned, and the property damage was widespread, including more than 1,500 homes and hundreds of businesses, at an estimated cost of $2.5 billion. The statistics in the wake of a disaster are always tragic. But we avoided another Katrina, and I was satisfied that our emphasis on preparedness had paid off.

There was a much larger disaster brewing that would disrupt many more households and change many more lives than the wildfires. America was on the brink of the worst economic collapse since the Great Depression. In Sacramento, our first whiff of trouble came even before the fires, as we started developing a budget for 2008–09. In the spring, we saw effects of a serious slowdown in the state housing market, despite more optimistic economic forecasts nationwide and internationally.

The economists who consulted for the state were saying, “We’re facing some headwinds in housing, but the economy will pick up again in the next couple of years. The fundamentals are strong, and you can expect continuing healthy growth in 2009–10.” Yet only two months later, our monthly revenues from taxes began falling alarmingly short: $300 million below expectations in August, $400 million in November, $600 million in December. The prediction was that we would have a $6 billion shortfall in our budget by the time the next fiscal year began in July 2008. I thought, “What is that about?”

While the beginning of the Great Recession is often dated to the financial market meltdown in September 2008, the crisis came earlier and harder to California than to the rest of the country. This was because of the scale of our housing market and the impact of the mortgage meltdown. California’s already legendary property values skyrocketed during the 1980s and 1990s, and homeowners started using the ever-increasing equity in their homes to fund retirement plans, finance college costs, or buy vacation homes. But now people were falling behind on mortgages and losing their homes at double the national rate. By some estimates, more than $630 billion in value was gone, lost, disappeared, and with it went tens of billions of dollars in tax revenue.

Part of the blame belonged to the federal government, which allowed fast and loose subprime mortgage deals. In the past, a 25 percent down payment had been required. What’s more, quasi-government entities Fannie Mae and Freddie Mac were encouraged to increase loans to low-income borrowers in order to stimulate the economy and expand the culture of home ownership. This helped fuel the housing bubble. Just as I’d learned from Milton Friedman, when the federal government meddles in markets, the states pay the price. Californians suffered in part because of a federal fuckup, and as governor, I was caught short.

I didn’t have much money to work with, but I used every bit of cash I could get my hands on to respond. We desperately tried to accelerate infrastructure bond spending to build highways and rail lines, build new roads, and repair old bridges. We found money for job programs to retrain construction workers losing their jobs. We persuaded big lenders to freeze interest rates for more than one hundred thousand home owners most at risk. We hired more than one thousand people to staff state call centers to advise mortgage holders in trouble and help people with unemployment benefits.

Just before Christmas, US treasury secretary Hank Paulson visited to discuss the subprime mortgage crisis. He and I held a “town hall” meeting in Stockton, and I listened to him talk about “minimizing the spillage” of the housing downturn into the overall economy. At that point, I was still willing to describe the problem as a “hiccup” in my comments to the audience. But I had a bad feeling about it. I flew to Washington not long afterward for a governors’ conference where Alphonso Jackson, President Bush’s housing secretary, gave a speech about how the American Dream of owning a home was alive and well. I knew Alphonso slightly and cornered him during the break to ask what was really going on. “It doesn’t look good,” is all he would say. The expression on his face alarmed me. He showed more concern than he’d shown onstage.

I decided that we should throw out the economic forecasts for fiscal year 2008 and budget for zero revenue growth. In our boom-addicted state, zero growth in the Sacramento budget would be much more painful than it sounds. We were facing $10 billion worth of automatic increases in pensions, education, health care, and other programs that were protected by law or federal funding mandates. So if state revenues stayed flat, the only place to come up with the funding was cuts in other programs that weren’t so protected. The choices were really tough. If we reduced spending on prisons, we had to let prisoners out and maybe make neighborhoods less safe. If we cut education, what did that say about our concern for our children, the most vulnerable of our citizens? If we cut health, were we saying we really didn’t care about old people, or the disabled, or the blind?

In the end I decided to cut all programs 10 percent across the board. It’s painful to have just endorsed things that you now have no money for. For example, I had supported a bill to strengthen foster care so kids would not wind up on the street. I believed such bills would ultimately reduce state expenses in health care and law enforcement because some foster care children get in trouble once they’re out on their own. But after passionately advocating this plan, I had to withdraw it when the financial crisis hit. I felt terrible, and I looked like a schmuck, backing out on a commitment we wanted to make but could no longer afford.

The final working days of December 2007 were devoted to a procession of interest-group advocates and community leaders whom I’d invited to the cabinet room near my office. I felt I had to look in their eyes and tell them myself what we were up against financially. The consequences of cuts are not just dollars, but people. Talking about fiscal responsibility sounds so cold when you have a representative for AIDS patients or poor children or the elderly sitting across from you. “Democrats are getting screwed, Republicans are getting screwed, we’re all getting screwed,” I told them. When I asked for their input, to my surprise, they thanked me for leveling with them. Many offered helpful advice.

It galled me that some of this pain could have been avoided. Even before I was elected in 2003 I’d insisted that the boom-and-bust nature of California’s dynamic economy created a huge downside risk in the event of a bust—and that California desperately needed a cushion. I’d tried to put in place a rainy-day fund that would have accumulated $10 billion by now, but I’d failed to convince the legislators or the voters to adopt one with rules stringent enough to keep the money locked up until there was a major emergency. Well, it was starting to rain, and I was forced to make unpopular decisions that nobody, least of all me, was happy about.

By spring 2008, state revenues were in a steep plunge. The budget deficit widened by $6 billion between January and April alone. And that was still months before the financial crisis went global.

I endorsed John McCain for president that January, even before the primaries ended. The senator from our neighboring state had helped me for years, particularly in the hard days of 2005, when John spent an entire day riding around Southern California with me on my bus campaigning for my doomed reform initiatives.

At the same time, as the presidential campaigns unfolded, I did not criticize Hillary Clinton or Barack Obama. The truth was that on the biggest issues, particularly the environment and building a new energy economy, I thought any of the candidates would be better than the current administration. I told an audience at Yale: “President McCain, President Obama, or President Clinton will all shift this country into a much higher gear on climate change. All three candidates will be great for the environment. So things will immediately pick up speed after inauguration day.”

I skipped the Republican National Convention that August for the first time in twenty years. I was stuck in California wrestling with the budget, but indirectly my absence reflected a much larger concern. The growing conservatism of the party didn’t appeal to me or to the vast majority of California voters. This tilt toward the far right became obvious when McCain chose Sarah Palin as his running mate. At the time of her nomination, I praised her as a smart, courageous leader and reformer. But ultimately I decided that I didn’t like the polarizing effect she had on the country.

If you visited the Schwarzenegger household that fall, you got a real blast of political diversity. I had a big John McCain poster on the front door. And in the living room stood a life-sized Obama cutout. The kids, for the first time, seemed politically engaged; the drama of the presidential election interested them much more than my job. I’d always teased Maria about coming from a family of political clones, but that was no problem in our household. One of our kids was a Democrat, one was a Republican, and two were independent/decline to state.

When it hit in late 2008, the Great Recession more than wiped out the progress we had made through years of discipline and cuts. Looking ahead to the next budget year, 2009–10, which began in July, we faced a combined gap for the current year and the coming year of $45 billion. In percentage terms and dollar amount, that was the biggest shortfall California had ever faced—in fact, it was the biggest shortfall any state had ever faced. The deficit was so huge that you could close all the schools and all the prisons and fire every state employee and still be in the hole.

Even when I took actions to save money, the budget got worse. With the collapse of the financial markets, we had to kick in billions of dollars to cover shortfalls in the public-employee pension system. I pushed hard for changes that removed the worst pension abuses, but it wasn’t enough. Meanwhile, prison spending soared, thanks to sweetheart contracts signed years before by previous governors as well as increases ordered by federal judges who actually took over parts of the system. I’d worked to save more than $1 billion by making controversial changes, including cutting out automatic pay raises for guards and reforming our parole policies. I had to fight the fiercest labor union in the state—the prison guards—at the same time I had to push hard against my strongest supporters in law enforcement, like the sheriffs and police chiefs. We proposed treating more nonviolent felonies as misdemeanors, shipping more prisoners out of state, and creating alternatives to prison for lower-risk offenders, like GPS monitoring and house arrest. We won major battles on those fronts, but prison costs still rose. In fact, we were now spending more on prisons than on universities.

The budget battles became like the movie Groundhog Day. No sooner would we finish doing all the negotiating and cutting for one budget than the revenue numbers would come in even lower than forecasted, and we’d have to start again.

Early 2009 was the worst. Budgets are normally negotiated in June (and often into the summer, on and on). But California’s financial picture deteriorated so quickly during the global meltdown that I called the legislature into special session and held budget talks over Christmas. It wasn’t just the deficit. We had a cash problem. The state was running low on money and in danger of having to issue IOUs to pay bills.

I always wanted to cut fast. Part of this was my philosophy: when you’re spending more money than you’re taking in, you cut spending. Simple. Part of this was math. In budgeting, the sooner you make cuts, the less deep they have to be. But for the legislature, the scary numbers had the opposite effect: they were paralyzed. The talks dragged into January and then February. I pressed them to act. Outside my office, I put up a display that said “Legislature’s Failure to Act” and counted the number of days and the additional debt being racked up for every day they didn’t move on the budget.

In mid-February, when we were in late-night negotiations, sometimes I would remind myself that this was nothing compared to being up to my neck in freezing jungle mud in Predator or driving a Cadillac down stairs in The 6th Day. And I’d think how budget negotiations are no different than grueling five-hour weight-lifting sessions in the gym. The joy in working out is that with each painful rep you get a step closer to achieving your goal.

Still, the weight of the crisis put even my optimism to the test. The hardest moment for me came after a conversation with Warren Buffett. I’d call him periodically to ask what he was seeing out there in the world beyond California, where he had a much better vantage than I did. The Obama administration was adding to the emergency stabilization measures launched under President Bush, and I wanted his advice on when all this would have an effect. He said, “The economy this time is like a deflated ball. It won’t bounce back. When you drop it, it just goes splat and lies there until you pick it up and pump some air back in.”

This was the big picture, and it didn’t look good. He explained what he meant. Not only had the United States taken a beating. So had Germany, England, France, India, and even China. This wasn’t just another American recession as usual. He said, “If assets have lost twenty percent of their value, the income from those assets will be less. Before you can really start to grow again, the whole world has to adjust to that fact. Propping up values artificially isn’t going to work. Everyone has to get used to living with less and building from a lower base.”

“How long will all that take?” I said.

“Years. It could easily be 2013 or 2015.”

What, 2013? I was counting in my head: 2009, 2010, 2011, 2012. My term ran out on December 31, 2010, and if Warren was right, I’d be back on my patio reading movie scripts long before any real growth returned.

Maria and Susan both noticed me moping around. What Buffett said meant hard times and diminished expectations for billions of people, not just Californians. I spread the word; Susan heard me describe the conversation many times to members of our staff and key lawmakers. It was a valuable reality check that helped us make hard and unpopular choices in the time that followed.

In fact, the financial crisis made necessary the biggest and most difficult deal of my political career. After months of grueling negotiations, late one night in February 2009, we finally agreed on a budget. It involved $42 billion in budget adjustments and costly compromises on all sides. Democrats had had to make big concessions on things important to them like welfare reform and union furloughs. Now I was asking Republicans to commit heresy—the equivalent of asking a pro-choice Democrat to become pro-life. In running for office I’d promised never to raise taxes except under the most dire circumstances. But I’d also taken an oath to do what was best for the state, and not for me or any ideology. So I gritted my teeth and actually signed a budget that raised income taxes, sales taxes, and even the car tax for the next two years. This was the very same car tax that had cost Gray Davis his governorship and that I cut as my first official act.

I dropped in the opinion polls like Warren Buffett’s deflated ball, as I knew I would. And I wasn’t the only one who took a beating. I coaxed legislative leaders of both parties to go along with me, and they all paid a price. The Democrats, senate leader Darrell Steinberg and assembly speaker Karen Bass, made themselves wildly unpopular with the liberals by agreeing to support open primary elections as well as even more welfare reforms—removing things like automatic cost of living increases. They enraged the public-employee unions by agreeing both to pension reform and to another condition I insisted on: the creation (at last!) of a strict rainy-day fund that could be used only in a true emergency. The Republican leaders paid an even higher price. The party stripped State Senator Dave Cogdill of his leadership position the night of the vote and forced Mike Villines, the assembly Republican leader, out of his post a few weeks later—all because they had accepted a compromise that included a tax increase.

That February budget compromise wasn’t the end of the story. California has so many budget formulas that are baked into the constitution or dictated by previous ballot initiatives that you can do very little fiscally without going back to the voters for approval. To complete the deal, I had to call a special election that May.

This election became a contest of the extremes—left and right—against the middle, those who were inclined to support the deal. Democrats battled Democrats against the spending cuts, and Republicans battled Republicans against the tax increases. The deal itself was messy—nobody really loved it, including me—and that made it politically vulnerable. I was deeply frustrated with party leaders and the press for not making plain the budget history, and the inescapable realities, that had led us to this point. Unions campaigned especially hard against the rainy-day fund because of the limits on spending it would impose.

I was disappointed at the lack of support for elected officials, including me, who had gone out on a limb. Democrats and unions had demanded more revenues for years. Now I, a Republican, had given them tax increases, and what were they doing? They were opposing these tax increases!

My salesmanship failed me. I found that after six years of trying to get citizens to reckon with the state’s budget problems, they were not with me. When it looked like we were going to lose, I even tried scare tactics. I put forward an apocalyptic “budget alternative” to show voters how all hell could break loose if they turned us down. The proposal warned of the release of fifty thousand prisoners, the firing of thousands of teachers and other public workers, and the forced sale of state landmarks such as San Quentin State Prison and the Los Angeles Memorial Coliseum.

We still lost. The voters rejected every key measure, and in the next few months, the legislature had to go back to the drawing board and grapple with the 2008–2009 budget yet again. Sadly, my apocalyptic vision wasn’t far off. In June I had to announce $24 billion of spending cuts. Thousands of teachers and public servants were laid off. The state had to hand out $2.6 billion of IOUs to pay bills, since we were again about to run out of cash. (We didn’t sell the coliseum or San Quentin, though.)

In our household, that summer was a time of terrible loss. Eunice and Sarge went as usual to Hyannis Port for vacation, even though they were now very frail and old: he was ninety-three, and she was eighty-seven. Sarge was in such an advanced stage of Alzheimer’s that he no longer recognized anybody, even Eunice. They’d been in Hyannis for only two weeks when on August 9 Eunice was rushed to Cape Cod Hospital; two days later she died.

Eunice had touched so many lives that there was a global outpouring of grief. The Kennedys mourned her at a requiem Mass in the same church where Maria and I had gotten married more than twenty years before. And while Sarge was able to attend the requiem, Teddy couldn’t come because he was in the end stage of brain cancer. Two weeks later, in Boston, he too died.

It was hard for me to let Eunice go. She’d been my mentor and cheerleader and the best mother-in-law in the world. But my loss was nothing compared to my wife’s. Maria was in more pain than I’d ever seen her experience. We had long conversations about her mom, but she wouldn’t talk publicly about her grief until after two months, when she went to speak at her women’s conference. She told thousands of attendees who had gathered at the Long Beach Arena, “When people ask, I say I’m fine, I’m holding up well. But the real truth is that I’m not fine. The real truth is that my mother’s death has brought me to my knees. She was my hero, my role model, my very best friend. I spoke to her every single day of my life. I tried really hard when I grew up to make her proud of me.”

I traveled to Denmark later that fall on a mission that I knew would have made my mother-in-law proud. Eunice and Sarge never hesitated to step across borders or to break bureaucratic barriers when there was important work to do for other people. That was how Eunice built the Special Olympics and how Sarge built the Peace Corps.

The United Nations secretary-general Ban Ki-moon and I had been working on an ambitious response to global warming. Two years earlier, in 2007, he’d been so impressed by California’s climate change initiative that he’d invited me to speak at the opening session of the United Nations. When I stepped to the podium that fall, I was almost overwhelmed to realize that I was standing where John F. Kennedy, Nelson Mandela, and Mikhail Gorbachev had all addressed the UN before me. The occasion gave California a world stage—and an opportunity to contribute to a crucial international conversation.

Now, two years later, the United Nations Climate Change Conference in Copenhagen was meant to be the most important meeting on global warming since the completion of the Kyoto Protocol in 1997. After years of environmental conferences and programs and debates, leaders from more than 110 nations were coming to Copenhagen to hammer out an action plan. But Secretary-General Ban was concerned that the prospects for agreement between industrialized nations and developing ones were poor. The United States had failed to ratify the Kyoto accords, while China and India had made it plain that they didn’t want Europe or America dictating their climate policies. The problems went on and on.

Since his visit to San Francisco in 2007, Ban had watched with great interest as California built broader and broader coalitions with other US states and “subnational” players abroad. The Western Climate Initiative, our regional cap-and-trade program for carbon emissions, had expanded to include seven US states and five Canadian provinces. And our second Governors’ Global Climate Summit in late 2009 drew governors and provincial leaders from six continents in spite of the world recession.

This subnational climate change movement had built bridges to the developing world. Washington and Beijing on a national level were still in a stalemate over climate issues, but they were willing for us to form region-to-region connections. California had already made agreements with the city of Shanghai and several of China’s most industrialized provinces aimed at reducing greenhouse gases and cooperating on projects in solar and wind power and electric buses and high-speed rail.

As news got around about these developments, people in the environmental community began to sense a giant opportunity here. Ban Ki-moon was receptive when I pitched California’s approach as plan B for Copenhagen, to supplement the main UN effort to address climate change. “Even if the negotiations hit an impasse,” I argued, “the conference doesn’t have to look like a failure. You can say that although the national governments are stuck, we have great successes over here on the subnational front, and we’re going to continue the fight.”

All great movements in history—civil rights, women’s suffrage, the campaign against apartheid, worker safety—start out on a grassroots level, not in places like Washington or Paris or Moscow or Beijing. That was my inspiration in trying to cope with climate change. For instance, when we cut our pollution by 70 percent at the Port of Long Beach, the second-busiest seaport in America, Washington didn’t tell us to do it. We did it ourselves. We passed laws that forbid trucks from idling, and gave truckers tax incentives to switch over to electric engines and clean diesel and hybrids. In the same way, California built the Hydrogen Highway (a chain of refueling stations for hydrogen-powered vehicles), launched the Million Solar Roofs program, and committed to cut its greenhouse gas emissions radically, all without waiting for Washington. So if we could create a groundswell of such projects around the world, getting people involved, getting companies involved, getting cities involved, getting states involved, national governments could then respond.

That was the idea I took to the national leaders assembled in Copenhagen. We held a press conference after the speech, but at a separate hotel from the conference, to dramatize the message: “While the national governments are meeting over there, we are here. You should pay close attention to us as well as to them. Not to us instead of them, because we are supporting players and they are the stars. But without the supporting players, they are not going to get it done.”

As the pessimists had predicted, no binding agreements were reached at the Copenhagen summit. President Obama dominated the headlines, with his dramatic personal intervention and his effort to hammer out an eleventh-hour accord with China, India, South Africa, and Brazil. Our initiative was not enough to change the course of events, but it did add a crucial new dimension to the debate. Ban Ki-moon and I became good friends, and in the following year, we teamed up to seek new ways for subnational governments to take climate change policy forward.

President Obama and I became friends too. Shortly after his 2008 election night victory, I congratulated him in a speech before a Republican audience, saying that I hoped he would be a successful president because Californians would benefit from effective national leadership. Knowing that I wanted to cooperate with him, President Obama invited me to the White House, and we developed a strong working relationship. He knew about my bipartisan record and the goals we shared on the environment, immigration, health care reform, and infrastructure, and that I could be trusted not to take potshots at him once I left his side. He greeted me with a hug. Our conversations were relaxed and full of humor, even though we were both facing dreadful economic challenges: a recession, high unemployment rates, huge deficits.

In the public opinion polls, my approval rating was down to 28 percent, reflecting the widespread unhappiness and misery about the economy. At least it wasn’t as low as the legislature’s approval rating of 17 percent. I had a choice. I could go along to get along and try to improve my poll numbers, or I could continue fighting hard to fix what was broken in Sacramento and watch my approval ratings kiss the floor. I chose to fight. Unlike regular politicians, I had nothing to lose. I had only a year left in my governorship, and I was barred by term-limit laws and the Constitution from seeking another term or the presidency.

Six years of ups and downs forged me as a governor the way Conan was forged by pit fighting and the Wheel of Pain. I now understood politics and government, and in spite of all the struggles and the recession and low approval ratings, I had more forward momentum than ever before. I felt more like a hungry eagle rather than a lame duck.

In 2010 I managed to achieve some important goals. I persuaded the legislature to once again adopt a sweeping budget reform measure establishing spending limits and a rainy-day fund. This was my final chance to fix a broken budget system. The measures passed in 2004 were good for starters but weren’t big enough to fix the system. The most carefully crafted, bipartisan measure passed by the legislature in 2009 got killed by the voters because it was tied to the “grand compromise” that included temporary tax increases. This time—the last, best chance we had to stop the crazy deficit spending once and for all in Sacramento—I convinced a worn-down legislature to put the measure back on the ballot (without the hated tax increases), even though it wouldn’t be voted on until after I left office. I vowed to raise the money to get it passed by the voters come hell or high water. I was disappointed when I learned that my successor, Governor Jerry Brown, signed a bill to remove those reforms from the 2012 ballot at the behest of Democrats and labor unions. The polls had shown it headed for a landslide victory this time, with 84 percent planning to vote yes, according to the reform group the Think Long Committee for California. In the end, politics as usual produced a tax increase with no real safeguards to restrict further spending. And now the budget reform initiative will not be voted on until 2014.

In the fall, I signed a historic pension reform that rolled back some of the worst excesses threatening to bankrupt the state. By cutting a lot of red tape, we issued permits for so many solar power plants in California—more than 5,000 megawatts in 2009 alone (one hundred times all the solar permitted in the United States a year earlier)—that California was being called the Saudi Arabia of Solar. California is now on track to build not just the most but also the largest solar projects in the world. I clinched agreement with the federal government and the state of Oregon to remove dams on and near the Klamath River, the largest dam removal and river restoration in US history. We adopted the nation’s first Green Building Standards requiring all new buildings in California to meet strict energy efficiency and sustainable development standards.

In 2010 I also teamed up with the NAACP and President Obama’s education secretary, Arne Duncan, to win a huge victory on education reform, giving parents the right to move their children out of failing schools. The teachers’ unions and school administrators fought vehemently against these reforms, but the bipartisan force of a Republican governor teaming up with a Democratic president and the premier civil rights group in the country was too much even for the most powerful labor union in the state.

But the real measure of success in 2010 came from the voters. I was more aware than ever that the key to real, permanent reform is being in sync with the hearts and minds of the people. In June, despite my low approval ratings, the voters passed the second piece of our political reform package: the open primary. The first piece, a landmark reform that broke a 200-year-old American tradition of rigging the boundaries of election districts, had passed in 2008. Combined with that reform, the open primary system would once and for all end the dominance of the far left and the far right special interests in our election system. The top two vote getters in each primary would square off in the general election regardless of political party. Independents and moderates of either party would be able to vote for any candidate they chose, ending the stranglehold that extremists had over both parties in a closed primary system. It passed with 54 percent of the vote.

The final test came in November. We had rattled so many cages on the left and the right with our reforms that we faced three ballot measures designed to repeal our victories. First was an effort to repeal the redistricting measure passed in 2008. Both parties funded the campaign to repeal the measure and return the districts safely into the hands of incumbents. They were also trying to defeat a new measure to expand fair districts to congressional races. Democratic House Speaker Nancy Pelosi made her California members pony up millions of dollars to defeat this measure and repeal ours. The fight was on.

The second was a referendum placed on the ballot by labor unions to punish business for supporting my spending cuts and political reforms. The referendum would have repealed the business tax reforms we fought so hard to win in 2009 as part of the compromise. Unfortunately, this was a typical move: get historic bipartisan agreement on tax increases and tax reforms that lower costs for business, and then the labor unions try to repeal the business reforms after the tax increases are in place.

The third measure was the centerpiece. Proposition 23 was put on the ballot and funded mainly by Texas oil companies to repeal our historic global warming act. Their campaign preyed upon peoples’ fears about the economy and claimed that our climate change efforts would push unemployment even higher. They plastered the state with TV ads that said. “Jobs First—Yes on 23.” We answered with a stunningly powerful campaign cochaired by George Shultz, Jim Cameron, and venture fund leader Tom Steyer which raised $25 million. One of our most effective ads showed a kid reaching for an inhaler and struggling to catch his breath. We didn’t just beat Proposition 23. We pulverized it by 20 points. We terminated any hope the Texas oil industry had of rolling back California’s leadership on climate change.

In fact, the voters backed every one of our initiatives that year, over the passionate opposition of political parties, labor unions, and Texas oil companies. Historic political reform, business tax reform, the strongest possible endorsement of our climate change efforts: it felt good to be in the powerful center again, with the people standing behind us.

We were turning a corner. All across California, you could see a new energy economy taking hold. A decade that had begun with blackouts and despair ended with the state approving more renewable energy projects than the entire United States combined and leading with resolve. A state in love with freeways and automobiles was now leading the nation in the development of alternative fuels. A state mired in gridlock was now blowing up the partisan boxes that shielded political parties from the voters they are supposed to represent.

My schedule got busier as my term neared the end. On the final leg of a trade mission to Asia in September, I’m proud to say I found a way to cram thirty-six hours of work into a single day. On Wednesday, September 15, I started at eight in the morning in Seoul by meeting the American Chamber of Commerce at the Grand Hilton. Then I spent time with Special Olympics athletes, met the chairmen of Korean Air and Hyundai Motor, chatted up the mayor of Seoul, signed a business cooperation agreement between Korea and California, rode a high-speed train, visited a department store, and rallied the US troops based in Korea. When I learned about a massive gas-pipeline explosion in San Bruno, I cut my schedule short and flew directly to the Bay Area instead of going home, crossing the international date line so that it was again Wednesday afternoon when I arrived. In San Bruno, I visited the scene of the explosion, was briefed by emergency officials and talked with victims who were still in shock. I spoke to families who lost their homes, their loved ones, their community. Of all the things I’ve done in my life, nothing is seared in my memory more than looking into the eyes of a person who has just lost everything he loved in the world.

In December, after the voters chose Jerry Brown to succeed me and plans for the transfer of power were well under way, a reporter asked why I didn’t quietly coast out the door like most governors would after two hectic terms. I told him I believe in sprinting through to the finish line. “There’s a lot of work that still can be done,” I said. “So why would I stop in November or December? It wouldn’t make any sense.”

The state was still in the grip of the deepest national financial crisis in modern history, and regardless of all our efforts, the next governor would be staring down the barrel of a continued budget deficit, probably for the next two years. I could have just ignored the numbers through the fall, leaving the task to Jerry Brown. Democratic legislative leaders certainly wanted me to do that; they were sick and tired of me pushing them for more spending cuts. But it would have been irresponsible to let months go by without action. So I called yet another special session of the legislature. This time I knew in advance that the legislature would fail to act. They were out of gas, and they prayed that the new Democratic governor would come in on a white horse and raise taxes, saving them from having to make more cuts. There was no way in hell they were going to make more cuts no matter how hard I pushed them. The media wrote the obvious: “He started with budget problems, and he ended with budget problems.”

Yes, I did. But we made a hell of a lot of progress, and we made a lot of history: workers’ comp reforms, parole reforms, pension reforms, education reforms, welfare reforms, and budget reforms not once, not twice, but four times. (And I will be there campaigning in 2014 to make sure the budget reforms pass the voters.) We made our state an international leader in climate change and renewable energy; a national leader in health care reform and the fight against obesity; we launched the biggest infrastructure investment effort in generations; and tackled water, the thorniest issue in California politics. We put in place the most significant political reforms since Hiram Johnson was governor—and in June 2012, the first election in which California’s new open primary system was in effect, the upsurge in the number of moderate, pragmatic candidates drew national attention. And we accomplished all this while dealing with the greatest economic disaster since the Great Depression.

I do not deny that being governor was more complex and challenging than I had imagined. One incident, in particular, stands out for the gap it shows between what people think you can do for them and the reality you face as governor. During the terrible drought of 2009, I went to talk to the farmers in Mendota in the Central Valley. I was with Alan Autry, the mayor of Fresno and a onetime pro football quarterback who did more than anyone to call my attention to the farmers. Mendota was one of the communities that had been hardest hit by the double wave of the economic crisis and devastating drought. Agricultural production was at a standstill, the fields had turned to dust, and there was 42 percent unemployment. We needed more water from the Sacramento–San Joaquin Delta. But environmentalists argued that diverting the water would threaten a little fish called the delta smelt, and a federal judge ordered the water kept off. The federal government thought that the delta smelt needed to be protected more than the farmers.

The farmers were demonstrating with signs that said “Turn On the Pumps” and showed me their dusty fields. They were saying things to the media like, “I’ll be damned if I’ll let a little fish take all my water away. We will fight the government to the end.”

I told them that we were negotiating with Secretary of the Interior Ken Salazar. “Those things take time and patience,” I said.

A farmer stood up and asked, “How can you say that? Why can’t you go there and turn the valve? You go there and turn it on.”

I realized people had the vision that I’d push aside the federal judge, push aside whoever was guarding the pumping station, go up to this huge chained valve, break the chain, and turn the wheel, releasing a torrent of water into the land, turning it a lush green and returning the farmers to work. But I couldn’t do that in real life! That’s the problem of presenting yourself as the Governator. You can do miracles but not the kind that require wearing a cape and being able to fly. Instead, it took months of pushing and cajoling the Department of the Interior and some dedicated negotiations with the Obama administration to get the water turned on.

As governor, you’re neither a solitary champion nor a star. You have to work with the legislature, the courts, the bureaucracy, and the federal government, not to mention with the voters themselves.

Politics can be a lot like crowd surfing in a mosh pit. All these hands reach out and carry you along, and sometimes you end up where you want to go, and sometimes you don’t. But compared to making a movie, when you do accomplish something in government, the satisfaction is so much larger and long lasting. In a movie, you are entertaining people for a few hours in a dark theater. In government, you are affecting entire lives; generations, even.

It was always the most extraordinary feeling when we would reach an agreement, and some measure would pass the legislature or win ballot approval. I would pull out a cigar and light it up, pull out my list of things I wanted to accomplish, and take a pen and mark that item off. Although I certainly wish I had been able to cross more items off the list, I feel good about what we did get done.

Even Maria agreed that the challenge had been worth it. Speaking at a wellness conference in 2010, she said, “I’d like to admit today that I was wrong to try to talk Arnold out of running for governor seven years ago, and he was right not to listen to me. The fact is, I didn’t want Arnold to run because I myself didn’t like growing up in a political family. I was afraid something bad would happen. I was afraid of the unknown. It turns out Arnold was right to follow his dream and run. He’s loved this governor’s job more than anything he’s ever done in his life. It ended up being a perfect match for his intellect, his love of people, his passion for public policy, and his competitive streak. I’ve never seen him happier or more fulfilled. Even with all the ups and downs of the last seven years, he says if he had to do it over again, he would in a heartbeat, and I believe him. I never thought I’d say this, but I thank him for not listening to me.”

I was luckier than I deserved to have such a wife.