Governor Schwarzenegger Highlights Infrastructure Needs at Milken Institute Global Conference

Partial Transcript

MICHAEL MILKEN:

Yes, he's the governor of the largest state in population in the United States and one of the 10 largest economies in the world. But as the cover of Newsweek told us, he is also the governor of the planet. And so --

GOVERNOR SCHWARZENEGGER:

Sounds good to me. (Laughter)

MICHAEL MILKEN:

Last year the Governor came here and we focused on environment and other important issues. And you might have noticed, those of you who were here, that he was wearing a green tie. Today we're talking about powerful issues -- roads, bridges, power plants, etc. -- and the Governor is wearing his power tie. However, we discovered that 84 percent of Americans don't wear a tie to work, so when the Governor gave his latest call to action and went to the podium, you will notice he dressed without a tie. So you can tell what the Governor's focus is by his tie or lack of tie. (Laughter)

For today, we had an announcement in February by the Governor that the bottom line is America right now needs to invest 1.6 trillion to rebuild and invest in the future. We must get going, we must invest. How has our political system -- with many of the people from around the world here today -- does it allow you to move forward, at the pace you need to move forward, to allow us to invest?

GOVERNOR SCHWARZENEGGER:

Well, first of all, let me just say it is wonderful to be back here again at this great conference, this Global Conference. And I am so surprised that you have become a comedian. It's really nice to see this kind of a change. (Laughter) It's wonderful. After Jay Leno, there will be you. (Laughter) I can see it, the Michael Milken Show. Really good. Give him a big hand. (Applause)

But you know infrastructure, I think that we all know, is extremely important. And I think that this little comedy routine there in the back, I think it was very clear how important it really is. I think that this is one of the things, when I became governor, that I recognized the fact that California itself has fallen behind in infrastructure. As a matter of fact, California really didn't build much in the last four decades. The last one that really built was Pat Brown. Pat Brown did an extraordinary job and set up a lot of the infrastructure we are using now, is being used, is what Pat Brown really was responsible for. But in the meantime, we went from 18 million to 38 million people and the infrastructure that we have now is for 18 million people, so we have to really move very quickly.

So this is why I campaigned and worked very hard to bring Democrats and Republicans together. And they made a commitment for $37 billion and an additional $5 billion and then it was put on the ballot. So the people of California made a commitment of $42 billion to start rebuilding California.

But this is really only the foot in the door, so to speak, because as I have said in my last State of the State Address, we need really $500 billion to rebuild California in the next 20 years -- $500 billion. We have put money into education, building more schools, expanding the university system, fixing our levees, transportation, all of those kinds of things, affordable housing and so on. But there is so much more that needs to be done. It cannot all be done, by the way, through bonds. I think that the only way it can get done is by also using public-private partnerships. (Applause)

MICHAEL MILKEN:

Well, speaking of public-private partnerships, we have at the conference this year financial institutions that have about 10 trillion in assets. And many of them have been active, very active, in this area. Crédit Agricole, which is the sixth largest bank in the world, fourth largest in tier one capital, has been active in more than 20 countries and at this time it's really been active more in Chicago than in California. Guggenheim has invested in a whole group -- another one of our sponsors -- of public-private.

In order to bring these public-private partnerships together the U.K. in the last few years has undergone a study; in that study on infrastructure they concluded that it would take 37 regulatory regimes to get something approved. And in their 2006 Infrastructure Development Report they concluded it was too slow, too complex, too many agencies. And so they created a new agency. (Laughter)

But the new agency is not a government agency; it's a planning commission. And all infrastructure goes under one agency. They have six months to study, three months to make a decision and six weeks of challenges. So in less than one year you get a decision.

Do you see the possibility of us creating an agency like that in California where you can go and get a decision from one body?

GOVERNOR SCHWARZENEGGER:

I think it is possible but it would be very, very difficult. I think that our bureaucracy and the agencies and the mentality of some of the legislators are still holding back progress in that area. I mean, we need public-private partnership. It's the only way that we really can build the kind of things that we need, the roads that we need and the schools and expanding universities and affordable housing, if it has to do with energy, all of those things. Water infrastructure, for instance, that we are negotiating right now, courts and government buildings and all this. We need it very badly.

But there is a mentality in Sacramento amongst some of the legislators that this would hurt unions, this would hurt government employees. And that's why I wanted to actually take the legislative leaders to British Columbia, because British Columbia is one of those places where they have done exactly what you just said and have created a commission that makes the decisions and all is done through that commission. And everyone is happy. They're building huge infrastructure through public-private partnerships and labor is happy, businesses are happy, the people are happy, the politicians are happy and the future is happy because of that.

MICHAEL MILKEN:

That's the 100th --

GOVERNOR SCHWARZENEGGER:

So I think that's the direction that we need to go. But as long as we are trying to protect our public employees and as long as the public employees union is lobbying against that and as long as you have legislators listening to them, that have their own interests, not always the interests of the state or the country, I think we will have obstacles there. I think time maybe will -- we will be able to, through time, overcome those obstacles and change that mentality.

Like, for instance, locally here Mayor Villaraigosa has penetrated through all of that and they are now doing more public-private partnerships. They made a commitment here in Los Angeles. In Sacramento, at the same time, our initiative, one of the bills, failed yesterday and it was voted down, that would permit us to go forward with public-private partnerships. So there is much more work that still needs to be done in Sacramento.

MICHAEL MILKEN:

Now, in setting up your group, I know you went to Governor Rendell of Pennsylvania, Mike Bloomberg from New York City. And Governor Rendell is going to become the head of the Governors Association. I know he's made infrastructure a very important issue here. If all the governors got together, do you think you could be more successful in putting forth these programs?

GOVERNOR SCHWARZENEGGER:

Oh, absolutely. And I think this is the idea, because we have seen that the federal government has really slowed down with building infrastructure in this country. If you think about during the time of Eisenhower, where they spent approximately 11 percent of the non-defense funding -- you know, 11 percent is a huge amount of money. Today I think it's maybe 2.6 percent they are spending on that. It has just really come to a grinding halt.

And so this is why Governor Rendell and Mayor Bloomberg and myself have gotten together and formed a partnership and we are out there promoting building America's future. And I think that more -- at the last Governors Conference, for instance, more governors came on board, seven other governors. And I think that this whole thing is growing because the fact of the matter is that nationwide we are too slow with building our infrastructure. We have seen now the bridge in Minneapolis falling down just because there is no upkeep. We have seen the levees in New Orleans wipe out and cause tremendous damage because of no upkeep.

So I think this is what is going to happen more so in the future if we don't do something about it and really start, get going and really pay attention and put this on the front burner.

...

MICHAEL MILKEN:

Governor, it's interesting you mentioned that. And when we look, for example, at China, they've been spending close to nine percent of their entire gross national product on infrastructure, etc., India and other countries have been spending considerable amounts. And the United States has been pretty much spending less than 1 percent, so this issue you've underlined.

One of the other thoughts in forming this partnership that you've done and leadership: When we look at what California has been able to accomplish versus other states, whether it be in the amount of energy we're using, a substantial increase in cars, a substantial increase in passengers, traffic, but still not an increase in use of gasoline.

When we talk about other issues, California has really led the country in so many things. How do you see it leading other parts of the country, just to achieve the levels we have and to get this across? Are there other governors we could identify today that you see as leaders in this effort besides Governor Rendell?

GOVERNOR SCHWARZENEGGER:

Well, I think that, as you have said, California -- the advantage we have is that even though when you look at the globe we are just a little spot, but I think the power of influence that we have over the rest of the country and the world, I think it's an equivalent of a whole continent. And I think it's very clear, if it has to do with stem cell research, or our education here or our higher education, or if it has to do with infrastructure, for instance, or our drive to reform our health care system and all of those areas. And I think that -- or global warming, for instance. You know, being able to make a commitment to roll back our greenhouse gas emissions to the 1990 level and the Low Carbon Fuel Standards that we set up. There are so many areas where we have been an example for other states and that other states have followed us.

And we're going to do that with infrastructure, because California is number one now in having made that commitment, that $42 billion commitment in infrastructure, an additional $8 billion to rebuild our prison system and to add 53,000 beds. And now, being in the middle of negotiating the water infrastructure, to fix the Delta, to build above-the-ground and below-the-ground water storage and also to fix the ecosystem and to do all that. I think that we are really way out there.

I think that by having more governors come on board and really putting the spotlight on that issue and reminding people this is important -- because the fact really is, we have to understand that when you talk about infrastructure to the general public it is not a sexy subject and so, therefore, this kind of goes right over them and they say, "What is he talking about, infrastructure?"

And I remember that in the beginning when we sold our infrastructure, in the beginning it had only 32 percent approval rating, kind of, like in the polls. It was 32 percent and everyone said, "It will never pass, it will never pass."

But then we made it more personal and we asked people, I said, "Do you get frustrated sitting in traffic and not spending time with your children on the sports field, or being home with your family or something like that?"

And all their heads would go like this and they would say, "Yeah."

I said well, vote yes on Proposition so-and-so. So we would remind them. I'd say, "You're frustrated that your kids are in overcrowded classrooms or that your kids are in classrooms that have 40 kids in there?" I would say, "Then vote yes on this proposition, because we want to build more schools." And, "Are you worried about that one day there will be an earthquake and it will wipe out our levees and it will be wiping out hundreds of thousands of homes and it will be worse than New Orleans?"

And they would go, "Yes."

And so this is how we finally turned this, that was a nonsexy thing and made it more attractive and made people understand. And I think that's what we have to do, is we have to put the spotlight on the issue. I think governors have to get together. And I think with Governor Rendell, with his leadership and especially him being a Democrat, me being a Republican and Michael Bloomberg being an Independent, we sell the idea that this has nothing to do with politics. Forget about all that. Let's take that aside and let's just do what is best for our state and what is best for our country and serve the people of our country rather than worrying about the party. (Applause)

MICHAEL MILKEN:

Now, we've had a number of pollsters at the Global Conference, as we do every year. One in particular, Frank Luntz, was with us, who did the study on the word 'infrastructure'. And his comment is, "Nobody cares about infrastructure. Only 32 percent of people even know what it is." And so I think it sounds that one of your successes is being able to communicate. Can you think of another word we could use for infrastructure instead of using that? (Laughter)

GOVERNOR SCHWARZENEGGER:

I don't think that you have to use another word, but as soon as you finish the word explain what you're talking about. And that's why I said when we talked about infrastructure people were -- 32 percent, he's absolutely correct -- one-third understand it and the rest don't, what it really means. So that's why you have to make it personal and you've got to really explain to people why it is important.

What is also important, I think, in order to get it done is, especially when you talk about public-private partnerships, what is important is to explain to people exactly what it is and why it is not a threat to public employees unions and why it's not a threat to anyone and why no one is trying to pull wool over wool over someone's eyes here -- that it is the only way, really, that we can afford to move forward and to take on those big projects. And we have seen it. You know, Tony Blair and I have talked about it at great length, about the things that he had accomplished in Great Britain and the kind of things that they are accomplishing in Australia and France and in, like I said, British Columbia and in Canada. I mean, it's really great, it's very inspirational when you see the kind of things that can be done if everyone works together. And I think miracles happen when the public, the public sector and the private sector work together. This is when really big things happen. I think this is the direction that we have to go in California and also, I think, in the United States.

MICHAEL MILKEN:

Here in Los Angeles it took 15 years to build the Getty Center. Bought the land, developed it, worked out a deal with the Santa Monica Conversancy -- only gave them 60 percent of the land, they were allowed to hold 30 to 40 percent. But as you look around the world and the speed at which they've been able to build and transform their cities -- Shanghai, for example, built an entire city in the same time that we built the Getty Center and transformed China and Shanghai in that sense. We have a lot of financial institutions and people from all over the world, not just the United States, here. Do you see the ability to shorten that period of time in California? In other words, if the person is willing to invest, is there a way to take that 15 or 10 or 5 years and get it down to a few years?

GOVERNOR SCHWARZENEGGER:

I don't think that we will ever get to where China and some of those other countries are, because it's a different political system. And I would never exchange their political system with ours. You know, we have the best political system in the world but it comes with disadvantages. What we have to do is basically just say look, we have just overregulated. We have just too many obstacles, we have put too many obstacles in front of us. We can't really be competitive internationally anymore with this system. Let's go and streamline and really have think tanks and people, smart people, debate this issue of how to go about to streamline the regulations. And not to continue putting more regulations and more obstacles up for businesses, because otherwise we couldn't be competitive and places like China will be going right by us.

Of course I dream of such a situation that I could say, let's build an airport there and then four years later there's an airport there. Of course, this is great. Or to say, okay, our 405 freeway is crowded. We're going to put a double-decker on top of it and then we will have a perfect situation. I dream of this. (Applause)

But that's not reality. So I think what it takes is for both parties to get together and to really negotiate and debate and come up with a compromise. But it ought not to be slowed down, because there's no way that we can continue on the way we're going, that it takes 20 years for us to add another runway on an airport, or to go and add another wing to a building. And you go through permitting processes. And then, the way the system is set up, they can sue you after you get your permits and then you're in court for years and years and all this. So it's abuse of a system that meant well. The system and the way the people put it together was all meant well, but people abuse the system in order to hold up businesses and growth.

MICHAEL MILKEN:

I know in Malibu where we're building, where I'm looking forward to my great-grandchildren, appreciating when we complete our project, so -- It also varies in the state, as to where we are.

You know, we've had a lot of discussion about other states advertising to try to get people to leave California and go to other states. However, we still have this growing population. And I thought we might just take a short break here and understand why so few take up that option to leave and why so many people have come here. Whether it is the Golden Gate or Yosemite or our beautiful forests and redwoods or our beaches etc., we have a place that the world wants to come to. And many years ago in this book "Megatrends" it pointed out that almost 70 percent of everything that happens starts in California. And now -- that was before you were the governor. (Laughter) So maybe we're up to 80 or 90 percent.

But can we rebuild California -- with 170,000 miles of roads and 12,000 bridges and 250 public airports -- without raising taxes? Can that be done?

GOVERNOR SCHWARZENEGGER:

Well, first of all, let me just say I don't think that we need to raise taxes in order to build anything, because the fact of the matter is that traditionally it was always part of the budget, that a certain percentage of your expenditure goes to infrastructure. And that's exactly what happened up until the Pat Brown years and then after that it stopped and most of the money went for social programs and other things, other priorities and we fell behind in our infrastructure. And I think that now what we have done, in order to make a commitment, is we have said let's go and build the infrastructure with bond money.

Now, as you know, $42 billion in bond money means that you're going to only get half of the performance and half of the infrastructure, because if you really put aside, let's say, 3 percent -- we have $100 billion of revenues, so that would mean $3 billion a year you put aside for infrastructure -- you will get twice as much built if you pay as you go, rather than bonding the money and then paying twice as much because of the interest and all of those things. So really, I don't think you have to raise taxes. I think one has to be disciplined, the legislators have to be disciplined and the governors and really go into a system, eventually, of pay as you go and make a commitment that we put a certain amount of money aside to build infrastructure.

Because if they can't be disciplined -- and of course some people will say right now, well, how will you ever get the legislators to be that disciplined, since they are such big spenders and love to just spend money year after year, even money they don't have? So therefore I have to say yes, it is a big challenge. But I think that, again, it can be done. I'm an optimist, as you know, so I always feel anything can be done if you bring people together. And I think that the relationship between Democrats and Republicans is much better in Sacramento. There is not anymore the name calling that we have seen a few years ago and they can talk. Even though their philosophies are still the same, but I think they can sit down and talk.

I remember that before I went to Sacramento and took on this job people said to me always that this is going to be the most difficult thing, to bring both of the parties together to agree on anything. And I always said, "How could it be so difficult? I mean, I sleep with a Democrat every night." (Laughter) So I said, "It couldn't be that big of a challenge." But I realized when I went up there that it was a huge challenge. And I did not recommend they should sleep with one another -- (Laughter) -- but I just wanted them to get along and to start talking like normal people and discussing things and let's come in with a compromise.

But as you know, we also have a redistricting problem that creates those extreme rights and extreme lefts and then it's very hard, of course, for them to get together. But I think it can be done. I think it can be done without raising taxes. I'm against raising taxes anyway, because there is no reason why we need to raise taxes. I think this is the way to go, is if they can't be disciplined and put money aside, I think to do it with bonds.

MICHAEL MILKEN:

Now, besides the concept of sleeping together, has the teepee come in handy at all in these negotiations?

GOVERNOR SCHWARZENEGGER:

Oh, absolutely. My smoking tent is always full of smoke. (Laughter) There are people from both parties coming in, negotiating and people from the outside coming in and negotiating. And I think it's really good.

The fact of the matter is, you know, even with all the difficulties that we have and all the challenges we have here in California -- getting things through the legislators and so on and budget problems -- but it is without any doubt, as you know, the greatest place in the world. I mean, California is so fantastic and I think that's the reason why so many people want to come here. People are not dying to go to Iowa. (Laughter) They're not going crazy to go to those places.

And especially, California is known for its diversity, which is so terrific, you know, that California is economically a powerful state because we have the Central Valley with its agriculture, we have Silicon Valley with the high-tech. We have the biotech in the south, in San Diego, we have the entertainment industry here in Los Angeles. We have all those different economies that make our economy strong. So it is a fantastic place, like I said, with our great education system, with a great commitment to the environment and all of those things. And that's why you see this continuous growth in population and why we need to build our infrastructure and rebuild our infrastructure and do the upkeep of our infrastructure in California.

MICHAEL MILKEN:

Now, almost everyone comes knocking at your door. People want more money for education, we need help in health care, all these other issues. When you sit down, how do you explain the importance of infrastructure versus other demands for the state's capital?

GOVERNOR SCHWARZENEGGER:

I always explain to people that if we don't have a strong economy we cannot afford education, we cannot afford health care, keeping our prisoners in prison, law enforcement, all of those very important issues. We cannot afford it. We need to have a strong economy. Well, right now California is operating maybe on eight cylinders instead of 12 cylinders.

MICHAEL MILKEN:

Not everyone has a 12-cylinder car, though. (Laughter)

GOVERNOR SCHWARZENEGGER:

I understand. But just so you understand what we are talking about. (Laughter) Or you can say, instead of a straight 10, maybe it performs at a seven right now.

MICHAEL MILKEN:

Okay.

GOVERNOR SCHWARZENEGGER:

Maybe that makes you feel better. (Laughter) But I think that if we rebuild our infrastructure and if we add the infrastructure that we need and we can move people and goods around -- how fast you move them around is economic power -- I think if we improve our infrastructure and really get serious about it that we can really reach very soon our full potential.

So this is why I say if you want all of those programs, if you want to increase funding for education and for health care and Healthy Families and the children and all of those things and law enforcement and fight gangs and crime and blah, blah, the whole list -- the only way we can do it is if we have the revenues. And the revenues we can only get into our state if we have a booming economy, if we do everything we can. Always every decision has to be how do we protect businesses, how do we protect our economy? Because that means more revenues are going to come to the state and that's what I'm interested in. So I think infrastructure is the most important thing. Without infrastructure we can never achieve that goal.

MICHAEL MILKEN:

Now, you had backed an initiative to put solar panels on 1 million homes, 1 million California roofs. Is that going to help us reduce the need for traditional power plants?

GOVERNOR SCHWARZENEGGER:

I think it is one of our weapons in our arsenal, I would say. I think that we need, you know, to build more power plants. I think that we need to create more renewable energy. I think we have to go and make sure that we can build the transmission lines so we can get the renewable energy onto the grid. I think there is a lot of work that needs to be done in that area.

But I tell you one thing, there is really great hope there, because I think that we have the best spots in the world for solar plants, for instance, or geothermal. There's no other place in the world like that. And so all we have to do now is -- and there are many of the companies that are coming into California, I've had a meeting yesterday. They all want to build and help us, they all want to invest in California.

All we have to do now is get rid of some of the obstacles, because there are obstacles that are being created to get the power onto the grid. If it is environmental obstacles that we have or other regulatory obstacles, or that we have 13 departments that are making decisions over energy and one is stepping over the other and it makes it very complicated, so it slows things down.

But I think you will see great things happening. And I think that California experienced the blackouts once. I think they have learned from that that we have to have our act together and provide the energy for this growing population and I don't think it's every going to happen again.

MICHAEL MILKEN:

Well, we sure hope you're correct on that one. With your building, I think that will happen.

You know, one of the things, as we looked at medicine and science and many years ago forming the Prostate Cancer Foundation, we saw that people were spending two years to submit a report. It was quite often taking a year to review it and it discouraged people to want to participate. And we developed a system where they would get their money within 90 days and we told them, you can only submit -- that we would promise to read five pages. So if you want to give us 10,000 pages it was okay; we'd only promise to read five.

And when we looked at our faster cures group we made an analogy to a train. And as we know, today trains around the world travel at 300 miles an hour. We can go to France or we can go to China and see those. And the average train today in the United States is traveling at the same speed it did 100 years ago; 55 miles an hour. And it is not the train, it's the tracks. It's 19th century tracks, or 20th century tracks and 19th century thinking and 20th century thinking.

And so 20th century thinking told us we should stop building nuclear plants, okay? That the risk/reward wasn't high enough, whereas countries like France have been very aggressive. Do you think we have the ability to renew building nuclear plants in the state of California?

GOVERNOR SCHWARZENEGGER:

Well, I think that -- and I've talked about this in the past -- that it's very important that we rethink and look at that subject again, because I think technology has changed. And I think that France has shown us that we can do something with the waste, nuclear waste, that we can use it again for energy. And there are all kinds of new things happening.

But at the same time also we have to look at is it financially the wisest thing to do? We have to look at all of those things because it could very well be that renewable energy is maybe cheaper.

So I think we have to look at all of those things, because as our population grows and as we increase the amount of businesses that we have in our state the demand for power goes up. And we need to really make sure that we have enough power in the future. I think, therefore, all of those things ought to be looked at, especially since we are talking about delivering energy green.

And you know, we are very much interested in getting rid of the dirty coal plants. I think this is very, very important. I think that we have to get rid of our usage of fossil fuel. I think all of this pollutes the earth and creates the global warming and climate change and the more we can fight those things and come up with alternative ways, I think the better it is. And our state is very intense about that, so I think one has to look at both of those; nuclear and look also at increasing our renewable energy.

MICHAEL MILKEN:

In the audience we have a number of, particularly, property and casualty and other life insurance companies. They're generally buying $300 to $400 billion a year in municipal bonds; they're probably the largest buyer of bonds that back schools and other types of things. Do you feel that you have enough interaction with the financial community today in terms of how they might help and finance some of the needs of California?

GOVERNOR SCHWARZENEGGER:

Yes, I think we have really good communication. And of course I have a good guy by the name of David Crane, as you know, who is our liaison and who is really very helpful in job creation and in making sure that the world knows that we are looking for investments and that we want to work with people that want to come in and invest in California. So yeah, I think that we have a really good -- but if you have any suggestions how to improve, I'm more than happy to take your suggestions, trust me.

MICHAEL MILKEN:

Quincy Jones told us the other night that 25 percent of the people in Congress do not have passports and only half of those with passports travel outside the United States. And only 11 percent or so, or less than 10 percent of Americans, have passports. Unlike many of our political leaders, you have traveled the world and you've had a chance to meet with other world leaders, you've had a chance to see with your own eyes what they've done. What are some of the lessons that you've seen that you've tried to bring back here that could be used in building out these infrastructure issues?

GOVERNOR SCHWARZENEGGER:

Well, I mean, if you go and -- you just talked about the high-speed train, high-speed rail. I think that when you go to France, like I was the last year and visited President Sarkozy -- and I remember after that meeting we went directly from his palace to the train station and I wanted to ride their train. And I couldn't believe with my own eyes that that train was going 350 kilometers an hour. And I was right there in the front watching that speed on those gauges and it was extraordinary how smooth that it rode.

So of course you come back to California and you have this renewed kind of energy and again this vision about we've got to have this in California. And so you go and you look back into again the high-speed rail that they have been talking about for 10 years, or maybe longer, in California and make sure to put this on the ballot and to let people vote on that and to get the matching funds and to get the public-private partnerships going again and to make the federal government come in with their money, all of those kinds of things.

So I think when you travel around it gives you a renewed kind of ideas and energy and you get inspired, inspiration. I mean, if you go to China -- even though I don't prefer their political system by any means -- but when you see that in 2000, in the year 2000 we were over there talking to their leaders about Special Olympics. That was what the trip was all about in the year 2000 with my in-laws, who had the International Special Olympics Games in 2007. And there they were talking about that they want to build this new airport in Shanghai and they had this vision and all those kind of things. And then you go back in 2007 for the International Special Olympics Games and the airport is there, you know? And the runways are there and with the best technology and the most futuristic kind of airport that you can think of.

And not only that, but there is a high-speed rail that goes 450 kilometers -- not the 350 I went, that's already old -- 450 kilometers in six minutes from the airport, which is, I think, 40 miles away -- six minutes into Shanghai. So you know, when you see that of course you get motivated, you get inspired by those kind of things. Then you come back and you push even harder when it comes to infrastructure.

So as I travel around -- when I was in Canada, in British Columbia and I see the extraordinary work that they are doing, how they are building bridges and airport buildings and schools and everything and transportation and onramps and offramps, all kinds of things and all through public-private partnerships. So yes, you come back and you immediately have a meeting again with your legislative leaders and you say, "Guys, I'm traveling around the world. They're doing such an outstanding job, they're beating us in this. We don't deserve that. We can do better than that. Let us be number one. Let's get together and make a decision." So, you know, you move things around.

So I think traveling around has a great impact, because I have learned -- you know, everything that I've ever done, it was always global. You know, the bodybuilding sport was global. I traveled around the world and trained and had seminars all over the world. In entertainment it was global. You know, we went around and made movies around the world and then promoted them in all the countries and you see all the things.

Now in politics you meet the political leaders around the world and you see -- your interests are different. You look at the infrastructure and all the things that they are doing, their political system and how they get things done, their efficiency level and all those things.

So I think it's exciting and it's motivating, so it has a terrific impact. And that's why I always encourage the legislators in Sacramento, because some of them come from those little towns. (Laughter) You know what I'm saying? They come from those little towns and they don't have that vision yet of an airport. (Applause) Or of a highway that maybe has 10 lanes or of putting a highway on top of a highway. They look at you and they say, "Well, we don't have that in my town. What are you talking about?" So they are kind of shocked when you say certain things.

So I like them to travel around. And I think I'm always against when the media beats up on them for traveling around because someone else is paying for their trips and all of those things. I mean, so what? If they would take the money from the taxpayers, then they will be complaining about they're using tax dollars to travel around the world and live in luxury and all this. So I think it's great when they go to Russia and they go to China and they go to Africa, they go to the Middle East and they go to Canada and they go to all different places around the world to get education and to learn what those places do.

Because we don't have to redesign the wheel all the time; we can go and copy other people. There are so many wonderful ideas and so many bright people out there and think tanks that come up with great ways of moving things forward. I think we should copy a lot of this stuff, you know?

So I love traveling and I love learning from the world, because I always said that the world is my classroom. This is where I get the best education, by traveling around the world.

MICHAEL MILKEN:

I think we all agree with that. (Applause) And today they've come from all around the world to your classroom today to listen.

One of the things about California that has made it strong is its educational system, particularly higher education. The Berkeley-Stanford complex, UCLA, SC, Caltech and others and the whole University of California system has empowered ideas and research that's changed the world. How does the educational system fit in with our needs and infrastructure and how do you see that priority?

GOVERNOR SCHWARZENEGGER:

Well, as you know, I think that we are lucky that we have the best education system in the world and that we have those great universities. And I think that it is absolutely essential, because they produce the brainpower and the future leaders. This is why we have to do everything that we can to support them.

And I think this is why it is also important that we change also our visa system. Because what we are doing is, we are bringing -- you know, we have all this talent coming from all over the world that study here in our state and in our country. But then, the day after they are finished, they have to leave the country, rather than staying here and using now their brainpower. This is a big frustration, as you know, that Silicon Valley has, that we have all these great students that get their education here in our great system and then we chase them out and we chase them back home again. (Applause) And this is why I'm always campaigning to change the visa system.

MICHAEL MILKEN:

We've estimated at the Milken Institute that as much as $500 billion dollars a year in human capital is brought into the United States by our university system. Do you believe that there is a way to communicate this? It seems so logical. The world's best and brightest come here. How do we keep them? How do you communicate that in this environment to the American people so that they would support it?

GOVERNOR SCHWARZENEGGER:

I think that the American people have nothing against for those students to stay. I think that we changed the system after 9/11 because we tightened everything and things changed, which of course it had to under the circumstances. But now let us go and relax when it comes to students. We can go and be tight on certain things and make sure that -- and Secretary Chertoff is doing a great job to keep our country secure and the Bush administration is doing a good job with that.

But the fact of the matter is, when it comes to students, let's keep them here. Let's use their brainpower, which is so important, especially in the high tech and all this biotech and all those other areas that we need, engineers that we need. So I think it is just so counterproductive. We do sometimes things that are so counterproductive, including, of course, the whole immigration issue in the first place. I mean that we cannot go and reform our education [sic] system so that people don't have to come in here illegally and everyone -- you know the federal government turns their back and lets all this happen.

Come up with a legal system where we say we're going to raise the cap, that if someone in California needs workers and they can't find the workforce in California, you should be able -- or in America, that you should be able to go outside of the United States and get that workforce, if it is from Mexico or from Southern America or if it is from Europe or from China, from wherever it is. We've got to go and do in a legal way so that we can check the background of each one of those individuals that come into our country and do it the legal way so they can have a driver's license and all of those things.

So I think that what we have to do is continuously push the federal government to be responsible to the people of the United States and to reform our immigration system once and for all. (Applause)

MICHAEL MILKEN:

I think that would be a great addition. Now, Governor, I notice that you commented that I was auditioning for another assignment -- you know, a fallback. All of us like to have a fallback assignment. But I noticed our secret cameras caught you test driving during the last year this car you told us about. It's going to be available soon and this is a complete electric car. Are we all going to have a chance to drive this car that you test drove?

GOVERNOR SCHWARZENEGGER:

Well, anyone can test drive it, I'm sure, because I think Tesla Motors has just sent out invitations that they're going to open up their shop here in Los Angeles and I think the cars then will come out. I will get, like I told you, one of the first ones and I'm looking forward to it.

MICHAEL MILKEN:

Now, in Abu Dhabi they auctioned off license plates a couple months ago and ABUDHABI1 went for $14 million in the auction. Are you thinking of using license plates here with this new car? Are you going to get CALIFORNIA1 when they give you that car?

GOVERNOR SCHWARZENEGGER:

I haven't thought that far in advance of what my license plate is going to look like, because I'm much more excited about the fact that I'm going to drive, I'm going to have this vehicle that will drive 100 percent electric and that it goes from 0 to 60 in four seconds and it drives 140 miles an hour. And I can drive 250 miles without charging it up and then the recharging only takes three and a half hours. So this is great. And there are other electric vehicles that are being built now here and there is all kinds of great work that is being done because we put a cap on our greenhouse gases.

I think that technology, as you know, will save us all. This is the important thing. That's why he have to push technology all the time, because I think that is going to be the answer in the end. And the sad story is that Detroit is falling behind because they're being protected, which of course in the end is going to backfire and those other car manufacturers from Europe and from Japan and China and South Korea, they will come over here with their new technology and they will be ahead of Detroit. And that's my fear. That's why I think it is very important that we put a cap on nationwide on our greenhouse gases and make Detroit respond to that and build new engines and new technology. (Applause)

MICHAEL MILKEN:

Well, one of the great advantages we have in California is not only leadership but your demonstration of that leadership. And whether it's an electric car -- some of us might have been comfortable with an electric car that only went 0 to 60 in maybe eight seconds and peaked out at 90 or 100, but it's a great example for us.

We also have the largest amount of venture capital and the largest amount of capital that's going into alternative energy, new technology, etc. In closing today, how do you balance the need for new infrastructure with the need for the environment and other things? So you've set us on two paths; saving the planet, a green world and at the same time the need for new infrastructure so we can grow our economy successfully. Are these two totally in line in your mind?

GOVERNOR SCHWARZENEGGER:

Yes. I think that, as I've always said, that you can have a growing economy and also protect the environment at the same time. And that's why I just said earlier that technology is, in the end, going to save all of this and it's very important that we inspire everyone to always come up with new ideas.

And I think that California has been very innovative and that's why I think so much venture capital has come into California when it comes to green clean technology. It's a booming industry. As you know, the Wall Street Journal called this the New Gold Rush in California. And I think that we are seeing that and I think that it really has helped us a lot.

And you can build -- as a matter of fact, there are even ways where you can really help, because the bond money, for instance, that we are using to rebuild California, we are looking at, you know, making construction companies use the cleaner cement rather than the old-fashioned cement, because now we know that we can make cement and reduce the greenhouse gas emissions, because we know that producing cement creates a lot of greenhouse gases. So we can do the kind of things where construction companies use the new green technology and are further along and inspire then other construction companies to go in that direction.

So I think that if you really handle it in a sensitive way and don't overstep, try to jump over your own shadow, that's the important thing here. Because we can't dictate down to, for instance, a truck driver, that you have to have a clean engine when in fact there is not clean engine around for that truck. Or you can't go to someone that has an apparatus or some equipment that costs a million dollars and that's supposed to last for 30 years -- you can't go to that person and say, you know, you have to now get a new piece of equipment. That would be inconsiderate.

So you've got to think about all of those things and I think it's a very sensitive thing that you have to go through. And we are kind of the first state that does it. European countries have done it already successfully. So I think it's a great challenge, but I think it's a challenge that we can take on and that we will be able to handle. The most important thing is to always think economy is the number one and the most important thing. In order to make the economy a top performer you have to have great infrastructure. And at the same time let's clean the world and fight global warming. It all can go hand in hand.

...

MICHAEL MILKEN:

Well, Governor, if the measure of a great leader and a great government official is when he says something he does it, you are one of our greatest leaders. Thank you for joining us.

GOVERNOR SCHWARZENEGGER:

Thank you very much. Thank you. (Applause)