CNBC News Releases



WHEN: Wednesday, May 23rd

WHERE: CNBC's Disruptor 50 Roadshow event in Los Angeles

Following is the unofficial transcript of a CNBC interview with Los Angeles Mayor Eric Garcetti and CNBC's Tyler Mathisen and Julia Boorstin Wednesday, May 23rd, at CNBC's Disruptor 50 Roadshow event in Los Angeles.

All references must be sourced to CNBC's Disruptor 50 Roadshow.

JULIA BOORSTIN: Mayor Garcetti, thank you so much for being here.

ERIC GARCETTI: Great to be here.

JULIA BOORSTIN: As an Angelino, it's so exciting to see what you're doing in this city, and also to report on what you're doing from a tech perspective. And I was at your tech job fair a little over a year ago. I understand the one this year was much bigger. And I think it's really important just to understand why are you placing such an emphasis on technology. It really seems to be at the center of everything you're doing.

ERIC GARCETTI: Well, technology does three things for us in L.A. One, it moves the democracy closer to the people. It actually empowers folks to know what's going on in their city, their neighborhood, and gives them the tools to advocate or to help solve problems. Two, it's a great economic driver. There's no question. Los Angeles has known that for a long time. We have always had technology at the core of what we've done. The first email that was ever sent was sent from L.A. to the Bay Area. It was a place where we put, you know, rovers on Mars. We've had obviously technology from moving pictures to-- these days, you know-- the disruption that's being done in logistics and in bio-tech and green tech. But the third reason that we've invested in tech is really about quality of life for folks that are. I think there's-- this is a moment of anxiety and excitement. I call it anxitement. Where people feel like, "Oh, my gosh, it's incredible, these breakthroughs in health care. But I can't afford my premiums." Or, "My God, we're putting people on-- Mars one day soon. But I'm stuck in traffic." And trying to figure out a way that we can bridge and use technology not as just a wild thing unto itself, but really making the quality of life for the average person have a little bit more-- a little less anxiety and a little bit more excitement.

JULIA BOORSTIN: It seems like there are two categories of the tech companies that you're trying to work with here. One is the safe axis. And it seems like having a safe axis, you have a halo effect. And on the other hand, you also want to foster entrepreneurship and get the start-ups off the ground. How do you approach those two different categories?

ERIC GARCETTI: Well, you put them together. I love mixing people together. That tech fair that you're talking about, it's now the largest tech job fair in the western United States, this year 15,000 people. We hope to get a couple though job applicants, maybe a couple dozen companies. We had over 250 companies and over 15,000 people sign up. And it's a much more diverse tech environment. And I mean that in two ways. I think the demographics of the people that are doing tech here are more diverse than the industry in general. But the type of technology is also more diverse. So you can be an engineer and start in digital technology. But unlike other parts of the country, you're not going to have to be locked into that. You can go to video game technology, entertainment tech, bio-technology, green technology, food technology. It really-- you can have a career in which you have many different stops, which I think is attractive to millennials. And it can be that big legacy company with, you know, SpaceX is still relatively new. But a legacy company, or a brand new start-up, and you can ping pong back and forth. And I love that, you know, companies like-- SpaceX will change the entire paradigm. And then an engineer from SpaceX will be part of a new company, in this case, another one of Elon's company, the Boring Company. Never having done construction technology before, and changed the entire tunnel boring machine technology to possibly get things we need that will help us really traffic, like, a tunnel system to move us around and two, three, maybe ten times faster than it's ever been done.

JULIA BOORSTIN: So I've seen the videos of the Boring Company. It looks really cool. I recommend that everyone check it out, if they haven't already. But also there's this question of how you as a mayor try to encourage innovation without also-- you know, with the support of your constituents, without stifling creativity. And I'm worried if you tell, "It's my house," it's going to mess with the fault lines. And there's going to be some terrible damage.

ERIC GARCETTI: Even if it is a boring company.

JULIA BOORSTIN: Even if it is a boring company.

ERIC GARCETTI: This is a totally boring conversation.


ERIC GARCETTI: But beyond that. I think that we want Los Angeles to be a platform, like a place when people come and say, "I have an idea, a product, a new technology." I want to be that government that gets out of the way where we need to get out of the way and lend a hand when you need us to be there. And usually government's the opposite. Exactly when you don't want us to be there, we're in your way. And when you need us we're nowhere to be found. And so, you know, we're working through-- for instance, like, with the Boring Company, let's figure out a way for you to test this technology. Who knows whether it'll hit or not? But isn't it worth trying? And don't we as Americans want to see our technologies work and then be applied right in our back yard instead of China or Dubai or other places that seem to be more risk taking? How that-- that great technology and those great ideas that we develop come to scale in other places. And so I think L.A.'s developing that reputation with transportation technology for sure, logistics. I mean, we are a place that will work with you. And we're a city government that controls the biggest port in the country, second bigger airport, the largest municipal utility, this incredible metropolis of 12 million people, the third largest economy in the world of any city. Like, test it here.

TYLER MATHISEN: You know, it seems to me just from my own observation that the best mayors do two things very well. They solve problems, housing, homelessness. They work on in seemingly intractable problems. And they one way or another raise the quality of life of the residents of the city. And that those are the two ultimate goals here. How, if you accept that as a notion, how are you using technology to solve those very basic fundamental issues that come to the mayor's office?

ERIC GARCETTI: Well, you know, my slogan was Back to Basics. Because I think it's nice to work on all the fun things going after the Olympics, building out a new airport, the future, if you will. But that means nothing if you aren't taking care of the present, fixing the streets, providing basic city services. I'll give you one thing. We worked with SRE which is a very disruptive company in Redlands, kind of based company that is connecting players whether it's the public or different government entities together with spatially imagined information. And we looked at just the cleanliness of our streets. And we took in a very old analogue way of actually having sanitation department in our city drive every block of every street of every neighborhood and rank how clean it was based on visual evidence that people can actually access, the first city in the country to do this. And one is clean, two needs some work, and three is pretty darn dirty. And we made a commitment to get rid of all the threes in the first 18 months. So it's a very old problem. Because people want clean streets. But by having that and sharing that with the public, we became much more accountable. Because somebody could click on their block and say, "Why, Mayor Garcetti, is my block a three? When it's a one down over there." And it helped us move the resources to where we needed to be. So I think, you know, giving people the technological tools to my original point really democratizes government and empowers people not to be passive. With homelessness and housing, the same thing. One of the least disruptive sectors is construction. At a moment when we-- when we have everything else kind of being disrupted, construction still is slow, costs a lot. Sometimes that's our own fault. Environmental regulations-- that aren't about the environment, but about, you know, two and a half or three years of pre-preparation for building. But when we have a homeless crisis here, we're working with technologists right now to say, "How do we build things faster, quicker, and that have maybe even a better quality of life for the folks that will come off the streets?" Why can't we use shipping containers because we've got a surplus of them? Why can't we have pre-fabrication? Why can't we get sometimes built in a matter of weeks instead of a matter of years? And so we're testing those technologies. Because if we can make them work, that means the $1.2 billion that voters passed here to house all the homeless individuals here might get us two or three times as many houses.

TYLER MATHISEN: Is the homeless issue – I don't know much about it in Los Angeles – a question of supply of housing—

ERIC GARCETTI: Absolutely.

TYLER MATHISEN: Or lack of economic means for people to buy housing? Is it an affordability problem? Or is it both?

ERIC GARCETTI: Both. Because the flip side is one in the same. So we've raised the minimum wage here. We're going after more middle class jobs. But it's, like, the rents are going higher and higher even as incomes are coming up. We have folks who have struggled with trauma and addiction and mental health in past years. But at least they could afford an apartment that was 1,100, 1,200 bucks. That doesn't exist anymore. So we need to build a whole bunch of supply. We're building 15 new rail lines and rapid transit lines, also thanks to the voters, the biggest initiative in this country's history at one time. $120 billion program. And that's a perfect place to put this housing because it's close to transportation. And so we have the opportunity I think to bring those rents down, to bring supply up, and hopefully to raise income at the same time. But Los Angeles right now has one of the biggest gaps in the country between-what housing costs and what your average wages are. And so if you can crunch that down, then you can get people indoors and beginning to address the healing that they need, the human services to not be back on the street ever again.

JULIA BOORSTIN: It's such a massive problem. And it's one I know people who live here in Los Angeles think about every day. Another question is for this idea of the skills gap. Are there – the companies here who either want to move here or are already based here, can they hire the people they need? And then can the people here who need jobs find jobs?

ERIC GARCETTI: Absolutely. I mean, we have a record number of jobs. It was interest after the riots or the uprising in 1992, we didn't go to that peak of jobs for the next 20 something years. We never recovered in L.A. until about three years ago. Some of the work I think we're collectively doing, we finally have a new peak in jobs-- both for residents in L.A. and people who come to L.A. to work. So those are new peaks a lot of work here almost record unemployment. On the flip side for companies looking to come here, especially in the tech space, we absolutely have the most plentiful supply of engineers in the country. 11,000 master's levels engineers that graduate out of 130 something universities and colleges in this area. For me what keeps me up is not whether or not tech companies will have those workers, but closing the gap in other places. If we're going to build 40 years of rapid transit lines, we can get those workers from other states. But we should be growing them up here so they don't need a college degree to have a middle class job as a laborer, electrician, a construction worker. And looking for those key sectors because Los Angeles is such a diverse economy. Hollywood, for instance, is only a top ten industry in the last decade. You know, we have trade jobs. We have things at the port where 40% of the goods come into America. We wane make sure those high-paying jobs stay there for the future. Electric fine or trucks and our logistic suite to reduce pollution. Those are the gaps I think that I want to fill in terms of skills to be able to put people in the community college and find those levels. And one last thing, we are the biggest city in the country to make community college free. The state of California followed. But this was the first year we had that. And it's the first year public school grads full-time at the community college went up 40% in a single year. And that stuff works. I have a foster son who's becoming a chef at a school just down the street from here. He was never top of the class when he graduated from high school luckily, which many of his peers didn't. But he found his love and got number one on his finals – his first final because he found the thing that he connections with. So a skills gap, but it's also a love gap. You have to figure out what people love to do and match them more effectively with that quickly. Get them in some sort of education or training program that can propel them on their own in that career.

JULIA BOORSTIN: You mentioned the diversity of Los Angeles. And one of the reasons is that it's such a beacon for immigrants. And there's so much immigration here. And you have made a public stance to different Los Angeles's immigrants in opposition to the federal government.

ERIC GARCETTI: Yeah, I don't get why anybody wouldn't. It's our country's history. L.A. is a place where everyone belongs. And that is a competitive strength as well as the right moral thing to do. 61% of our businesses in L.A. on our main streets are started by immigrants. Why would I want to be anti-business? Family unity is pretty important to me. Why would I want to break them apart? And in terms of public safety, what we're seeing coming out of Washington is actually dangerous for our streets. Because when there's trust for everybody here, our police officers are safer, our communities are safer, and everybody's engaged in public safety. So I'm never going to stop listening to police over politicians. I'm never going to stop, you know, trying to invest in our main street businesses and keeping our families together. That seems pretty elementary.

TYLER MATHISEN: Is the federal government a friend or a foe?

ERIC GARCETTI: Depends who it is. You know, I never look at—

TYLER MATHISEN: But if you said who.

ERIC GARCETTI: Yeah, there's no primitive friends, no primitive enemies. We've actually worked even with the administration on some important things. But we're having to play stupid defense much more often than we should. It's the part, you know, mayors have to solve real problems. Washington politicians apparently don't. They can invent problems. They can try to rile up a base around them. Problems that literally don't exist out there. And I would say I think it's not unique to Los Angeles. This isn't a West Coast or a coastal thing. I think there are two Americas. But it's not the heartland versus the coast or red versus blue or all these things. It's Washington versus the rest of us, a Washington that's fundamentally out of touch with the struggles that we have and the aspirations that we have, that seeks to divide and subtract rather than to kind of add and multiply. And that-- that is a distraction. But I try to spend not too much of my day there. I see too many friends spend most of their day. And you should watch cable television. But who spend most of their day yelling at cable TV instead of getting to work and realizing the power that they have. One quick example is when the president withdrew from the Paris Climate Accords. We could have cried in the corner about it. I chair a group called Climate Mayors that leads on climate change in cities around the country. I just picked up the phone and today we have over 490 cities in 47 states representing 80 million Americans who have said, "If he's out, we're in." So we have a lot of power to exercise that we don't need Washington to give us permission to do.

JULIA BOORSTIN: So what are your aspirations? Are you going to run for president?

ERIC GARCETTI: I have no idea. I'm looking at it because I'm as frustrated I think any patriot should be looking at his or her role right now and trying to make this country decent again and strong again. And I see a lot of indecency and a lot of weak decisions, a lot of weak leadership. But I may be able to do that best as a mayor with a group of mayors. But I certainly think that we are a country a lot better than what we're showing right now.

TYLER MATHISEN: When might you decide?

ERIC GARCETTI: Sometime next year. Like there's plenty of time. I think we should all be focused on 2018 and first getting a Congress in place. There's no savior coming in 2020. If we still have a Congress that is looking at things that are fundamentally out of touch with I think where the American people are. When they're thinking of gun violence, the environment, to tax breaks that have gone more towards, you know, stop buy-backs than middle class assistance.

TYLER MATHISEN: Let's talk about the Democratic Party and its leadership. It is older. It is largely white. It is not as diverse as one might like it to be. Talk to me about that. It feels to me like the leadership of the Democratic Party, there is a vacuum there.

ERIC GARCETTI: I don't know if there's a vacuum in leadership. We've got some extremely capable strategists and people who have worked incredibly hard who I think might be able to win the House back. But long term, I think Democrats need to be a lot less obsessed with ourselves and more obsessed with American people. Everybody's always like what's the – Eric, what's the agenda for the Democratic Party?

TYLER MATHISEN: What is the message?

ERIC GARCETTI: Well, I think—

TYLER MATHISEN: What should it be?

ERIC GARCETTI: It has to be that we're not obsessed with rethinking a Democratic agenda. But we're focused on American people. We can't have slogans that are inward looking. They have to – people, you know, I never won an election by talking. I won an election by listening. And I think we've gotten away from that. We think that-- that we're the smarty-pants party too often, with, you know, a 14 point plank in a platform and we're going to win people over because we have the best ideas. I do think we have better ideas. I do think we are truly for the underdog. But first and foremost, you have to hear people, listen to them, and speak plain English. And we've gotten away from that. This presidential election was about the gut, not the head. It was, you know, people who said, "Okay, yeah, I know. I don't like those things about him. But at least he's going to do something." What I love about being a mayor and what I try to bring to the party is where we do still have power, we raised the minimum wage at the same time we lowered our city's business tax. We made community college free here. The largest infrastructure investment in America. We do support immigrants. We believe everybody belongs in this country. Those things that have a more universal appeal to everyone and I can go straight down the checklist of the rights that I'm for and the environmental work that I've done and compete with the most, you know, progressive folks. But most Americans don't wake up saying, "I'm a Democratic. What do I want to do today? Or I'm a Republican. What am I going to do today?" They say, "I'm Eric. And I'm struggling to pay this bill. I wonder if my kids will be able to go to college. Is anybody speaking to me?" And so that mythical coal miner in, you know, West Virginia, I got solutions for him or her. You know, here in L.A. we've created 30,000 green energy jobs in the last five – four and a half years, since I've been mayor. That's the equivalent of 60% of all the coal jobs left in America. And we're 1% of the population. So let's get to work and let's do those things instead of, you know, pretending we're going to bring back an American that has moved on and a world that has moved on. Let's claim the future for Americans instead being the past.

JULIA BOORSTIN: Well, I hope you will keep us posted as you evaluate your presidential—

ERIC GARCETTI: That's an exclusive announcement today. I think people should support us by investing in Los Angeles.

JULIA BOORSTIN: Great note to end on.

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