‘The whole system has to be reimagined’ — Newsom calls for rethinking economy amid AI boom - POLITICO

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‘The whole system has to be reimagined’ — Newsom calls for rethinking economy amid AI boom<br>The California governor and likely presidential contender laid out a vision for adapting to rapid technological transformation

California Gov. Gavin Newsom speaks during The Center for American Progress IDEAS Conference in Washington, on May 19, 2026. | Jim Watson/AFP via Getty Images

By Jeremy B. White05/19/2026 02:24 PM EDT

Gavin Newsom argued for a fundamental overhaul of economic and tax policy on Tuesday as he tested a populist message with a crowd of Democratic political professionals ahead of a likely presidential run.<br>“You cannot save democracy unless we democratize the economy,” the Democratic California governor said at a Center for American Progress event in Washington. “The whole system has to be reimagined.”

In an address that served as both a call-to-action for the Democratic Party and a stump-speech rehearsal, Newsom warned the economy was failing most Americans and predicted accelerating technological transformations like artificial intelligence would only worsen the problem. He argued that voters will reward politicians who acknowledge that bleak state of affairs.

“There’s a reason Donald Trump’s in office. There’s a reason Bernie (Sanders) fills stadiums — they’re both right on the diagnosis,” Newsom said. “The pitchforks — yeah, they’re here.”<br>It was a striking prescription from a governor who is seen in Sacramento as a business-friendly moderate. Newsom has long championed Silicon Valley innovation, including by vetoing a series of high-profile bills to regulate artificial intelligence and limit autonomous vehicles — before signing a proposal for more scaled-back AI regulation — while leading a state with a yawning wealth gap and a high poverty rate. He pointed to a California wealth tax ballot proposal, which he opposes, as a product of popular resentment over the economy.<br>But he has also consistently urged the Democratic Party to take a more aggressive approach to President Donald Trump and Republicans, whom he described as “ruthless” — and on Tuesday, he argued Democrats needed to offer a “compelling vision” for reversing declining economic opportunity.<br>He name-checked progressive luminaries like Sanders and Rep. Alexandria Ocasio-Cortez as he acknowledged — after serving as one of former President Joe Biden’s most prominent surrogates — that Biden’s economic policies largely fell flat with an electorate that returned Trump to the White House. And he laid out a theory of victory that sought to avoid the “moderate versus progressive” dichotomy that will inevitably dominate the 2028 Democratic primary.<br>“My sense in this country was that our path back as Democrats … was through the center,” Newsom said. “I think there may be some truth to that, but I think increasingly I’d argue it’s through the fight. People want fighters.”<br>Newsom argued that Democrats needed to advance beyond “tinkering” and pursue ideas, like universal basic capital or wage replacement, to counteract job losses from artificial intelligence. He said rapid advancement in AI would “detonate” the prevailing order and argued technology-fueled economic precarity was already reordering politics.<br>“Now it’s the blue- collar worker that sounds a lot like 25-year-old white-collar workers I see in San Francisco wondering why they’re not getting a callback on a job interview — they’re sounding the same,” Newsom said. “That’s a new coalition.”

Filed Under: Gavin Newsom

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