Can Democrats Still Govern? — with Gavin Newsom

May 28, 2026 · Summarized May 28, 2026

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Key takeaways

California’s economic growth is deep-rooted in its commitment to innovation, diversity, and research, which must be preserved through strategic investments and policies.
Addressing California’s housing crisis requires comprehensive reforms—streamlining permits, enforcement of laws, and proactive development to increase supply and reduce homelessness.
Urban homelessness is a complex issue that links mental health, drug addiction, and law enforcement, requiring visible results and strategic leadership to restore trust.
California is reestablishing its leadership in the creative economy by boosting film tax credits and improving competitiveness to retain jobs and attract productions.
Tax reform ideas such as billionaire taxes, stepping up base, and addressing capital gains loopholes are crucial to reduce inequality and ensure the wealthy contribute their fair share.
As AI advances rapidly, California is taking the lead in regulation and safety standards to prevent misuse, emphasizing state-driven oversight due to federal inaction.
Foreign policy involves protecting national and allied interests, supporting Israel’s right to defend itself, and calibrating strategies around Iran, emphasizing the importance of strategic clarity.
Strong, empathetic leadership extends beyond policy—prioritizing community, service, and family, and acknowledging personal shortcomings as part of authentic governance.

Summary

California’s Leadership and Economic Success

Governor Gavin Newsom reflects on his tenure and California's economic advancements, including moving from the fifth to the fourth largest economy in the world and its leadership in innovation, clean energy, AI, and venture capital. He emphasizes that California’s success rests on a foundation of diverse talent, robust research universities like UCLA and Stanford, and a culture that encourages risk and innovation. Despite political criticisms, he defends California’s high-income earners and notes the state’s significant economic growth—40% under his leadership—and its role as a hub for Fortune 500 companies and startups. The discussion highlights the importance of maintaining a talented, diverse workforce and investment in research and development to sustain leadership.

Housing Crisis and Homelessness in California

The podcast discusses California’s ongoing housing crisis, driven largely by supply and demand imbalances. Newsom attributes the proliferation of homelessness to decades of underbuilding and local NIMBYism. He details recent efforts to reform land use and permitting laws, enforce housing laws, and support development with subsidies and tax credits at the state level. These policies have increased housing construction by 59% since his tenure began and reduced the time for building approvals. The focus is on proactive strategies—using legal enforcement, support programs, and reform—to address the homelessness crisis comprehensively, including mental health reform and conservatorship laws.

Urban Challenges: Los Angeles and the Broader Political Landscape

The conversation explores the political and social issues in L.A., especially around homelessness, law enforcement, and civic dissatisfaction. Newsom discusses the anger in the city, the rise of political change, and the importance of visible results. He emphasizes that effective leadership requires addressing the root causes of homelessness, mental health issues, and drug problems, and criticizes the perceived permissiveness during COVID. The conversation also extends to broader electoral implications, with Newsom commenting on the challenges Democrats face in managing cities and the significance of visible progress to rebuild trust.

California’s Creative Economy and Tax Competitiveness

The discussion covers California’s historically dominant creative and tech industries, noting the impact of international competition, tax incentives, and subsidies. Newsom highlights recent investments in film tax credits that have begun reversing the trend of Hollywood jobs leaving the state. He underscores the need to stay competitive through supportive policies like tax credits, streamlining permitting, and fostering a conducive environment for talent and businesses to thrive. The importance of federal and state collaboration in maintaining California’s innovation edge is also emphasized.

Tax Policy and Wealth Inequality

The episode tackles the complex issue of taxation, especially on high earners and the ultra-wealthy. Newsom defends California’s progressive tax system, arguing that high-income earners pay a significant share of taxes and that the wealthy often pay on capital gains rather than income. He advocates for reforms like a billionaire tax, addressing capital gains loopholes, and implementing measures like an alternative minimum tax on assets. He also discusses the broader economic implications of wealth concentration, the risk of inequality fueling social unrest, and the need for a more equitable tax system that supports social cohesion and democracy.

Technology and AI Regulation

Newsom describes proactive measures taken in California to regulate AI, including transparency and safety requirements for large language models. He emphasizes California’s leadership role in setting standards, contrasting it with the lack of federal regulation. The conversation highlights the opportunities and risks of AI, the importance of government oversight, and the need for regulations to ensure trust and safety in rapidly advancing technologies. Newsom stresses that states must lead in this space due to federal inaction, and discusses strategies like employment insurance, portable benefits, and wealth redistribution as part of AI policy planning.

Foreign Policy and Security: Iran and Israel

The podcast covers Newsom’s views on Iran’s nuclear ambitions, criticizing the Biden administration’s handling of Iran and advocating for a firm red line against nuclear proliferation. He discusses the U.S.-Israel relationship, condemning past permissiveness towards Benjamin Netanyahu’s government, and underscores the importance of maintaining Israel’s right to self-defense while calling for reforms. Newsom condemns the conduct of the recent war in Gaza, emphasizing the need for accountability and strategic recalibration in foreign policy. His stance reflects strong support for Israel’s security and concerns about the broader implications of Middle Eastern conflicts.

Personal Reflections: Leadership, Service, and Family

In a more personal section, Newsom shares reflections on his legacy, emphasizing service, community, and mentorship. He discusses his dedication to public service, optimism about the power of collective effort, and the importance of kindness and empathy. He admits shortcomings in balancing his responsibilities with family life and urges other leaders to prioritize being present for loved ones. Newsom also candidly shares the emotional impact of his mother’s passing and the lessons learned about vulnerability, regret, and the importance of expressing love and gratitude in family relationships.

Show notes

Governor Gavin Newsom joins Scott to discuss why Americans are losing faith in institutions — and whether Democrats still know how to govern.

They discuss California’s housing crisis, homelessness in Los Angeles and San Francisco, AI’s threat to white-collar jobs, wealth taxes, healthcare reform, and why Newsom believes Democrats are often perceived as “slow, weak, and ineffective.”

They also unpack Israel and Iran, the future of capitalism, masculinity, parenting, and the growing divide between the rich and everyone else.

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