California — The Navarro Report
Governor Gavin Newsom’s office spent last week pushing back hard against what it called a “tired Fox News narrative” about California’s economy, pairing the messaging campaign with the announcement of $48.5 million in new Jobs First Regional Investment grants aimed at supporting 20,000 jobs across 18 projects statewide. Taken on its own, it reads like routine gubernatorial boosterism. Taken alongside everything else Newsom has done over the past year — the podcast with Charlie Kirk, the swing through early-primary South Carolina, the appearances at COP30 and the Center for American Progress — it reads like the opening argument of a presidential campaign that has not yet been formally declared but is, by nearly every outward sign, already underway.
Newsom cannot run for governor again; term limits close out his tenure in January 2027. That fact alone has reoriented much of what he does publicly. UC San Diego political science professor Thad Kousser has noted that California’s governorship has, for a generation, functioned as an automatic national platform — “every governor of California has been automatically considered a presidential contender,” he told the Daily Bruin — and Newsom appears to be leaning into that inheritance rather than resisting it. He has, at various points over the past 21 months, tried on several different versions of himself for a prospective 2028 run: a post-2024 pivot toward “Middle America and the South” after Kamala Harris’s loss, a podcast launched with a prominent conservative influencer as its first guest, and more recently a leftward turn calling for what he termed “universal basic capital” to redistribute AI profits to displaced workers. None of this fits neatly into a single ideological lane, which is itself a data point about a candidate still auditioning for the role rather than settled into it.
The economic messaging fits the same pattern. At a Center for American Progress presentation earlier this year, Newsom declared that California “dominates in every category” and is “America’s coming attraction,” leaning on the state’s status as the world’s fourth-largest economy and its concentration of Nobel laureates and productivity gains. What that framing omits, as CalMatters commentary has pointed out, is the messier underlying picture: recent tech-sector layoffs, a shrinking number of jobs in key industries, and a widening gap between the state’s wealthiest residents and everyone else. Those omissions are not accidental. A presidential candidate selling a record needs a clean story, and California’s story right now is not clean.
Start with gasoline, the most immediate pocketbook issue for millions of Californians. The state is losing nearly a fifth of its in-state refining capacity as Phillips 66’s Los Angeles-area refinery and Valero’s Benicia facility both shut down, citing regulatory costs and unsustainable margins in the California market. Academic modeling from USC and UC Davis has warned that prices could climb well above current levels once the closures fully take effect — a dynamic already visible in Los Angeles County, where the average gas price rose for a twelfth consecutive day this weekend to $5.742 a gallon. California built a first-in-the-nation law designed to police refiner profit margins during price spikes; regulators delayed its implementation for five years, a decision defenders say was necessary to avoid pushing refiners out of the state faster, but one that leaves the state with fewer tools just as supply tightens further.
Then there is the budget. California’s finances have been running semi-permanent, multibillion-dollar deficits, a structural problem CalMatters commentary traces partly to Newsom’s own 2022 declaration of a state surplus that did not hold up. Newsom has ruled out tax increases to close the gap — an unsurprising position for a Democrat who does not want to run for president as the candidate who raised taxes — but has offered what critics describe as budget gimmicks rather than structural fixes. Layer on top of that a housing shortage that looks largely unchanged since Newsom took office in 2019, chronic wildfire-driven insurance instability, persistent water supply uncertainty, and a bullet train project still without a clear path to completion, and the “dominates in every category” framing starts to look like a candidate’s highlight reel rather than a governor’s honest accounting.
Newsom’s critics, including Republican strategist Karl Rove, have argued this gap between rhetoric and record is precisely the vulnerability a general-election opponent would exploit. Rove wrote in the Wall Street Journal that California “no longer has the quality of life that was long a gigantic magnet for jobs and commerce,” arguing that neither Newsom nor fellow potential 2028 contender JB Pritzker can “credibly claim a solid record of economic achievement.” Even some Democrats have voiced similar unease: South Carolina Democrat Richard Harpootlian, reacting to Newsom’s recent swing through the early-primary state, said Newsom needs to explain his “many failures in California” before asking primary voters elsewhere to trust him with the national economy.
Newsom, for his part, has been careful to publicly deflect direct questions about 2028, telling reporters at COP30 in Belem that he is “more worried about 2026 and taking back the House” than about his own future ambitions. But the through-line connecting the South Carolina trip, the CAP presentation, the Trump-era messaging offensive, and now the pointed defense of California’s economy is difficult to read as anything other than a candidate building his case in real time.
The messaging shift itself is instructive. Newsom has told interviewers his party is “getting crushed on narrative” against Republicans and needs to go on offense rather than stay on defense — a framing that applies just as easily to his own record as to the national Democratic Party’s. Running ads in Texas and Florida, states with no direct relevance to California policy, only makes sense as an exercise in raising his national profile rather than serving his current constituents. That same logic explains why an economic development grant program and a pushback campaign against critical coverage were rolled out together: the audience for both is less Sacramento than it is Democratic primary voters watching from outside the state.
For California readers, the practical stakes are immediate: a governor whose final year in office is, by design or not, oriented toward a national audience is a governor whose incentive to solve stubborn in-state problems — gas prices, housing, the deficit — competes directly with his incentive to keep the state’s talking points clean for a campaign that has not yet officially begun.
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