Noah Smith
· Noahpinion
· February 20, 2026 at 10:49
· ⏱ 20 min read
| Read on Substack ↗
Summary
The article argues that Democrats should abandon the 2010s progressive economic program (deficit spending, care subsidies, billionaire taxes) and adopt a robust, uncertainty-proof policy centered on abundance (cheap housing/energy/food), a U.S. sovereign wealth fund to redistribute corporate profits from AI, and subsidies for human hiring and training. For markets, this implies potential regulatory and tax shifts that could affect sectors like utilities, housing, and corporate ownership structures, but no actionable trade ideas are presented.
•The 2010s progressive program failed because it assumed demand shortage (like 2009) but the post-pandemic problem was inflation, exacerbated by Biden's spending.
•Abundance (YIMBY for everything) is proposed to lower cost of living and reduce fear of job loss from AI, but must include 'human reservation' policies to prevent AI data centers from consuming resources like electricity and land.
•Labor's share of U.S. national income has been declining since 2000, and a sovereign wealth fund (modeled on Alaska Permanent Fund) would give the government ownership of corporate equity to redistribute AI-driven profits.
•A sovereign wealth fund funded by a temporary corporate tax increase is more politically robust than income taxes because Republicans are less likely to sell government shares (which would crash markets).
•Hiring subsidies (government pays companies to hire for at least two years) and retention incentives are proposed to incentivize companies to invest in human-AI complementarity instead of just replacing workers.
•The article criticizes the 2010s program's reliance on taxing billionaires, which never materialized, and notes that cash benefits (like expanded Child Tax Credit) lacked political support.
•Democrats' next economic offering should be 'robust to uncertainty' — working whether AI fully replaces humans or fizzles out — similar spirit to New Deal policies.