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- [00:00]
Podcast Host (Ad Reader)
AI agents are getting pretty impressive.
- [00:02]
Sean Illing
You might not even realize you're listening.
- [00:04]
Podcast Host (Ad Reader)
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- [00:16]
Sean Illing
Avoiding your unfinished home projects because you're.
- [00:18]
Oren Cass
Not sure where to start.
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Sean Illing
Thumbtack knows homes, so you don't have to. Don't know the difference between matte, paint, finish and satin or what that clunking.
- [00:27]
Oren Cass
Sound from your dryer is.
- [00:29]
Sean Illing
With Thumbtack, you don't have to be a home pro. You just have to hire one. You can hire top rated pros, see price estimates and read reviews all on the app. Download today. For decades, the American right has stayed on brand. The economy, low taxes, free markets, deregulation, those have been the buzzwords for more than half a century. But lately, that conservative doctrine has started to be challenged. There's a new wave of thinkers who argue that Republicans have been wrong on the economy. And those challenges are coming from the right. This new economic thinking, it's not libertarian, it's obviously not progressive, but it is a break from what we've come to expect from the American right. The question is, is it for real? I'm Sean Elling, and this is the gray area. Today's guest is Oren Kass. He's the founder of the think tank American Compass and the editor of a new book called the New Conservative. And he's one of the most influential advocates of this right wing economic popul. Cass thinks the Republican Party has been too captive to corporate interest and market fundamentalism. And he believes that conservatism needs a major reset, one that embraces tariffs and American manufacturing that empowers workers. It's a conservatism that wants to re ask a very simple what is the economy for? Who is it for, really? It's. It's an ambitious project. Whether the Republican Party is serious about it is a separate question, but Cass certainly is. And his economic approach has the attention of some very prominent Republicans like J.D. vance and Marco Rubio. So I invited him on the show to hear what he had to say. Oren Cass, welcome to the show.
- [02:49]
Oren Cass
Oh, thank you for having me.
- [02:52]
Sean Illing
I want to start with a quote from something you actually wrote in 2018, because I think it does sum up what's motivating your whole political project. You write, our political economy has relied upon the insidious metaphor of the economic piece, which measures success by the amount of GDP available to every American for consumption. But the things America thought she wanted have not made her happy. Let's start there. What does that mean? What did we think we wanted? And why hasn't it made us happy?
- [03:31]
Oren Cass
Well, you're very perceptive to start there. It's funny, we were just putting together this new book called the New Conservatives that's sort of an anthology of everything we've been doing at American Compass over the last five years. And I actually went back and grabbed that essay and made it a prologue to the book because exactly as you said, it is sort of a starting point, certainly for the way I think about a lot of this. And I think in my mind, what we saw go wrong in our economics and our politics is that we did come to think of sort of consumption as the end unto itself. And to be clear, I love consumption as much as the next guy, I think. I'm not saying we should go back and live in log cabins, but I think we assumed that as long as we were increasing consumption, as long as material living standards were rising, everybody would be happy and we could declare success. And it's important to say in economics from a formal perspective, that is in fact how our economic models operate. Economists will tell you their assumption is that the goal of the economic system is, is to maximize consumption. And so that's where that economic pie metaphor comes from. And it's something that was so widely embraced across the political spectrum, across sort of the intellectual spectrum, I would say, was this idea that as long as you're growing the economy, you're growing gdp, you don't really have to worry too much about what's in the pie or where it's coming from. You can always sort of then chop it up and make sure everybody has lots of pie. And, and I think it's important to say that, and this is the point that we sort of got what we thought we wanted. It's important to say that that worked, that for all of the problems we have in this country, if you're only looking at material living standards, if you're asking how much stuff people have, how big their houses are, whether they're air conditioned, even how much health care they consume, really at every socioeconomic level, consumption is up. We did that. And yet I think it's also very obvious that that did not achieve what we were trying to achieve, that that did not necessarily correspond to human flourishing, that that did not correspond to a strengthening economy over time, that it certainly did not correspond to strengthening families and communities. And ultimately it didn't correspond to a strong and healthy political system or democracy. And so there's then obviously A lot of. To talk about in terms of, okay, well, why isn't that right? Why did it go wrong? What do you do about it? But as a starting point, I think it's important to recognize how much sort of debate or confusion there is still about that basic point. There are still a lot of people right now this month looking around and writing about, hey, wait a minute, people have more stuff than ever. This has been successful. It makes no sense that anybody's upset.
- [06:29]
Sean Illing
So just to be as clear as possible, when you say we didn't achieve what we wanted to achieve, you mean it didn't make us happy? It didn't. It didn't allow us to live flourishing, fulfilling lives.
- [06:41]
Oren Cass
That's right. And I think, you know, I don't love the term happy. I think a lot of happiness studies kind of get very, very sloppy very quickly. I do think, though, that there is a way in which we can define the ends that we're trying to achieve. And I think an interesting sort of element of disagreement within our politics that's quite natural and healthy. It is contested what are the ends that we're trying to achieve? But to the extent that we can agree on certain basic things, I think we probably want to see a situation where people are building lives that allow them to support themselves and their families, that provide a stable environment for raising kids who are then able to go on and do those same things. Things that we see their health improving, that we see life expectancy rising, that ultimately in the macro economy, we see investment and innovation and growth and progress. All of those things are very different from just how big is your tv? And I think there was an assumption that it would just all be correlated. And you still see this point being made that, well, rising GDP is correlated with all these other things. So just focus on rising gdp. And it's certainly true you'd rather be a rich country than a poor country, but there's an awful lot of texture and variation therein. And I think if you look at the trajectory that the United States is on and has been for the last 20 or 25 years, what you see is sort of a real decline in a lot of these capacities. Whether you're looking in economic terms at. At investment and growth and innovation and productivity, or you're looking in more social terms at families and communities and life expectancy. And pretty much however you measure it, that rising consumption did not ultimately correspond with the actual ends that I think we, for the most part, want to focus on.
- [08:45]
Sean Illing
That has definitely been the trajectory to use your Word. And the strange thing for someone like me is that American conservatism, certainly in my lifetime, has largely existed to reinforce the ideology you're rejecting here. And I'm happy to see that pivot. But why do you think the political right has been blind for so long to the things you're correctly, in my opinion, fighting for?
- [09:15]
Oren Cass
Now, I think there's a very interesting pivot point that you see essentially around the time of the Reagan revolution. And if you think about the coalition that Reagan assembled, it had these different elements. It had the social conservatives, who I would say are most closely aligned to a fundamentally conservative outlook on a lot of these questions. But then it brought to that also the very libertarian free market folks on the economic side, and then also the kind of quite aggressive interventionist foreign policy hawks. And what all these folks had in common was they really hated communism and really wanted to win the Cold War and saw that as sort of the existential crisis and tests. But what happened partly as a result is that I think within that coalition, a very libertarian free market mindset was then imposed on the economic policy of the right of center, even where that was very much in tension with a lot of other conservative values. And you saw people writing about that at the time from both sides. From one side, Friedrich Hayek, who is one of the ultimate carriers of this free market ideology, he has a very famous essay that's literally titled why I Am Not a Conservative, emphasizing that what he calls faith in markets to solve problems and self regulate was very much at odds with how conservatives looked at the world. And from the flip side, you had a lot of conservatives, folks like Roger Scruton and Yuval Levin, more recently, pointing out the ways that certainly conservatives like markets, they prefer markets as a way of ordering the economy to other options, but recognizing that markets are very much in tension with other values like family and community. And in some cases, markets even actively can undermine or erode the strength of those other institutions. Markets are also dependent on institutions. If you want markets to work well, you actually need constraints. You need institutional supports. And so that tension was always present. I think the coalition made a lot of sense in the context of winning the Cold War. It made a lot of sense in a context where markets in the middle to late 20th century really did seem to be delivering on a lot of the things that conservatives really cared about. But then I think that it sort of reached its expiration date and just kind of lived on by inertia into the 2000s, into this era of kind of radical embrace of Free trade even with communist China, and cutting taxes even in the face of big deficits.
- [12:03]
Sean Illing
In what sense is this vision of yours conservative? Because I can imagine a skeptical leftist listening to this or reading your work and thinking this is just a rebranded democratic socialism. Like, why is that wrong? What is that missing?
- [12:23]
Oren Cass
Well, I think there's, there's a real disconnect both on the, on the ends and on the means.
- [12:29]
Sean Illing
Tell me about that.
- [12:30]
Oren Cass
I think there's a very healthy contestation over what are the appropriate ends that we're actually building toward. And I think what you're seeing conservatives now coming back to finally actually articulating a lot more effectively is a set of actual value judgments about what we do think the good life consists of, what we do think is necessary for human flourishing in a way that libertarians are entirely unwilling to. Right. For libertarians, it's sort of liberty and the market are the end unto itself and whatever comes out of that. Nothing else to say about it. I think if you look at certainly my own view and what you see conservatives focusing on, I think there is a set of value judgments and preferences for in many respects quite traditional formations at the family level, at the community level, saying that it is not merely a value neutral choice. Would you rather get married and have kids or spend more money on vacations in Greece? That it is actually appropriate and necessary for the good society to say, no, one of these things is better than the other and more important and should be valued more highly? I think at the national level you're also seeing it in what is a much more robust nationalism on the right of center, where I think conservatives recognize the importance of the nation and sort of solidarity within the nation to functioning markets, to a functioning society in a way that at least the modern left tends to resist in a lot of cases.
- [14:09]
Sean Illing
Well, look, I mean, I'm certainly not here to speak for the political left. My own views are, I think, a little more complicated than neat distinctions will allow for. But, and part of the issue here is there is no monolithic left or monolithic right. I mean, it's not as though it's that neat. But I would say that I think there's a deep tradition of left wing thought that prioritizes community and connection and advocates for justice and fairness precisely because it promotes social stability. And this is indeed a major leftist criticism of right wing libertarianism. I think there is more overlap on some of these ends than you might, than you might think or than what your comments might imply.
- [15:00]
Oren Cass
Look, I certainly don't disagree that there's overlap. And I think even if you sort of think of a prior version of the right and left, you could say the same thing. Well, you know, everybody is sort of focusing on growth and prosperity and so forth. There's always plenty of overlap. And it's a good thing that there's agreement. You wouldn't want to have sort of two political traditions that literally aren't agreeing on or speaking to each other about anything at all. But I do think to sort of answer the question that you started with, there are very distinct trade offs and points of conflict between these worldviews. And, and again, I don't think that's a bad thing. I think you want to have different perspectives. But when I hear people sort of ask like, well, how are the things you're talking about not just what the left wants? I think the answer is, well, there's clearly quite a lot of space between the things we're talking about and certainly what the modern political left is spending its time on. And then I think the other piece is that then I think you see a lot of distinction in terms of the means and the kinds of policy approaches that conservatives are more inclined to, partly based on sort of their view of what is and is not likely to work, and partly based on sort of principles around the role of government and so forth. And the way I always put it is that I think if you imagine the libertarians as the group that are kind of just trusting the market and assuming that, well, whatever the market delivers is going to work, I think what my perception certainly is that you tend to hear from the left is much more a skepticism that markets can work, that markets can do these things or should do these things, and therefore a preference for a much larger role for the state in addressing these various challenges and solving these problems. And it seems to me that the conservative view is more one that markets are not going to, of their own accord, automatically do all of these things, but that markets, properly constrained and channeled, can do a lot of them. And that there are a lot of reasons we prefer market based solutions to state based solutions. And so as we think about trying to address a lot of these problems, we're much more inclined to ask, okay, what would it take? What institutions, what constraints do we need? And so I think as a result, you're seeing now in the kind of things conservatives are focused on somewhat, kind of counterintuitively, a lot more interventions in the market intended to hopefully get markets doing the kinds of things we want to see them doing. Whereas I think the agenda from the left tends much more to be about what are the things that the state is going to do, essentially because the market will not.
- [18:04]
Sean Illing
Yeah, I mean, look, there's certainly a contingent on the left that just says capitalism is bad, as though that's an answer to all our problems. I'm not one of those people, but I do think there's a tendency to speak about capitalism as though it's just an economic system, when in fact it's also an ideology. It's also a political morality with its own values. And we can value family and community and these sorts of things, but capitalism values profit and expansion and competition, and these sets of values are often in conflict. And, you know, the position of a lot of people on the left is not all that different from yours, which is the market itself isn't the problem. The unfettered market is the problem. There needs to be guardrails and that, you know, that role is best filled by the state. But that seems to be your position. No.
- [18:51]
Oren Cass
Well, so, you know, I think it's maybe helpful to kind of get concrete and think about different kind of policy areas and what the implications of it would be. I think, you know, one really clear example is when we think about, you know, okay, to the extent that we've seen really significant wage stagnation for. For, you know, the median worker for the working class, you know, what are the solutions to that problem? What are the sources of that problem? And I do think it's fair to say that a lot of the folks on the left, certainly the. What I hear them saying as a critique, is essentially that, well, this is what capitalism does. Capitalism generates sort of returns for capital and in many ways is designed and intended to either outright exploit labor or certainly leave labor in a weakened position.
- [19:49]
Sean Illing
That is what it does. No, I don't want to get too far afield here. I'll get us back to the point.
- [19:54]
Oren Cass
You're making my point for me that you just take for granted. Well, of course that's the case, and it seems to me that that's not the case at all, that capitalism in the abstract is a system that works only if both labor and capital are working productively. And the extent to which either benefits or doesn't, it seems to me is a function of the relative power that they have within that market. And if you have a situation where capital is highly dependent on labor to generate profit and workers have power to demand better conditions, and in fact, the strategy that is going to generate the most profit is one that requires actually investing in workers and improving their productivity. It seems to me you can have a very productive system that that works out very well for workers as well.
- [20:51]
Sean Illing
I mean, there are many different ways to do capitalism right in the right system with, with the right guardrails. It's clearly the most successful economic system invented in the history of the species. I wouldn't deny that at all. Which is why I'm not a let's abolish capitalism person. I'm not that at all, just to be clear.
- [21:10]
Oren Cass
No, and I don't think most people certainly on the American left are let's abolish capitalism people. I do think they tend to assume that capitalism as operating in the market is not going to generate especially good outcomes for workers and that the way to address that, therefore, is, for instance, through more taxation and redistribution. And I think one problem certainly with the left in America today is that there are just a number of other values that are placed above outcomes for workers. Obviously, the importance of addressing climate change gets much higher priority. The approach to immigration and frankly, a refusal to enforce immigration law has taken much higher priority. I think at this point, certainly in the way that we operate our education system and put basically all of our eggs on the traditional higher education basket has the same effect. And so I think at the end of the day, politics on all sides, it comes down to trade offs. I think it's very easy to sort of declare that we like all the good things and don't like all the bad things, but what our politics comes down to is how we weigh those different values and what trade offs we're willing to accept. And I think what you're seeing today is that conservatives, where certainly they have not done a good job of this in the past, are starting to lean much further into asking what can we do that are going to boost the prospects for workers, that are going to boost the prospects for family formation at the expense of other things we might like to. Whereas on the left, I just, I frankly, and I think this is very obvious, certainly in the rhetoric of the Democratic Party, there is another set of things that tends to command top priority.
- [23:19]
Podcast Host (Ad Reader)
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- [24:13]
Sean Illing
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- [24:16]
Oren Cass
Bank said fiscal restraint is what you're craving.
- [24:18]
Sean Illing
So I put my earnings in a high yield account, let the savings compound and the interest mount.
- [24:24]
Oren Cass
I'm optimizing cash flow, putting debt in check.
- [24:26]
Sean Illing
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Oren Cass
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- [24:34]
Sean Illing
Songs but they sound pretty sweet to your wallet.
- [24:37]
Oren Cass
BNC bank brilliantly boring since 1865.
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Sean Illing
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- [24:55]
Oren Cass
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Sean Illing
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- [25:21]
Oren Cass
Foreign.
- [25:26]
Sean Illing
Well, let's, let's move away from this a little bit because I'm not a member of the Democratic Party and I'm also not a representative or spokesman for, for the left. And I don't want to get too bogged down on some of these, these things because I actually think the, the contestation between some of these value judgments is, I think, a big sticking point and I want to get there. And I think the best way to get there is, is to talk about what your conservative alternative actually looks like, what you want to do differently. Now that we have the diagnosis right, this is the problem. These are the problems you're reacting against. What is it that you want to do to fix this? What does your conservative project look like?
- [26:08]
Oren Cass
Well, there are lots of things and I think generally speaking, when we think about it, we break it into kind of two big buckets. One that is focused on a lot of these broader macroeconomic issues. You know, how is the economy functioning? What are the incentives in markets? And then the other one is the much more kind of micro economic issues that are focused much more on, you know, what are the supporting institutions that are helping people to succeed in these markets. And so I guess, you know, we can talk through both of them. If I were to start on kind of the market side and the question of sort of how do we actually get back to productive markets, where we start from certainly is. And going all the way back to Adam Smith, and he has this concept of the invisible hand. And it's, I think, actually a very unfortunate metaphor because it sounds magical, right? Like, oh, an invisible hand that sounds like just. That takes care of everything. And if you actually. Look, he only uses the term once in the wealth of nations, he uses the term once and he uses it in a paragraph that actually is about all of the requirements, what you need if you want the invisible hand to work. And what he says is, first of all, you need people. He's assuming that people are going to prefer domestic to foreign investment. And he's assuming that the thing that is going to generate the most profit is expanding output and employing as many people as possible. And his point is, if those two things are true, if people who are trying to make a lot of money, A, want to do that domestically and B, want to do that by investing in growth and employment, then people pursuing their own interest will also advance the public interest. I think that's true, but it's not magic. It's almost a truism. And what it gives you, I think, is still, even today, a very helpful roadmap to thinking about markets, which is to recognize that the whole project here is to align private and public incentives. And if the things that are going to earn people a lot of money are also things that are going to be good for workers, good for the country, then the system will work really well. And so the question is, what are the policies you need?
- [28:23]
Sean Illing
I totally agree with that. If I'm a leftist, I'm an Adam Smith leftist, I think the Theory of Moral Sentiments is just as important a book as the wealth of nations, right?
- [28:33]
Oren Cass
But, well, to be clear and like, also love the Theory of Moral Sentiments. This is even just within the wealth of Nations. This is what he's actually talking about. And so I think it's then very straightforward to actually look out across the last 30 years and say, okay, well, what are the ways that sort of broke. What are the ways that the ways to make a lot of money are no longer the ways, things that actually we think are going to be good for the economy, good for workers, good for the nation. One obvious one in my mind is globalization. That the moment we released the constraint on There is an advantage in investing domestically and said, actually, if there's more money to be made, shutting down your factory and opening one in China, have at it. We entirely lose the right to expect that markets are actually going to deliver on the things we care about. I think a second one is what we call financialization, which refers to just the sort of metastasizing role that financial markets play in our economy. To be clear, financial markets are very important. The idea of allocating capital efficiently is vital to capitalism, obviously. But what our financial markets have become is sort of an end unto themselves, where the most money to be made in our economy is made. Essentially trading piles of assets around in circles, doing financial engineering, figuring out ways to get more cash out of existing operations, ideally while cutting them down in a lot of cases. And so again, if you say, well, the place where the top students from the top business schools are going to go, and for that matter the top engineering students from the top engineering schools, is not to starting new businesses and creating new products and making people more productive, it's to starting hedge funds and seeing who can set up their office closest to the trading floor to front run each other by a millisecond in their trades. You lose the right to expect that people pursuing profit is going to generate good outcomes to the economy. The third area I would mention here is, and this is one where I think there's certainly a lot of interesting overlap with the left is the idea of industrial policy and just the recognition that the way that the economy has evolved is one in which, generally speaking, sort of making big capital investments in physical assets that take a long time to pay off has become a lot less attractive than raising venture capital money to make an app. And the fact that there's a higher return on capital making the app has no correlation to which activity is actually more useful to the society. And so if we actually think that, that making things matters, if we want to do more manufacturing, if we want to have those kinds of jobs, you are going to have to have some sort of policy that actually either rewards that kind of investment or discourages the other kind of investment.
- [31:27]
Sean Illing
Well, this gets at a question I have, and I know it's a question a lot of people have, because one thing you notice when you listen to a lot of economic populists on the right is when they talk about the kind of world they want to live in, they usually point to that mid century economy where there were all these manufacturing jobs and that was the foundation of the economy. But that world is gone. And I'm not saying there aren't industrial policies that can improve the situation, but we're not going back to that world. We're not undoing globalization. So it's not clear to me what the 21st century version of this economy looks like. What does it orbit around? We're talking about the world of AI and the Internet. It's a service economy. We're not all going to be working on assembly lines in Detroit or Cleveland. Right. So what are we going to do?
- [32:14]
Oren Cass
Well, I feel like you sort of just strung together a lot of assertions there, some of which I agree with entirely and some of which I don't think follow at all. And so just to try to sort of untangle those a little bit.
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Sean Illing
Yeah, go for it.
- [32:28]
Oren Cass
You're, you're certainly right that the modern economy and the economy of the future is going to look very different from the economy of what is increasingly a century ago. The kinds of jobs are going to be very different. It's going to be a relatively more services focused economy. That doesn't at all mean that there is no undoing of globalization or certainly scaling back the excesses of globalization. It doesn't mean that we can't have a much healthier industrial economy with more of those kinds of good jobs. It doesn't mean that those kinds of jobs aren't still very important to the foundation of local economies and the health of those service economies. So the reason that our manufacturing sector has atrophied the way it is is not because we've become a services based economy and people don't want a lot more manufactured stuff. It's because we embraced a policy approach that said, well, we're just not going to make the stuff. And the second reason this is really important to focus on is because it's really important to remember that the theory of globalization was not. And the theory of trade generally going all the way back to Adam Smith, is not we stop making stuff, someone else makes the stuff. Instead, the theory is supposed to be, and this is implicit right in the word trade, we will make some things that we are best at making and others will make things that they are best making. And we will trade the things we make best for the things they make best. And if that had happened, and to the extent that that does happen, I think trade can be fantastic. But what we've gotten instead, and where globalization has gone wrong is this model that simply says we will not make any of the stuff. And by the way, we don't get the stuff imported for free. What we send back is assets. We send back the future claims on our economy in the form of debt, in the form of equity, in the form of real estate. And so Warren Buffett made this point back when we were first starting to do this in the early 2000s, that this was doubly foolish. We were both hollowing out our capacity today and mortgaging the farm for the future. And so I've now sort of gone on a bit in an attempt to kind of untangle the things you were saying. But I would kind of play that back to you and say, like, is any part of that wrong? Does any part of that not seem consistent with how you would think about it? Because if that is right, then the whole like, well, we're not going to reverse globalization, it's a services economy is just sort of a non sequitur. It doesn't speak to the problems we have or the solutions we have available.
- [34:58]
Sean Illing
No, I was just saying I just don't know what that world is going to look like. I'm not saying that we can't have a better economy without, you know, recapitulating, you know, the, the economy of the 1950s and 60s or whatever. It's just, it's just going to look very different.
- [35:14]
Oren Cass
Oh, absolutely, but why? It doesn't seem to me to be hard to envision. I mean, we, we know all sorts of stuff that we make. We know stuff lots of other really developed economies make. I mean, put China to the side as, as a sort of, relative to the size of their economy. We have almost as big a trade deficit with Germany. I mean, we see in Germany, Korea, Taiwan. We see highly developed economies with very high levels of productivity, with very good jobs in their manufacturing sectors that don't run massive trade deficits, that in fact run trade surpluses. And I don't think anybody's saying, well, the US has to kind of become an export led economy and run giant surpluses. The question is, why can't we at least fix that deficit? Why can't we either make more of the stuff that we consume here or be making stuff for export to trade for more of the stuff that we import? The burden of proof is almost in the wrong place. The better question would be why on earth isn't that what's happening and why shouldn't that happen?
- [36:17]
Sean Illing
What is the price of that? How much pain do we have to suffer to bridge from this world to that world? Do you think that Americans simply need to consume fewer goods at higher prices so long as those goods are made In America? I mean, do we just have to take a little bit of economic pain as we undergo this transition?
- [36:39]
Oren Cass
I do think there will be economic pain in the transition and so I don't want to minimize that and we can come back to what, what that looks like. I do think it's important to say that as a long term matter, this is better. One of the most shocking statistics that I always highlight for folks is that it's not just that productivity growth is slowing in manufacturing. Productivity growth in our manufacturing sector has actually been negative for a decade. We've literally been getting worse at making things. You need more American labor in a factory today than you did a decade ago for comparable output. That shouldn't be possible in a capitalist economy. That's crazy. And so the alternative, people look at that and they say like, oh, well, we're really bad at manufacturing. If you insisted on doing a lot of that, that would be really painful. But that's a bizarre static analysis. If we actually made this a priority and we're investing in it and committing to building that sector, that's not what investment and productivity in the sector would look like at all. And so I think we should have a lot of, you know, on one hand, confidence that a more balanced economy would be a stronger one in the long run. And we should also be really focused on the costs that we're bearing now. Right, because it's not like, well, by doing things this way, everything's awesome. By doing things this way, we do have a lot of cheap stuff. But I would suggest that actually it's right now that the American people are bearing a lot of economic costs, of bad choices.
- [38:14]
Sean Illing
Well, look, let me interject there a little bit because I just want to be as concrete as possible. I don't want to talk about the economic pain in abstract terms, like what kind of pain are we talking about? For how long? On whose shoulders will it fall, this element of sacrifice here? Right. If we're going to ask people to give up certain conveniences, certain comforts, certain privileges in some case for the sake of some greater good, what is that greater good? What is that shared purpose?
- [38:44]
Oren Cass
The greater good. And the shared purpose is a stronger economy that is on a better trajectory and providing better opportunities for people to have good jobs that allow them to support families and that is distributing prosperity more widely across the country in terms of the sort of upfront cost that we're asking to get there. I think there are a couple of things. I think one is that in the short run, some things are going to be more expensive because we have lost the ability to make them. And if we want to start making them again, we're going to have to go through some growing pains and figure out how to do that. And so I think what we are looking at is probably a five to ten year period in which we have some adjustment costs in the economy where we have higher costs of some things, where we're needing to direct relatively more resources to actual investment. But that's not actually all that different from the kinds of economic choices we make all the time.
- [40:03]
Sean Illing
And Doug Limu and I always tell.
- [40:05]
Oren Cass
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- [40:08]
Sean Illing
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Oren Cass
Cue the emu music.
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Sean Illing
Limu.
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Podcast Host (Ad Reader)
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- [40:15]
Oren Cass
Increase your wealth. Customize and save.
- [40:19]
Sean Illing
We see that may have been too much feeling.
- [40:23]
Oren Cass
Only pay for what you need@libertymutual.com Liberty Liberty.
- [40:26]
Sean Illing
Liberty.
- [40:27]
Oren Cass
Liberty Savings Ferry unwritten by Liberty Mutual Insurance Company and affiliates Excludes Massachusetts Trip planner by Expedia.
- [40:33]
Sean Illing
You were made to outdo your holiday.
- [40:36]
Oren Cass
Your hammocking and your pooling.
- [40:41]
Sean Illing
We were made to help organize the competition.
- [40:44]
Oren Cass
Expedia made to travel.
- [40:46]
Sean Illing
Tron. Ares has arrived.
- [40:48]
Oren Cass
I would like you to meet Ares, the ultimate AI soldier.
- [40:52]
Sean Illing
He is biblically strong and supremely intelligent.
- [40:55]
Oren Cass
You think you're in control of this? You're not.
- [41:00]
Sean Illing
On October 10th. What are you?
- [41:02]
Oren Cass
My world is coming to destroy yours. But I can help you.
- [41:06]
Sean Illing
The war for our world begins in Imax. Tron Aries, rated PG 13. May be inappropriate for children under 13. Only in theaters October 10th. Get tickets now, if you'll allow me to just get a little big picture for a second. You know, there is a pluralist critique of this, right? And. And that critique is. Maybe critique isn't the right word. Maybe challenge is a better one. But in a diverse liberal society, it is hard to build policy around a moral vision of, to use your phrase, you know, the good life, because people don't agree on what that is. That's sort of a foundational premise of liberalism. You know, how seriously do you take those sorts of objections? Do you take them seriously at all? You know, I guess what I'm really wondering, and I'm asking in the spirit of curiosity, not skepticism, is if your political vision depends on a kind of cultural cohesion that doesn't exist. Or maybe it did exist at some point, but no longer does.
- [42:25]
Oren Cass
I think it's a descriptive matter. That's. That's exactly right. And in my mind, actually speaks very articulately to the point I was trying to make back at the start of the conversation about what I see as a real distinction between where conservatives are right now and where progressives are. Conservatives believe that not just that it's a good idea to have such a vision, but that it's, in fact, indispensable, that it is impossible to actually imagine you're going to have a cohesive and functioning society where people aren't willing to debate and ultimately resolve those kinds of issues. I would dispute a little bit that it's inconsistent with pluralism. One thing that's interesting in my 2018 book, that Place you started with the working hypothesis, was sort of based on the exact concept I described. That I think we're trying to get to is what I call productive pluralism, which is a recognition that it's incredibly important for people to be able to play a productive and contributing role, not just for the society, but for themselves, but that they're going to have a lot of different ways they want to do that, they're going to have a lot of different aptitudes and abilities, and they're going to be in a lot of different places. And one of the things that the market, unfettered, does so poorly in its pursuit of efficiency is it tends to crush that pluralism, and it tends to push towards specialization in particular functions and not take it all seriously. The way that that does not align well, what people want. So I think you can have a pluralist vision and recognize that people are going to want to fulfill the good life in various ways, but actually have, in fact, that pluralism be a substantive commitment. Say that if you want to have a healthy society, it has to be one that does provide lots of different pathways to a good life, and that that's exactly where we're failing right now. And that if we want to support that pluralism, we have to be willing to, in a sense, intervene in and shape markets to uphold it.
- [44:41]
Sean Illing
I take those points. Let me try to be a little more precise with what I was saying, because I'm with you on this basic claim that libertarian types, and the more we'll call them technocratic liberals, can sometimes reduce people to mere economic actors. And I think both of us think that human beings are more than that, that there's more to flourishing than material comforts. I think what I'm trying to foreground here is the challenges of going beyond that and talking about sustaining the good life because of these differences and to be as concrete as possible. As I was saying earlier, I mean, a lot of what you hear from conservative economic populace, people like Senator Josh Hawley is that we want to revive that mid century economy where men had livable wages and upward mobility, lots of factory jobs, and they were able to support families on one income. And there was a lot of good in that world. But it's also true that there was a price for that arrangement. As you know, right? Women had less autonomy, they were reduced to parenting and nothing else. Plenty of people don't think raising a family is the highest good. And we can agree or disagree on that. I mean, I'm a father. The point is that that's a choice that we can all make in a free, pluralistic, liberal society. So when you talk about supporting families or promoting a more meaningful form of life, I'm just wondering how you, you think about these kinds of differences in terms of what we're organizing the economy around, who it's really for. And how do you respond to people who don't want to go back to that world, who worry that holding up that period of American life, as many do, as the Shining example, means a return to a time where women didn't have careers, didn't have financial freedom. I'm not saying that this is what you want, but I am asking, can we regain the good things about that period without those unacceptable costs? If that makes sense.
- [46:46]
Oren Cass
It's a very good question. And I think your point about sort of raising a family on one income is a great place to start in thinking about it, because the idea that we should have an economy in which it is not just sort of hypothetically feasible, but in fact the norm and expectation that you can raise a family on one income, in a sense that that is our definition of a healthy economy seems to me an incredibly important principle and one that I'm interested to kind of dig into a little bit. Like would you want to, I mean you specifically. But would one want to resist that? Because I guess it's possible to say no. We actively prefer an economy where that's not a norm or expectation because that's the way to ensure that you have gender equity in the workplace. I guess you could say that. But going back to your point about pluralism, that's an extraordinary rejection of pluralism in favor of a market imposed form of constraint that forces people into one arrangement that, by the way, the vast majority of people, men and women across the political spectrum, say they don't like. Now it's very possible that whereas you can support a family on one income, you still choose to have a second person working. But choose is the key word there. And I think this really gets in many ways to the exact heart of the struggle that a lot of folks on the left are having right now is that if you assert that, you say, I want that to be a genuine choice. And I think people on the left get very nervous about that. They say, oh, but what if people make the wrong choice? Or what if there are other social and cultural pressures such that they don't have the freedom they should, with the payout of that being therefore, let's just have no choice at all. And so I think this is what's so interesting about this, is that I think it does make a lot of this very concrete, but it also to some extent answers your question. Is it plausible in our modern politics to make these kinds of claims and be successful? Because the reality is that this claim is an 80, 20 claim in our politics. A lot of normative claims like these are ones that people overwhelmingly do want to hear and agree with and believe in. And I think one of the things that you're seeing conservatives feel toward, and plenty are not getting it right at all, but some are really starting to get it right, is that when they find that set of claims and believe in them and want to build an agenda around it, do you lose some sort of highly educated, urban, upper class people? Yes, but you probably add five or ten working class people across ethnicities for every one person you lose. And so one of my great hopes for American politics is that making these kinds of claims and advancing these arguments in ways that align with what really, I would say the majority of Americans do want is the dominant strategy from a game theory perspective. And to the extent that politicians see that, to the extent that intellectual leaders see that, I think it will push things in a very constructive direction.
- [50:24]
Sean Illing
I want to pivot and I do want to talk about what's happening now politically and get a sense of whether you think the Republican Party and the conservative movement more generally is bending in your direction. First of all, I should ask, are you involved in any official capacity with the Trump administration? Are you advising them? Do you have a, an actual role?
- [50:48]
Oren Cass
No, no. I'm full time chief economist at a, at a 501c3 nonprofit. And so obviously in that role, we provide political advice and policy advice to anyone who will listen. But we, we don't have any formal affiliation with, with the administration.
- [51:05]
Sean Illing
Who are you advising in the administration? Whose ears do you have? I'm just curious.
- [51:09]
Oren Cass
Oh, and anyone who will listen to us. But we, we never comment on private Conversations.
- [51:15]
Sean Illing
Okay. Part of the case you're making is that there is this, like, ongoing paradigm shift within American conservatism. I don't really believe that. I'm not sold on that. I might be wrong. Maybe you'll convince me. But when you look at what this administration is doing on the policy front, do you like it? Do you think Trump is moving us closer to your desired world?
- [51:42]
Oren Cass
I think we're definitely moving in the right direction. We could dive into the specifics across policy areas or even within a policy area. I mean, just on tariffs alone. Spend a tremendous amount of time sort of emphasizing the ways that I think the problems that they're addressing, the direction they're trying to go, is the right one. On the specifics of how things are timed and what the levels are and so forth, what legal authorities you use for what. I have all sorts of thoughts on how it might be done better. I also think we've seen some very good course corrections, and it's getting better. But broadly speaking, to your question about the direction that things are headed, I think it's extraordinarily clear to me that the Republican Party and the conservative movement are shifting quite dramatically in this direction. And one way to look at that is in terms of personnel. I mean, Trump has obviously been something of a constant over the last decade in Republican politics, but the distance from Mike Pence to JD Vance is pretty dramatic. The distance from Rex Tillerson to Marco Rubio is pretty dramatic. The distance from the various secretaries of labor in the first term to a Secretary of labor recommended by the Teamsters is pretty dramatic.
- [53:06]
Sean Illing
Hold on, I gotta pause you there, because I have to ask, is it really? Rhetorically, yes. But substantively, is it. I mean, the reason why it's hard for me to take this iteration of the GOP seriously. I mean, you can just look at this, the big, beautiful domestic policy bill they just passed. I mean, it is the same old Republican Party. You know that it is jammed up with a bunch of stuff that reflects conventional conservative priorities. It's not doing a whole lot to help working class people. It is. It is more tax cuts offset by more cuts to Medicaid and food stamps, which low income people depend on. And the net result, as always, will be more upward redistribution of wealth. And on top of that, another 3, 4, 5 trillion dollars tacked onto the deficit just for good measure. How am I. How can you look at that and feel like the GOP is genuinely pivoting in your direction?
- [54:11]
Oren Cass
Well, I've been extremely critical, particularly of the. Of the deficit element of the, of the big beautiful bill. Because I think if, if one is going to be a fiscal conservative, one has to not be adding to deficits right now. But I, I do think there's a way in which a lot of the sort of efforts to argue that things are not changing in the Republican Party strike me as I think they are very useful sort of political talking points if one wants to score points about what's happening sort of on the surface at this moment. But I think they honestly just do a real disservice to people who are sort of trying to understand where things are going. And elected political leaders are always going to be the lagging indicator of what's happening in any political party or political movement. They are by definition going to be the oldest, the ones who have been around the longest, the ones who have sort of most built their careers and ideologies and relationships around what was happening 20 or 30 years ago. And so if one wants to know what is passing in Congress today, then yes, you count the votes of the people in Congress today. If you want to know what's actually moving within a party or what's going to happen over a 10 or 15 year period, counting the votes today, I think is just not what someone in good faith trying to understand the direction would do.
- [55:41]
Sean Illing
Okay, look, I am trying to understand in good faith, I promise you. So I am asking you, if not on the basis of what they're actually doing, then on what basis can we assess and make judgments about the direction they're going? I'm just looking at what's actually happening.
- [55:56]
Oren Cass
Right, but my point is that even when you're asking sort of in terms of what they're actually doing, right, you picked the sort of one element of it that is the sort of most obviously kind of legacy element, among other things, what it mostly is is a direct effort to extend the thing that they did in 2017. And so even if you look just, you know, in, in terms of policy, I mean, obviously you have everything that's going on on trade. Right? Like, let's not forget the, the entire trade agenda, not, not only in the sort of substance of it, but, but also the messaging of it and the fact that you have political leaders out there saying the American dream isn't cheap stuff and yes, some things are going to be more expensive and here's why we think that's worth it. It seems to me extraordinary sea change in kind of, broadly speaking, economic thinking.
- [56:53]
Sean Illing
The tariff regime, the trade war, that is a genuine shift, no doubt. About it. It's not entirely clear to me how that's a boon for poor and working class people at the moment. But I may not be seeing the whole picture.
- [57:07]
Oren Cass
There's a very interesting economic debate to be had about whether it will work. I obviously have one very strong view. It's a debate, but in terms of what they're trying to do, it seems pretty clear to me that what they are trying to do is quite explicitly focused on the economic interests of workers. I don't think there's any way you can make the case that, well, really what this trade war is is upward distribution of redistribution of wealth or good for Wall street and multinational corporations. I don't think that's a plausible. I'd be interested if anyone has even attempted to make that claim, but I don't think that's right. I think another very interesting area, I mentioned some of the things that are going on on the labor front. One really interesting effort that's underway and Josh Hawley is the leader of it, but Bernie Moreno's new center from Ohio is the co sponsor of it. They've actually taken the proactive right, which is like the ultimate kind of Dem wish list of labor reforms, and they've just chopped it up and they've said, look, some of these we actually think are perfectly legitimate and good ideas. Others of these we don't agree with and we're going to start advancing the ones we think are good ideas. So you now have a labor bill co sponsored by Hawley and Moreno with a lot of other support that would in fact force Corp, you know, employers and workers to reach a first contract that if the negotiations stall, it goes to arbitration and you get a first contract. That's a dramatic shift in how you would see the Republican Party. I think you're seeing the same thing in the financial sector. There was a great example recently where private equity firm that had bought out a bunch of paper plants was trying to shut down the paper plant in Ohio. And you literally had the Republican politicians out there at the rally with the union leaders sort of forcing a change and a commitment to at least keep the plant open for the rest of the year and try to find a transaction that would keep it open afterward. On family policy, you see, you know, in 2017 you had Marco Rubio and Mike Lee had to threaten to tank the entire tax cut bill to get an expanded child tax credit in it. Now it is an uncontroversial top priority that the child tax credit is not only kept at that level, but expanded Further. And so even at the level of like what is happening in legislation, it's clear that this is a, a very different party from 2017. If you look at who Trump has appointed, it's a very different set of appointments. If you look at the critical mass and center of gravity among the younger elected officials, the people coming into the Senate, it's a completely different set of priorities and policies from those who have been there for a long time.
- [60:15]
Sean Illing
Look, I'm with you. I'm not convinced that the DNA of the party has changed, but I will grant that there are indications that, that there has been a shift. I don't know what it's going to amount to materially down the road, but I will grant you that there, there are some things that are very different compared to the party of Mitt Romney. I think Trump has cultivated a very unique coalition, certainly more, much more working class than the pre Trump Republican Party. And I don't know how much of that coalition is a function of Trump and how much of that coalition will, will fade when he fades, I have no idea. I'm not making any predictions on that. But I mean, I will ask, I mean, hypothetically, if the, the Republican Party does prove an unreliable vehicle for your movement, can you see a world in which you're working with Democrats? There does seem to be a lot of space for common cause.
- [61:09]
Oren Cass
We do work with some Democrats. I think there are Democrats who are doing very good and interesting work. We recently had Congressman Jared Goldin from Maine on the American Compass podcast because he is the sponsor of the 10% global tariff legislation in Congress. And so one thing I always emphasize is that I think a healthy American politics is not one where one party gets everything right and dominates and heads to 100% of, of the vote and the other one collapses into irrelevance. It's one where we actually have two healthy political parties that are both focused on the concerns and priorities of the typical American and are then contesting a lot of these very legitimate disagreements about ends and means. But based on what is happening in American politics today, and based on, again, not just superficial incentives, but the very real fundamental differences between conservatism and progressivism, I would expect that this is going to have the most success and salience and overlap in thinking on the right of center.
- [62:22]
Sean Illing
Well, look, you may be right. I don't know. In some ways I hope you're more right than wrong because I don't really care who gets us there. I think a politics that converges more on the interest of working class people is a good thing. I know we're out of time, so we can leave it right there. Orncast. This was fun and you're a good sport and it was a pleasure to have this dialogue.
- [62:51]
Oren Cass
You are as well. This was a lot of fun. Thank you for having me.
- [63:00]
Sean Illing
All right. I hope you enjoyed this episode. I know I did. As always, we want to know what you think and we really appreciate the many messages we've received this week. We read every one of them. I read every one of them and they help us make a better show. So drop us a line at the gray area@vox.com or leave us a message on our new voicemail line at 1-1-800-214-5749. And once you're finished with that, go ahead and rate and review and subscribe to the pod. This episode was produced by Beth Morrissey, edited by Jorge Just, engineered by Christian Ayala. Fact Checked by Melissa Hirsch and Alex Overington wrote our theme music. New episodes of the Gray Area drop on Mondays. Listen and subscribe. The show is part of vox. Support Vox's journalism by joining our membership program today. VOX is running a limited time membership sale, over 30% off right now. Membership includes exclusive perks like ad free pods. Members also get unlimited access to all of Vox's journalism. Your support helps fund our work. We rely on listeners like you. Go to Vox.com members to sign up and if you decide to sign up because of this show, let us know.