Oren Cass
@oren_cass
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Chief Economist, @AmerCompass. Editor of "The New Conservatives" (coming June 3). Subscribe: https://t.co/4j7P9PL4J4
Joined November 2011
1/ Why is American Compass launching Commonplace, a new magazine about what matters in America? . (Follow: @commonplc) . For the same reason we launched @AmerCompass: to do the work of revitalizing conservatism, which legacy institutions have proved themselves incapable of. 🧵.
Coming in January: Commonplace. A new magazine from American Compass about what matters in America. Edited by Helen Andrews and Drew Holden. @AmerCompass @herandrews @DrewHolden360
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Thread (1/16). How is that our economic statistics suggest workers have been making slow but steady progress in recent decades, while popular perception is that their family finances are coming under increasingly untenable pressure? I've been working on this, here's my answer:.
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CBS sideline reporter stands six feet away from QB Joe Burrow for post-game interview, concludes with delicate fist bump, and then when the camera is supposed to have cut away goes in for the hug. #CovidTheatre
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2/ Punchline: Popular perception is correct. In 1985, the typical male worker could cover a family of four's major expenditures (housing, health care, transportation, education) on 30 weeks of salary. By 2018 it took 53 weeks. Which is a problem, there being 52 weeks in a year.
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Absolutely brutal Boeing story.@nytimes. "What used to be a duopoly has become two-thirds Airbus, one-third Boeing. A lot of people are looking at Airbus and seeing a company run by competent people. The contrast with Boeing is fairly profound.”
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1/ My long-but-worthwhile-read @nytimes is about the American political class's self-righteous detachment from the economic and social conditions of its nation. This is the root cause of present instability and poses the most serious long-term threat to the Republic. 🧵
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14/ Some might say: that's absurd, of course a family can't cover an entire health insurance premium, a 3-bed house, and college for two kids on a single worker's salary, that's not how anyone lives. But COTI shows that in the past a family COULD do that. Just not anymore.
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10/ When we say "inflation-adjusted wages look good," we are actually saying "if you could take your wage back to 1970 and spend it, you'd be better off than you were at the time with a 1970 wage." I mean, maybe that's interesting. But it doesn't describe lived experience.
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6/ A key assumption of our inflation-adjusted analyses is that old products are still available. Don't like / can't afford the $26K 2018 Grand Caravan, go buy the $18K 1996 one instead. Except you can't. Same problem is even more pernicious in areas like housing and health care.
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5/ Fair enough. But, if you're a family that needs to buy a minivan, while it's nice that the 2018 Grand Caravan ($26,300 in 2018) has many features the 1996 Grand Caravan ($17,900 in 1996) did not, you still face the problem that you need an extra $8,500 to buy one.
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8/ Again, fair enough. But we have to recognize that the median family must now pay more for health insurance and will not use the cure. Last 20 yrs, the typical family's health care consumption has gone up $2K, but their premium has gone up $13K. No wonder they feel worse off.
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13/ COTI shows that while the nominal median male wage rose from $443 to $1,026 from 1985 to 2018 (132%), the expected cost of his family's major expenditures rose from $13,227 to $54,414 (311%). He used to need 30 weeks of work to cover those costs, now he needs 53.
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9/ So, start putting these things together, and you find a situation where major costs facing families have skyrocketed unsustainably in ways our economics is incapable of acknowledging. Then we gloss over the underlying assumptions and say "inflation-adjusted wages look good.".
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3/ Why do our inflation-adjusted data say otherwise? Because inflation does not assess affordability. You don't have to take my word for it. Here's a neat study by Nobel laureate Robert Shiller making the point, as cited by Fed economist Michael Bryan:
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One for the history books, from the top of the @nytimes homepage: . “The U.S. Is Edging Toward Normal, Alarming Some Officials”
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16/ The point isn't to validate some specific policy agenda, but to introduce a new set of facts that should help inform the starting point for our debates. How to get higher wages? How to get lower costs? Let's at least acknowledge these are pressing and long-worsening problems.
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4/ For example, our inflation-adjusted data say car prices have not increased since the mid-1990s. Obviously, that's not remotely true. What economists are saying is that cars have gotten better so the higher sticker price doesn't reflect inflation, it reflects higher quality.
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[Insert compulsory SoundCloud joke. -ed] . You can read the full report with technical analysis @ManhattanInst. And my narrative essay presenting the full argument has just been published by @AmericanAffrs. That is all.
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12/ I've created a measure I call the Cost-of-Thriving Index (COTI), comparing nominal costs to a family for housing, health care, transportation, and education with nominal weekly wage of median male worker. My new @ManhattanInst report details rationale, assumptions, sources.
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15/ Conservatives especially should be wary of taking comfort that massive government supports make up the gap. If you're thinking, "well, but of course we subsidize health care and college heavily," that's not a defense of the status quo. It's a blaring red siren.
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11/ There are lots of good reasons to have our existing technical measures. Macroeconomists need them. But alongside them, we need a perspective that looks at the costs households actually face as compared to the wages that workers actually earn.
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7/ Another huge problem with health care, especially, is that everyone has to pay for shared risk. If a million-dollar miracle cure needed by 1 in 1,000 households drives up everyone's insurance premium, that's not inflationary. You now have access to the million-dollar cure.
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Just wild to see the media go straight from "Biden didn't call Trump voters garbage, look at this apostrophe we found" to "wow, Trump just called for Liz Cheney to face a firing squad" . If you want to trash public ethics and personal credibility because you truly believe the.
Once again, Trump shows he’s built in a lab to humiliate his apologists . You wanna rationalize the MSG rally as bad jokes by comedians or, yes. seize on Biden garbage line and pretend we back to LAMBERT FIELD and BINDERS FULL OF WOMEN gaffe patrol era ?. Nope. Trump gonna call.
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One of the major recent developments in American politics is the nasty divorce underway between the Republican Party and conservatives on one side and the Chamber of Commerce and big business on the other. What's causing the breakup? 🧵.
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1/ If you don't like what Trump did on reciprocity, that's fine. But if you're claiming it's indecipherable, you're not trying very hard. In February, in Understanding America, I explained exactly how this might look and why:.
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Because "efficient" is the opposite of "resilient," not a synonym.
The global supply chain is amazingly efficient. So why did it break down?
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Are we in the ballpark yet of something that might rightly lead conservatives to question whether corporate America is behaving in the national interest?.
Tim Cook secretly signed an “agreement, estimated to be worth more than $275 billion, with Chinese officials promising Apple would do its part to develop China’s economy and technological prowess through investments, business deals and worker training.”
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The new policies announced by President Trump today confirm the end of the disastrous WTO era and lay the groundwork for a new set of arrangements in the international economy that prioritize the national interest and the flourishing of the nation's working families.
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As a particularly outspoken opponent of universal basic income, I would emphasize: . Direct cash payments are the correct policy in this crisis and have nothing to do with UBI, whose entire premise (and greatest flaw) is that you know in advance you will receive it in perpetuity.
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Ivy League law professor thanks Joe Biden for unlawfully giving thousands of Ivy League law grads $10,000 a piece. Modern progressivism in one tweet.
Good news for thousands of my former students. I’m grateful on their behalf, Mr. President.
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Hypothesis: student debt holders are, on average, less deserving or in need of a wealth transfer than is the median American (who doesn't have a college degree). -or-. This plan is less equitable and less socially useful than simply throwing $1.6 trillion out of a helicopter.
Bernie Sanders is out with a sweeping new bill to wipe out all the student debt, providing relief for 45 million Americans. via @aterkel.
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We did a great @AmerCompass case study last year on how European industrial policy (Airbus) had triumphed in the commercial aviation market while shareholder-maximizing financialization in the U.S. (Boeing) had fared poorly.
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"Boeing’s decision to build the Max as a variation of the 737 because it would be quicker, easier and cheaper than starting from scratch affected the plane’s design and development, playing a role in its troubling history."
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1/ Let's discuss this remarkable article in @nytimes about the importance of universal daycare. No, not the @KathaPollitt op-ed from Sunday. An article from 1974 about conditions in the Soviet Union, which sound, well. see if this remind you of anything.
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I have been writing about the Paris Accord since before it was negotiated, so I am issuing myself a waiver from my no-tweetstorm rule. 1/.
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I've said, "free trade, free markets, choose one." May need to add, "free trade, free speech, choose one." . Fascinating to follow in real-time our discovery that our norms and institutions rely on assumptions that don't hold if we integrate our market with an authoritarian one.
#China has begun an aggressive campaign demanding complete obedience from all foreign businesses on political issues. Prez #Trump was right on Aug 23 to order US companies to consider alternatives to China. #Apple #NBA #HoustonRockets #ESPN #SaveOurDemocracy.
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Treating children as an inconvenience that prevents all parents from joining the labor force really is progressive canon at this point. This from Biden is eerily reminiscent of his claim during the primary that his childcare tax credit "would put 7 million women back to work.".
Nearly 2 million women in our country have been locked out of the workforce because they have to care for a child or an elderly relative at home. My Build Back Better Act will make caregiving accessible and affordable and help them get back to work.
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Angsty teens who think they’re sticking it to the man by wearing Abercrombie grow up to be Lefties who think free daycare sticks it to the suits.
free daycare is bad and no one wants it or likes it, according to this study from the Exxon Citibank Small Business Institute of Personal Freedom.
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Strikingly direct admission of blinders that economists proudly wear. Parents: We hate having to both work full-time. Economists: Yet that's what you do, so it must be what you want. This circular reasoning, unmoored from reality, underlies a frightening number of econ claims.
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How would a better international economic arrangement look for the United States?. On @TheDailyShow, I explain what I think should be America's three key principles:. - Balanced Trade.- Burden Owning.- China Out
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This op-ed encapsulates perfectly the desiccated thinking that has led our society and economy astray. It is not "charity" to treat your employees well, even when you could get away with less. It is a core obligation of any institution that employs people.
"The real contributions of Harvard, MIT and Stanford to the world are not the food-service workers they hire."
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1/ Today's moves, doubling down on the 10% global tariff and temporarily suspending reciprocal tariffs as promising negotiations proceed, have greatly strengthened the foundation of the president's vital push to address the failures of the international economy.
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I have a lot of tolerance for politicos spinning data. It’s their job. But saying “wages up” shows a heckuva disdain for the reality facing working families these days. “Real average hourly earnings decreased 3.0 percent, seasonally adjusted, from July 2021 to July 2022.” -BLS.
Jobs up and inflation down. Wages up and gas prices down.
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I see your poorly drawn trendline (@nytimes) and raise you the mostly poorly drawn line of best fit in the history of major media opinion pages (@wsjopinion).
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It's gratifying to see so many people saying that the right-of-center's future is multiracial, working class, and conservative. American Compass's mission (@AmerCompass) is to build this. If you're not familiar with our work, now might be a good time to get acquainted. Thread!.
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A warning from @tylercowen: . If we tell companies they can't use supply chains that may have slave labor in them, "The losers will be U.S. consumers, who will face higher prices and less choice." 1/3
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6/ The success of an anti-establishment figure like Trump should provoke immediate soul-searching and radical reform from elites (highly credentialed leaders across government, law, media, business, academia. ). The response to his success, unfortunately, has been the opposite.
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12/12 The people do not pull to the side, nor should they. Anyone worried about the future of American democracy should be concerned foremost with the elites’ bizarre belief that the road is theirs. There's an off-ramp! How to find it? Read the essay:
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The GOP has been cutting taxes for 40 years. The federal tax burden is way down. Also down in recent decades?. 🔻Economic growth. 🔻Wage growth. 🔻Investment. If you keep paging through a dog-eared 1980s playbook and can find nothing but tax cuts, it's time for a new playbook.
Republicans are going to focus on economic growth and focus on how we’re the party of tax cuts and not tax hikes. We need to focus on job creation, not policies that create higher taxes, leading to job losses.
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7/ We have not failed, the elite thinking goes; we have been failed, by the American people. In some tellings, grievance-filled Americans simply do not appreciate their prosperity. In others they are incapable of informed judgments, or perhaps they are just too racist to care.
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Everyone knew. Everyone knows. Why would anyone adopt the default that young people getting stoned is fine for their brains until proven otherwise?. This is the faux-sophisticated posing of "evidence based" commentary run amok.
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The wise person who accepted $450m for the painting can too. No resources were created or destroyed in the transaction (an asset swap).
The idiot who paid $450m for a painting could have covered the World Health Organization's TB, malaria, and reproductive maternal, newborn, child and adolescent programs for an entire year.
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Exceptional VP pick. @jdvance1's conservative economics and dedication to American workers captures perfectly the Republican Party’s transformation over the past eight years.
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1/16 The @WSJ has given me the space to make the thorough case for tariffs, so allow me to briefly outline the argment here. In a sentence, it comes down to a straightforward argument: Making things matters. 🧵
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1. American corporations kowtow to Chinese censorship but gleefully criticize America. Hollywood rewrites scripts. Disney's ESPN axed coverage of Hong Kong. Nike declares itself "a brand that is of China and for China" while cancelling a shoe with the original American flag.
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May need a bot to tweet this picture daily. When you hear "mfg job loss has been going on for 50 years" or "it's mostly automation," or "this was just the expected decline in mfg share of jobs," please remember the data. Many good debates to be had working from shared reality.
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9/ Democracy itself is at stake if the election does not go their way, the elites lecture, even as they pursue plainly anti-democratic strategies. How’s that going? More voters believe Trump than Biden can handle “threats to democracy” well.
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Today at Understanding America, here's how I think it makes sense to understand the Liberation Day tariffs:. 1. The 10% Global Tariff. Looks like (and should be) permanent. Offers a stable and substantial source of revenue. Not clear the route by which it might be removed.
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“Our founding fathers had the vision to acquire a continent. WE will speculate in crypto.”. We have ceased to see the world in terms of real value for real people and now think merely about piles of financial assets.
The wait is over. This is our Louisiana Purchase moment. Read the text for my BITCOIN Act below ⬇️⬇️.
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What makes NBA's relationship with China especially gross is that the "economic pressure" excuses relevant to other industries don't apply to them at all. It's not like, if they don't do biz with China, some German league is going to undercut them on price and take market share.
.@MegynKelly: “Why would the the NBA take $500+ million from a country engaging in ethnic cleansing?” . @MCuban: “Becuz they are a customer of ours, & guess what Megyn? I’m okay w/ doing business with China. We have to pick our battles.”. Starts at 41:35.
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I wonder if it will be a problem for our society in the coming months that the bureaucrats, firms, and “experts” who we’ve granted power, status, and income in responding to the Covid crisis all have their power, status, and income tied to Covid remaining a crisis….
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8/ Now Trump is more popular than ever, at least compared to the alternatives on offer. Somehow the response of elites to that humiliating indictment of their leadership is a redoubled obstinance.
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Climate change is serious and requires policy responses. Predictions of climate catastrophism are usually unserious. NYT four years ago: Catastrophic heat deaths coming, will kill mainly in the South. NYT today: Err, would you believe mainly in the North?. [Reality: neither.]
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If I understand MMT, money printing and deficit spending is great until it triggers inflation, and then policymakers just come together and raise taxes to pull the money back out, right?. So this is the moment when MMTers start calling for big middle-class tax increases, right?.
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But the proposal isn't to punish countries that have behaved badly, it's to give them a choice: either ensure no slavery or lose the supply chains. Maybe they'll do something about slavery. Incentives matter! This is not among the outcomes @tylercowen seems to contemplate. 3/3.
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Long gone are the days of "what's good for our country is good for General Motors, and vice versa." . Big business routinely behaves in ways that damage the national interest and distort our democracy. Americans, conservative or otherwise, are rightly fed up and seeking remedies.
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10/10 He'd assume we lost the Cold War and our economic system had collapsed. "No, no," you tell him. "We won! And our economy has been growing by leaps and bounds! We're more prosperous than ever!" Then he'd shake his head, chuckle, and walk away. Because that's just crazy.
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Further, it is relief in an economic crisis that we as a society are choosing to trigger for what we believe is our collective benefit; a crisis whose financial costs seem generally destined to land disproportionately on those less able to bear them.
It's relief, not a bailout. It's relief, not welfare. It's relief to prevent much less efficient bailouts and welfare usage.
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From my article yesterday @TheAtlantic: There's absolutely no reason to means-test these cash payments upfront using old data. It's less efficient AND less well targeted than clawing back payments to high-income households through tax code at year's end.
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5/ In a democratic republic such as the United States, the ballot box is the primary check on an unresponsive, incompetent or corrupt ruling class. If those in power come to believe they are the only logical options, the people can always prove them wrong.
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Notice how much further his argument goes than "don't worry about child labor, families only choose that if it's their best option." Now, even stripping outright slavery out of the supply chain is a mistake, because things will get even worse in countries that tolerate it. 2/3.
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It’s important to understand that for many libertarians, their open borders advocacy leading to a Qatar-like caste system in America is a feature, not a bug.
American workers got to sleep in their beds and not get hit by a cargo ship because immigrant workers went to work to fill potholes so that they could commute to work going to jobs with better pay and working conditions.
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2/ My story starts with my own experience as domestic policy director on Mitt Romney's 2012 presidential campaign. Questions began trickling in from New Hampshire -- what's our plan on opioids? I am ashamed to say I did not know what they were. But I was no outlier.
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The new @MittRomney family security proposal is a significant development and exactly the sort of thorough and thoughtful policy innovation we need more of on the right-of-center. Debating ideas like these is the right way for conservatism to move forward.
NEWS: @MittRomney unveils plan to provide $3K per child, giving bipartisan support to President Biden’s major effort around child poverty. Romney plan would also offer $4,200/year per child under 6. Expect it as amendment to Dems budget resolution today.
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There's a contradiction here: corporations genuinely committed to civic responsibility would presumably shy away from promoting racially divisive ideology, delisting books, undermining democratically enacted laws, etc. The "responsibility" being exercised is rather selective. .
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10/ The result is a shockingly irresponsible national game of chicken. Barreling from one side are elites who remain fully committed to their own preferences, to pulling the levers of power for their own benefit and to offering status quo candidates in both parties.
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4/ Hillary Clinton, of course, didn’t need her own views of Americans leaked: In public remarks, she gleefully classified half of the voters who supported Trump as “deplorables,” as her audience laughed and applauded.
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3/ The infamous "bitter clinger" and “47 percent” comments by Obama and Romney captured the atmosphere in the ruling class well: delivered at private fund-raisers in San Francisco in 2008 and Boca Raton in 2012, evincing disdain for the voters who lived in between.
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S&P 500 up double-digits in real terms, real wages down 2.4%. Great job everybody. What if, going out on a limb here, just flushing trillions of dollars into an economy doesn't actually generate sustained, broad-based prosperity?.
On average, real wages declined 2.4% from December 2020 to December 2021. Workers have gotten effective pay cuts in year 1 of the Biden presidency.
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Likewise, free markets aren't the objective; liberty, peace, and prosperity are. We want the human condition to flourish. Market fundamentalism can thwart that.
Democracy isn’t the objective; liberty, peace, and prospefity are. We want the human condition to flourish. Rank democracy can thwart that.
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2. American corporations mistreat American workers. Companies like Disney make employees train their H1B-holding replacements. Amazon has badly broken HR systems that underpaid workers and denied them benefits. Efforts at union organizing face retaliation.
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I appreciate Amazon offering me $1 to accept slower shipping on my order. But I'd also like a button where I can accept slower shipping in return for them treating a worker well for the day.
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American Compass (@AmerCompass) has officially launched. Our mission is to restore an economic consensus that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity. Read my introductory note at our new website.
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👀 At @NatConTalk conference, @HawleyMO puts corp tax cuts at top of list of economic policy mistakes from the past generation of Republicans, asks, “Why should labor ever be taxed more than capital? It should not be.” Calls for conservatives to embrace private-sector unions.
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WSJ Ed Board: "If Mr. Trump really wants to upset the swamp, he’d propose that every private investment made for the rest of this year be exempt from any capital gains tax.". Swamp: "Yup. Nothing would upset us more. Please, not that. You wouldn't dare." .
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Just no way in real life, in these conditions, you'd have econ advisor obsessed with tax cuts doing oppo research on gov't disease expert while hardest-hit state's governor self-designs poster celebrating himself with phrase "forget the politics.". Sorry, showrunners, I'm out.
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4. American corporations abandon and offshore critical industries and technologies, weakening the nation's economy and national security. Intel outsourced chip production, Boeing offshored vital aerospace components, Google and others site AI research in Beijing.
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3. American corporations wield their economic power to undermine democratic processes, threatening secondary boycotts of businesses in states like Indiana, North Carolina, and Georgia to force repeal of duly enacted legislation.
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“I’m for globalization and a strong safety net” seems likely to become for the next generation of insulated but determinedly respectable professionals what “I’m socially liberal and fiscally conservative” was for the last. -- The Once and Future Worker (2018).
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🧵One institution stands out for breadth of conservative priorities it could advance: generating widespread prosperity, limiting government intervention, preserving families and ways of life, revitalizing communities, fostering solidarity. The labor union.
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6/ Back in 1974, Soviet citizens "express astonishment when they learn that an American father can support a family of two, three or four children without his wife's working. Many are surprised that American women would willingly have more than one child."
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7. American corporations gladly help China, but not America. Google refused to work with the U.S. DoD. McKinsey has a "public commitment to anti-racism" but advises Chinese state-owned enterprises. Tesla takes billions in U.S. subsidies and then shifts its export hub to Shanghai.
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I'm genuinely interested in this question: why are the policies that are appropriate when daily crossers exceed 5,000 not also the appropriate policies when crossers fall below that number? This is not, generally speaking, how one enforces laws, if one wants the laws enforced. .
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An Institute of American Enterprise should focus intently on bad big business behavior, and what it portends for the future of a well-functioning market democracy. What say you, @MichaelRStrain, might our @BizRoundtable friends have something to answer for as well?. [end].
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1/ Political realignment is sending "socially liberal, fiscally conservative" cocktail party Republicans into the Democratic Party and the more racially diverse working-class Democratic base into the GOP. This means a radical shift for the politics of "big government". 🧵.
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6. American corporations promote racial polarization. Companies from Wal-Mart to AT&T to Raytheon "train" employees that America is a systemically racist society and instruct them to understand themselves and their relationships in terms of racial conflict.
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9/ Now imagine telling an American in 1974: 50 years from now, our families will face these same pressures and we'll embrace this mandatory two-earner structure and push toward this kind of national daycare system. it's what people want, and frankly we won't have a choice.
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11/ . barreling from the other are ordinary people, the majority of Americans, who reject elite preferences but feel unable to assert others, except through the last resort that democracy affords them. Both sides are honking as loudly as they can.
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Progressives are demonstrating how their race-obsessed lens prevents them from even comprehending the emergence of a multi-ethnic, working-class, conservative coalition. But that won't stop it from arriving. My latest on The Commons @AmerCompass.
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Really embarrassing to see so many economists argue that a sharp decrease in the supply of migrant labor would create shortages or price increases. I think they must be forgetting that migrants are consumers too!. They should study the lump-of-labor fallacy.
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