The basic quandary for economists in this debate is that they stake their claims to expertise and deference on their field’s purported rigor, but they can uphold their own standards only under artificial conditions inapplicable to policymaking. As a result, their work’s defensibility bears an inverse relationship to its relevance.
Oren Cass is right to note that modern economists largely misunderstand Adam Smith. But the misunderstanding runs deeper and traces even further back than editorializing in 20th-century textbooks. For more than two centuries, scholars have ignored the relationship between Smith’s political philosophy and economic analysis.
Oren Cass’s essay demonstrates how the advantages of industrial policy, apparent to some of the founders of economics and foundational to the success of the United States, were carefully airbrushed out by advocates of free trade in the 20th century.
American Compass research director Wells King reviews two books on the de-growth movement.
As neoclassical economics steeped with market fundamentalist ideology started to gain ascendency in the 1970s, the federal government gradually abandoned efforts to help lagging regions.
While it is true that Sweden adopted some neoliberal reforms after an economic crisis in the early 1990s, Sweden is not, and never has been, a free-market welfare state.
American inequality is higher now than at any time since WWII. The gap is wide and getting wider. Read what the data show and why it matters.
Some right-of-center analysts have absolute conviction that basic statistics describing some of America’s challenges are obviously wrong
The United States is not producing 24,881% more computers than it was in 1980, and is likely producing significantly fewer because of offshoring.
Knowing that many Americans see flourishing as the right goal, both the freedom and fairness camps claim their policies generate flourishing. But mostly they don’t.
As hard as it is to believe, there was a time – before the New Deal – when economists were largely treated like any other interest group, occasionally saying something interesting, but usually ignored by policymakers.
Let’s peg the federal minimum wage to state median wages.
Raising the minimum wage would not increase unemployment; it would increase living standards for low-income workers—and, critically, it would boost overall U.S. productivity growth.
If one believes that ideas matter, then the person who has surely done the most harm to humanity is Karl Marx, as his writings led to Communism, with its repression and tens of millions of deaths (as well the rise of Nazi Germany).
Little persuasion happens in 280-character snippets, but people willing to explain their thinking and answer each other’s questions can still accomplish a lot by clarifying their views and identifying the underlying sources of disagreement. So I was delighted yesterday when the Cato Institute’s Alex Nowrasteh took the time to walk me through his understanding of how wages are set in labor markets.
When it comes to the economy, the Biden administration will have to focus on three things: COVID, a recovery package, and China. Everyone understands we have to get vaccines in the arms of as many Americans as possible as soon as possible. And hopefully the Senate can agree on an economic recovery package.
A few years ago, the Information Technology and Innovation Foundation (ITIF, the tech policy think tank I lead) surveyed several hundred DC policy folks to find out, among other things, what they thought ITIF’s political orientation was. About 40 percent said we were moderate, a third said we were conservative, and a quarter said we were liberal. Assuming the latter two groups weren’t clueless, it reinforced to me that on economic policy, the old conservative-liberal lines are anachronistic.
How are wages set in the United States?
American Compass’s Oren Cass suggests that the professional class might learn from the pandemic that “material living standards” do not always translate into “quality of life.”
In March, I could see that our social response to the coronavirus would be more consequential than the virus itself. Natural disasters can do great damage, but they do not usually change societies. By contrast, mass mobilizations for wars in the modern era have been deeply consequential.
Earlier this month I visited the National Civil Rights Museum in Memphis, located at the Lorraine Motel where Martin Luther King Jr. often stayed and where on April 4, 1968 he was assassinated while standing on the outside balcony, chatting with colleagues and getting ready for dinner.
On the most recent episode of Jonah Goldberg’s podcast, The Remnant, AEI director of economic policy studies Michael Strain delivers a harsh assessment of projects like American Compass.
Over the last several decades a major shift has occurred in how many U.S. elites – pundits, advocates, policy makers, and others – think and talk about corporations. For much of the 20th century most elites viewed corporations as an institutional tool by which America could best achieve its most important economic goals: innovation and increasing living standards. To be sure, there would always the occasional Enron or Tyco scofflaw, but these were seen as the exception, to be prosecuted and shunned.
With surging COVID-19 cases in many parts of the country and a widely available vaccine months away—and with consumer and investor confidence and spending likely to be weak even with a vaccine—the odds are quite high that economic recovery will be long, drawn-out, and weak. As such, Congress is rightly debating a fifth economic recovery package.
As we seek a realignment in American political economy we would do well to rediscover the thought of a 19th-century critic who did not like us very much. John Ruskin (1819–1900) found Americans obsessed with a liberty he considered license and naively committed to an ideal of equality he believed impossible: “also, as a nation, they are wholly undesirous of Rest, and incapable of it.” In her utilitarian preoccupation with commercial ventures, America had inherited Montaigne’s English vice of inquietude and seemed unlikely to recover.
The decline in American manufacturing hurt workers of every racial background.
In a recent Real Clear Markets column, economist John Tamny made the case that Oren Cass’s policy advice is backwards and will result in political doom for, in Tamny’s words, “the hyper emotional Marco Rubio.”
Daniel Moynihan once stated that “Everyone is entitled to his own opinion, but not his own facts.” This is no more true than with today’s debate over the health of U.S. manufacturing; a debate that is critical to get right if policy makers are to respond appropriately.
The Senate is finally back in Washington and negotiations over the next coronavirus recovery package are underway. The White House’s initial salvo was reported Monday and includes a capital gains tax cut, a measure to increase entertainment tax deductions, and a payroll tax cut.
Before anyone had heard the term “COVID-19,” working America was already in a crisis.
For my inaugural post here on The Commons, I want to offer a few thoughts on how one of the pillars of the American Compass mission, community, has too often been a blind spot in the prevailing view of the economy.
Welcome to American Compass. Our mission is to restore an economic consensus that emphasizes the importance of family, community, and industry to the nation’s liberty and prosperity.