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Policy Brief: The Global Tariff

Levy a tariff on all imports that rises until trade is balanced

Policy Brief: The Market Access Charge

Make American goods more attractive to foreigners than American assets

Policy Brief: The Import Certificate

Balance trade by requiring importers to purchase credits from exporters.

Policy in Brief: Balancing U.S. Trade

On this episode of Policy in Brief, Oren Cass is joined by American Compass policy director Chris Griswold to discuss how U.S. trade fell so far out of balance—and some ideas for how to rebalance it.

Bad Trade

“Bad competitiveness” results in weakening demand, which either reduces global production or requires surging debt to maintain demand and production at its existing level. Perhaps that rings a bell, because it is the world we live in.

The Import Quota that Remade the Auto Industry

President Reagan negotiated a quota on Japanese imports that bought Detroit time to retool and spurred massive foreign investment in a new manufacturing base in the South.

Chipping Away at Globalization Is a Smart Move

American Compass’s Oren Cass argues that the CHIPS Act marks an inflection point for America turning away from globalization and revitalizing domestic industry.

CHIPS Won’t Help China

American Compass executive director Oren Cass argues that demanding perfect legislation is a convenient excuse for voting no, and a standard by which everyone would always vote no.

Cutting China Tariffs Will Offer No Respite From Rising Prices

American Compass executive director Oren Cass makes the case against rolling back tariffs on China in response to inflation.

The Market’s Border Crisis

American Compass executive director Oren Cass makes the case that revitalizing the American industrial base requires moving beyond globalization.

Why the Economists Are Losing

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.

What Conservative Critics of Globalization Miss

It is hard, nay impossible, to find a more sophisticated conservative critique of globalization than that articulated by Oren Cass. Perhaps because Cass was once a card-carrying member of the economic establishment himself, he has an exceptionally clear sense of some of the problematic assumptions that have underpinned that establishment’s high level of support for globalization over the past three decades.

Globalists Finally See Reality

When the former high priests of globalization admit it’s not working, the time has come not only to ask why they’ve changed their minds, but also why they were so wrong for so long. Oren Cass’s exposé of the abuses of classical economic theory offers a valuable starting point. But the problems lie even deeper and extend much further.

How to Bound the American Market

In his essay, Oren Cass correctly argues that a well-functioning capitalist system requires a “bounded market” within a nation-state that imposes interdependence on labor, capital, and consumers. Frictionless capital mobility across borders, in contrast, decouples the interests of investors from their country and their workers.

Did Globalization Cause the Great Stagnation?

Analyzing the effects of any long-run macroeconomic trend is admittedly a difficult affair. After all, typically more than one big trend is happening at a time, which means that isolating the impact of any particular force requires careful and thoughtful empirical analysis.

Globalization: America’s Biggest Bipartisan Mistake

American Compass research director Wells King explores the history of the Uniparty’s push for globalization at all costs and the fallacies undergirding their arguments.

Why the Free Trade Debate Needs the Real Adam Smith

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.

It’s Time for a Neoclassical Economic Reckoning

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.

Freer Trade Isn’t Always Better

Oren Cass takes on the entrenched belief held by the U.S. economics profession that countries should always pursue a policy of free trade. He argues that Smith and Ricardo have been misunderstood for generations because their key assumptions around capital mobility were omitted as the arguments were passed down.

Just Say No to Rejoining TPP

Economic theorists treat globalization as the free market’s natural end state. But trade practitioners know that the opposite is true—that efforts at stitching together the world’s economies are among the messiest sausage-making exercises in policymaking.

America Should Use Existing Tools, Not Fashion New Ones

The debate over free trade versus protectionism has been around for hundreds of years, with a level of political prominence that has varied over time. After a relatively quiet period in the post-war era, the modern debate over trade and globalization’s rules and institutions has grown quite contentious.

Modern Economics Is Not an Illuminati Conspiracy

The first part of Mr. Cass’s argument is that the entire economics profession has either misread or misinterpreted a sentence in Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, and that it has built the case for free trade from that alleged misreading or misrepresentation. This is simply and fundamentally not true.

Weighing In

Commentators and policy analysts respond to our analysis of globalization and proposals to restore balance to the American economy

The Balancing Act

Policymakers can act on several fronts: market access and investment rules to govern the flow of goods and capital; sovereign actions taken in relation to global institutions; and immigration policy that affects labor market composition.

Republican Stance on Free Markets Is Shifting When it Comes to China

Despite the priority traditionally given to the free flow of capital, many now argue that Beijing should be the exception, writes American Compass executive director Oren Cass.

Wrong All Along

Each argument for globalization appeared sensible on its own terms, but each was built upon faulty premises or failed in the final analysis to support the ultimate agenda.

The Conservative Confusion on Globalization

The question is not will we manage our economy’s interaction with the global market, but how, writes American Compass executive director Oren Cass.

Where’s the Growth?

The era of globalization has coincided closely with the onset of precisely those problems that a clear-eyed analyst might have predicted and delivered outcomes contrary to the ones its ideologues envisioned.

New Report Finds Globalization Failed to Deliver Economic Growth and Good Jobs

PRESS RELEASE—New American Compass report on the failed experiment of globalization and an online quiz that exposes the bipartisan Uniparty’s witless case for globalization

Conflicted Party

The problem was that the powerful and wealthy saw no problem. They benefited from closing American factories and moving jobs abroad. They benefited from lower wages. This was their agenda from the start.

Regaining Our Balance

How to Right the Wrongs of Globalization

Searching for Capitalism in the Wreckage of Globalization

Mutual dependence between capital and labor, not mere “economic freedom,” is what Adam Smith so ably described. Globalization destroys it.

Has the Right Gotten It All Wrong?

Oren Cass joins David Bahnsen to discuss globalization, market orthodoxy, and much more.

Can Free Trade Work for Everyone?

Pete Coy discusses the debate over free trade, highlighting Oren Cass’s rebuttal of Glenn Hubbard’s recent book.

20 Years of “Free Trade” with China

We have adapted Senator Rubio’s speech as an essay, which we are pleased to present as this week’s Compass Point: Trading It All Away.

Trading It All Away

Adapted from remarks delivered by Senator Marco Rubio on the 20th anniversary of China’s ascension to the WTO.

Marco Rubio Gets It. Our Economic Addiction to China Is a National Security Threat.

Henry Olsen discusses Sen. Rubio’s remarks at American Compass’s inaugural Henry Clay Lecture in Political Economy.

Why China Matters to You

Twenty years into the foolish experiment of Chinese ascension to the World Trade Organization, America now has a strategic peer whose values and goals in conflict with our own. We have committed to an international system on the assumption that we would set its course, and face a hoisting by our own petard if adversaries gain leverage within its institutions.

After Hegemony

After decades of foreign policy debates centered on dealing with states and actors far weaker than ourselves, the United States has lost the “finger tip feel” and grammar for determining how to respond to a nation that is comparable to us in power.

The Costs of Tech Policy Inaction

Regulatory skeptics make a fundamental mistake in assuming that the United States can freely choose between greater state intervention in digital markets and a continued laissez-faire approach.

A Guide to the Semiconductor Industry

A guide to what is happening in the semiconductor industry and how the U.S. fell behind its competitors in the global race for leadership.

If We Can’t Agree on a Global Minimum, Abolish the Corporate Tax

It may come as a surprise to many readers that arguments about radically altering the concept of corporate taxation do not hail exclusively from right-wing libertarian think tanks.

Magical Thinking on China and Trade

Unilaterally disarming from trade conflict on behalf of open markets, and then making empty demands, is not a plan.

Trade After Trump: A Post-Mortem with Former USTR Robert Lighthizer

Ambassador Robert E. Lighthizer joins American Compass executive director Oren Cass for a conversation about his work as the U.S. Trade Representative, the overhaul of America’s economic relationship with China, successes achieved and lessons learned, and key challenges facing the Biden administration.

Trade After Trump: A Post-Mortem with Former U.S. Trade Representative Robert E. Lighthizer

Former U.S. Trade Representative Ambassador Robert E. Lighthizer joins American Compass executive director Oren Cass for a conversation about trade policy, in his first interview since leaving the administration.

The Immigration Shimmy

Immigration expansionists face a difficult challenge: they support high levels of immigration—including many more less-skilled immigrants—for a variety of legitimate reasons, but the less-skilled immigration has detrimental economic effects on Read more…

Worker Power, Loose Borders: Pick One

A funny thing happened in the days after we published “What Happened: The Trump Presidency in Review.” The collection’s emphasis on the success of economic policies that pushed the labor market toward full employment attracted substantial interest from proponents of looser fiscal and monetary policy. But that “strange new respect” came with the mandatory caveat that we were still wrong to suggest increased immigration enforcement and a slower inflow of new workers might be part of the same package.

Shooting Down the Flying Geese Theory of Trade

Although neoliberal globalists are often said to be opposed to industrial policy and strategic trade, that is not necessarily true.  Neoliberals of the kind who have dominated U.S. policy under the two Bushes, Bill Clinton and Barack Obama are not orthodox anti-government libertarians.  They support a particular kind of industrial policy, whose emblem is not the American eagle but the Japanese goose.

War Footing: Made in the Americas

Taking the side of ancient particularity in its long-standing quarrel with modern universalism, I warned in a July Commons post against the temptation to orient American policy towards China around the moralizing language of human rights that has dominated international discourse since the Second World War.

Are British Conservatives Providing a Future Template for Post-Trump Republicans?

Much as the Brexit referendum anticipated the rise of the Trump presidency, the current UK Conservative government led by Prime Minister Boris Johnson may now be providing clues as to a possible future path for the post-Trump Republican Party in the United States.  The prevailing ideological preferences of Johnson and his advisors are becoming increasingly clear in the context of the United Kingdom’s current negotiations with the European Union (EU), where the vexed question of state aid to industries may ultimately become the issue that torpedoes a comprehensive free trade deal.

How We Do the Work Is As Important As Where We Do It

Repatriating supply chains to home shores has become an increasingly fashionable topic in the wake of the COVID-19 pandemic. Part of the rationale is to ensure that adequate redundancy and resiliency are built into our economies, even at the cost of “just in time” inventory accumulation practices (which have prioritized short term profitability at a cost of the kinds of supply shocks we are experiencing today).

Balanced Trade, Robust Industry, and Rising Productivity: Pick All Three

Professor Dan Drezner is again illustrating how we ended up with a misbegotten consensus on globalization built upon inadequate assumptions and shallow analysis. A couple of weeks ago, we encountered him badly mischaracterizing a study about the supposed value of trade liberalization. Breezing past that issue, he is back now with a more outlandish claim, that: “a world in which ‘trade were balanced, domestic industry robust, and productivity rising’ is a world that not only does not exist, but very likely cannot exist” (emphasis in original).

Time for a Hegelian Synthesis on Trade and Globalization

German philosopher Hegel postulated that history progresses through thesis, antithesis and then synthesis. Today we are seeing the first two dynamics with trade policy and attitudes towards globalization; we desperately need the third.

Free Trade and the Paradox of Consumption

In a recent post, Rachel Bovard rightly defended the notion that in certain instances national security considerations should supersede free trade considerations. She specifically cited the ban on Huawei in the context of a discussion of a recent Real Clear Markets column by economist John Tamny, who makes a traditional free market case against the ban on Huawei in the US market

Failing a Test on Trade

Professor Dan Drezner has been crudely criticizing Senator Josh Hawley’s New York Times op-ed on U.S. withdrawal from the WTO—treating it  “the way one would treat an undergrad paper in global political economy,” awarding a C-minus, and offering the feedback that, “You can do better work than this, Josh. Put in the effort, do more research and make sharper arguments next time.” He exposes the fundamental weakness of his critique though, with the claim that “Hawley prefers exiting the WTO and rejecting the estimated $2.1 trillion in benefits from trade,” in the process demonstrating exactly what simplistic economic analyses of trade policy get wrong.

“TRIM” the WTO, Don’t Abolish It

It is refreshing to see an increasing number of politicians and pundits from across the political spectrum calling for re-establishing their manufacturing base to address the vulnerabilities exposed in the wake of COVID-19.  The latest is GOP Senator Josh Hawley, calling for the abolition of the World Trade Organization, in a NY Times Op-ed.

Josh Hawley, the WTO, & the Shifting World Order

Sen. Josh Hawley recently opined in the New York Times about the need for the US to back out of the World Trade Organization (WTO) and engage the global economy with bilateral trade agreements that better reflect American interests.

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