In a recent essay for the American Conservative, Oren Cass offers a compelling critique of conservatism’s “free market fundamentalism.” With the market leaving behind “entire demographic and geographic swathes of the nation,” notes Cass, whatever comes after Trump must “depart substantially from what came before.”
I wholeheartedly agree. Unfortunately, the post-Trump vision Cass presents fails to depart from what’s arguably the key pre-Trump conservative dogma: Hostility to anything that smacks of “redistribution.”
It’s one thing to oppose redistribution as a cure-all for our increasingly bifurcated labor market. Here, I fully agree with Cass’s focus on “predistributive” approaches to creating a high-wage economy directly. It’s another thing entirely, however, to preemptively dismiss any form of new social spending (a point I elaborate on in my full response to Cass’s essay here). For one thing, it’s inconsistent with Cass’s support for a national wage subsidy program which, while distinct from traditional “welfare,” would nevertheless require a large apparatus of redistributive transfers. But more to the point, it neglects the extent to which “free market fundamentalism” is simply shorthand for the sort of spend-thrift, “small government” libertarianism that Cass is otherwise correct in decrying.
As Cass writes,
The partnership between economic libertarians and social conservatives that characterized the late 20th century’s fusionism worked because the minimalist economic policies prioritized by the libertarians appeared in practice to be supporting the social outcomes prioritized by the conservatives. Post-Trumpism, starting from the premise that this no longer works, asks, “what’s gonna give?”
Hear, hear! Yet if fusionism is really dead or dying, why should social conservatives continue to feel obliged to let “fiscally-conservative, socially-Burning-Man”-types put them in a policy straightjacket?
One of the few times when I have found myself in agreement with Paul Krugman is when he famously wrote, “Productivity isn’t everything, but in the long run it is almost everything.” Yet, today, this statement is not only passé, but downright suspect, at least among many U.S. elites. For in a world characterized by neo-Luddite fear of new technologies and outlandish claims that technology will destroy most of our jobs, public and elite opinion has shifted to a view that “productivity is almost nothing, especially if any worker loses their job from it.”
This matters greatly because for over 200 years the United States political system supported, or at least didn’t significantly object to automation. That enabled extremely high rates of productivity growth.
But now many elites tell us that automation is harmful. Read More
The Wall Street Journal’s defense of private equity (“Populists Don’t Know Much About Private Equity”) is an impressionist masterpiece of market fundamentalism, relying on the unexamined assumption that fees paid to private-equity partners represent “social value.” One can simply step back and gawk in amazement, but true appreciation requires poring over each brushstroke. Read More
Since the neoliberal era began in the 1970s, many public policy thinkers have assumed that America’s employment-based benefit system of welfare capitalism is doomed to extinction by the growth in freelance or gig workers. To replace employer benefits, the left tends to support welfare statism and the right tends to support welfare individualism, in the form of portable, individualized tax credits or savings accounts.
Contrary to popular belief, however, the number of true gig workers is relatively small and has been stable for decades. In a new article in Tablet, I suggest that rather than replacing our legacy system of welfare capitalism with radically different socialist or libertarian models, we should universalize welfare capitalism by mandating the provision by employers of health insurance, paid parental leave, paid vacations and other benefits, with transitional subsidies to help small businesses adapt. Read More
As we tend to do with momentous occasions, I clearly remember where I was and what I was doing when I heard the first lines of Lin-Manuel Miranda’s Hamilton. It was a hot and humid day in August, my parents had the kids so I was prepping for an insulation project in our attic, and on a friend’s recommendation I hit play on the original cast Hamilton soundtrack which was free on Amazon Prime. For months afterwards I listened repeatedly, during dishes, folding laundry, increasingly captivated. (I may or may not have convinced my husband to make a trip to NYC for our anniversary in order to see Hamilton’s grave and home in Harlem; I may or may not be calling the child in my womb Eliza.)
Hamilton for me was an antidote to cynicism, a renewed hope that despite our nation’s many faults and failings and despite deepening polarization there could also be a common respect for the constitutional republic which we share—something for Dick Cheney and President Obama to agree upon, a way to celebrate being American that felt both accessible to progressives and conservatives.
So I was intrigued by the recent Time magazine piece, “Will Hamilton resonate in 2020’s America?” in which Andrew Chow writes that “Hamilton remains an astonishing triumph in so many ways” but asserts that “when the film drops on Disney+ on July 3, it will arrive into a world that has been transformed by the past four years. A very different President holds power; income inequality has widened; a pandemic has wiped out the life savings of thousands of Americans, souring the musical’s bootstraps premise.” Read More
There are many reasons to be pessimistic about the future of this country at the moment, and most of them are hard to ignore. But there are also new glimmers of hope appearing in important areas, even if they don’t get much media attention.
Specifically, it appears that Congress is finally beginning to take semiconductor manufacturing and supply chains seriously. There are currently two major proposals in the Senate that aim to rebuild America’s semiconductor production capacity, and these initiatives follow TSMC’s decision to build a semiconductor fab in Arizona, with significant federal and state support.
One proposal is the American Foundries Act, cosponsored by Senators Tom Cotton, Chuck Schumer, Josh Hawley, Marco Rubio, and others from both parties. The bill provides $15 billion for commercial semiconductor manufacturing, delivered through block grants administered by the Department of Commerce. It also provides $5 billion for production facilities for defense applications and $5 billion in research funding for DARPA and other agencies.
The other bill is also a bipartisan effort, sponsored by Senators John Cornyn and Mark Warner. This bill would create a 40 percent refundable income tax credit for semiconductor equipment, $10 billion in federal funding to match state incentives to build semiconductor factories, and $12 billion in R&D funding.
It would be unfortunate if these proposals were pitted against each other at the expense of their shared goals. Both represent a meaningful improvement over the status quo, and there are rumors that they might eventually be merged. That said, in my opinion there are two reasons to prefer the Cotton bill. Read More
Just a few years ago, it was possible for nationalist Americans to warn foreign enemies like North Korea that the US was a “hyperpower.” A few decades ago, however, the label was a term of abuse: French Foreign Minister Hubert Vedrine used it to describe an America that had gone beyond even the bounds of superpower, to become “a country that is dominant or predominant in all categories.” In fact it was the globalized power of the Clinton-era US, according to Vedrine (and many others at the time), that had become “abusive.” The only antidote, he ventured, was “steady and persevering work in favor of real multilateralism against unilateralism, for balanced multipolarism against unipolarism, for cultural diversity against uniformity. None of that will happen automatically and our influence in the world isn’t going to grow all by itself. A strategy, a tactic, a method, are necessary. It’s possible.”
Even as the first stirrings of coronavirus made their way to the West, the nationalist and populist movements aimed at undoing the heavy damage of the Clinton-Bush-Obama years looked with renewed esteem toward a muscular and proud America. But in just a handful of months, that dynamic has been virtually destroyed. Today it is the woke state–through its administrative elite, managerial underclass, and online and offline mobs–that is poised to seize and wield American hyperpower. And it is the woke state’s adversaries that must now consider how to organize and persevere against the new uniformity and unilateralism that its leaders and its foot soldiers wish to impose, not just on all of America but on the whole world.
Analysts and commentators talk about today’s “precariate.” The term plays on the Marxist notion of the proletariat, recasting it to describe gig workers, college grads whose income is swallowed by student loan debt, and wage-earners who can’t stay ahead of heath costs, childcare costs, car repair bills, and credit card debt.
The term is useful. But many commentators fail to recognize is that there is a social-cultural precariousness that is as debilitating as the economic vulnerability that characterizes the lives of many American workers.
The opinion pages of both the Financial Times and Wall Street Journal have featured calls for industrial policy in the past week, an encouraging trend toward realism about the necessary role for government in a free-market economy. In the Times, yesterday’s editorial warned against “the absence of a proactive industrial policy” and argued that “quick adoption or reiteration of a series of long-term industrial goals would … greatly benefit Britain’s post-coronavirus rebuild.” This expands notably on its observation at the pandemic’s start that “governments will have to accept a more active role in the economy” through public services and active labor-market policy. The Journal, for its part, took the confusing step of running an op-ed proposing industrial policy under the headline “America Doesn’t Need an Industrial Policy.” Continuing to haggle over the term even as the substance moves forward will generate some confusion, but it marks progress down the path toward better policy.
The excellent op-ed, by the Hudson Institute’s Thomas Duesterberg, proposed to make the American economy “more resilient and secure” through a series of government interventions. By all appearances, Duesterberg was among those confused by the attempt to couch his agenda as opposition to industrial policy. On one hand, he did write that, “an industrial policy remains a bad idea. … History records few examples of democracies in which political leaders have successfully steered their economies by targeting industries for support.” On the other hand, within a few sentences he was suggesting, “the U.S. would benefit from a government-led effort to identify industries that are vital to national security and products that are essential in national health emergencies”; a sentence after that, “the federal government must also consider how to protect the overall economic strength of important and capital-intensive sectors like semiconductors and telecommunications equipment.” Read More
ITIF recently released a report about how “innovation mercantilist” policies were instrumental in enabling China to dominate the global telecom equipment industry, and how that rise came at the expense of global innovation in this industry.
A typical response to the report was along the lines of “So what. The United States had industrial policies too.” In other words, the implication was that once you go down the Listian path of national developmentalism, any and all policies are valid and not open to criticism. Read More