ECONOMIC POLICYHow Free-Market Policymakers Got It All Wrong for Decades
Conservative economist says singular focus on deregulation, unfettered trade failed to deliver for American households.
The free-market policymakers of the late 20th and early 21st centuries have “an empirical problem,” said Oren Cass, J.D.’12, founder and chief economist of the conservative think tank American Compass.
“The stuff they were doing on economics did not work.”
Cass, author of “The Once and Future Worker: A Vision for the Renewal of Work in America” (2018), argued in a talk last week hosted by the Department of Government that the era’s Republicans, with their focus on deregulation and unfettered trade, marked a departure from the party’s longer, more productive traditions of building the economy by bolstering the labor force.
Cass’ ideas, anchored by social conservatism, are gaining traction with a younger set of policymakers on the right. But his pro-worker rhetoric overlaps at times with language used on the left. “Marco Rubio and J.D. Vance on one side and Bernie Sanders and Elizabeth Warren on the other actually see a lot of the same problems in the economy and are willing to say it,” offered Cass, who rang a note of optimism over this “increasing consensus.”
Across U.S. history, he said, Republican presidents rarely fell in line with what many today consider GOP economic orthodoxy. Abraham Lincoln, William McKinley, Teddy Roosevelt Jr., and Richard Nixon all used tariffs to shore up domestic industry and protect the country’s wage earners.
Former President Ronald Reagan, celebrated by conservatives for his embrace of free enterprise, raised taxes at least five times and was far more protectionist than his reputation might suggest. Cass underscored this point by offering background on Reagan’s famous quote: “I’ve always felt the nine most terrifying words in the English language are: I’m from the government, and I’m here to help.”
Reagan uttered these words in 1986 while announcing record-breaking aid to American farmers, including drought assistance and price supports. “One of the very funny things about what we think of as Reaganomics, conservative economics — what I call market fundamentalism — is it’s actually a post-Reagan phenomenon,” Cass said.
How did the market fundamentalism come to dominate politics on the right? Cass, a policy adviser to Mitt Romney’s 2012 presidential campaign, pointed to the distinct interest groups that comprised the famous “three-legged stool” of Reagan’s electoral coalition: social conservatives, economic libertarians, and national security hawks.
“What do these three groups have in common?” Cass asked. “They all really, really, really hate communists. And in the middle of the Cold War, in the context where the Democratic Party was — let’s be honest
