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Whose Realignment? On Oren Cass’s Vision of Post-Trump Conservatism

The New Deal's social welfare programs have actually fared much better than its industrial policies.

At the height of the Tea Party movement, many on the right began to genuinely believe America was in the midst of a limited government realignment. Republican and independent voters were angry, and that anger was being channelled toward candidates who evinced an uncompromising commitment to the founding principles of 1776. Yet as real and grassroots as that energy was, the Tea Party still required the intellectual work of professional conservative and free market organizations, i.e. the “conservative movement,” to give content to its inchoate form.

For their work, they were rewarded with a wave midterm election in 2010. Nearly one third of Tea Party-endorsed House candidates and half of Tea Party Senate candidates won their races, generating up to five million additional votes for the Republican Party nationwide. In a special election issue, Time Magazine dubbed the new wave of lawmakers the Party Crashers. “How a new breed of Republicans tapped into voter rage and upset the Establishment,” the cover read, “But can they govern?”

In the decade since, we’ve learned the answer to that question is a rather resounding “no.” And with much of the same grassroots energy shifting to Donald Trump’s election in 2016, we also learned the mistake of ascribing sophisticated philosophical commitments to the electorate. Or as Tea Party congressman Thomas Massie put it, “They weren’t voting for libertarian ideas—they were voting for the craziest son of a bitch in the race. And Donald Trump won best in class, as we had up until he came along.”

The result has been a President elected on the basis of a fairly ambitious legislative agenda—replace Obamacare with something better, build a border wall and reform the immigration system, invest massively in infrastructure, and revitalize American manufacturing—with a bullpen of allied lawmakers who have no particular interest, much less the acumen, to actually move legislation. This disjunct has pushed much of the quintessentially Trumpian agenda into executive branch actions, which are routinely undermined by legal challenges if not the ambivalence of the President’s own staff. Thus despite all the talk of Trump provoking a “political realignment” around an economically populist brand of conservatism, his signature legislative achievement—the Tax Cuts and Jobs Act—is indistinguishable from what one might have expected from a Jeb Bush administration. Add in steel tariffs and minor tweaks to NAFTA, and we’re back to Bush 43’s first term.

Counterculture or Counterestablishment?

There are two broader lessons to draw from the experience of the last four years. The first is that ideological purity matters much less to Republican voters than it does to conservatism’s Beltway gatekeepers. The GOP’s base has a level of dispositional and demographic continuity, but how that maps into a coherent governing philosophy has many degrees of freedom. The second is that, while all elections matter, winning office on a heterodox policy agenda is moot without the institutional capital and personnel to back it up. Michael Lind makes this point eloquently in his 2020 book, The New Class War, where he notes that “today’s populism is a counterculture, not a counterestablishment. A counterculture defines itself in opposition to the establishment. A counterestablishment wants to be the establishment.”

This is the context in which conservative thinker Oren Cass has launched his new project, American Compass, to which I am a contributor. As a membership organization, American Compass can be thought of as an effort to build out a conservative counterestablishment based on many of the issues Trump’s election either raised or represented. Members include journalists, lawyers and academics, but also a cadre of reform-minded Republican legislative staff. In that sense, American Compass somewhat mirrors the Democratic Leadership Council’s ambition in forming the New Democrats — only rather than trying to shift the Democratic Party rightward, American Compass hopes to shift the post-Trump Republican Party in some sense leftward, or at the very least away from what Cass calls “free market fundamentalism.”

In an essay for The American Conservative, Cass distinguishes between those on the right charting a post-Trump future and those who long for a return to the pre-Trump, “let markets rip,” consensus. I joined American Compass enthusiastically in part because I see Cass’s vision as a cousin to my own. Markets are important, but not the be-all-end-all of public policy. If markets are failing to deliver inclusive economic growth and human flourishing, it’s markets that must adjust, not we humans.

That might sound surprising, because in the same piece Cass holds up my home organization—the Niskanen Center—as representative of the opposing view. Citing a paper I co-authored with several of my colleagues, Cass portrays our position as “let markets be markets, and use redistribution to clean up afterward.” His evidence for this claim is a line in which we describe the “China Shock” as less a failure of trade policy than “as an indictment of our inadequate social insurance system.” This is meant to contrast with the American Compass philosophy of “predistribution,” in which protectionism and direct regulation of the market “channels investment toward goals beyond aggregate consumption,” creating a “high-wage/low-welfare” society where stable families and flourishing communities result naturally.

Needless to say, there are many policy shops in D.C. for which “liberate markets and redistribute the gains” resonates, but applied to us it’s at best incomplete, and at worse a severe mischaracterization. The very same paper Cass cites, for instance, contains a section titled “Beyond Market and Democratic Fundamentalism” in which we reject the notion that “all you need to get markets up and running is to get government out of the way.” Instead, we write that markets are “creatures of regulation, law, and custom” and “products of design—for good or ill.” In education, for example, we note that “charter schools work best in districts with a strong, relatively autonomous governing structure, rather than those characterized by a laissez-faire, anything-goes approach.” This is because educational markets require “very strict rules on market exit for those whose schools do not work well.” Educational competition, in the sense of light restrictions on market entry, thus requires a variety of “pre-market” support systems to function effectively.

Something similar holds true for America’s vitiated manufacturing base. In context, our claim about the China Shock refers to the finding that SSA disability benefits were nearly three times more responsive to trade-induced job loss than Unemployment Insurance and Trade Adjustment Assistance combined. Absent adequate wage insurance and reemployment programs, many displaced workers fell back on disability insurance as a demoralizing kind of “guaranteed minimum income,” and not for lack of strict barriers to eligibility. Had these same workers stayed attached to the labor force, they could have transferred their skills into higher-value lines of production, perhaps at the very same factory if America had a more robust manufacturing extension program (public-private partnerships that help manufacturers upgrade their processes, and which President Trump’s budget proposes abolishing). Instead, it was the laissez-faire attitude of policymakers vis-à-vis the pre-market support systems required for competition to help rather than hurt American workers that made dependency on redistribution the path of least resistance.

“Big Government,” True and False

Underlying the stunted worldview of pre-Trump conservatism is ultimately a conflation of “big government” with taxes and transfers. The view originated in the Old Right’s opposition to the New Deal, but the conservative movement’s obsessive opposition to the “welfare state” didn’t fully crystallize until after the Reagan Revolution. From then on, conservatives lost touch with the vocabulary of social insurance, and began to equate any and all social spending with “redistribution.” This suppressed the important distinction between programs in which citizens contribute to mutual insurance systems that protect against common risks, and purely egalitarian transfers designed to provide relief to the poor while soaking the rich.

Unfortunately, this ideological confusion has carried over into Cass’s vision of post-Trump conservatism, suggesting less of a break with fusionist dogma than advertised. In turn, Cass is forced into a kind of doublespeak, criticizing us for being too sanguine about the free market, while simultaneously maintaining that our commitment to the social safety net “is fatally flawed in both theory and practice” because social insurance inevitably “invades the market” and undermines “individual liberty.”

A moment’s reflection reveals the incoherence of this perspective. For one, a focus on taxes and transfers implies a country that combines universal social insurance programs for medical care, retirement, unemployment and paid leave is somehow less “free” than a regime with none of the above, even if it’s combined with limited restrictions on personal and commercial behavior. Conversely, a country that taxes and transfers little but which achieves a similar degree of economic security through mandates, price controls, and autarky will be perceived as maximally free. While this latter path may have a federal budget Grover Norquist could drown in a bathtub, I contend it in fact represents the “bigger” of the two styles of government.

The New Deal contained many things both good and bad, but Social Security has stood the test of time. No other single program has done more to reduce poverty in America, while serving as a foundation for the growth of America’s middle-class into the 1950s and ‘60s, at least for those working in covered occupations. Its enduring popularity is attested to by large majorities of public support for either maintaining or expanding the existing system, including within Trump’s base. Nonetheless, Social Security represents fully one-quarter of the federal budget, second only to the combined cost of Medicare, Medicaid, and children’s health insurance. Contrast this with another New Deal era program, the National Industrial Recovery Act (NIRA) of 1933. However well intentioned, the NIRA led to an explosion of poorly administered industrial regulations, wage and price controls, and general strikes, until being nullified as unconstitutional only a few years after enactment. But hey, at least it didn’t increase the deficit!

Cass’s essay associates our support for social insurance with “‘technocratic progressivism,” but as the above example shows, this gets things exactly backwards. The labor market upheaval generated by the industrial revolution and the Great Depression led countries around the world to establish similar risk pooling arrangements, making Social Security among the least technocratic aspects of the New Deal. It was progressive ideology that demanded taking things a step further, guided by a belief that capitalism’s propensity for creative-destruction demonstrated the “evils of unrestrained competition,” and thus the need for national economic planning and regulation to reorient markets to the greater good. Sound familiar?

None of this is to deny the power of trade policy and industrial planning to improve on market outcomes. On the contrary, I have written extensively about the folly of admitting China to the World Trade Organization, and direct a policy initiative that calls on the center-right to embrace a “good jobs” industrial policy. Cass is aware of this, which is no doubt why I was invited to join American Compass in the first place. Yet you wouldn’t know it from his essay. In his eagerness to product differentiate, he instead portrays our openness to redistribution as a substitute for his market-shaping approach. Better to make a narcissism of small differences than to violate the arch conservative shibboleth, and admit to the many ways in which a high-wage economy and universal welfare state are in fact complementary.

It would help if Cass could point to a country with the sort of high-wage, low-welfare regime he prefers. Capitalism admits to many varieties, but this does not seem to be one of them. No doubt there are Northern European countries where egalitarian outcomes are achieved via a compressed, collectively-bargained wage structure, thus reducing the need for ex post redistribution. Consequently, these countries have relatively flatter tax structures and more universal, rather than means-tested, social programs. Nonetheless, their absolute level of taxation and spending is still much higher than in the United States. This shouldn’t be surprising, as high average wages correlate with popular demand for a wide variety of public goods.

Nor are corporatist models that devolve state functions like social insurance to member- and employee-owned organizations viable in the American context, at least at scale. It may appear to work for Germany, but that’s only in the background of a non-trivial Bismarckian welfare state. More importantly, we settler societies have to work with the institutions we inherited, which are emphatically not those of Medieval Europe.

Adding to the confusion is Cass’s long-term advocacy for a national wage subsidy scheme. Whatever their merits, wage subsidies are impossible to square with a blanket opposition to state-directed redistribution, much less with a high-wage political economy—a point I conveyed in my review of Cass’s 2018 book, The Once and Future Worker:

Upon closer examination, wage subsidies belong to the same class of neoliberal “competitiveness” policies that Cass is otherwise consistent in decrying. At scale, they would take the U.S. comparative advantage farther down the low road of cheap, abundant labor, expand the kind of unproductive service sector jobs working class men supposedly hate, and hold back any chance of re-industrialization.

Trumpism in Theory and Practice

What explains this slight of hand? With no hint of irony, the first paragraph of Cass’s essay supplies the answer: “People and organizations in broad agreement often fight with greater zeal amongst themselves than against their true opponents. Inventing and accentuating differences becomes a self-defeating prerequisite to asserting power.”

Despite our surface level agreement with American Compass on aspects of how post-Trump conservatism ought to evolve, we at Niskanen differ in making no bones about our antipathy to President Trump. Yet our concerns with this administration have less to do with policy (although there are many areas of disagreement there, too), and more to do with this administration’s incompetence, self-dealing, and contempt for democratic norms. Whether we need a border wall, for example, is a distinct question than whether it’s constitutional to declare a National Emergency and end-run Congress in the quest to build one.

Cass, in contrast, takes a quietist stance to the abuses of this administration. That may be because he sees riding the slipstream of Trumpism as the only way to influence the next stage of conservatism’s intellectual evolution. Unfortunately, this underestimates the extent to which Trumpism in practice, if not in theory, has simply offered a continuation of pre-Trump Republican orthodoxies. Again, this may be less Trump’s fault than a function of how his administration was staffed, in lieu of any real transition plan, by actors from within the mainstream conservative movement, including many a libertarian “policy entrepreneur.” But that makes these last four years no less underwhelming.

Reforming institutional conservatism from within is a fool’s errand. As my colleague Geoffrey Kabaservice has noted, “Despite Mr. Trump’s considerable flaws as a presidential candidate, he effectively diagnosed the reasons the Republican Party is widely disliked, even by its own voters. It has become the party of the white working class … but it has done next to nothing to address the terrible problems that disproportionately affect that class.” Indeed, for decades the pre-Trump Republican grift was to talk like a populist and walk like a libertine hedge fund manager. Trump was supposed to break this cycle, but has so far merely followed a hypertrophied version of the same playbook. “Left behind” communities across America remain just as devastated from job loss, opioid addiction, and family breakdown as they did before, only now more so, what with the whole pandemic thing. And as if to add insult to injury, the administration is now trying to block states from expanding Medicaid—a program that, whatever its other flaws, facilitates treatment for opioid use disorder.

I’m hopeful that American Compass and efforts like it will change this going forward. But they have a lot of work to do, none of which is aided by a preemptive rejection of anything that smacks of “redistribution.” So long as libertarian ideologues, the donor class, and Freedom Caucus-types have a veto over acceptable conservative thought, Cass’s vision of a post-Trump conservatism aligned around the interests of the working class will remain an exercise in wishcasting.

Samuel Hammond (@hamandcheese) is the director of poverty and welfare policy for the Niskanen Center.