Transcript: Oren Cass

An interview with the founder and chief economist of American Compass

With J.D. Vance as Trump’s running mate, the economic populism that’s ascendent in the Republican Party is in the spotlight. To understand this set of policy concerns, there is no better person to speak to than my guest on this week’s program, who has been influential in driving this agenda — and in challenging the economic orthodoxy on the right.

Oren Cass is the founder and chief economist of American Compass, and the author of The Once and Future Worker: A Vision for the Renewal of Work in America.

This is an edited transcript for paid subscribers. You can listen to the interview for free here.

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TH: Thank you for making the time to come on the show today. I've been really interested in getting to speak with you. I have been following — and trying to understand — the economic populism that's ascendant on the American right, in part because we're seeing echoes of it here in Canada. 

So, let me just start today by laying out where I'm coming from: I'm from the left. I'm in my forties. The left that I came up in was pro-organized labour, pro-working class dignity, interested in material conditions like housing. It was anti-war in general, and anti-U.S. as the world's policemen in particular. It was pro-speech. It was anti-globalization, wary of free trade and corporate power. And it was anti-establishment. None of this applies to the mainstream liberal identitarian left now — in your country or mine. But we are now seeing the positions I just described taken up by a faction of the American right, which you belong to and are influential in shaping.

So, I want to understand what has happened. We can do that by looking at what's happening on the left, which is something that I've spent a lot of time on. Or, we can do it by looking at what's happening on the right, which I'm now doing. I want to start by talking about your own progression. 10 years ago you were domestic policy director for the Mitt Romney campaign. Then you launched a think tank, American Compass, which from what I can tell, sitting here in Canada, challenges the economic orthodoxy of the Republican Party. Tell me about your intellectual evolution over the past decade.

OC: I think I came into conservative politics differently than most people probably do. I had actually done business consulting. But then went to law school when everyone else was going to business school, and then on to Mitt Romney's campaign. So, I never actually did the usual learning of the orthodoxy — all the fellowships, think tank internships, and working in Hill offices. That partly, I think, builds allegiance to the existing way of thinking, but also provides something of a brainwashing function probably.

I always would have described myself as very conservative, but what I found even working on the Romney campaign was that a lot of things that were just the things that Republicans were supposed to say didn't necessarily align very well with what I would have thought conservatives actually believed. I certainly didn't have a well-developed alternative in mind at that point. But a particularly formative experience for me, that I've written about a bunch, was working on trade policy, which was part of my portfolio. I brought then-Governor Romney the very standard briefing on what a Republican says on trade. And he said, “That's fine, but what are we going to do about China?” All of the senior economic advisors were aghast, like, “What kind of question is that? We're going to do free trade with China, because free trade is good.” 

And Romney said, “No, from a businessman's perspective, that was obviously wrong — and misunderstood what was happening.” So, I got sent off to figure out what else could we say about China, and discovered a right-of-centre economic community and policy community that could not answer the question. And was not interested in answering the question. It was based on this set of assumptions that the goal was just GDP growth, as economists had defined it. The goal was consumer welfare, and having as much cheap stuff as possible to consume. And whether we actually made anything in America was a totally anachronistic, nostalgic thing to even care about.

On the trade issue alone, that was obviously quite jarring — and has become something I have worked on ever since. But it also spoke to a problem in the set of core assumptions. If the assumptions were leading to that thinking on trade, what else were those assumptions leading to? So, ever since I've been trying to go back and say, “Wait a minute, let's actually work from conservative principles toward making sense of the problems we have today.” And that requires throwing out an awful lot of assumptions and landing in a lot of different places than where the Republican Party was a decade ago.

TH: Your own progression aligns with this shift that is happening within the conservative movement at large. Can you help me to understand the distance between the Old Right — which you've described as the party of tax cuts, free trade, and even, I think you joked, busting unions — and the New Right, which has this more working-class base. How would you describe this evolution, and where the current fault lines are?

OC: The Old Right, I will often describe it as wedded to a certain market fundamentalism. What it comes down to is understanding the coalition that Ronald Reagan built and brought to such success. It's typically called, in the U.S., “fusionism.” It brought together very libertarian free market economic thinkers with social conservatives and Cold War hawks. That was a very sensible coalition in the context of winning the Cold War. And it did win the Cold War. Kudos to them, by the way. 

But as with any coalition, there are things you'll agree on and things you won't. And the effect of outsourcing all of the economic thinking to libertarians was that the economic policy that emerged wasn't actually conservative at all. For one thing, it essentially took the free market to be the end unto itself, rather than taking seriously a broader definition of human flourishing that conservatives might care about. It was extremely doctrinaire and absolute, instead of prudential. Libertarians, one of the strengths arguably of their thinking is it is extremely internally coherent. But it's also just very absolutist. 

Whereas conservatives, going all the way to Edmund Burke, tend to take a much more pragmatic approach to thinking about what the problems actually are, what the circumstances are, and what government can and cannot do. With the end of the Cold War, with the era of globalization, we ended up with this strangely expired coalition still being held together by default — even though its elements didn't really agree with each other, particularly on the things that were now becoming the big issues. 

I think you rightly described this evolution that's been going on, that really starts after 2012. A lot of interesting things were happening in the real world in that period. That's when all of the economic research about the China Shock was published. People actually had to start admitting free trade with China was not working. That's when all of the research on deaths of despair and the opioid epidemic were published. People had to start realizing that for large segments of the population — so much so that overall life expectancy was falling — for large segments of the population, the economic and social conditions in the country were just not conducive to flourishing. And so, what you ended up with were the libertarian economists who just sort of shrugged and said, “That's fine. Our libertarian principles are still the correct ones.” And then, a bunch of conservatives who said, “Whoa, wait a minute. This is a very different set of problems. We are clearly getting things very wrong. What are we going to do about it?”

So, I think the best way to understand the Old Right — and what today I would describe as the legacy right —  is those who continue to insist that it is still 2014, and Ronald Reagan's 1980 playbook is the correct one. And the New Right is much more the conservatives who bring these conservative principles to the actual problems, whether that is the problem of free trade, the rise of China, uncontrolled immigration, Big Tech, the financialization of the economy. It is a totally different set of problems and it requires new thinking.

TH: In a recent piece for The New York Times, you called out the Republican establishment. You wrote: “During the Trump administration, a G.O.P.-controlled Congress made its one major accomplishment a tax cut. Wall Street remains mostly off-limits to criticism, let alone constraint.” And you later add: “The party’s anti-Trump faction spent eight years plotting its return to power only to rally behind Nikki Haley, the quintessential vessel for the anti-government, pro-globalization ideology already rejected by the party’s voters.”

So, on the one hand, what I'm seeing is that we have these populist senators like Josh Hawley writing Op-Eds about pro-labour conservatism and praising the Teamsters president's appearance at the RNC as “a watershed moment.” But then on the other hand, there is the Heritage Foundation’s Project 2025, which I know you contributed to the labour chapter for, which Ezra Klein pointed out in his podcast interview with you proposes reversals on pro-union policy. Which version of the Republican agenda should the American public believe, and vote on, during this time where there is this tug of war going on?

OC: Well, I think we're in a period of transition — and Trump himself is obviously a huge factor in that. Trump is an extraordinarily disruptive figure. He created the space for a lot of new thinking, and for people in the right-of-centre to question what is the coalition, what are the problems going forward. But he obviously does not have an especially well-defined ideology or platform himself. I think it's really important to distinguish the question of what exactly is happening at this moment — What does Trump stand for? What would a Trump administration do? — from the broader question of where is the right-of-centre and the conservative movement headed? Because the funny thing about Trump is that he's sort of the dog that caught the car.

These sorts of shifts in coalitions happen every few decades in any country. Typically it's a catastrophic political failure that is a trigger. In the 1960s in the U.S., Barry Goldwater gets crushed in 1964, but that leads to the new conservative movement and ultimately Ronald Reagan's success in 1980. It's Walter Mondale getting crushed by Reagan, then, that leads to the new Democrats and Bill Clinton ultimately winning in 1992. Everything that's going on in conservatism would make a lot more sense if Donald Trump had lost by eight points. Which, by the way, he very well could have to an even vaguely competent Democrat in 2016. 

All this work, the emergence of this new group of senators — not just Josh Hawley, but also Marco Rubio, J.D. Vance obviously, Tom Cotton — they are the ones doing this work and charting the course for what the Republican Party will be going forward. In the meantime, you have this transitional period where you have a figure like Trump. During his first term, you do still have Paul Ryan as Speaker of the House and Paul Ryan wants to do a big tax cut. And so, it is a strange point along the way. But if you look forward at where things are headed, I think it's quite clear that Nikki Haley is not coming back — that the future is going to be very different from the past.

TH: I was looking at that Project 2025 document, and the way that it's framed. It talks about taking down the Deep State. I wonder if that kind of conspiratorial language is helpful for this moment in American politics. Does it fuel distrust and hysterical thinking, in much the same way that the left does with its claims that democracy constantly hangs in the balance? Am I wrong in reading it that way?

OC: I think that's a fair point. I think there's a lot of counterproductive rhetoric on the right, partly to your point about the extent to which it seems to be incredibly anti-institutional. I think there are many serious problems with many of America's institutions. But just as a realist, and especially as a conservative, I think it's important to think about why that's the case and what one can constructively do about it instead of trying to burn it all down, so to speak. 

I think that's definitely one of the forces that’s not constructive. I also don't think it's very politically effective. I think what most people are looking for is actually something a lot less angry and polarized, and a lot more pragmatic. Certainly it is unfortunate, I think, that to your point on both sides right now, that we don't have a lot of political figures who seem to be frankly even very rationally behaving in the way that would be likely to attract the most votes. It makes sense if you spend enough time with the political consultant class. But it doesn't make a lot of sense if you zoom out and think about what a well-functioning democracy would be pushing toward.

TH: On that point of extremes, I wanted to raise the issue of immigration as well. In Canada, we had a pro-immigration consensus across all parties for quite a number of years, but we have had mass immigration and we have had a huge increase in temporary foreign workers and in students coming. The numbers have put a lot of pressure on housing and healthcare and the consensus has since collapsed. And so, we're starting to have a more polarized conversation in this country about immigration. If you think about the immigration conversation in the States, on the one hand, the left does not seem to acknowledge any connection between mass immigration and low wages for unskilled workers, something I know you've pointed out. But on the other hand, there is this worrisome anti-immigrant rhetoric on the right. One example would be Trump repeating claims that Venezuela is sending its criminals to the U.S. How do we chart a public conversation that deals in reality and evidence, but also doesn't fuel ugly animosities that can only harm our society?

OC: The “we" is an interesting question. Any of us individually can do it by having the right conversation about it. I think at the mass political level, there is definitely a real challenge that, frankly, the progressive policemen of our public discourse don't show any interest in distinguishing between serious, thoughtful concern about bad immigration policy and the sorts of things that Donald Trump might say. A really interesting contrast is actually between Trump and Vance on this. Vance has, for a number of years, tried to really talk about the issue in what I think are quite effective terms. And people will write stories anyway about “J.D. Vance only wants more white babies.”

Even I get attacked for being anti-immigrant and this being consistent with other terrible radical positions. If no matter what you say that's how it's going to be treated, then the incentive to have the right conversation obviously declines dramatically. I think at the end of the day where we are headed, at least in the U.S. on this issue, is toward a world in which an ever-larger segment of the population is just fed up with the status quo and yet feels quite powerless and marginalized in their effort to effect any sort of change. Which is the same thing we're seeing in so many Western democracies. The UK is obviously struggling with this. France is obviously struggling with it. I think it's probably the most volatile issue in our politics. 

It was, in many senses, at the heart of The New York Times piece that you quoted from — the idea that the elite can permanently maintain their preferences, and ignore what are quite valid concerns, is just not in the actual set of plausible outcomes. Either people get serious about doing something responsible about it — or you're going to end up with much less responsible things done about it.

I think the jury is out on where that's going to head. I think certainly this election cycle is going to have a lot to do with it.

TH: I want to circle back to that Times piece in a moment, and to that particular paragraph that you're referring to, because I thought it was so striking. But first, let's talk about J.D. Vance for a minute. I think that Trump's choice of him as a running mate is so interesting. I know you are close to Vance. I’m really interested in how we are to read Vance in a reasonable way. In Canada right now, there is the line that he is a cynical opportunist. That he was against Trump, that now he's for him. That he can't really be trusted when it comes to representing the interests of working Americans. I just had someone on the podcast this week arguing that it's way more complex than that. How do we read Vance and his evolution?