The ‘New Conservatism’ is Driven by Bad Economics

Norbert Michel

The United Auto Workers announced it’s expanding the strike against General Motors and Ford today, just three days after Politico’s story about what many see as a major shift in the Republican Party toward supporting organized labor. But while the politics might be shifting, the economics haven’t changed.

With the GOP long on the opposite side of unions, several key Republicans now seem ready to embrace the cause. Senator J.D. Vance (R‑OH), for example, says that striking workers “deserve to get their end of the shake.” The strike also coincides with a new poll conducted by American Compass, the “conservative” think tank that’s been pushing a populist agenda.

According to Oren Cass, American Compass’s executive director, the shift has already occurred.

Cass recently told Politico there is “no going back to a pre‐​Trump, 1980s‐​style conservatism,” adding “It just does not have anything useful to say about the actual issues of the 2020s.” Perhaps Cass is correct about the political environment. He did, after all, work on Mitt Romney’s two failed presidential campaigns in 2008 and 2012.

Cass is dead wrong, though, on the details of the actual policy. He insists that this newly oriented conservativism is a reaction to “this weird sort of hyper libertarian economics, pro‐​capital, no matter what kind of force for, globalization and open borders and nation building and all of this stuff.” That’s a lot of stuff, but the idea that U.S. economic policy even got to the edge of becoming libertarian, much less hyper libertarian, is completely detached from reality.

Cass is quite good, though, at remaining detached from reality.

To this very day, he continues to premise his policy prescriptions on the idea that American capitalism has failed. One of his most‐​repeated lines is “A market economy that once produced widespread, broadly shared prosperity has devolved into one where wages rose only 1% in the past 50 years.” In his book, The Once and Future Worker, Cass laments that “while gross domestic product (GDP) tripled from 1975 to 2015, the median worker’s wages have barely budged.”

But the only way to legitimize these statistics is to cherry‐​pick and ignore the other 99 out of 100 ways to estimate Americans’ income growth over the past 50 years. That would be bad enough, but it’s unfathomable that Cass doesn’t know what he’s doing because so many people have explained the true income trends. (There’s a very long list.)

Or maybe that’s too harsh. Perhaps it really is just a coincidence that Cass picked a starting point of 1975, the year that produces the lowest possible (positive) growth rate going back to 1964. Or that ignoring female workers in the data dramatically worsens the picture. Even if these are just coincidences, the American Compass agenda has bigger problems.

First, it’s not at all clear that their income stagnation resonated with Trump voters, the supposed impetus for this new “conservatism.” For instance, when the authors of The Great Revolt surveyed rust belt Trump voters, they found that “a full 84 percent were actually optimistic about their own future career path or financial situation, regardless of how they felt about their community’s prospects as a whole.” (see page 20.) Even now, after the pandemic, polling by Gallup shows that “Between 81% and 90% of U.S. adults are either ‘very’ or ‘somewhat’ satisfied with their family life, current housing, education, job, community and personal health.”

Another major problem for American Compass is that their decaying Rust Belt and Appalachian town narrative is historically inaccurate. It’s not new, and there was no shortage of government intervention during the last 50 years.

In Big White Ghetto, author Kevin Williamson describes the story of Garbutt, New York, a town built on the gypsum industry (see page 18). A local historian wrote of Garbutt:

As the years passed away, a change came over the spirit of their dream. Their church was demolished and its timber put to an ignoble use; their schools were reduced to one, and that a primary; their hotels were converted into dwelling houses; their workshops, one by one, slowly and silently sank from sight until there was but little left to the burg except its name.

This passage wasn’t written in 1988. It was written in 1908.

Appalachia’s decay also started long before the 1970s, and government intervention hasn’t helped. In 1964, LIFE magazine published “The Valley of Poverty,” a special report on President Lyndon Johnson’s nascent War on Poverty. It described Appalachia, an area stretching from “Alabama to southern Pennsylvania,” as “a vast junkyard” due to the “same disaster that struck eastern Kentucky.”

The disaster? That would be the collapse of the coal industry 20 years earlier. Cass can’t blame China or Reagan for that one.

In 1965 the federal government made the region a key focus of its War on Poverty. While people can argue over whether those government programs made things worse, there’s no argument over whether those programs existed. Telling people that some kind of “market fundamentalism” caused all the problems in that region is pure propaganda.

Whatever their motivation, what Cass and his allies are selling is dangerous. They want government officials – presumably themselves – to have more control over how people produce and purchase the goods and services that meet their needs. That sort of system only works well for the politicians in charge. Until, of course, some other group of politicians is in charge.