Interview: Oren Cass on the New Right Economic Consensus

Oren Cass is founder and chief economist of American Compass and author of The Once and Future Worker: A Vision for the Renewal of Work in America. He can be found on X @oren_cass, at Substack Understanding America, and at his website americancompass.org. This interview was edited for clarity.

Ari: Can you explain the work you do and your goals?

Oren: We founded American Compass at a time of incredible flux. Many people were framing a different approach to social issues. But, right-of-center that process was absent at the institutional level.

Nearing the end of Trump’s first term, think tanks, publications, and offices on Capitol Hill had their heads down assuming this, too, would pass and things would return to the status quo — obviously untrue. We saw what happened when Tories in the UK tried this.

The Republican establishment fell apart because the country has real problems that public policy and market fundamentalism did not address. If anything, it was exacerbating problems.

Our goal in establishing American Compass was to provide a flagship for rethinking issues at a foundational level. An economic ideology guides how people consider public policy. Economic consensus had formed around a very unhealthy idea that the market itself would deliver the best outcome; consumer welfare was the end-all-be-all. As long as there was enough GDP growth, we could redistribute as much wealth as necessary, and everyone would be happy.

Our mission is to restore economic consensus emphasizing the importance of family, community, and industry to the nation's liberty and prosperity — not because we're anti-growth but because we believe those things are prerequisites to growth. Not paying them enough attention hollowed out much of what made this nation strong in the first place.

Ari: Libertarians have a simple tagline about small government and free trade that resonates with people. Do you have a similar tagline that gets your ideas across as simply as possible?

Oren: It's advantageous for Libertarians that their ideology is so simplistic it fits on a bumper sticker. Reality is complicated. To summarize as simply as possible, we want economics and the market to serve families instead of propagating a system where families are expected to serve the market.

We’re flipping the orientation. Efficiency and growth in a free market aren't ends unto themselves. Free markets are great, but they must be held accountable for delivering good results. If they're not accountable, public policy has to play a role.

The American tradition of economic policy has always been one of robust government involvement in trade, industry, and investment. The past few decades, a weird anachronistic idea emerged that if we get out of the way, everything will work out.

Ari: Can you expand on how Republicanism or the U.S. addressed these issues in the past? When did things change and why is it so hard to change them back?

Many debates about the formation of America were about whether it would have a strong national government. The initial attempt at the Articles of Confederation did not go well. The Constitution of 1789 recognized that we need national government to play a role in trade, immigration, intellectual property, investment in industry, and other issues.

Fans of the Broadway musical, Hamilton know his full biography. His vision of a strong industrial nation triumphed over the Jeffersonian agrarian vision. Part and parcel to that was a centralized financial system. What came to be called the American System included high tariffs to protect domestic industry, intensive investment in infrastructure, and a national bank.

Abraham Lincoln proudly declared himself a tariff man. I was struck recently to discover a passage from Eisenhower's memoir in which he took an incredibly defensive stance on trade. In describing his efforts to expand trade, he goes to great lengths to clarify that he would open trade “subject to careful study” so that it would not adversely affect domestic industry.

The idea of an unregulated free market only emerged in the mid-20th century — associated with folks like Milton Friedman and Friedrich Hayek, who were writing in the 1960s when the market was delivering extraordinary outcomes. In the post-war era, the U.S. was the dominant industrial power, building its middle class and simultaneously helping rebuild the rest of the world. Trade was almost perfectly balanced for decades on end.

Hayek observed this and wrote about how the magical power of the self-regulating market would always accomplish this, even if we didn't understand how. This simplistic thinking became deeply entrenched, especially right-of-center.

Economists who presented this as a science that gave them special knowledge — and a right to dictate policy — embraced it. By the post-Cold War era, the fall of communism was interpreted as an ultimate endorsement of the free market.

We entered a period of deregulating financial markets, rapidly expanding trade, admitting China into the WTO, and not enforcing our borders or restricting immigration in any meaningful way. We got exactly what we wanted: lots of trade, efficiency, booming stock markets, and high profits. We did not get strong, stable communities, rising wages, or domestic industry — the building blocks of a nation.

Ari: What made you want to spearhead this movement?

Oren: I came into the policy world via an unusual path. Most people come to Washington and do internships where they read Hayek and Friedman. They go work at AEI or Heritage. Then, they work in a congressional office. The footpath indoctrinates them into certain thought processes.

I worked for the Romney campaign in law school and became his domestic policy director. I was very involved in policy discussions without having been subjected to brainwashing. Long before Trump, Romney was the first to say free trade with China wasn't working. His economic advisors were appalled. It was my job to find answers.

Economists and policymakers right-of-center needed better answers, but weren't even interested in the question. Because of the dogma around free trade, this was taboo talk. What problems could possibly arise from China sending us lots of cheap stuff?

That realization set off alarm bells for me because critical thinking was not happening. I quickly perceived that assumptions leading to that conclusion are pervasive. How else are they steering us wrong? It got me thinking about economic consensus, our assumptions, the framework we utilize to examine the economy and public policy, and what needs to change.

Ari: How should the Republican Party coalesce on these economic ideas?

Oren: The party dynamic right now is that social issues yield the greatest consensus. Though there are very serious fights about issues like abortion, the clearest conservative through-line lies in social conservatism and party stance on social and cultural issues.

Economic policy veered far off the rails through this period, in part because Conservatives were shuffled off to debate social issues. The Reagan Coalition Era punctuated the “three-legged stool,” sometimes called Fusionism. Free-market libertarians decided economic policy; social conservatives concentrated on societal issues, and Cold War Hawks (Neo-Cons) focused on foreign policy.

The Republican Party paired social conservatism with disastrous foreign policy adventurism and a set of unappealing economic ideas. Today, actual conservatism is reasserting in those dimensions. JD Vance’s address to the RNC spoke in precisely those terms, repeatedly pairing foreign policy and economic issues without mentioning social issues.

The formulation that combines sending our jobs overseas and sending our children off to die perfectly encapsulates this — two policy approaches that are not conservative, popular, or wise.

Conservatism is an extraordinarily powerful and coherent set of ideas, and a viable governing coalition. Working and middle-class people, and people of all races and religions, would prefer a more socially conservative stance. However, they were turned off by the Republican economic message.

Suppose we introduce an economic message that acknowledges and is responsive to their concerns. It might alienate some libertarians, but for every one libertarian who wanders off into the wilderness, ten former Democrats might be interested in jumping on board. That realignment has so much potential for a conservative governing majority.

Ari: As Republicans become the party of the working class, who do they absorb from the Democrat coalition?

Oren: The working class is defined as workers and their families where the adults haven't earned college degrees. The reality is that most Americans, even young Americans, don't earn a college degree. Among older generations, the vast majority of Americans do not have a college degree.

That status is predictive of their perspective on social and cultural issues. It also predicts how they experienced the economic change of recent decades. In the prior alignment, they chose between Democrats — who held a strange, dissatisfying set of progressive cultural commitments, but spoke to their economic concerns — or a Republican Party that made sense on culture but had nothing to offer economically except another corporate tax cut.

Now we’re seeing push and pull. There’s pull into the Republican Party as its economic agenda — rhetoric and point of view — acknowledges that a majority of the American people are entitled to have their preferences and priorities taken seriously and respected.

There is push out of the Democrat Party as it becomes more radical on cultural issues, and as its economic agenda becomes less responsive to typical working-class families. The border crisis and insisting on uncontrolled immigration, its green climate policies, and forgiving student debt are not working-class interests.

People are noticing that the Republican Party and conservatives are addressing their problems.

Ari: Do you think the media is getting it wrong about JD Vance?

Oren: There has been some very thoughtful, in-depth coverage. However, media and commentators on the left refuse to acknowledge his legitimacy. They think Vance is a fake who doesn't care about workers. Where is that evidence? They embrace circular reasoning: he's a Republican; Republicans like to cut taxes. But that's not what he said.

Remarkably, Vance partners with Democrats; he’s serious. Still, the left accuses him of not being pro-worker because he doesn’t support the PRO Act — while the PRO Act itself isn’t pro-worker. It’s a wish list of big labor reforms to entrench unions. Big labor today is wildly dysfunctional, and most workers don't like modern unions, especially their political involvement.

Ari: Trump recently received support from tech billionaires. How does that play in?

Oren: The tech billionaire class has different priorities than Wall Street. It's unclear to me that those priorities are meaningfully more pro-worker. A small subset of the Silicon Valley community has an overriding focus on cultural issues and niche Bitcoin regulation-type issues. They would have always preferred Trump and the Republican Party.

For working-class Americans who like parts of the conservative message but not the economic side, the economic dam is breaking. In Silicon Valley, folks now find it socially acceptable to talk about it and are coming out with a set of positions.

Are we trading one donor class for another? I have a weak sense of one versus the other regarding political influence. However, this doesn't have much to do with the underlying economic issues.

Ari: Are Republicans losing the wealthy donor class base that wants more migration to the U.S.?

Oren: Concerning corporate support, the Chamber of Commerce, and company PACs, there is an alienation from the Republican Party. It's unclear whether extremely wealthy donors who form the party base have gone anywhere. The rule of thumb is they like winning and are prepared to support whomever they think will win.

I’ve been describing what this realignment could look like for the party, medium to long term. The Democrat Party continues to align more closely with interests of the professional-managerial class.

If it happens, what is the base of financial and political support for a working-class conservative party? If not Wall Street, corporate America, or labor unions, then what? That’s an interesting, unanswered question for today’s rising political figures.