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American Compass on CNBC: Conservatism in Name Only

Posted: May 21, 2024

The two signal domestic policy achievements of the Trump administration were tax reform and stopping the regulatory state in its tracks. Compared to the Obama and Biden administrations, there is no more striking policy contrast. These domestic achievements could not be more in keeping with the tenets of conservatism, which seek to limit the role of government in American life and commerce. It is somewhat puzzling, then, to see a self-styled conservative intellectual breezily dismiss these accomplishments out of hand.

This morning, Oren Cass of American Compass appeared on CNBC to articulate a “conservative economic reset.” Given an opportunity to elaborate on what that might look like, he observed that, “what we need is actually a stronger, more productive economy that sees a lot more domestic investment and that sees a real focus on boosting the productivity of American workers.” That is indeed the recipe for improving American prosperity, but Cass is simply not a credible chef. 

By Cass’s lights, the recipe for productivity growth is not, among other things, “just more tax cuts, deregulation…” Cass further muddles history, asserting that in 2016, it was Speaker Paul Ryan pushing “a big tax cut.” He conveniently forgets that Donald Trump ran on a tax plan that proposed cutting the corporate tax rate to 15 percent. Ultimately, President Trump signed the Tax Cuts and Jobs Act into law, which among other things, cut the corporate rate to 21 percent. 

Cass’s embrace of higher taxes and more regulation drew a bemused reaction from CNBC’s Joe Kernan, who asked Cass directly: “In what universe would that make sense as a conservative to raise taxes on corporations?” Kernan later posted on X: “Bonkers. Walking quacking uniparty progressivism. Run as fast as you can.”

Whether Cass chooses to admit it or not, the tax reform enacted by a Republican-led Congress and signed by President Trump led to increased investment and exactly the type of growth he claims to champion, but serially fails to understand. A number of studies have since found that the TCJA materially improved growth and domestic investment. It also put an end to companies moving overseas to escape what had been the developed world’s highest corporate tax rate. Prior to the enactment of the TCJA, U.S. firms often picked up and fled U.S. shores, a practice known as “inversion.” Those came to a screeching halt after the TCJA. 

Given the degree to which the TCJA improved growth, investment, and staunched the tide of offshoring U.S. firms, it’s an odd policy critique for Cass to embrace. Perhaps he sees a political upside for conservatives? On that front, Cass gets it wrong again. Indeed, his own polling found 72-28 Republican voter support for tax cuts. And small wonder, sandwiched between the tax-happy Obama and Biden administrations, conservatives rightly see the tax policies of the Trump administration as worth defending. 

On regulations, the contrasts between progressives and conservatives is even more stark. According to the American Action Forum, the Biden administration has imposed $1.6 trillion in new regulatory costs on the U.S. economy. By the same point in his presidency, President Obama had imposed over $300 billion. These administrative actions amount to a tax increase on U.S. firms that stifle the very investment Cass celebrates. By contrast, at this point the Trump administration had on net cut regulatory burdens by over $150 billion

These policies helped contribute to strong economic growth that delivered meaningful gains for working Americans. From 2016-2019, median net worth increased by 18 percent, median income increased by 9.7 percent, and poverty reached a record low.

Cass gets his history wrong, the policy wrong, and the politics wrong. But if you’re going to espouse a progressive policy agenda, you have to distort history. It’s troubling that Cass is waving the banner of conservativism while repudiating conservative policy successes. But when that banner is paid for by progressives, his willful ignorance makes a bit more sense. 

Watch the full video here: