The populist economic policy agenda, which is ascendant among some policymakers of late, includes higher tariffs, higher taxes, higher unionization, a domestic “industrial policy,” and a more interventionist regulatory state. Among the more outspoken advocates for this agenda is Oren Cass of the nonprofit American Compass. In a recent television appearance, Mr. Cass stated that this movement has,“a place for anyone who’s willing to look seriously at what has actually gone on in the economy.”
If one were to take a serious look at the actual economic outcomes, particularly for working families, a good place to start would be real median household income data. This series is compiled by the U.S. Census Bureau and released annually.
One need not be a partisan to observe a marked upshift in income gains for the middle class under the Trump administration. The most significant domestic policy changes of the Trump administration were the tax policies enacted into law through the Tax Cuts and Jobs Act (TCJA) and bringing the Obama-era regulatory state to a halt. The former policy improved economic growth, workers’ wages, and investment. The latter policy stopped Obama-era regulatory bloat in its tracks – over 8 years, the Obama administration imposed $890 billion in regulatory costs on the economy. In stark contrast, the Trump administration brought that down to just $40 billion in regulatory costs.
“Looking seriously” at the economy one plainly sees improved economic outcomes for median households during the Trump administration. The COVID-19 pandemic obviously figures prominently in this time period. But the simple fact is that inflation reached 40-year highs in the wake of the Biden administration’s fiscal response to the pandemic. That inflation has steadily chipped away at worker pay such that real average hourly earnings for workers have fallen under the current administration. The current administration has imposed new taxes and has called for a $5 trillion tax increase over the next 10-years. In contrast to the Trump administration’s approach to regulations, the Biden administration has supercharged the regulatory state, imposing nearly $1.7 trillion in new regulatory costs on the economy in less than four years.
In sum, “looking seriously” at the economy, as Mr. Cass invites, should hardly inspire a return to an economic policy agenda replete with higher taxes and greater regulatory burdens. Despite the packaging of Cass’ “new conservative economics,” the agenda promoted by populists appears awfully familiar, if one has the courage to look.