What to know about the ‘New Right’ school of economic thought advocated by Vance

John Yang:

Vice President-elect J.D. Vance is an advocate of a new school of conservative economic thought. It challenges orthodox Republican stands on taxes, regulation and free markets, and says that tax policy and other government intervention should be used to promote the social conservative goals of stronger families, communities and industry.

In a New York Times op-ed this weekend, a leading proponent of what's being called the new right advises President-Elect Trump not to huddle with his supporters at Mar-a-Lago and then see how much of their agenda he can advance and to instead consider other ideas and take the road less traveled.

Oren Cass wrote that op ed. He's founder and chief economist at a think tank called American Compass, and he's the author of a book, "The Once and Future: A Vision for the Renewal of Work in America."

Tuesday's exit poll showed that there was broad unhappiness with the economy and the way things were going. Two thirds of the voters described the economy as not so good or poor, and 70 percent of them voted for Mr. Trump. What do you think they were voting for? What changes do you think they were voting for?

Oren Cass, American Compass:

Well, I think they were voting against what we've done in this country for 20 or 25 years now, except during Mr. Trump's first term, which is basically just focus on this idea that all people want is cheap stuff.

So the more we do globalization and move our jobs to China, the more we have an open border and bring in low wage migrant workers, the better off we'll be. And we'll see high GDP numbers and the stock market will go up and everything will be great.

And the reality is that for most people, that has been a catastrophic failure. And I think that explains a lot of Trump's popularity. And I think a lot of his best ideas on trade, on immigration, potentially on education and family policy are ones that could really push in a better direction.

John Yang:

And as I understand it, you advocate using tax increases in some cases and using other government regulation to achieve those goals. So what is your general view of the role of government in the economy?

Oren Cass:

Well, I should say I don't like tax increases, but I think we have to be realistic. When we have a $2 trillion deficit, the solution is probably not going to be entirely spending cuts. And we also have to understand that the recent rounds of tax cuts, they didn't have the benefits that were promised.

And the reason they didn't have those benefits is because our problem in our economy isn't that corporate profits aren't high enough. Our problem is that we don't have the right set of incentives we don't have the things that earn the most money also being things that create good jobs, that build a stronger economy.

And so if you have a situation where the most profitable activities are offshoring, are speculating on Wall Street, are building another app in Silicon Valley, there's no economic theory that says that's going to work for the American people. And so I think we do need to use tax policy, we do need to use regulation to try to bring those interests back into alignment.

John Yang:

Let me ask you some specifics. I mean, President-Elect Trump, through the campaign, talked about cutting taxes practically wherever he went, exempting taxes on tip income, exempting Social Security payments, lowering the corporate tax rate. What do you think of those things?

Oren Cass:

Well, I think we have today a politics where both candidates go around talking about how they're just going to cut everybody's taxes. And of course, everybody likes a tax cut. But I don't think those are the things that are going to turn our economy in a much better direction. You know, obviously he emphasized tariffs a lot. Obviously, he emphasized enforcing our immigration laws and making sure that jobs are going to people who are here legally and American citizens.

Those kinds of policies are the ones that are actually going to, I think, create the right incentives so that if you want to make an investment in this country, if you want to make a profit, you have to figure out how to do it with American workers and by making American workers more productive.

John Yang:

Talk about American workers. On immigration, what would a new right immigration policy look like?

Oren Cass:

Well, step one is enforcement. We have to actually enforce the law. I think the lawlessness that we've seen is incredibly unbecoming to a great nation, frankly. And that's something that, unfortunately, the Biden and Harris administration got entirely wrong and that Trump did much better on in his first term and is obviously committed to this time as well.

Once you actually have control of the situation, I think what we need to focus on is saying, look, immigration can be a wonderful thing for the nation, for the economy, but at the low end of the labor market, where we already have seen a lot of people struggling to make ends meet, to support families, bringing in lots more workers to compete in that low end of the market is just not a good idea. It's not good for the workers who are here.

And so I think we should aim to have much lower levels of immigration. And if we want to have immigration, it should be immigration into the high end of the labor market. You know, folks who are going to be competing with those who are already paid very well and are doing just fine in our economy.

John Yang:

The vice president-elect, as I said, has been talking, as you reference, has been talking about these things for quite a while. Now that he's vice president, now that he's in the White House. Do you what are your hopes maybe, and expectations of these views taking hold?

Oren Cass:

Well, I think it's a wonderful step forward for the Republican Party and the conservative movement and ultimately for the United States to have somebody like him in that role. You know, one of the best ways to measure how far the conservative movement has come is to look at the distance from Mike Pence to J.D. Vance. That sort of captures what is going on in the party.

And so to have somebody who I think really understands these issues so well, can articulate the principles behind them so well. And then, as he's already shown in his short time in the Senate, is very good at translating them into actual policy. It's not just rhetoric, it's actual policy that has the prospect to really benefit workers and their families.

And so my hope is that he has a lot of influence in the administration's priorities and that he has the opportunity to pursue some of these things that really matter a lot to him.

John Yang:

Oren Cass of the American Compass, thank you very much.

Oren Cass:

Thank you for having me.