Breaking Points with Krystal and Saagar6/14/24: Ryan CLASHES With Right-Winger On Immigration, Biden, Economy - Counterpoints Fridays
Ryan debates Oren Cass, the Executive Director of the American Compass, on Immigration, Biden, and the economy.
Oren Cass: https://x.com/oren_cass
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The core position of the Democratic Party is that anybody who wants to come to America should be able to do so. If that's your position, you're not actually serious about helping workers. You're basically trying to hold together a political coalition that has very different priorities.
Why are the Trump appointees on the NLRB so consistently voting with bosses?
You know, one of the biggest problems with unions as they operate today is that they have become primarily political enterprises and essentially arms of the Democratic Party. And the problem is that that's not what workers blocked. I think it's pretty sick to say among private sector union workers the majority supported Donald Trump in twenty twenty.
Welcome to counterpoints today.
We're going to be joined by Oran Cass, who is the executive director of American Compass, which is a kind of rising what would you call it, new right organization that is kind of reshaping the way that the kind of right wing associates itself with previously kind of left wing ideas like it's really important to have worker power to raise wages, and is trying to kind of reshape this new populism that folks like Trump are either kind of pushing forward or drafting off of. But to explain a little bit better than that, let's bring in my co host Emily Dashinski as well as Orrin Cass himself.
Emily welcome, How you doing.
I'm good.
I'm in London. If people didn't watch the Wednesday show, a second week on the job at unheard so here I am coming to you from the UK, and maybe we'll talk about the EU elections just a little bit. I know Orren probably has some thoughts on them because all of these fault lines.
Were at play. But first, Oran welcome.
You've been profiled by all kinds of different media outlets as really one of the driving forces on Capitol Hill of you know, the new right of putting sort of policy meat on the bones of populism on the right. You were a policy director for Romney's presidential campaign back in twenty twelve, and I'm sure we can get into some of that. You've joined us on this program before. But first of all, welcome more thanks for being.
Here, well, thank you for having me. It's great to see you guys.
Of course, and in full disclosure, I have involvement with American Compass. I'm a fan of American Compass. So we'll put that on the table while Ryan starts yelling and Oran starts yelling.
Back, and we'll have it'll all be in good fun. So or why don't you start just.
By telling us, you know, kind of how this populist program is going. I know, we particularly want to get into immigration because that's probably where there's going to be some disagreement. But if we just sort of zoom out thirty thousand feet and people say there might be another Trump administration imminently, do you feel like if day one, Donald Trump or really any Republican president were to take office that a lot of these policy proposals, you know, against financialization, for example, family leave, some of the.
Stuff that's on the table.
Do you feel like it would really have a shot at passing or you know, getting the serious attention of the President.
Well, I think absolutely. You know, I think we've seen a real sea change in the in the set of policy issues people are even talking about on the right of center on Capitol Hill in Washington, and then also the kinds of policy that moves forward, and so you know, I think you see lots of examples of this. I mean, one is when it comes to dealing with China with free trade. Obviously, the old orthodoxy that you know, free trade is good, always more reach, trade is better, Cheap stuff is what we want. That's gone. And so whether that's talking about restricting investment into China, whether that's talking about raising tariffs on China, those are the things you see Republican leaders talking about at this point. I think you see the same thing on issues like family policy, where there are lots of different proposals out there now to really increase the support that we provide to working families. You see it on industrial policy, where something like the Chips Act can pass with bipartisan support, and you see a host of Republicans offering other proposals to do more of the same, and so in all these areas it's a real shift away from the old. Well, if we just sort of cut taxes and get out of the way, a rising tide will whipt all ships. I think substantively people have realized that's not true. And politically, the Republican coalition, the people who actually support Republicans and vote Republican don't believe that and don't want to hear it, by and large, and so both on the substance the economics and and on the politics, it is an old different American right than we became accustomed to over the past decades.
It definitely is a different American right, and you know, it has a lot of overlap with traditional kind of left wing approaches to economic policy, whether it's uh, you know, uh antitrust which actually has you know, strong anti trust enforcement, has a home on the on a kind of free market right, because you need to break up trusts if you're going to have free markets. But you know, skepticism of free trade, like you said in industrial policy, you know, subsidies, support for for families and for you know, just for raising children, et cetera. So where where though, do you break off from kind of left wing economic orthodoxy. What what what do you see as fundamental to kind of a populist right economics that that wouldn't overlap with say Bernie's.
And actually, can I jump in first, because I have I wanted to ask about this particularly and I pulled a quote. This is from the Charting the Course policy series that American Compass released recently. It reads, the intro reads, the vital conservative commitment to limited government depends upon bringing federal spending under control. Spending determined government size, its economic force, and the cost borne by citizens, whether they agree to over taxation or not. The higher inflation of recent years in surging interest payments on our skyrocketing national debt both serve as reminders that one way or another, taxpayers are inevitably on the hook for the propaly gets spending of politicians. So that sounds again, you were on the Romney campaign, You're in a significant role in the Romney campaign in twenty twelve. That sounds good to me as sort of a traditional conservative. It sounds like something that might allay the fears of traditional conservatives. But where does that, you know, what ground does that leave to cooperate like someone like a Bernie Sanders, What is the distinct between you know, American Compass an Orange Cass and Bernie Sanders and Elizabeth Warren.
Well, I, you know, I think it's an important place to start to just recognize that these sort of definitions of left right, progressive conservative have gotten jumbled in a lot of confusing ways in recent decades. I mean, if you know, if you ask what was the actual left or Democratic Party policy agenda over the last twenty years and you know, or thirty years when back to Bill Clinton and then Barack Obama, you know, I'm not sure how much you would distinguish it from basically the Wall Street agenda. I mean, it was aggressive efforts at expanding free trade. It was promoting you know, financial deregulation, it was obviously trying to bring in a large number of low age workers from other countries, and so, you know a lot of things that Ryan was saying, like, well, but you know, isn't this or that the position of the left. Well, I'm not sure. I'm not sure if it is. And so you know, if you look at someone like Bernie Sanders, I would say, yeah, certainly there are places where I would say Bernie has a point, whether that's in diagnosing things that are not going well in the economy, or you know, on an issue like antitrust, where competition is obviously very important and has not been promoted very effectively. The problem is that at the end of the day, if you look at a Bernie Sanders or Elizabeth Warren agenda, it's I would say, confused, if nothing else. I mean, I don't know how it intends to actually address the problems that we have in this country, because it's not willing to, for instance, acknowledge that that work actually matters and what we need to be doing is promoting work and high wages for American workers. It instead is essentially committed at this point to open borders, which is fundamentally incompatible that even even on an issue like labor. You know, we say that or have always assumed that the Left is sort of the pro worker, pro labor party. I guess that's true if you mean they agree with with sort of union bosses and the people who run labor unions, but it's not at all clear that their positions align with what the workers in those unions want, and in fact, one of the things those workers most want is for the unions to stop focusing on progressive political priorities. And so I think there's this very interesting moment that we're in right now where you've had really on both sides for a long time now, these political leaders who focused on the kind of very niche concerns of their highest income constituents and donors, I suppose, and you have this huge mass of Americans who weren't really served by either agenda, and what you're seeing right now is a lot of folks on the right of center are actually focusing on that and trying to respond to it and construct kind an agenda that looks more like what most Americans want, even as you have a Democratic Party that sort of seems to be drifting ever further into this kind of weird progressive bubble of among other things, that wildly unpopular in addition to ineffective positions. And so I think that's that's really the driving force in our politics right now, and it's certainly creating a lot of opportunity for conservatives to advance the things they care about.
So to me, I think there are kind of two different questions embedded in what you said there, and one is the you know what is the best immigration policy you know, for workers, for low wage workers, for medium wage workers, or high wage workers. And there might be different answers to to all of those different questions, and that's something that we should spend some time talking about. But then, but the other question is is immigration and are immigrants kind of being used and highlighted in a way that distracts us from a more serious confrontation with the things that are actually driving inequality, that are actually driving wages down, that are allowing kind of the CEOs in the top ten or twenty percent to aggregate all of the wealth over the last fifty years to themselves. So I think it's sort of like two different questions, Like, on the one hand, yes, there may be a better or worse immigration policy, But if the focus is only on immigration policy, are we missing the more fundamental problems that we need to be addressing if we're going to actually build real worker power.
Well, I think the way you just sort of focused on worker power is exactly right. The underlying question is what power do workers have in the labor market? Are they going to be in a position where there is demand for their labor where you actually have to figure out a way to use them more productively, to create better jobs, to build a good business. That isn't, in essence the secret source of capitalism. I mean, going all the way back to Adam Smith when he talks about the invisible hand. It's not something that works by magic, he says, it's something that works if the things that are going to generate the most profit are also the things that are going to yield the most output in the country and employ the most people domestically. And so the problem in recent decades is that we've just released those constraints. We've said the best way is to make a lot of money, have nothing to do with creating good jobs for American workers, because first of all, you can offshore and produce elsewhere. And second of all, if you complain, oh, we have a labor shortage, then we use that as a reason to bring in more workers. So I absolutely agree that that the core underlying issue is worker power. The question is, Okay, what are you going to do about that? And what are the levers that what has gone wrong? What are the levers you're going to pull? And the answer there is, I think in two parts, one globalization and offshoring and the use of foreign workers elsewhere. And two immigration the policy of saying, if we feel like we don't have enough workers here, instead of telling businesses to figure it out, we're going to bring in more workers. And I don't know how you claim to be serious about worker power or rising wages for the interests of workers in the long run unless you're willing to be serious about the need to actually enforce immigration law and have constraints on who enters our labor market.
Do we have ex three here? So it's a famous chart, looks like a little crocodile. It's called for those who are just listing. Decline in union membership mirrors income gains of the top one percent, and what you see top ten percent, that's a top ten percent. What you say is a surgeon union membership in the late nineteen thirties nineteen four.
Which then.
Brings about a more egalitarian economy. In the nineteen seventies, you start to see it diverge. In the nineteen eighties and nineties, you have a collapse in union membership, and at the same time, executives and others in the top ten percent are walking away with all the gains while everyone else is becoming a miserated So from my perspective, obviously the number of workers who are adding to labor supply matters, like that's what that's what we call a tight labor market versus a loose labor market. A loose labor market has what Carl Marks even called a reserve army. A capitalism's reserve army is the number of kind of unemployed people who are willing to come in and take the jobs of workers who might get militant inside the workplace. But throughout the twentieth century, you saw pretty steady population growth, right, Actually in the nineteen ninety I think we had lower population growth than we had in other decades. Yet you yet you don't see kind of explosions in wage gains at that point. So to me, the most important thing, this is what Bernie Sanders would say, the most important thing you can do for workers is to help them organize unions. And the way that you do that in nineteen what happened in the nineteen thirties, you know, the federal government stepped in and created the NLRB and other kind of pro labor mechanisms that you know, enabled workers to actually win these contracts and win these organizing drives. There was a lot of union organizing in the nineteenth century, but the National Guard and the Army and the Pinkertons and others were allowed to go in and violently crush and otherwise crush organizing drives. But when the federal government was brought to bear on behalf of or at least neutrally, as a really it's workers.
Workers got real power. So how do you feel about a.
Genuine question like, how do you feel about, you know, where does kind of union policy you fit into this agenda?
Well, I think having a much stronger and more effective labor movement is actually an incredibly important part of the picture here, and that's something that American Compass has focused an incredible amount of attention on, and frankly, it's something I think it's really encouraging to see a lot of conservatives start to put energy behind as well. I mean, you see you know, senators like JD. Vance and Josh Holly literally out there on picket lines. I think I just saw that, you know, the head of the Teamsters union wants to address the Republican National Convention this year because there is a recognition that that worker power is a good thing, and that a strong labor movement is a piece of that puzzle. I think the problem is is if you focus only on that, and so I think that chart that you put up is certainly a relevant one. You could, of course, up a very similar chart looking at instead of union membership, the massive influx of less skilled immigrants after the nineteen sixty five immigration reform. You could put up a similar chart looking at the massive shift to offshoring as globalization took off. So all of these trends are relevant, relevant. I think you can't focus on just a labor movement and organizing in the absence of the others, because organizing will only get you so far if you have a loose labor market. I mean, at the end of the day, the way that organizing gives workers power is in part by essentially cartelizing access to their labor. Right at the end of you do have to have a somewhat tight labor market underlying it. If you're going to exert power through a labor movement, if you have sort of an unlimited number of unskilled often not even in the country legally, workers who are certainly not going to be an effective part of a labor movement coming in and offering to take the jobs instead. If you have the option of just moving the work overseas, then your labor movement is not going to be very effective. And so what I think is so frustrating, certainly from my perspective, is to see on the right of center a real willingness to acknowledge the need for sort of an all of the above strategy and to say, yes, absolutely a better labor movement and more power and representation for workers as a part of that. But gosh, you sure have to be serious about trade and immigration as well. And then you look across the aisle to the left side, and you just don't see that. You see the sort of base political posturing and talking points about unions even when those unions aren't representing workers very effectively, and no willingness to take on the immigration element of it. And that's what tells me you're, if that's your position, you're not actually serious about helping workers. You're you're basically trying to hold together a political coalition that has very different priorities.
Whilst well, I was just gonna say adversely, go ahead, no, I.
Just say interesting, speaking of holding together, political coalitions that have very different priorities. And again another genuine question out I gotcha, like why are the Trump appointees on the nlrb uh so consistently voting with bosses? And is that something that like the Hallies and the Jdvances of the world are working on.
Well, I think there's no question that that Trump himself is a sort of an imperfect vessel to say the least of a lot of of this this sort of thinking. You know, For one thing, Trump in a sense was the dog who caught the car and and was elected at a point where there was where there was no infrastructure, no set of ideas, no broader set of appointees and so forth to draw on. And that's why you see he comes into power in twenty seventeen, and what are the two things that actually try to do Repeal Obamacare and PACI big tax cut, Because those were the two things that were on the shelf. You still had Paul Ryan in charge in Congress. And I think one thing that would be very different in any future Republican administration, certainly if you have a Trump administration, is when you look down Pennsylvania Avenue to Capitol Hill and ask you know, who's really driving the agenda there at this point. It's not Paul Ryan. It is folks like jd Vance, Marco Rubio, Josh Hawley, Tom Cotton, and so you know, certainly I think you would see a different dynamic this time around.
But didn't that tax cut prevent offshoring? I mean, isn't there an argument that it prevented offshoring?
You know, there are elements of the tax cut on certainly on the corporate side that I think we're very important that that encouraged reshoring, that that encouraged investment, and and that's great as a share of the total cost of the tax that is not where most most most of the dollars were. And so I think that one thing you see now also when when you hear sort of discussion about well, what should happen to the Taest Cut Jobs Act TIKJA as it's expiring and needs to either be let go or renewed in parts, is you have some folks who are saying, just renew the whole thing. You have others saying, well, you know, wait a minute. First of all, we can't afford to do that, but let's talk about which parts of it actually sort of our most important to the economic priorities. But you know, I mean I would love to ask Ryan also again as a genuine question, not not at gotcha, like how do you make sense of the Democratic Party's position on immigration at this point? Is is is there some case that this is actually somehow good for workers or consistent with the sort of rising wages and vibrant working in middle class that we want, or I just I don't even know what the argument at this point is besides sort of what we don't want to get yelled at by these progressive groups.
And I laugh, because how do you make sense of a policy that is two different policies like the policy the policy that Biden ran on in twenty twenty, which is that, you know, Trump's immigration policy is immoral and a stain on the fabric of our society, versus the policy that he's implementing now, which is like, Okay, actually, I'm going to implement Trump's policy, but I'm going to do it in a much more gentler way, and I'm not gonna I'm not gonna be racist about it when I do it. So like, not only can I not explain, you know, the rationale behind their policy.
I can't even.
Really explain what their policy is because they have because they've fluctuated kind of all over the place in just a matter of a couple of years. Like one of the biggest U turns in like political history, in the sense that it was such a salient issue Biden, you know, running ads on, you know, on the precise issue that he's now done like a basically a complete U turnover, like the the the.
Bill that he tried to pass, complete U turn.
Yeah, like the build I mean the bill that he the BIL that he tried to pass, and the executive order is pretty much a shutdown like after you know, what is it so after twenty five hundred encounters in a day after that, it's shut down.
People people think people seem to think.
That people came in during his administration.
Right, yes, like there was a surge.
There was a surge, but it like is that because Biden was trying to bring people in. You he's got he's sending Kamala Harris down to Central America saying, uh, don't come. He was trying to keep Title forty two in place. He's trying like he's like it's a completely inco he has a completely incoherent immigration policy, and he's he's sanctioning and otherwise miserating countries or in our region, which is you know, creating creating more push. But I don't think because he wants to push people like say, out of Venezuela or out of Haiti, or out of out of Cuba, but just because it's a schizophrenic, incoherent foreign policy that doesn't have any relation to that either.
It's just completely chaotic. But I don't. But in other words, I don't think that.
They sat down and said, what we desperately want is to have thousands of people a day kind of like.
Pouring over the southern border like that.
I don't that's not what you is that what the right things that the Biden administration wanted to do.
What do you think is that?
I think the Biden administration would obviously prefer, for political reasons, to not have the liability of a border. Right. The problem is that the core position of the Democratic Party is that anybody who wants to come to America should be able to do so. And that's where you know, I think you get this fight over, like, well, is that open borders or not? And they'll say, well, it's not open borders because we think we should have laws and so forth. Well, the question is what do you think those laws should be. And that's where you see even in the context of the so called border bill that was supposed to limit or you know, potentially shut down the border if you had too many illegal crossings. Even then, as as Center Chris Murphy famously said, the border is not closed. The goal was to instead expand the rate at which we could essentially grant people temporary status while having asylum claims adjudicated through ports of entry. I think you saw, you know, recently MAJORCIS was talking about even sort of opening offices in other countries to help people more effectively make these claims. Obviously, you have the CBP one app that is designed to you know, let you schedule when to show up and assert your asside and claim and come into the country. And then once you have people who who are here, you have the bid administration not only sort of catching and releasing them, but then also trying to stretch you know, what are supposed to be very limited authorities like parole into essentially indefinite legal status with work permits and so That's the core question is is you know you can have all these fights about who did what with Title forty two, and at what threshold do you or don't you shut down the border between ports of entry? The question is what's your actual goal and what's your orientation. Are you willing to recognize that a healthy American labor market requires very firm constraints on entry, particularly into the lowage side, or are you're going to say no, anybody, anybody who wants to come should be able to come, and I'd be interested you disagree, But it seems to me that the Democrats position and everything they do is very clearly we're entered round the position that anyone who wants to come should be able to come, and that every policy they pursue and position that they take is as a result, not actually supporting the interests of the legal workers who are here, both both native and of course the many prior generations of immigrants who, if they are here legally and are in many cases now American citizens, deserve exactly the same consideration and are often the most harmed by this sort of policy.
Let's talk about sanctions as worker policy, then, because I think we're in maybe some people on the right, those of us on the right, have rethought whether or not some of those demands a different policy in Central America and South America. So would you support lifting sanctions on places like Venezuela that a lot of new workers into the country of the course, the Biden administration had been Venezuela and they have been Cuban. Would you support lifting sanctions? Would you support lifting the embargo in Cuba? How do you think about them?
It's an interesting question. I won't claim to be an expert on the sort of foreign policy and sanctions element of our policy with respect to Cuba and Venezuela. I do think the important sort of core premise here, though, is that it is not America's obligation to be the country of last resort for the rest of the world. And so this sort of attempt to establish this linkage. You know, you also hear like, oh, well, the US did this or that, and you know the nineteen fifties or nineteen sixties, therefore we have to do X today. The reality is that that's not feasible and it's also not consistent with what the American people want. And I think that's where the rubber really has to meet the road on a lot of this is that, you know, so many people are making this collection a sort of referendum on democracy and democratic norms, and yet you have an administration and a democratic party that is steadfastly unwilling to to pursue and implement the will of the American people, who overwhelmingly reject this notion that people who want to come to America should just be able to come to America. They want to see certainly a generous, orderly, legal immigration system, but that that has to be the game. And so if we're not willing to do that, if leaders aren't willing to take that seriously and pursue that course, they should not be surprised if they get thrown out on their ear.
I think the problem comes in when we said I think Democrats will be happy. You said, Okay, we're going to have a generous kind of legal, orderly immigration system.
All right.
Now, We're going to sit down and in Congress, we're going to rewrite our immigration laws, which haven't been drafted or redrafted since the nineteen eighties. We're going to modernize them. We're going to make this much more efficient. We're going to aim it in a logical direction. I think democrats be happy to do that. Nobody is willing. Nobody nobody can in our current systems it down and rewrite immigration policies, so you end up having this hodgepodge of executive orders, illegal crossings, uh, you know, total chaos, lawsuits, and you know, nobody can you know, point one in one direction or another. I think it's it might be easier to just you know, say, forget about Democrats, Like I'll just argue that like in general, like more more immigration is actually better for workers more more broadly, and we can just kind of take it from there, like forget it, forget about forget about what democrats believe in one. One kind of issue that I have with with the way that you present your your labor work over at Americ compasses around the kind of market what seems like market fundamentalism around the around the labor market. Like it feels like an idea that you know, supply and demand drives everything, and that if you can kind of come in and you can just restrict supply of labor, then you're going to then then you're going to solve the problems that you're trying to solve you're gonna you're gonna you're going to raise the real wages for workers. And the reason I think that that's at best incomplete because it doesn't emphasize enough the need to do actual union unionizing, which gives workers real power, is that if you don't change the structural power, and all you do is kind of tilt the needle a little bit by tightening, uh, by by creating a little bit of a shortage, by not allowing people in, what you're going to get is that the people at the top still have the power, still have the power, and any any changes then are are going to any any profits from that are going to flow up to them.
They're going to make that work.
And you saw so for example, you saw this happen in the pandemic. It was a real example of like all of a sudden, companies and particularly like you know, restaurants elsewhere like really needed to raise wages because there was a huge labor shortage. Not only did we have basically immigrations sealed down at the border, lots of workers just.
Weren't willing to weren't willing to work.
Some of them were just complete We're just locked out so they couldn't find enough workers. And so the first part of your theory came true. Like you did see nominal wage growth. You know, jobs that used to pay thirteen dollars an hour, we're now paying sixteen seventeen.
Dollars an hour.
But what you also saw was the economy starting to completely buckle, and you saw it on a micro level. You'd go, you'd see restaurants that were used to be open all day. Now they're only open half the day because they couldn't get enough workers to come in, or if they were open at all, they would only have one section open because they only had you know, this number of people who were able to come in and that you know, blasted. And then as a result, the price of everything goes way up. You start to see this have you spike and inflation. And so while nominal wages went up during the pandemic, real wages actually went down. And that's because you didn't structurally change who had power within the political economy, and so all of the kind of all of these price movements.
Just kind of flowed to the very top.
And so my argument would be, if you don't have unions who were able to then fight back against that whatever ability you have of pushing up nominal wages is just going to lead to inflation across the economy and then more profits for the top ten percent.
Well, I guess I have a little bit of trouble in following that story, because it seems to me that that is also what a lot of labor economists would not incorrectly worry unions would do. I mean, if what you're saying is that when workers have power and push for higher wages, is that just forces up prices and the result is inflation. I mean, fair enough. Maybe we have a very long conversation about what was actually going on during the pandemic, But I don't see how the story is different if it's your union contract driving up those wages. If your theory is that higher wages are just going to translate to higher prices and therefore no real wage gains, than then unions don't really get you anything. In fact, a lot of people would say that's exactly what unions were doing in the nineteen seventies, that that drove stag plation.
The Well, the idea is that the idea is that unions and more worker power, which would also translate into more power for politicians who represented workers would be able to then intervene and make sure that the richest of the rich don't pull out those wages. You get a line in your in your compass essay. Was it called jobs that Americans do or jobs Americans won't do?
Yeah? Jobs Americans would do, would would do?
Yes?
So you had one line that has said, you know, windshield installers are paid what they are because that is what must be offered to employ the required number.
The same is true of marketing executives.
What's interesting about that line is that that's not actually my experience. So I had this bizarre experience where I used to work for the Huffington Post, which was bought by after I'd been there for a couple of years, it was bought by AOL, and then several years after that it was bought by Verizon. And so because I was kind of a senior person at the Huffington Post and they'd never really owned media before, I wound up being kind of categorized in an executive level at like AOL and Verizon, even though like it didn't make any sense, which is kind of a but it put me in in orbit of all of these basically vice presidents or marketing executives and all these types at these corporations, And so I was able to get a window into how that world operated. And what you saw was this just wildly corrupt kind of backscratching going on. And so while you might have to pay a windshield wiper x amount to get them to come do winshe winshield installers, you might have to pay them a particular amount, it was actually marketing executives who were deciding what their friends were getting paid. It wasn't a question of what do we have to pay this person to get them to.
Do this job.
It was a question of basically how much can we get away with stealing from shareholders here, Like what is the most amount that I can pay you and that you in the next executive compensation committee will agree to pay me, and you just extract all the shareholders wealth that way. Not because you had to pay them that there were other people who would have done a job cheaper. But it's this clubby crony kind of backscratching corporate world which is just living off the backs of the workers and the shareholders because they have the power, because there's no, there are no politicians backed by workers who are cracking down on them. There's no union at these companies. Verizon did have one, AOL didn't have one. I'm talking more about AOL here, And so you wind up with this corporate culture that just siphons wealth off of the top. And if you don't undo that, just shrinking the number of people who are able to apply for thirteen dollars an hour jobs is what I'm saying, isn't going to change things structurally.
I guess I feel like we've gone on a little bit of a detour here. I mean, I don't disagree there are all sorts of problems with THEIG executive compensation, but as you noted, I mean other things, Rising is unionized. You know, cracking down on stupid employer compensation schemes isn't what unions do. And so I think we really do need to focus on this question of you know, when we talk about worker power, what do we mean, what do we think it's going to accomplish, whether it's unionized or not. What we think it's going to accomplish that could be good? Is it actually focuses companies on investing in productivity, growth, at the end of the day, if we want real wages to grow in the long run, if we want greater prosperity for typical workers, we need their productivity to be rising. And businesses are only going to have an interest in making investments in their productivity rising if they are restricted in part by by type labor markets, potentially by a more formal organizing movement in who they can higher and how much they have to pay. So again, I don't think there's any disagreement that labor unions can play a constructive role here. The problem, and I mean we've jumped so many steps over it's worth remembering back where we started, is the question of whether we think it matters if we have a huge influx of less skilled workers or or if we prefer a situation where there are actually many fewer workers. And it is especially interesting to see now in the sort of post pandemic tight labor market environment, that all of the economists who used to argue that immigration doesn't have an effect on wages have now completely turned around on this, I mean everybody. And again you have the Biden administration out there on this as well, trying to make the case that somehow you know, we need to bring that upward pressure on wages down by expanding labor supply. And that's our new case for why we need high levels immigration. And that's just insane. I'm sorry. You can't take seriously the idea of worker power and wanting to see workers benefit in the long run. If you're then going to turn around and say, whoa, whoa, whoa, it looks like actually workers are starting to actually sort of gain the upper hand here and be able to demand higher wages. Let's bring in lots more workers to prevent that from happening. You just can't do that. What you have to do instead is tell the business community, look, we do see that you're under pressure without a lot of workers available. You know what, it sounds like you'd better do find a way to make those workers more productive. And if you do that, you're going to be successful in the market. Your profits are going to go up, et cetera, etc. And that's the set of incentives you need. And policymakers who are committed to creating that set of incentives that dynamic, I think should be credited with being pro worker. And policymakers who are not interested in that dynamic and are instead interested in parating the corporate line that help we need more workers should not be credited with, within any serious way, being pro worker.
And I'm putting myself in the shoes of somebody on the left right now listening to this, thinking, all right, so is orange cast then pro worker if he doesn't support, for example, and Ryan, you can add to this, you know, significant tax cuts, tax increases on the wealthy, maybe even in the middle class, like European style tax system. And I know, actually you've been debating people on the right. You think the rights a version or allergy to tax increases is wrong. But you know, let's say the sort of Occupy Wall Street.
Agenda.
You know, if you don't support that, then are you serious? I know this is funny probably for you, because a lot of people on the right will attack you and compass for taking money from sort of left wing people and they think you're the secret socialist. But if I'm sort of a populist, disaffected maybe person on the left watching this.
Why is or in task pro worker?
Is he actually willing to sort of take the steps that Ryan mentioned that would structurally change the economy or are these just you know, fun talking points that mask something that's really just warmed over conservatism.
Well, I mean, I think in general I'm in favor of pursuing all of these angles. I mean, to Ryan's point about sort of executive compensation and so forth. You know, American Compass has done a ton of work on excesses of Wall Street, mismanagement of corporations, et cetera. I think getting specifically at that question of sort of who controls and sets employee compensation is a particularly difficult one. But I'd be the first to acknowledge it's a problem and them all ears on what to do about it. I think likewise, when you talk about the tax issue, you know, American Compass has just put out this work saying this idea that we should only ever cut taxes and our budget only has a spending problem is just not true. Now the flip side, I think it's also important to say it's not like tax increases are good for workers, right, Like I think it would be wrong to out there and say the way we solve these problems for workers is to is to raise taxes on somebody else. And I think that's where the sort of occupy Wall Street, like we just need to sort of if we punish the one percent somehow, that will benefit somebody. I'm just not sure what the logical chain is there. I think the two things we need to focus on much more strongly than a lot on the in the Republican Party have historically. One is that that budget deficits matter now. Right. It's not just a matter of accumulating debt that's going to promote some you know, cause some future crisis. Budget deficits are are a form of imbalance in the economy that has all sorts of consequences that crowd out better private investment, that drive up trade deficits and encourage offshoring. And so saying actually, we need to get our budget deficit under control and that will be a good thing for work, I think is really important. And then the second piece of it is to acknowledge that, you know a lot of the things we spend money on that Republicans of historically said well, let's just cut those things are really popular with and important to workers. And so whether you're talking about you know, the safety net, certainly if you're talking about entitlements, you know, your typical working family isn't interested in seeing those things cut now Obviously there are trade offs in life. Either you have to reduce spending or you have to pay more taxes to cover the spending. But what we've said is the appropriate pro worker view here is number one, you do have to close the budget deficit. You have to be willing to pay for the government you have. And number two, the way to do that is going to have to be through real compromise that yes, does bring down spending, including in some painful ways, but yes, also it's going to have to raise some more revenue in some painful ways. And so that's that's the position that we've taken. Again, I think it's one very interesting thing that you start to see conservatives taking. You know, we just put out a podcast where we spoke with both Congressman Rocanna, the progressive Democrat, and Congressman Jody Errington, the conservative Republican who's chair of the House Budget Committee. And it's very interesting to see, you know, Congressman Arrington. Chairman Arrington is more than happy to emphasize, yes, they're going to have to be compromises here. We can't just do the Republican tax cutting thing. Revenue has to be on the table because we do have to close this budget deficit, and that's exactly the place I want to see conservatives going. Franklin, It's very frustrating on the other side of the conversation to try to ask progressives, you know, to say, like, look, we think there could be some revenue on the table, what's the spending that we're going to put on the table, and the answer being well, you know, essentially nothing. I mean, I mean, you look at the Biden budget. Biden takes spending up further over the next ten years while making no attempt to pay for it, and that's just not real. We're going to have to get past that if we're actually going to make the progress that I think you're starting to see pro worker conservatives open to open to pursuing.
One last point on kind of unions and worker power before we move back to the question of immigration, the economy or worker power. There is that to your point about that unions at a micro level, you know, can have the same effect of you know, they drive up they drive up wages, and then they might drive up prices and can have some you know, inflation as a result of that. What I'm also talking about, though, is the way that union density and a big labor movement changes the entire political economy.
And I think if we can put up Ex.
Four here, I believe it is or any any of these charts that I grabbed kind of show the picture that you know, so this is basically the way that you're seeing all of the gains flow to, you know, very high wage earners. Happens to co inside precisely with the time that union power is collapsing. You know, as union power is surging in the forties, fifties and sixties, you know, the political economy is structured kind of toward workers, and eventually these big companies are able to kind of beat back the labor movement, to break the back of unions, and as a result, the kind of entire political structure changes.
And so I think we have ex.
Five here which shows right at the time that unions are broken before you break the unions. So it's not just that the union in micro negotiations with the company are what are producing the effect that you're seeing on.
The chart there.
It's also that both parties then are you know, are heavily influenced by workers because unions are organized and they're able to get out the vote based on their material economic concerns, and so they then implement legislation that makes it more difficult for people to accumulate that sort of wealth. What happens in the seventies and eighties is that you see that marginal tax rates just start to collapse, and you ask, you know, what to do about this crazy corrupt executive compensation. The answer is quite simple, you tax it. Like back in the nineteen seventies and nineteen eighties, when you had very high marginal tax rates, there just wasn't the incentive for executives to go out and do all of this stuff. Now, the counter argument to that ninety percent tax rate, people often say, well, actually nobody ever paid the ninety percent, so it's kind of a myth that we ever even had it. But my argument would be the point wasn't to collect revenue. It was social policy. It was policy aimed at discouraging the type of activity that would accumulate that much wealth. So, in other words, a corporate rate or a private equity group might be able to look at a kmart and say, we could bankrupt this pension fund and steal all the money. We could break the union, we could sell the land out from under it and just keep all the money, but at ninety percent tax rate, Like, what's even the point of doing it. So we're just going to go to try to find things that we can do that are actually kind of useful to society, which, to your point, and to Adam Smith's point that you quoted in the essay, like capitalism works if you're directing people towards socially useful projects rather than socially destructive ones. And so what I'd say is, like, by reorganizing the political economy so that workers have power again, what those workers will do is produce policy that produce federal policies that then make it very difficult for the top one percent to continue to gobble up all of the wealth. And I just don't think that's the kind of thing that you can do just by say, tightening immigration down at the border.
Well again, I don't think we disagree that that a stronger labor movement is important as well. We'd have to have a longer conversation about this ninety percent tax bracket issue. It's important to understand that that it would not have back then, and anything you would do today would not hit your sort of Huffington Post marketing executive and and so when you start and conversely, when you start to talk about the profits that you're making from from you know, taking over in bankrupting Kmart, you know those are typically coming through capital gains and if they're even realized and being steered into to wealth and other forms. So you know, look, American comments has said, there's from with all this stuff, we should be we should be trying to make policy that addresses it. I would not agree that a ninety percent top tax rate is really going to do those things, but I do think the point about the political economy of labor unions is really important, and maybe we're spending just another minute on because I think, you know, one of the biggest problems with unions as they operate today is that they have become primarily political enterprises and essentially arms of the Democratic Party, certainly in the way that they spend their money, and the problem is that that's not what workers want. I mean, the data is a little hard to tease out, but I think it's pretty safe to say among private sector union workers, the majority supported Donald Trump in twenty twenty, and almost certainly be the case in twenty twenty four, and so you have this problem. You know, if nothing else, American workers don't look politically very different from just Americans generally. And so the idea that we're going to sort of use union power and sort of organize workers and exert political power through them in a way that advances the Democratic Party's priorities, it just doesn't make any sense. And in fact, the continued effort to try to do that is probably the number one obstacle to organizing today. I mean, we've done a lot of survey work. One of the things you find is that among the significant share of workers who have no interest in unions, that the number one thing they dislike about them is the politics. And that goes for whether you're a Democrat or a Republican. And if you ask workers would they prefer an organization representing them focused only on workplace issues or both workplace issues and national political issues, They'll they'll choose only workplace issues by almost three to one. So I guess I would sort of pose the question back to you because this is something that we've posed to a lot of folks on the left of center who we'd love to work with on this issue of labor reform of building better work organizations. How do you feel about a system that really does strengthen the ability to organize, create more and better forms of worker power, but also quite explicitly says these are not for use in national politics. I mean, almost the way you know American compass as a five toh one C three, we limit what nonprofits can do in the political realm. Would you be comfortable with a model that says, yes, we're going to do it a lot more to give workers a lot more economic power in the labor market, representation in the workplace, but those entities cannot be ones that are then turning around and trying to be political in ways that workers don't actually want. Is that a deal you're interested in or not?
I think I'd happily agree to it if billionaires were also kept out of politics, if corporate America was kept out of politics, if corporate corporations couldn't fund super PACs, if billionaires couldn't fund super PACs, and basically you just I guess you then publicly financed campaigns.
But I think that the history of giving people.
Economic rights without giving them political rights doesn't pan out well.
Like you need both.
Because and they would still have political rights, they just among their I mean, they just would not be using unions, which are representing a group of workers that don't agree on politics, to exert them. I should say I highly agree with you on the corporate point. I would like to see us address citizens united one way or another. I think getting that out of politics as well would be very constructive. At American Compass, we continue to look for a partner on the left who would be willing to take this exact deal and go out there and say, look, workers would be better served, our political system would be better served if we reduce both the role of unions and corporations in our politics. We have yet to find anyone on the left of center willing to agree with that premise or write about it. If you were your listeners know of any such groups, please do let us know, because I think that's absolutely the direction to move.
Yeah.
I think the reason you're not going to find that is because I don't think anybody believes that kind of corporate power and the power of the rich is ever actually going to be taken off the political playing field. And so just if you take what's left of union power away and you take away the ability for unions to grow, to grow and then and to become what you know gall Braith calls the countervailing force, like without that, without that countervailing force of UH of labor unions, I think corporate power just becomes too too dominant. So that's why, yeah, what what? What kind of reaction have you gotten? Has anybody come close? I find it hard to believe that anybody would even come close to agreeing to that.
On the left, well, typically the dynamic is exactly what we've seen in this discussion, where the person on the left are presented here by you, attempts what they think is the gotcha of well, sure, i'd be open to that if we could also do something. If you're opening saying about proper power, and then we say, yes, that's great, we would love to do something about corporate power, and then they immediately retreat as you just have back. Now, well, now, never mind, I guess I don't think it would actually work.
Right, because how are you going to do that?
I mean, I brought it up right if you didn't think it was realistic or plausible, like right, like, everyone on the left spends all their time talking about how we should absolutely do something about Susan's United and so forth.
So if I say like, yes, great, lets and you immediately turn around and say, oh, why bother is not going to accomplish anything, then why why are you talking about it? Yeah?
It was because it was It was a it was a joke. It was a joke.
Really wasn't a joke.
Absolutely right, because.
You could do it.
Look, if you could do public financing, then then all right, then then maybe then maybe that works. I don't think just limiting corporate and top one percent kind of power is enough. You also have to you have to empower somebody who stands up for people. So is public financing in your in your deal, this hypothetical deal that's out there.
Yeah, I'm certainly open to the idea of it. I think you know how you how you do it well is of course a massive challenge. And I also think you don't want to exclude the role of of individuals as donors. I think there's a lot of benefits in the in the campaign system to that as well. But building a model that that does has reduced the influence on both sides, I think is exactly the right one. And so I think as we've seen. You know, what I think this discussion is sort of emphasized generally, is that what you see is the more sort of populist conservative view that is I think fair to say ascendant on the right within the Republican Party, really does jumble a lot of these things. I think it puts a lot of pressure on progressives and areas where they sort of conveniently pretended to be a lot more pro worker than they actually are. But it also creates a lot of space for actual progress. I mean, you've had the sort of trench warfare of Democratic and Republican Party of the last thirty years, neither of whom budging on anything and anything that could get worked out having already been worked out. As you see both parties, but especially the Republican parties shift in its coalition and its emphasis, that does create new ground for progress. And so that is something we're very interested in pursuing.
No, I do think it is.
It is genuinely interesting where the where the Republican Party is headed.
I'm curious to see kind of where that continues to go.
There's a bill and on the question of individual donors is I'm sure you know the bill by John Sarbines, which basically matches every contribution that somebody makes up to two hundred and fifty dollars by six. So it turns like small, small, to even medium size two hundred fifty dollars contributions from individuals who choose who they're going to support, and so it still leaves a role for individual donors. Then it multiplies them by six with federal financing, and they have a clever scheme where it's not taxpayer money, it's actually money that the I think the SEC or the CFPB or somebody collects from, like you know, corrupt corporations. So those fines would go into a pool that would then be used to support public financing. But do you want to ask, do you want to get yours? And I don't know if I'm representing the left or what here. It's a minority view in general to say that immigration is actually good for the country and good for good for workers. But I'm sure you saw the report from the Congressional Budget Office which revised up its GDP forecasts and said that something that over the next decade there would be an additional seven trillion dollars in economic growth because of the higher rate of immigration that that we're seeing, and that the reason that inflation has been actually tamed, not not not tamed completely, but why inflation is growing less than it was of the pandemic was that the that immigration has fueled economic growth to the extent that it's you know, just spreading generally and having the American economy, you know, drive the American economy grow faster, uh and with lower inflation than basically any other economy in the world. So I'm sure you've seen this a whole bunch of times. What's your what's your response to just the general idea that you need workers to grow the economy and that if you're not, if you're not growing the economy, simply restricting the labor supply only ends up in the end hurting workers and they as they say that real wages go down even if their nominal wages go up.
Well, I think there's two things to say. One is, again the report that you're talking about is talking about GDP and not GDP per capita. It's i think one of the sillier math tricks in all of economic policy to say, well, immigration is good for the economy because GDP goes up well, of course it does. If you have more people, there will be more economic output. But when we talk about the actual prosperity of the typical American worker, we're not interested in overall GDP. We're interested in GDP per capita UH, and report, I believe, quite notably does does not predict that this is increasing GDP per capita or even more importantly, sort of media and GDP per capita the median wages of a typical worker, because immigration wouldn't wouldn't do that. So let's let's first of all be clear about what we are and aren't talking about with respect to this idea that you know, if you have constraints on the labor market, then then you're not going to see real wages rise. Again, the driver of whether or not real wages rise is whether productivity is growing UH and and particularly whether, if you're talking about median wages particular workers, whether the productivity of the typical worker is growing. A lot of things need to happen for that productivity to grow, but in general, I do think it is it is reasonable to say that if you want to see a focus on growing productivity and investment in that, you need to make that a imperative you need to make that key to business success. And when you have a massive untapped pool of lower skilled, low wage labor available, investing in productivity is not going to be especially important. I mean, it's also really important to keep in mind that we do have a fairly large, in effect natural experiment on this point, because we went through all we have gone through long periods in American history of both rapid immigration and significantly constrained immigration. And I'm pretty sure that in the post war period when the US had very low levels of immigration, there is at a whole lot of evidence that that was a bad thing for the labor market. That seemed to have coincided just fine with rapid productivity growth, economic growth, increases in output per worker, rising real wages. So yes, more immigrants, more people means a bigger economy. But that is one of the cardinal mistakes that policy makers made in recent decades of focusing on that and not focusing on what actually matters, which is the well being of the typical worker.
But how far would you take it in the opposite direction, Like if if more electricians is bad, I would argue the more you know, actually, right now, in this economy, I think we don't have enough electricians, like we need we need to produce more electricians, and sometimes you need policy beyond just a price signal, Like I think one mistake that economists make is that they is that they live in kind of an imaginary land where you know, prices dictate supply and demand, just without realizing that there are also there's also a real economy. There's a real world, Like you can the price for wheat can be whatever you want it to be. But if there's if it's not raining and you've got a complete drought in a particular area, like you're not going to be able to grow wheat, Like, you still need real things. The price that you can be paying for nurses in you know, West Virginia could be quite high, but if there aren't any people there who are trained and willing to work in that area, uh, You're you're not going to You're not going to be able to just solve the problem just by raising prices. And if you do raise it high enough that you're able to pull nurses away from other areas, now you don't have enough over there. In other words, you need need more nurses. You have to you have to produce more of them. That would be my uh argument, How far would you take the counter argument? Like if let's say you're if you want to raise the wages of nurses, why not go beyond shutting the border down? Like would we say, Okay, for the next year, we're not going to graduate anybody from nursing school because that's going to tighten the labor pool around around nursing. Uh, trying to like if because if your poles lever is labor supply, why stop that immigration?
Well, because the policy goal is the well being of American workers, right, So the countervailing interest here would be people in the United States who do want to be nurses. And so I mean, I guess you could say, like, arbitrarily, let's tell a bunch of people they can't work, and that would I guess, tighten the labor supply, but at obviously the very serious expense of the Americans who you would be telling can't work. So I think what you're trying to solve for is the healthiest possible labor market serving the interests of American workers. And that is sort of how I would would try to evaluate the policy proposals. I would say just again focusing on the nurse example a little more, It's worth keeping in mind that one thing you would expect to see if you have a shortage of nurses, and compensation for nurses therefore starts to rise significantly. It's not just a matter of sort of moving nurses from one place to another. It's a matter of having more nurses over time. And one of the things I think we get wrong, and also in sort of blaming the tight labor market for inflation in recent years, is that if you have a tight labor market, especially at the bottom, what you're doing is affecting relative prices. You're you're forcing people to drive up wages for one set of workers. There are other workers who don't benefit from that, and in particular would be the high skilled workers, the higher wage workers, whose labor market is not getting tighter. And so in a sense, what you are talking about at the macro level is a fairly significant shift over time, and one that I think would be very important. And that's where that windshield white you know, windshield installer versus marketing is to example, ultimately comes down. Is that if if you move toward an economy in which we really need a lot more. Uh, and and to treat a lot better and to create better jobs for those workers who have been left behind. That's that's also going to have a blowback effect on those who have benefited most from from this model in a way that I think would be very healthy for the society. And so I think that's something that certainly makes some people very uncomfortable, But is the direction we're going to have to go if if we want to address a lot of a lot of the problems we have eye plagues. Actually, I have to depart, so we should wrap up. But this has been a terrific conversation.
Yeah, no, Emily had to draw I don't know if she mentioned it. Emily had to drop off earlier, she had she had to run, you know, a lot lot more to talk about here. And I think like as long as we're as long as we're talking about growing worker power through a strong a strong labor movement, then I think I think the left and the left and the populist right can certainly negotiate around a sane immigration policy. I don't think that has to make or break that potential.
Coalition there, I hope. So all right, well, there we go.
Orn Cass, executive director at American Compass and the visionary for the new populist Right.
Thank you so much for joining us here.
This was great. Thank you.
That was oron Cass, and normally Emily and I would go over the interview at this point, Emily had to drop off a little bit earlier, so we'll.
Do that next time.
We promise we'll do a review of that conversation and definitely have cast on again. These are interesting things to tease out until next time. These counterpoints we'll see soon.
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