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Oren Cass Profile picture
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7 Jul, 5 tweets, 2 min read
The GOP has been cutting taxes for 40 years. The federal tax burden is way down. Also down in recent decades?

🔻Economic growth.
🔻Wage growth.
🔻Investment.

If you keep paging through a dog-eared 1980s playbook and can find nothing but tax cuts, it's time for a new playbook.
Going into a pandemic? "Tax cuts are always a good idea." Coming out of a pandemic? "Focus on tax cuts."

There's nothing remotely conservative about any of this. Not even really fair to call it libertarian. It's just rote recitation of outdated dogma.
And by the way, cutting taxes when they raise only 16% of GDP, while we spend more than 20%, just isn't going to happen. Shouldn't happen. Can't happen. Money's not free.

So if you're focused on tax cuts, that's really just a way of staying you're focused on nothing. Not great.
"What else could we focus on? We thought there's just tax cuts." Glad you asked. You could focus on:

- Supporting parents
- Boosting domestic industry
- Financing infrastructure
- Reforming financial markets
- Rebuilding labor
- Creating non-college pathways
I could go on...
These things would all be more conservative than cutting taxes in the face of a trillion dollar deficit.

They'd also lead to an awful lot more good jobs.

Politicians who apply conservative principles to _current_ problems will be the next leaders of America's right-of-center.

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More from @oren_cass

Oren Cass Profile picture
4 Jun
1/ Weekend reading 🚨

The new @AmerCompass collection begins from a simple premise: the information revolution of the past 30 years has brought about the most consequential technological transformation since the industrial revolution 200 years ago. 🧵

americancompass.org/collections/lo…
2/ An important thing to understand about the industrial revolution is that it actually made people pretty miserable for a pretty long time -- decades of stagnant to declining wages, declining health and life expectancy, people literally got shorter!
3/ Eventually, policymakers caught up, recognizing that the state needed to play a different role in an industrial economy than it had in an agrarian one. Indentured children in factories and mines were not the same as children working on the family farm.
Read 14 tweets
Oren Cass Profile picture
29 Mar
I appreciate @DonFSchneider taking the time to reply to my recent essay, We're Just Speculating Here... The Rise of Wall Street and the Fall of American Investment. But I'm not persuaded by his "no investment decline" thesis. Two points in particular:
1. I do see "much weakness in equipment" in his chart -- at least the last ten straight years of data below his long-run average. Here's net investment as % of GDP by decade:
1960s, 1.7%
1970s, 1.9%
1980s, 1.4%
1990s, 1.5%
2000s, 1.3%
2010s, 1.2%

2. Using the GDP deflator for private nonresidential fixed investment to get "real net investment" is facially untenable. He provides the chart. It basically shows no inflation for 40 years. Companies get about as much for $100 in 2020 as they did in 1980.
Read 6 tweets
Oren Cass Profile picture
25 Mar
Thread (1/12). How have Wall Street's fortunes diverged so radically from Main Street's in recent decades? I think a large part of the explanation comes down to our misunderstanding of the word "investment." Most "investors" are doing nothing of the sort. americancompass.org/essays/specula…
2/ My new research brief @AmerCompass classifies publicly traded companies as "Sustainers" or "Eroders" depending on whether they are investing faster than they use up their past investments. Our economy has undergone a transformation. americancompass.org/essays/the-cor…
3/ Half a century ago, the vast majority of companies were Sustainers -- actively investing to grow their capital stock. Now Eroders predominate, returning record amounts of cash to shareholders even as they fail to make the investments they need.
Read 13 tweets
Oren Cass Profile picture
23 Mar
Today marks one year since the COVID crash's bottom, when the S&P fell more than 30% in a bit over a month.

After a decade of hedge funds woefully underperforming simple index-fund investing, this should have been their moment to shine.

They did not. americancompass.org/essays/coin-fl…
Data on the performance of hedge funds and private equity in the COVID crash's wake is now available and, as @wellscking shows in the latest @AmerCompass Coin-Flip Capitalism update, the picture is not pretty. americancompass.org/essays/coin-fl…
The defense of hedge funds and their disastrously subpar returns in recent years has always been that they are specifically designed NOT to track the market and they provide value precisely because their performance is uncorrelated.
Read 7 tweets
Oren Cass Profile picture
12 Mar
Amazon has repeatedly pushed the envelope on labor practices and then retreated or claimed to reform in the face of bad PR. Come with me on a brief tour of the past decade:
2011: "Instead, they said they were pushed harder and harder to work faster and faster until they were terminated, they quit or they got injured. Those interviewed say turnover at the warehouse is high and many hires don't last more than a few months."
mcall.com/news/watchdog/…
2011 contd: "During summer heat waves, Amazon arranged to have paramedics parked in ambulances outside, ready to treat any workers who dehydrated or suffered other forms of heat stress. ... And new applicants were ready to begin work at any time."
mcall.com/news/watchdog/…
Read 18 tweets
Oren Cass Profile picture
2 Mar
Today @nytimes, I separate the debate over child allowance proposals into two separate questions:

(1) Should we send more financial help to working families? ✅

(2) Should the safety net deliver unconditional cash to the non-working poor? ❌

nytimes.com/2021/03/02/opi…
American families are struggling to make ends meet and an expansion of the social compact to better support them makes sense. But such a program should expect that families are doing their part to support themselves, and go to those with at least some earned income.
By contrast, trying to tackle poverty by just giving cash to households disconnected from the workforce is a bad idea. We should absolutely have a strong safety net, but just "Give People Money" isn't the right answer.
Read 5 tweets

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