1/ The long-predicted fiscal crisis is here, now. Interest payments exceeding defense spending. Deficits above $2 trillion, suppressing growth and hollowing out our economy.

As we show @AmerCompass, there's only one answer here. Call it the 19-20 solution... 🧵 2/ What is the 19-20 solution? It's pretty easy to understand. The only way to bring our budget back to balance is to get taxes and spending back to between 19 and 20% of GDP. Read between the lines, you discover there's actually incredibly broad agreement on this:

1/ The latest @AmerCompass podcast covers immigration.
@MarkSKrikorian cuts through the inane spin and arcane legalese to offer the clearest explanation I've heard of how the Biden admin created the border crisis and what it will take to fix it.
Here's what I learned:🧵 2/ The key starting point is to change your mental picture of "illegal immigration." The term "border crisis" conjures people sneaking across unguarded expanses of wilderness. That seems like it could be hard to stop! But mostly that's not what is happening.

1/ Political realignment is sending "socially liberal, fiscally conservative" cocktail party Republicans into the Democratic Party and the more racially diverse working-class Democratic base into the GOP. This means a radical shift for the politics of "big government"... 🧵 2/ New @AmerCompass polling shows the GOP consultant class's anti-government ethos no longer has any purchase with the GOP base (if it ever did). Republicans believe government can solve problems and generally want to see it doing more, even at the federal level. For instance:

To understand the underlying fraud of the "border security" bill, the thing to recognize is that it's the product of compromise between one side that wants to secure the border and one that does _not_ want to secure the border. Everything else follows from that. The open-border side is trying to present themselves as an inevitable feature of the landscape. If one side is irrevocably committed to absurd policy, this is just "the toughest immigration bill there will ever be." May as well take the deal. But... But!

https://x.com/davidfrum/status/1754362000803536936?s=20

1/ To understand @JoeBiden's disastrously low standing on the economy, we tried an experiment @AmerCompass:

Survey American attitudes on a Top 10 set of Biden economic policies, 5 of which are broadly supported, 5 of which are polarizing.

The results are fascinating. 🧵 2/ Successful politicians “pick fights” on contested issues where the bulk of voters are on their side. Biden has done the opposite, doubling down on a set of high-contrast issues that divide Democrats and the upper class from everyone else. americancompass.org/how-the-biden-…

1/ Kicking off the New Year with a must-read: Free Trade's Origin Myth @LawLiberty
What if I told you economists' sacred theory of "comparative advantage" was regarded as a totally inadequate basis for trade policy for 100+ years after it was first published? 🧵 2/ Comparative advantage, first described in the early 1800s, rose phoenix-like from the ashes of World War II, as American economists sought to claim for themselves a leading role in rebuilding a peaceful, US-led world order. lawliberty.org/forum/free-tra…

1/ Out today -- a new @AmerCompass collection on tax policy: A Walk on the Supply Side. My essay, The Curse of Voodoo Economics, argues that conservative conflation of two rationales for tax-cutting has driven economic policy off the rails. Let me explain...🧵 2/ A common explanation for the Republican Party’s tax-cutting obsession is that it follows naturally from conservative principles. Conservatives favor smaller government and have greater faith in markets, ergo tax cuts will always be central to the GOP agenda.

1/16 The @WSJ has given me the space to make the thorough case for tariffs, so allow me to briefly outline the argment here. In a sentence, it comes down to a straightforward argument: Making things matters. 🧵 2/ Economists in Washington like @MichaelRStrain and @AdamPosen love to ridicule tariffs, for instance the global 10% tariff proposed by @realDonaldTrump. "Lunacy" and "horrifying" says Posen. "A disaster for the U.S. economy" says Strain.

1/10 The poll of GOP voters that we released this morning @AmerCompass depicts a really interesting issues landscape and explains a lot about what is going on in Republican politics and with conservative policy fights. 🧵 americancompass.org/the-new-conser… 2/ Here's what we did: We started by presenting in random order a list of 12 different challenges that many conservatives say are facing the country, and asked respondents to choose the two to five they considered most important.

Does this moment present a unique opportunity for Congress to take serious action on immigration policy? I think so, for a number of reasons. 🧵 1. The crisis is finally reaching across America, into even the deepest blue progressive enclaves. NYC is pleading for help, Massachusetts has declared a state of emergency. This both creates awareness of illegal immigration's costs, and an incentive to act.

Not sure @NikkiHaley understands what industrial policy is? Whatever one thinks of the Railway Safety Act, that ain't it.

She sure talks a lot about South Carolina though! She should take a look at what that state's ambitious GOP governor did in the 2010s. For instance...🧵

https://twitter.com/NikkiHaley/status/1705225644974412279

2/ An 800% increase in the state's "closing fund" -- "dollars the state can tap to ensure a business opens up shop or expands in South Carolina." postandcourier.com/politics/oppon…

1/ The @FreedomWorks capitulation is one of the clearest signs yet of the accelerating realignment in American politics.

It confirms conservatives' worst suspicions about the libertarian groups that held sway over the Right's economic policy. 🧵 politico.com/news/2023/09/1… 2/ For years, groups like @FreedomWorks and @AEI have been telling policymakers that the truly "conservative" thing to do is cut taxes, globalize, avoid regulation, weaken unions... This was, coincidentally, the business lobby's agenda too. But never mind, it was "conservative."

The best nonsensical WSJ editorials are the ones flatly contradicted by the contemporaneous reporting of the paper's news side. This one on U.S. Steel is a doozy of the genre.
wsj.com/articles/the-p…


WSJ editorial subhed: "Unions and politicians are trying to steer the company’s sale after tariffs fail to make it more competitive"

WSJ Finance section subhed: "Suitors are circling America’s venerable steelmaker for good reasons"
wsj.com/finance/stocks…

1/ I'm told songwriters from @AEI, @Cato, and @AFPhq gathered at George Mason this weekened to rebut the declensionism and grievance-onomics of @AintGottaDollar's Rich Men from Richmond.

The result is a powerful new ballad for the Old Right:

"Every Feller's a Rockafeller" 2/ What's that? You want to know how it goes?

🎶🪕🎶🪕
Your revealed preference, is to work all day
Your marginal product, determines your pay
And thanks to government aid, like the ol’ ACA
Your standard-uh-livin’ just keeps risin’ away

This was a tour de force by @NoahCRothman on @NRO's The Editors podcast. He seems to have an entire theory of anti-empirical political economy that I'd be eager to learn more about. nationalreview.com/podcasts/the-e… "Capitalism, as we understand it, is a spontaneous order. Rules and institutions are required to prevent anti-competitive practices from arising among associations between men that thwart the formation of those spontaneous associations."

Not that the Old Right has been covering itself in glory the past few weeks, but I'd have to say the enthusiasm for the @Forbes article posted yesterday by @NorbertjMichel @CatoInstitute on financialization breaks some new ground. Allow me to explain... americancompass.org/yes-financiali… Norbert swung hard at @AmerCompass, earning applause from an embarrassingly large crowd, but his rejection of financialization makes come-see-me-after-class type mistakes with both logic and data. I'll go briefly over his three key factual claims:

1/ It's here -- Rebuilding American Capitalism: A Handbook for Conservative Policymakers.

The culmination of three years of @AmerCompass work to develop a coherent and comprehensive alternative to the Old Right's market fundamentalism. americancompass.org/rebuilding-ame… 2/ Rebuilding American Capitalism explains the foundations of conservative economics and shows how to construct a platform atop that applies conservative principles to contemporary problems -- more than two-dozen proposals, each linked to all the relevant @AmerCompass research.

Fortunately, the analysis here discusses both!

"Guest workers picking lettuce do not spend their wages primarily on lettuce."

https://twitter.com/AlexNowrasteh/status/1654196329717944321

As I note in Jobs Americans Would Do, the claim that immigration does not suppress wages because it brings both supply and demand was rather undermined by everyone suggesting we use immigration to battle inflation and address "labor shortages." americancompass.org/jobs-americans…

1/ Here's my big essay for the year: Jobs Americans Would Do. Give it a read.

It begins with a simple hypothetical about an entrepreneur named Alex, who wants programmers to code apps for him at $16/hr while sitting in a hot, dusty field... 🧵americancompass.org/jobs-americans… 2/ If you can't find app developers to sit in a hot field for $16/hr, is coding a "job Americans won't do"? If the people who apply don't know Java, is that a "skills gap"? If not, why not? How do we distinguish that lament from the "labor shortage" complaints we take seriously?

1/ 🧵So you want proof the New Right really cares about worker power and is prepared for public policy to do something about it?

Let's take a walk through the Labor chapter of the new @Heritage "Mandate for Leadership": 👀thf_media.s3.amazonaws.com/project2025/20… 2/ From the Mission Statement: "federal labor and employment agencies have an important role to play by protecting workers, setting boundaries for the healthy functioning of labor markets, and ultimately encouraging wages and conditions for jobs that can support a family." 👀

1/ As it turns out, I was one of Tucker's last guests on @TuckerCarlsonToday. He was very generous to share his platform for such an in-depth discussion of conservative economics. Here's my my closing comment, on where conservatism needs to go now: 2/ "In the context of the Cold War, you had what's called fusionism on the right-of-center -- this idea that the coalition that was going to win the Cold War was we're going to get the hard-core, free-market economic folks, the social conservatives, and the Cold War hawks..."