White House Advisor
Appearances
Global News Podcast
Putin agrees to pause Ukraine energy attacks during Trump call
A White House advisor... We are following some breaking news in Washington. In a statement out moments ago, the White House says, quote, the movement to peace will begin with an energy and infrastructure ceasefire. This morning's...
Global News Podcast
Putin agrees to pause Ukraine energy attacks during Trump call
And splashdown. Crew 9, back on Earth.
Today, Explained
The nostalgia economy
We do have a preference, certainly at the margin, for something made here versus something made overseas. And so... we're going to make it relatively more attractive to produce things here and to buy things that are made here.
Today, Explained
The nostalgia economy
On this front, we support very much the Trump administration's approach. I think a global tariff is the right way to do things. And the reason is that it might sound nice to say, you know, we're just going to focus on the sexy or politically popular products like the advanced semiconductor or the electric vehicle. But there are two problems with that.
Today, Explained
The nostalgia economy
First of all, the things that are going to be most politically popular are not necessarily going to be the things that are actually most important.
Today, Explained
The nostalgia economy
I mean, we're already seeing this even just in the electric vehicle space, where it turns out if you don't do the critical mineral mining and processing, you're going to have an awfully hard time making the batteries and the electric vehicles and leading there.
Today, Explained
The nostalgia economy
So you really have to think all the way up and down the supply chain and not just think that, well, maybe we'll bring in all the parts and just pick and choose certain things to do ourselves. The really nice thing about having a broad global tariff is maybe it sounds like a big intervention in the market. In one way, it is. But in another way, it's really the much more free market approach.
Today, Explained
The nostalgia economy
It's a very simple, broad policy that conveys a value that we see in domestic production. And then within that constraint, it really does leave it up to the market. Figure out which things it makes sense to bring back. Figure out there are still going to be plenty of things that we trade with the rest of the world, and that's good too. But ideally, we start to bring that trade back toward balance.
Today, Explained
The nostalgia economy
Who's paying for this? Well, I think there are two questions there. I think it's a real misunderstanding to think that something like advanced semiconductors is saying that a CEO is excited to build that factory, whereas the shoe factory, I guess, I don't know, because the shoes are more basic, that's not something a CEO is excited to build.
Today, Explained
The nostalgia economy
It's a great question. I was just—I'm glad we sort of dug one layer deeper because the question of what can be— made here productively, it has nothing to do with sort of necessarily how high tech the final product is. It comes down much more to how high tech the production process is. I mean, one of the things that, you know, the US does still have a significant manufacturing
Today, Explained
The nostalgia economy
presence in is something like basic chemicals, because a chemical plant obviously isn't about people doing things with their fingers. It is a set of very advanced processes. And so I think the way that we have to think about it with something like a global tariff in particular is We are putting a finger on the scale.
Today, Explained
The nostalgia economy
We're saying those things that maybe you're choosing to make elsewhere today, but there's the closest case that it could also make sense to make it here. Well, now we've flipped that equation. Now those things do make sense to make here.
Today, Explained
The nostalgia economy
And so the answer to the question of who's going to invest here is the people who can make a lot of money producing things here under that different set of conditions.
Today, Explained
The nostalgia economy
So I think when we're thinking about the trade issue, the question is a very fundamental trade-off between globalization and offshoring in pursuit of just cheap, efficient production, as opposed to a reindustrialization that takes seriously the value of having a strong industrial economy domestically. And we saw we've made that trade-off in one direction after the year 2000 in particular.
Today, Explained
The nostalgia economy
And insofar as that's what we want, it worked, right? We did, in fact, deindustrialize and get a lot more cheap stuff. And it seems to me that people quite reasonably and rationally are not happy with having made that trade-off. And so I think offering them the converse of it, saying, you know, would you prefer...
Today, Explained
The nostalgia economy
an economy, and a nation at the end of the day that has a stronger industrial base, that provides more of these kinds of opportunities, that gets all the other benefits in terms of innovation and national security and so forth. But it also means that maybe there are some things that are more expensive. Maybe the TVs aren't quite as big as they otherwise would be.
Today, Explained
The nostalgia economy
Is that a trade-off that you wish we had made instead? I think most Americans absolutely say the answer to that question is yes.
Today, Explained
The nostalgia economy
Sorry. I think it's really important to distinguish between the kinds of price effects we're talking about here and what was going on with the inflation crisis.
Today, Explained
The nostalgia economy
Well, there are a few studies that try to get at it, but again, I think you're asking the wrong question. The question is not, would you pay more for a TV that was made in Michigan?
Today, Explained
The nostalgia economy
The question is, would you rebalance the economy in a direction that doesn't place quite such a high priority on cheap consumer goods and places a higher priority on some of these other factors that are incredibly important to people?
Today, Explained
The nostalgia economy
And it seems pretty clear to me that there is a widespread understanding today that people are frustrated with the direction that we've moved on this and that they do want to see something change. At American Compass, we've tried to ask the question, a couple of different ways. And what we find whenever we do this is people say, yes, this is a trade-off they want to make.
Today, Explained
The nostalgia economy
Yes, they really like that message. And so to the extent that you can pull those things, I think that is what the answer indicates.
Today, Explained
The nostalgia economy
Well, I guess I'd start by saying I don't think it's nostalgic to wish that we had a society and an economy where the typical man without a college degree can find a good, stable job that would allow him to support a family. And I don't think it's nostalgic to say that we would like more people to be getting married and building stable families and raising kids.
Today, Explained
The nostalgia economy
I think those are quite noble and worthy aspirations that should be at the center of our politics. And across so many dimensions, whether it's other measures of social well-being, whether it's life expectancy, various problems with addiction and so forth, what we are seeing is a divergence that is very closely tied to people's economic fortunes and economic opportunities.
Today, Explained
The nostalgia economy
And if you have a model of economic growth where, you know, young men ages 25 to 29 are earning the same wages after adjusting for inflation that they earned 50 years ago, I think it's fair to say we need to take things in another direction.
Today, Explained
The nostalgia economy
This is a policy at the end of the day that's oriented toward helping some of the folks who have really been the losers in the economy and have been left behind for a long time.
Today, Explained
The nostalgia economy
My name is Oren Cass. I am the founder and chief economist at American Compass. We work closely with a lot of policymakers, both on Capitol Hill and folks who are in the administration, trying to share our views on what the key problems are for America and what the best policy solutions would be.
Today, Explained
The nostalgia economy
Well, I think the shock is proportional to the size of the announcement, you know, on what President Trump was calling Liberation Day. He, first of all, sort of went with an all of the above approach. You know, he did a global tariff plus very large tariffs on China, plus across the board what they're calling reciprocal tariffs on most other countries.
Today, Explained
The nostalgia economy
And then the level of those reciprocal tariffs in particular was very high. And so I think that that has pushed the shock to the high side. The other factor that I think is very important in doing tariffs is that ideally they are phased in because, you know, people need time to adapt. If you want more domestic production, you need time to build more factories.
Today, Explained
The nostalgia economy
And so I think having everything snap in immediately rather than announce what they would be as they phased in has been a major factor in the shock.
Today, Explained
The nostalgia economy
I think phase-ins would be better. I think the reality is that there are absolutely going to be costs associated with tariffs. I think it is worth incurring those costs in the short run for the long-term benefits to the American economy. But you don't want to bear costs unnecessarily.
Today, Explained
The nostalgia economy
The fundamental argument for tariffs is that making things matters, that we care what we can make in the United States. We care whether we're making anything in the United States. And economists had rejected that idea. Economists said it didn't matter what we make. We will have other jobs instead, and those will be better jobs.
Today, Explained
The nostalgia economy
And that turned out just not to be true, particularly for the sort of folks, you know, people who are not in big coastal cities, people who might have less education. You know, the kind of industry in raw materials, in manufacturing, in logistics and infrastructure, things that can be done productively and create a lot of value all over the country with all different kinds of skills,
Today, Explained
The nostalgia economy
are really important opportunities to offer. And I think likewise, having a strong industrial base is just really important to the kind of innovation we do, the kind of growth we get. And we forsook all of that. And so tariffs work from the opposite assumption. Tariffs say, yes, making things does matter.