Grover Norquist Abdicates His Citizenship, and Cheapens Yours

And more from this week…

The United States reached the new millennium, more than 200 years into its existence, having won two world wars and then the Cold War, having invented and built the modern world, with the federal budget in surplus and its publicly held debt less than one-third of its GDP. That achievement was possible only because of the seriousness with which the American people took their citizenship. They recognized the liberty and prosperity of the American republic as something developed at great cost by prior generations, embraced their role as trustees, and committed to improving upon their inheritance and passing on something even greater to their children.

And they conducted politics accordingly. Neither side behaved well in every instance. But when one strayed toward irresponsibility, the other appealed to the people’s better angels rather than taking the opportunity to behave even worse, and voters rewarded discipline. After President Ronald Reagan’s initial tax cuts left the deficit far larger than his advisers had predicted, he accepted a series of tax increases to narrow the gap. In 1983, the Republican White House and Democratic House agreed on a major Social Security reform that extended the program’s life through both tax increases and benefit cuts. In 1990, another Republican White House and another Democratic Congress committed to spending caps that held until the budget reached balance. It is in this way, and only in this way, that a democratic republic can flourish.

Sadly, fiscal policy is one of the areas in which Republican Party dogma has departed most obviously, and most calamitously, in recent decades from the conservative tradition and the core obligations of citizenship. And no one bears more responsibility for the failure than Americans for Tax Reform’s Grover Norquist. Everyone is familiar with the ATR “pledge,” under which most Republicans have promised, in effect, never to raise taxes under any circumstances. This imprudent absolutism led to absurd results such as all eight GOP candidates in the 2012 presidential primary signaling at a Fox News debate that they would reject a budget deal with $10 of spending cuts for every $1 of tax increases.

The result has been steadily rising spending and expanding government, ballooning deficits, and a debt crisis now out of control, as interest payments exceed the defense budget and drive deficits yet higher. More fundamentally, Norquist’s legacy will be to have bastardized conservatism, cheapened citizenship, and polluted the public square with a childish politics that elevates name-calling over problem-solving and promotes win-at-all-costs strategies that produce only losers.

Norquist makes no pretense of taking policy seriously. He evinces little familiarity with the substance of the federal budget and offers no pathway toward fiscal balance. In our debate this week on Henry Olsen’s Conservative Crossroads, I asked him whether he could point to anyone who had produced a politically plausible budget that could balance without tax increases. His first answer was that “federalism is the path.” He suggested we should “fight fraud.”

I tried to explain that the states could not rein in Medicare, Social Security, defense spending, or our interest payments on the debt, and asked again, “What can we hold onto that says, yes, this is a level of spending cuts that the American people would ever consider, even on the right-of-center, that becomes fiscally sustainable?” His answer, again, was to “let the states figure things out.”

Was he proposing to send Medicare and Social Security to the states? Or national defense? No, he was “talking about most of the welfare programs and certainly Medicaid, Aid to Families with Dependent Children, to jobs programs.” Amusingly, AFDC is the program that was reformed into Temporary Assistance for Needy Families during the Clinton administration. Three decades after it happened, this is still one of the few spending cuts on Norquist’s list.

The amusement soured into pity when Olsen, moderating the debate, asked what each of us would do about Social Security. Norquist mentioned cutting benefits for high earners, but even he knew that got nowhere near a solution. And so he reached for more money, not smaller government—first “Trump Accounts” (an entirely new spending program), then selling off federal land. Even he does not take his own platform seriously.

Norquist’s team fired off not one but two press releases seeking to clean up their boss’s mess the next day. It’s the second one that interests me: “Oren Cass Calls for Trillions in New Tax Increases.”

The Congressional Budget Office estimates that we are headed for more than $24 trillion in cumulative deficits over the next ten years, so we do indeed need to raise trillions of dollars in additional revenue. We could make unprecedented spending cuts that Republicans have never contemplated, and Norquist would never propose, and we would still need trillions of dollars in new revenue. Seeing as the debate’s topic was “Should Conservatives Raise Taxes?” and my position was “yes,” I guess I took for granted that I should come prepared with a list of increases that I believe conservatives should put on the table. I proposed closing the deficit over time with roughly $1 in tax increases for every $2 of spending cuts, getting revenue to about 19% of GDP and spending to about 20%. The taxes I had in mind included codification of tariffs, higher rates for the top income brackets, a higher corporate tax rate, a financial transaction tax, and a higher payroll tax cap.

That position is open to entirely reasonable critique from anyone advocating an alternative budget with spending cuts sufficient to make tax increases unnecessary. But Norquist cannot do that, because he has no alternative, and anyone who has studied the problem knows that the shape of any such proposal would be neither plausible nor popular. He can’t even admit there is a crisis.

Olsen asked him directly, “Do you see the federal deficit, which is now running at about 6% of GDP, our debt is 100% roughly of GDP (the amount that’s held by the public), do you see that as a crisis or do you see that as just normal government operating…?” After a meandering non-answer, Olsen tried again, and Norquist eventually arrived at this: “So you’re asking me about an impossible not true counterfactual fairytale. Do I believe in that? No. And if you walk into a room believing that, you’ll get tooken.”

Norquist can be forgiven the debate faceplant. What’s unforgivable is his abdication of citizenship. His preference for lower taxes is reasonable—admirable, even. But tax cuts below plausible spending levels are not tax cuts; they are tax deferrals. Someone will have to pay the tab, and he is advocating that we pass it to our children, with interest.

“To be a citizen,” we write in Reclaiming American Citizenship, “is to inherit something built by others, owe something to those around you, and leave something better for those who come after.” Rather than tackle the entitlement crisis, he suggests that we take our national inheritance of public lands and sell it off (“with the sale of land, you could solve a lot of the problems,” he assured us) to sustain an unsustainable binge a bit longer, leaving less to future generations. This is what we mean by people who “have mortgaged structures they did not build, sold off assets they did not own, and devalued the basic currency of citizenship.” And it is why “we find our nation headed toward fiscal collapse, as we continually consume more than we can produce, accumulate debt we cannot repay, and make promises we cannot and will not keep.”

The only defense offered for this folly is a cry to “look at the other side.” Democrats will never accept spending cuts, the argument goes, so Republicans should never accept tax increases. The evidence actually cuts the other way: for instance, with the 1983 and 1990 deals mentioned above, as well as the 2011 Budget Control Act that Norquist cites himself. Never mind. Democrats purportedly reneged on a 1982 deal, and that justifies everything.

Thus, the plan must be to attract voters by cutting taxes, win elections, and then use the resulting power to shrink government. Norquist was strikingly blunt about this during our debate, framing his opening statement around the idea that Republicans “made themselves become the party that would not raise taxes. Branding is very important. You see that with Coca-Cola, that’s why you can pick up a Coke and take it home. … Republicans who raise taxes or even suggest that, Republicans who raise taxes are ratheads in a Coke bottle.”

A political party as a soda brand, voters as consumers of sugary beverages, and fiscal conservatives as “ratheads.” This is, nearly verbatim, the corrosion we describe in Reclaiming American Citizenship: the people “devolving from citizens into mere consumers—passive subjects of an empire that promised safety and comfort while draining away liberty, dignity, and prosperity.” Norquist proudly takes credit.

The analogy would be bad enough even if it inadvertently captured something true. But Norquist pairs this rhetoric with a narrative account that only confirms his own failure. He describes two periods, one in which Republicans were open to tax increases and one in which they were not. “The Republican Party was willing to go along with this and support tax increases from 1932 until 1994,” he says. In those days:

We’re not opposed to tax increases on principle. We didn’t say no. During that period, how did it work out for the Republican Party? They control Congress twice. They won Congress twice in 62 years. It was as if the Washington Generals and the Harlem Globetrotters played every single day and the Globetrotters always won.

By contrast:

In 1994, the Republican Party, 95% signed the commitment, written commitment to the American people. We’re not raising taxes. What happened? We had a situation where the Republicans won 18 years of government, House and Senate 18 years. Democrats, six years, mixed, six years. So we’ve seen that as the party that won’t raise taxes, we have a chance to govern.

Because he proudly touts how faithfully Republicans followed his strategy for decades, it is entirely fair to ask, “How’s that workin’ out for ya?” Well, from 1932 to 1994, the deficit as a share of GDP fell from more than 4% to less than 3%, and the budget was on its way to balance within a few years. The Great Depression and World War II did drive publicly held debt above 100% of GDP in 1946, but by 1994 it was back below 50%, a remarkable feat of fiscal discipline.

But in the first, fleeting moment of unified Republican control at the start of President George W. Bush’s first term, the GOP passed a massive tax cut. When it had control again in 2003, it passed another. Spending, which had fallen as a share of GDP in every year of the Clinton administration, rose sharply. The surplus collapsed back into deficit. By 2019, the last full year before COVID, tax receipts were at their lowest level for an economy at full employment, and spending at its highest, since the 1980s. The deficit was nearly 5% of GDP. This year it is 6% of GDP and the federal debt is climbing back above 100% of GDP, on track to surpass its post-World War II record.

This is exactly what theory would predict. Promising to cut taxes no matter what happens to spending is an invitation to profligacy. William Niskanen, economic adviser to President Reagan and longtime chairman of the libertarian Cato Institute, explained the point well:

The demand for federal spending by current voters declines with the amount of this spending that is financed by current taxes. Future voters will bear the burden of any resulting deficit but are not effectively represented by those making the current fiscal choices. One implication of this relation is that a tax increase may be the most effective policy to reduce the relative level of federal spending.

Nor does the evidence support the case that anti-tax zealotry works as a political ploy. American Compass’s own research shows that Americans of all political stripes strongly prefer efforts to restore fiscal sanity through a combination of higher taxes and lower spending. The Norquist style leads directly to perception of the public square as “an arena merely for fighting, with no prospect of resolving differences or achieving change,” we argue in Reclaiming American Citizenship. We must “choose instead a responsive politics that demonstrates faith in the wisdom and morality of ordinary citizens and holds elites accountable for representing and serving them well.”

No doubt, Norquist will go down with his ship, speechifying instead of debating, attacking instead of proposing, and leaning on references from 30 or 40 years ago, when his position fossilized. But for any conservative who aspires to help get America out of its hole, the time has come to put up or shut up: How are we going to pay our bills? There’s no shame in having tried a strategy that proved ineffective, but a great deal in sticking with it once you know you are harming your own nation.

As we conclude our citizenship statement, “What passes for radicalism these days at both ends of the political spectrum has become quite dull, performed for attention, impressive to no one, incapable of solving problems. We stand for something that is far more radical because it dares to be responsible and responsive: the hard work necessary to reclaim American citizenship, reform ourselves, and restore our American republic.”

Well that was a bit long, so we’ll run through the roundup quickly.

GOOD, BAD, AND UGLY FOR TECH

The Good: Big Companies Are Starting to Hire Again, Defying Predictions of AI Wipeout (Wall Street Journal). This follows last week’s news that initial jobless claims had fallen to their lowest level in more than 50 years. We remain vigilant for signs of labor-market catastrophe, but thus far the evidence remains scant.

The Bad: Young Adults Are Letting AI Do Their Talking for Them—Even in Person (New York Times). “She’ll even, at times, fire it up to formulate a response to the person standing next to her.” Please consider refusing to continue a conversation with anyone who does this.

The Ugly: Meta Is Fighting a Mountain of Social-Media Lawsuits—at Just the Wrong Time (Wall Street Journal). The libertarian case for not regulating massive companies as they release products that impose potentially massive costs on society is that we already have tort liability, which would place the cost back on the companies, so we can trust them to behave rationally. Of course, that only works if the liability indeed gets imposed. Now Meta is lobbying for immunity, which would reward its malfeasance and send exactly the wrong message to future “permissionless innovators.”

But what if the liability is too high, and even bankrupts the company? Well, what if a company’s products are so toxic that people wish it didn’t exist? Welcome to the wonderful world of law and economics. If you’d prefer not to have that catastrophic and unpredictable liability hanging over an industry’s head, may we introduce you to the wonderful world of actually governing in a democratic republic?

Speaking of which, if AI models are going to start committing felonies, someone needs to go to jail. And if you’re cavalierly unsure of how many felonies you’re committing…

GOOD READS FOR YOUR WEEKEND

The Cities That Said Yes to Drugs (The Atlantic). Too many brutal anecdotes to pick one, just read the whole thing. And as you do, ponder which of the awful progressive ideas promoted today by The Atlantic will be the subject of this kind of takedown ten years hence?

• Bonus link: Oren’s oldie-but-goodie in the New York Times on the folly of progressivism’s faith that it stands always on “the right side of history.”

Inside the Phone-Throwing Drama at the Troubled, Broke Democratic Party (New York Times). Self-recommending headline.

Can Vance square his Catholicism with Trump’s Republican Party? (Sohrab Ahmari, Financial Times). “...it is a Republican vice-president who has written a book sharply critical of the old religious right, and sometimes even of the culture-warrior new right. Along the way, Vance praises labour unions, calls for a living wage and favourably cites Herbert McCabe, an Irish priest who sympathetically engaged with Marxism.”

And for your weekend listen, check out American Compass policy director Chris Griswold on the University of Chicago’s Capitalisn’t Podcast with Luigi Zingales and Bethany McLean.

THE GLOBAL REBALANCING

FCC chairman Brendan Carr and his team deserve enormous credit for continuing to lead the China-decoupling charge in the Trump administration. This week’s ban on advanced Chinese robots was especially notable: Trump Administration Bans New Chinese Humanoid Robots, to Protect US AI Buildout (Reuters). For more, see excellent breakdowns from Friends o’ th’ Stack Peter Harrell and Chris McGuire.

But, uh oh, somebody call the wahmbulance… China threatens retaliation against U.S. humanoid robot ban, says it ‘severely damages’ relations (CNBC).

In Foreign Affairs, Biden national security advisor Jake Sullivan makes The Case for a Strategic Investment Fund.

Mercedes-Benz Cuts Sales Guidance Amid Worsening Chinese Market (Wall Street Journal). Some real “Leopards Eating People’s Faces Party” energy here. Who could have guessed that betting your future on the Chinese market and handing over an ownership stake to Chinese entities wouldn’t work out better?

Speaking of which, Tesla Weighs Sale of China Business to Pave Way for Potential SpaceX Merger (Wall Street Journal). It’s good that people recognize a major U.S. defense contractor should not have a major Chinese arm. Perhaps we should have recognized a decade ago that it was a bad idea for a major U.S. electric vehicle maker to have a major Chinese arm…

More encouragingly, Lilly, Resilience to Invest $750 Million in US Drug Manufacturing Expansion (Reuters): “Global drugmakers have been ramping up U.S. manufacturing since last year and stockpiling inventory as President Donald Trump’s administration moves to impose 100% tariffs on branded drugs ⁠unless companies cut prices or make medicines domestically.”

And for your contemplation, Adam Tooze mulls the discontinuities between China Shocks 1.0 and 2.0, while Michael Pettis underscores the similarities.

CROPS CONTINUE TO NOT ROT IN FIELDS

The New York Times of course stands ready with credulous reporting that Employers Fear Labor Shortage as Many Immigrants Lose Protected Status. But around every corner, more evidence fro how the world really works.

In Asterisk, Dylan Matthews tells the extraordinary story of cotton picking’s rapid automation. “Considering that the going hand-picking rate was barely 60 cents in the late 1930s, it is natural to wonder if the Rusts would have succeeded even if they had been able to produce a mass-produced model then. Their machine was fine, but it could not compete with cheap Southern labor. Once Southern labor was no longer cheap, though, mechanization became very attractive indeed. And because it was no longer cheap due to a mass exodus from the farming sector and migration northward, there were far fewer people left for their invention to displace.”

More on the topic, from the Economic History Association:

The most controversial issue raised by the introduction of the mechanical cotton harvester has been its role in the Great Migration. Popular opinion has accepted the view that machines eliminated jobs and forced poor families to leave their homes and farms in a forlorn search for urban jobs. On the other hand agricultural experts argued that mechanization was not the cause, but the result of economic change in the Cotton South. Wartime and postwar labor shortages were the major factors in stimulating the use of machines in cotton fields. Most of the out-migration from the South stemmed from a desire to obtain high paying jobs in northern industries, not from an “enclosure” movement motivated by landowners who mechanized as rapidly as possible. Indeed, the South’s cotton farmers were often reluctant to make the transition from hand labor, which was familiar and workable, to machines, which were expensive and untried.

Holley (2000) used an empirical analysis to compare the impact of mechanization and manufacturing wages on the labor available for picking cotton. The result showed that mechanization accounted for less than 40 percent of the decrease in handpicking, while the other 60 percent was attributed to the decrease in the supply of labor caused by higher wages in manufacturing industries. Hand labor was pulled out of the Cotton South by higher industrial wages rather than displaced by job-destroying machines.

AND FINALLY, SUBMITTED WITHOUT COMMENT

All from the Wall Street Journal…

See the $600 Million World of Executive Perks. “From private ranch vacations to concierge medicine, these are the ultraluxury perks top executives scored last year.” (“Apollo Global Management, the private-equity giant, spent $790,000 for its billionaire CEO, Marc Rowan, to have a car and driver, citing ‘increased efficiency, convenience and confidentiality.’”)

His Wedding Guests Were Arriving—Just as His $45 Billion Fund Was Falling Apart. “Leopold Aschenbrenner was hailed as the ‘Nostradamus of AI.’ But his Situational Awareness hedge fund took on too much leverage, leading to a crash he never saw coming.” (“There would also be a pre-wedding colloquium to discuss ideas in panels and breakout sessions…”)

He Didn’t Plan to Buy in Los Angeles. The Perfect Home Changed His Mind. “Darren Walker, president of Anonymous Content, filled the Paul Revere Williams–designed house with sleek furnishings and a collection of works by Black artists.” (“From 2013 until the end of 2025, Walker was president of the Ford Foundation, based in New York. During that time he oversaw some $8 billion in grants to individuals and organizations, while shifting the foundation’s focus to art and social-justice initiatives.”)

Enjoy the weekend!