America’s economic model remains the envy of the world, with innovation and entrepreneurship driving growth unmatched in Europe or Asia. But economist Stephen Moore warns that recent policy choices risk undermining those advantages.
Appearing on Chicago’s Morning Answer, Moore praised the Wall Street Journal’s recent assessment that American capitalism thrives because it is built on individual risk-taking and opportunity. He contrasted this with Europe’s high safety nets and slower growth, noting that per capita income in Arkansas—one of the poorest U.S. states—still exceeds that of Germany.
Yet Moore pointed to troubling trends. The federal government recently pledged $10 billion in subsidies to Intel, a move he called “industrial policy at its worst,” propping up failing companies with taxpayer dollars. At the same time, a federal court ruled Google must share its technology with competitors because it was deemed “too successful.” Moore said such interventions punish achievement instead of rewarding it. “Let people succeed and fail—that’s the American formula,” he argued.
Moore emphasized that America’s biggest firms—seven companies now valued higher than all of Europe’s combined—are proof of the free-enterprise system’s strength. But he cautioned that business investment is increasingly flowing to red states with pro-growth policies, while cities like Chicago and New York are losing residents and companies due to crime and progressive leadership. “People are voting with their feet,” he said, predicting that Wall Street could eventually relocate to Dallas or Miami if New York politics continue to lurch left.
On trade, Moore broke with Donald Trump over tariffs. While acknowledging that Trump used tariffs as leverage in securing favorable trade deals, Moore said the Constitution clearly gives taxing authority to Congress, not the Oval Office. He predicted the Supreme Court could strike down Trump’s tariff powers if current legal challenges advance. “We don’t have a monarchy,” Moore said, warning that the precedent could backfire if a future president imposed sweeping taxes under the guise of an “emergency.”
Asked about market risks, Moore downplayed fears of a bubble despite elevated stock valuations. He noted that recent tax cuts and pro-business policies are still fueling investment. But he expressed concern about persistent problems in education and workforce development, pointing to rising unemployment among Black Americans as evidence of systemic school failures.
Moore concluded that America’s formula for prosperity remains intact but fragile. “We have the winning system,” he said. “The tragedy is too many leaders want to change it.”