(Bloomberg Opinion) -- At his best, Senator Marco Rubio shows leadership on public policy. Unlike many Republicans in Congress, he’s unafraid to question his party’s orthodoxy and is willing to break new ground by applying conservative principles to the problems facing 21st-century America. But in a recent essay in “The Atlantic,” he wasn’t at his best.
Like others in the GOP, Rubio is trying to find a policy agenda and a public voice for the age of President Donald Trump. In doing so, he shows too much flexibility on policy and vision, and too much willingness to accept as new and enduring political constraints things which are likely to be passing fashions.
In his essay, Rubio embraces the Trumpian vision — shared by many on the political left, as well — of a U.S. defeated and in decline. Rubio writes of “the absence of the American dream” and seems to accept — incorrectly, in my view — that U.S. society is no longer upwardly mobile.
He argues that when he was born in the early 1970s, families like his, “with a few kids and parents with only high-school degrees,” were middle class, while today they are “falling behind.” In reality, average income — defined (roughly) as wages and salary plus social-insurance benefits and adjusted for inflation — for both the lowest-income and middle-income households has grown by 32 percent since 1979, according to the nonpartisan Congressional Budget Office. After adding in government safety-net benefits and subtracting federal taxes, income for those households grew by 79 percent and 46 percent, respectively.
It’s reasonable to debate whether this pace of income growth is adequate. But it’s not the case that large swaths of American households are falling behind relative to where they were four decades ago.
Again conforming to current political fashions, Rubio seems hostile towards economic dynamism. He writes:
Offering workers retraining and career education is a big part of the answer to our current dilemma. But constantly scrambling to keep up with the ever-shifting forces of globalization and automation is not the American dream.
Rubio is correct that public policy is too reactive, often waiting for workers to experience a painful dislocation before stepping in. But the way Rubio writes about globalization and automation is off base. Over the last several decades, despite significant changes in the economy and the business cycle’s ups and downs, it has not become harder for workers to find jobs. The unemployment rate in the 1960s and 1970s averaged about 6 percent. Over the last 20 years, the unemployment rate is about the same.
And while the current bipartisan critique of globalization is correct in arguing that free trade poses a threat to workers in firms that produce goods and services similar to those being imported from abroad, it ignores the evidence that trade helps workers in firms that export. If anything, this evidence suggests that over the past two decades, globalization has increased the demand for labor. And automation increases productivity, which is the key driver of prosperity and opportunity.
“For too long,” Rubio writes, “government and business leaders alike have stood back and endorsed supposedly unstoppable global forces that have made life harder for working Americans.” Globalization and automation are indeed powerful forces reshaping economies around the world. Rubio proposes reforms to higher education, tax policy, and collective bargaining to manage them, but they’re not up to the challenge. Even still, Rubio’s notions for higher education — a new accreditation system to allow for innovative curriculum and educational products, and reforming student loan financing — merit serious discussion. I agree that U.S. society overemphasizes the importance of the traditional four-year college degree.
Rubio wants to expand and make permanent provisions in the 2017 tax law that allow companies to immediately deduct capital expenses from their taxable income, and to tax stock buybacks at the same rate as dividends. These proposals also have merit, and they should be debated — despite the senator’s unfortunate decision to cloak them in the now-fashionable concern over buybacks and doubt about whether the new tax law will increase investment.
It is the warm words the Florida senator has for labor unions that strike the conservative ear as most bizarre. Rubio writes that “the decline of unions, insofar as they represented important places for workers and their families to secure the conditions of the American dream, is not something to be celebrated.”
Unions raise wages for union members, and reduce income inequality within firms and industries. But they concentrate benefits and diffuse costs. By making workers more expensive, unions reduce employment opportunities. For this reason (among others), conservatives have rightly celebrated their declining prevalence.
Rather than traditional unions, Rubio proposes German-style worker-management councils. It is far from clear why this model would not rapidly morph into traditional, adversarial unions.
In his essay, Rubio also perpetuates the straw man that the right offers an excessively single-minded “focus on economic growth” as the solution to “the challenges of our time.” In so doing, he joins the Trumpian right in downplaying the importance of economic growth while also ignoring the many policies offered by GOP politicians — the child tax-credit expansion in the new tax law, and proposals for criminal-justice and higher-education reform, for example — that are not designed primarily to increase the GDP growth rate.
Rubio articulates “a desire for an old promise, that no matter what America looks like or how it has changed, a stable and prosperous life should be attainable for the many.” This is the right goal. Achieving it requires challenging the narratives of Trumpian populism, not conforming to them. It requires confidence that despite its disruptions, economic dynamism is, on the whole, a positive thing. And it requires the type of principled policy innovation to meet the challenges of the day that Rubio, at his best, can deliver.
To contact the editor responsible for this story: Jonathan Landman at jlandman4@bloomberg.net
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and resident scholar at the American Enterprise Institute. He is the editor of “The U.S. Labor Market: Questions and Challenges for Public Policy.”
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