Politics & Policy

Right On, Rubio

The Florida senator has been laying out innovative, nuanced proposals for domestic-policy reforms.

Marco Rubio is smack in the middle of the current polls for the 2016 presidential primary. But he may be the early frontrunner when it comes to offering a realistic conservative agenda for reforms that address the economic challenges of modern America. And whether or not he pulls the trigger on a White House run, the U.S. senator from Florida is already helping to refashion the GOP once again into the Party of Ideas.

In a series of smart domestic-policy speeches this year, Rubio has generally avoided the easy, reflexive response as to what’s gone terribly wrong with the American economy. Blaming “Obamanomics” may play well at CPAC or on talk radio, but it’s incomplete. Last week, for instance, Rubio gave a speech on “sparking dynamic growth” that didn’t get around to mentioning President Obama until three-quarters of the way through — and then just a few times.

Rubio has mostly focused on the larger structural forces affecting middle-class America both before the Great Recession and since. “This anemic growth and economic underperformance is not just due to the recession that began in 2007,” Rubio said. “It is primarily the result of trends that began well before then, a rapid, fundamental economic transformation that Washington hasn’t even begun to seriously address.” He went on to describe how globalization and automation have created economic uncertainty and opportunity for workers. Then he highlighted how public policy has failed to minimize the former and maximize the latter.

Rubio’s insights aren’t necessarily novel ones — at least not to economists who have been examining the structural shifts altering the U.S. economy. Several recent books, including Tyler Cowen’s Average Is Over and Erik Brynjolfsson and Andrew McAfee’s The Second Machine Age, have examined the impact of automation on labor markets. And econ-world is abuzz about the new book from French economist Thomas Piketty, Capital in the Twenty-First Century, which argues that as economic growth slows, mature, advanced economies will inevitably become more unequal, with capital owners grabbing a greater and greater share of national income.

Unfortunately issues of inequality, immobility, and economic insecurity have been mostly missing from Republican policy debates. The party’s policymakers in D.C. have focused almost exclusively on the federal debt and Obamacare as the biggest drags on economic growth and job creation. Rubio certainly isn’t ignoring those issues. But he’s also trying to broaden and deepen the debate to address the more fundamental, long-term challenges that are squeezing the broad middle class and trapping millions of American in poverty.

The Rubio agenda is still a work in progress, though it’s headed in exactly the right direction. In early February, the senator laid out a higher-education plan that would give students better information on college outcome and costs, create more competition for existing schools, and use private capital to finance individual students through income-share agreements. A few weeks later, he marked the 50th anniversary of the War on Poverty by offering a plan to radically revamp the American welfare state — among other changes, he proposes combining federal programs into a single funding stream managed by the states, and replacing the Earned Income Tax credit with a broader, direct wage subsidy.

At Google’s Washington headquarters last week, Rubio focused on pro-growth, pro-innovation policies such as ensuring Internet freedom, reallocating wireless spectrum for commercial use, and giving start-ups more access to cutting-edge facilities at the national laboratories. He also urged that we put a cap on the total cost of U.S. regulation to prevent Big Business and Big Government from teaming up to strangle private-sector competition. Reducing anti-entrepreneurial cronyism will also be a goal of the broad-based tax-reform plan Rubio is cooking up with fellow senator and policy entrepreneur Mike Lee of Utah. If the Tea Party had started in Silicon Valley, it might have produced something like the Rubio innovation blueprint.

What Republicans should be aiming for is a set of policies that generate extreme competitive intensity for business while shielding workers from the tumult such creative destruction inevitably brings. Rubio appears to have already figured this out.

— James Pethokoukis, a columnist, blogs for the American Enterprise Institute.


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