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[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi. Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. There’s a notable shift occurring in the constituencies of both Republican and Democratic voter bases, reflecting a broader reevaluation of traditional political ideologies. Republican Senator Marco Rubio’s recent opinion piece in National Affairs, titled Industrial Policy, Right and Wrong, underscores this shift by challenging longstanding conservative views.
[00:00:32] Senator Rubio argues that the traditional embrace of free market principles has contributed to the decline of American manufacturing. Senator Rubio’s concerns with the current administration’s industrial policy are based on his view that they’re misguided, driven by a progressive agenda that neglects the interests of American workers, and are essential industries.
[00:00:53] Instead, Senator Rubio proposes redirecting industrial policy towards supporting the common good, focusing on job creation, industry stability, and national security. But does Senator Rubio’s argument withstand historical and factual scrutiny? Can an industrial policy directed by temporary majorities provide lasting solutions?
[00:01:16] And what lessons can free market advocates glean from his arguments to address legitimate concerns about the disruptions caused by capitalism? Joining me today is Colin Grabow, the Associate Director at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. His research primarily focuses on examining domestic trade protectionism, with a keen interest in policies such as the Jones Act and the U.S. sugar program. Mr. Grabow recently penned an insightful article for Cato titled, What Senator Rubio Gets Wrong About Manufacturing and Industrial Policy. In this piece, he dissects eight myths that form the foundation of Senator Rubio’s arguments. We will delve into the transformations taking place within the U.S. manufacturing sector and explore how shifts in productivity and changing consumer demands have contributed to the discontent that Senator Rubio addresses in his controversial piece. When I return, I’ll be joined by Cato Institute’s Associate Director, Colin Grabow. All right, we’re back. This is Hubwonk.
[00:02:20] I’m Joe Selvaggi, and I’m now joined by Colin Grabow, Associate Director at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Welcome back to Hubwonk, Colin.
[00:02:30] Colin Grabow: Thanks for having me on, Joe.
[00:02:32] Joe Selvaggi: All right, well, I’m thrilled to have you on because I was intrigued by your recent piece in Cato.
[00:02:37] It was entitled, What Senator Rubio gets wrong about manufacturing and industrial policy. I’ll say, this was in response to a piece that, Senator Rubio, Florida Senator Rubio wrote in National Affairs that was entitled Industrial Policy, Right and Wrong. and why I thought it was important to cover this is it seems his article and your response to it seems to capture a debate that’s emerging.
[00:02:56] Really, it’s without a party. Both voices on the left and the right, Republicans, and Democrats are all in this election season, starting to whisper about the value and the importance and the need for a quote-unquote industrial policy. So, so, let’s, for the benefit of our listeners who haven’t read either your piece or Senator Rubio’s piece, at a very high level, sketch out for our listeners what the case, Senator Rubio makes for a quote-unquote industrial policy.
[00:03:25] Colin Grabow: Yeah, well, I’ll first note that I don’t want to put words in his mouth, so I’ll just quote what Senator Rubio himself, posted to Twitter just, shortly before our conversation, just, I think, 30 minutes ago. He said, as a recap, my argument is that markets are efficient, but don’t always work in the best interest of our country, especially when adversaries like China skew global markets in their favor with theft and subsidies, that’s not good for America.
[00:03:53] Obviously, his essay was quite long in National Affairs, my kind of summary of it. Is that he believes U. S. manufacturing has collapsed. In fact, he flatly states that it has collapsed in his essay, I think twice, to the detriment of our economy and our national security, while China has risen with attendant economic and national security benefits.
[00:04:14] And to reverse this trend, he believes the U. S. needs to take a page out of China’s playbook. but it’s also, it’s not purely about China. I think Rubio clearly believes the United States needs to be more self-reliant as a matter of national security and needs to produce more of what it consumes, and therefore we need national policy to correct the free market and bias us more back in that manufacturing direction.
[00:04:38] Joe Selvaggi: So at a high level, the U. S. economy is not where it should be. Its manufacturing has collapsed and to use China as an example, a more engaged, government intervention into free markets is preferable to, let’s say, What classic free market people would say, less government is in general better.
[00:04:55] Is that the broad stroke of this?
[00:04:57] Colin Grabow: Yeah, I think he believes that unbridled capitalism does not get us where we need to be to compete with China and assure our national security. That’s a fair summary of where, of his perspective.
[00:05:09] Joe Selvaggi: If only, unbridled capitalism was where we lived, but let’s move on from that assertion and go into it.
[00:05:15] What I like about your paper is you break it down. I think you, you distill out the eight myths you identify in Senator Rubio’s, piece. But I think it’s also eight myths that, in general, people who don’t follow economics or microeconomics, macroeconomics, trade policy, industrial policy, those people who sort of know it in vague terms, these are myths everyone shares, both on the left and the right.
[00:05:36] So let’s take them each at a time and then just offer some real information. You do a lot of research in this area. let’s put some numbers and some ideas of where you consider the myths and have our listeners for themselves. either accept it or reject it. So, let’s start at the beginning.
[00:05:50] I think you made it very clear that about two times in his piece, Senator Rubio had characterized his U. S. manufacturing as having collapsed. your piece cites many other papers that challenge that. Share with our listeners, has it collapsed and if it hasn’t, why might someone perceive it to have collapsed?
[00:06:09] Colin Grabow: So, I think, so, to give a very short answer, no, it has not collapsed. Let me address that head-on. The United States is a manufacturing giant. we account for a, greater share of global manufacturing output than traditional manufacturing powers like Japan, Germany, India, and South Korea.
[00:06:26] Take all those, we put out more manufacturing output in those four countries combined. Combined. in 2022, the United States exported one, I think, roughly 1.6 trillion worth of manufactured goods. this includes tens of billions of dollars for things like medical instruments, integrated circuits, aerospace, and Autos.
[00:06:47] In 2021, we’re the world’s fourth-largest steel producer, it’s second-largest automaker, and its largest aerospace exporter. If U.S. manufacturing was its own country by GDP, I think we’d be something like the, it would be like the eighth largest economy in the world, so it would be top ten. But you’re correct, that there’s nonetheless this perception among many that the U.S. manufacturing sector is not doing well, so what explains this? How do we have these? Why do these perceptions not line up with the facts? I think it’s very much rooted in employment. Employment has declined in manufacturing. At its peak back in 1979, I think there was something like 20 million people employed in manufacturing today.
[00:07:31] We’re around 13 million. So, it’s significantly smaller. And then also, as a percentage of GDP, in fact, I was at a, think tank hearing event earlier this week, in which a member of Congress, said something like, decades ago, manufacturing was a priority. 35 percent of our GDP and, now it’s like 10 to 15%.
[00:07:52] And I think that alarms people. So, it’s a story, ultimately, how you reconcile these two things is that it’s a story of U. S. manufacturers doing more with less. Yes, there are fewer people employed, but they’re producing, our actual output is at or near record highs. Yes. I’ll give you just one example, the U.S. steel industry output is something like, I think it’s 8 percent higher now, or a few years ago it was 8%, in 2017 it was 8 percent higher than it was in 1980, yet employment has declined by 79%. It’s gone from almost 400,000 to just a little over 80,000. So I think that’s what’s good.
[00:08:31] That’s the story of manufacturing in the United States. Lots of output, but, its prominence in the U. S. economy, relative prominence is smaller, and in terms of employment, it’s declined.
[00:08:41] Joe Selvaggi: So we don’t want to trivialize the pain of, let’s say, a steel worker who’s been displaced by this automation, but at the same token, what you’re saying is, we’re producing things that are of higher value and produced in a more automated way.
[00:08:55] So the worker that remains in the steel factory is, I guess by your estimate, five times more productive. They’re able to make five times the wage or, certainly a greater wage, and that sort of job that is gone has gone to automation, but it’s, if manufacturing has gone elsewhere, it’s to places where the cost of labor is substantially lower.
[00:09:16] So, I don’t think anybody would want a job that pays what, let’s say, a very poor country that still does manufacturing. By hand, would want, right?
[00:09:26] Colin Grabow: Yeah, so, I, again, I think the story is largely one of automation and productivity, improvements, but that’s not the whole story. Yes, there are manufacturing jobs that have gone overseas.
[00:09:36] For example, textiles. people aren’t making socks, in the United States anymore. Maybe they are. They’re very high-end specialty socks. But, your T-shirts and things like that. It’s gone to Central America and other in Southeast Asia and other places like that. I’m not sure how much we should mourn the fact that we’ve lost those jobs and your kids won’t be able to grow up to work in a textile mill.
[00:09:55] Also, another trend that I think is often overlooked is one of dematerialization. Just a lot of things have disappeared or become digitized or just become smaller. For example, it wasn’t that long ago people had CD collections. I don’t own any CDs anymore.
[00:10:11] It’s all on your hard drive or in the cloud, somewhere. Same thing with DVDs or a DVD player. I got rid of mine, a few years ago. Or a road atlas, there’s no point to that thing. And even some of the things we have, like, the laptop I’m talking to you on, this is much smaller and consumes less materials than the big bulky desktop I used to use when I was in college.
[00:10:33] So these are other factors that I think help explain what’s going on in manufacturing.
[00:10:38] Joe Selvaggi: Part of the, let’s say consequence of fewer people working in actual manufacturing jobs, Senator Rubio, also in his article, draws a line between the decline in actual manufacturing jobs to a decline in marriage rates and childbirth rates.
[00:10:53] This seems to be quite a leap. Of course, they’re correlated because both are, going down. but to assert that one is caused by the other, you characterize that as myth number two, that there’s some of that the loss of manufacturing jobs, is undermining our culture, our marriage rates, and our birth rates.
[00:11:11] What do you have to say about that?
[00:11:13] Colin Grabow: Yeah, so, the underlying argument there is a respectable element to it. It’s not hard to understand that if manufacturing workers lose their jobs, that their marriage prospects and their ability to afford children declines. But with that said, there are a few things to point out.
[00:11:27] First, that’s true of all workers. That’s not something unique to manufacturing workers. All workers, experience, job churn, job loss. That’s not a unique feature of manufacturing. And then furthermore, the job losses that have resulted from trade are relatively modest in the context of the U.S. economy. I think the best estimates are something that somewhere around a million jobs were lost due to competition from China, the so-called China shock. It’s also keep in mind that in the U.S. each year, tens of millions of jobs are lost and gained. Job loss is just a normal part of a well-functioning economy.
[00:12:07] An economy with no job loss is an economy that’s trapped in amber, that’s completely sclerotic, with no improvement in our standard of living. I think our focus here in these conversations needs to be about, what are the barriers that, once these workers lose their jobs, what are barriers that stop them from reentering the workplace?
[00:12:26] That is the problem that we need to identify and remedy. Maybe is it the high cost of housing and more prosperous places? There are places where there are jobs, but just moving there is difficult because of things like, again, the high cost of housing, and maybe a lack of child care.
[00:12:41] What’s going on? That’s, I think, where the conversation needs to be. Furthermore, as I point out, my response to Rubio, notions that, well, if we reindustrialize, this will solve some of those issues. well, look at China. China’s the world’s biggest manufacturer and they have a falling, they have falling child birth rates and marriage rates. So, let’s also step back and recognize that declining birth rates are a feature across the developed world. Actually, I think it even extends beyond the developed world to many developing countries as well. And then lastly, I pointed out earlier, there was something like a million jobs lost due to trade.
[00:13:19] And I think overall in manufacturing, again, back in the 70s, we’re like 20 million, we’re at 13 million. I think since 2000, it’s gone down by like 5 million, something like this. Well, it’s hard to explain broad societal trends based on a few in a country of close to 350 million people based on a few million workers, I think.
[00:13:39] So, well, I don’t want to say that, it’s had no effect whatsoever. I think we need to keep the larger context in mind as well.
[00:13:47] Joe Selvaggi: Indeed. And again, if you’ve lost your job, if we follow the other principles, it’s more likely you lost your job to another American company than it is to China, right?
[00:13:56] Let’s face it, either automation or another U. S. economy, competing with other Americans is a lot harder than competing with China, right?
[00:14:02] Colin Grabow: Yeah, that’s a great point that’s often overlooked is that we often see a factory that closed and we assume, oh, well, production went to China, went to Mexico, something like that.
[00:14:12] Well, a lot of those, rust belt factories that closed, auto, autos being, or steel being classic examples, well, a lot of them, they just, they move south. they went down to Alabama or South Carolina, someplace like that. Steel, I think, last couple of years, a new steel plant opened in Arkansas.
[00:14:28] So, as you put it, there’s actually a very good chance you just lost your job to another American. Right.
[00:14:34] Joe Selvaggi: Well, I’ll say, one of your next myths is about the fact that Senator Rubio concedes that It’s also a good idea. President Biden thinks industrial policy is good, but he gets it wrong. In other words, President Biden believes in an industrial policy that helps good industries and good companies, but Rubio disagrees with what he perceives as good and has his own version of what’s good.
[00:14:55] He characterizes Biden’s industrial policy as corrupted by, I want to get it right, aligned with special interests and progressive ideologies. That’s why his industrial policy is not so good. Rubio says he would favor the right industries. Again, I set up the question pretty well. What could be wrong with that logic, right?
[00:15:12] Take that away there.
[00:15:14] Colin Grabow: Yeah, so Biden is also pro-industrial policy. The problem is he’s doing it wrong. He is too beholden to these progressive, ideologies and special interests, as you point out. I will dispense with that. I can do it right. Well, let’s just say for the sake of argument, he can.
[00:15:30] That, Senator Rubio and his fellow travelers, those he associates with, all have special insights, that they are immune from the pressures of special interests. Well, how can we maintain that? control of the presidency and Congress are constantly in flux, and not even just from a party perspective, but just from a personality and ideological one.
[00:15:51] Biden, President Biden was Obama’s vice president. President Obama belatedly but finally championed free trade. He endorsed the Trans-Pacific Partnership and did a lot of work to try to get that passed. He signed a few bilateral free trade agreements. Biden has done very little on trade.
[00:16:09] These are both Democrats, but, with different outlooks, on trade policy. And, furthermore, even if an industrial policy can be well crafted, what’s to ensure that it stays that way and remains well managed when new legislators enter office? What’s to ensure that they will, keep the same policies in place?
[00:16:27] Once Rubio constructs this industrial policy machinery, the folks that follow on from him, will maintain that and won’t, divert course. I see no reason to think that won’t be the case.
[00:16:38] Joe Selvaggi: Right, we have to, he has to either live forever or, and never lose an election, or face the consequence of someone else having, their hand on the rudder as well.
[00:16:46] Going further into that discussion, he characterizes who, and which industries he would help as only being those that are essential, leaving the rest of the economy alone. I suppose speaking to, let’s say, more free market advocates, I would characterize myself that way, he wants to assure someone like me that he’s not going to touch all industries, only the essential ones, which begs the question, How does one determine, which are essential and which should be subject to free market forces?
[00:17:09] What would you say about that?
[00:17:11] Colin Grabow: Yeah, that, it’s an excellent question. In his essay, Senator Rubio says, I just want, we’ll limit these interventions to essential industries, and I think that sounds fairly reasonable. But, Well, you also note that in his essay, Rubio, when he starts to list examples of some of these industries, he says, well, the mining industry, oil and gas, metallurgy, agriculture, chemistry, medicine, and he says, et cetera.
[00:17:35] So that’s not even a comprehensive list. and, that’s a That’s the nontrivial part of the U. S. economy right there. And let’s further keep in mind that Senator Rubio is a guy that, in past years, he’s notorious for, his support of the sugar industry and the protectionism that supports that industry there in Florida.
[00:17:55] And he’s described that as a national security interest, issue before, saying that, if we didn’t have this kind of protectionism, that basically our sugar, farms would get paved over by shopping malls and we can’t feed ourselves. So given that kind of underlying mentality, where’s the limiting, what’s the limiting principle to all this?
[00:18:12] Where do we draw that line? How do we delineate this? and it’s not obvious to me. I’ll also just point out one other thing, I think you can make a pretty good case, At the very least, Rubio’s outlook, dovetails very nicely with the U. S. sugar industry. And yet, we also have to assume this is a guy that’s going direct industrial policy while not being captured by special interests.
[00:18:31] I have my doubts about that. So yeah I think we can all get in a room and agree, yes, we should, support essential industries, but then I think we’d have a really tough time coming up with exactly what constitutes essential, and I don’t think Senator Rubio in his essay does a good job of spelling out what exactly that entails or what the criteria are to be used to judge and evaluate these things.
[00:18:53] Joe Selvaggi: Yes, and quickly, I think we can imagine everything, every worker, every industry, every business being essential, which leads me to another myth you have. Again, I’m going to I know in broad strokes say, there are a lot of people even on the right, but there are certainly on the left who romanticize China’s power to be able to manage its economy.
[00:19:11] In other words, if they consider everything essential and they get involved, it looks like they’re going gangbusters. isn’t this a, a success story about, command economies? if China has been able to do it successfully, why can’t we? What would you say to, those who say, China is indeed an example of.
[00:19:27] What can be done if the government gets more involved in industry?
[00:19:31] Colin Grabow: Yeah, well, you refer to this so that other people might see this as a success. I think we first have to step back and ask ourselves, well, what’s success? what are the criteria that we’re using to evaluate this? it’s true. I think that some of China’s industries are larger than would otherwise be the case without certain government interventions through things like Cheap financing, for example, I believe state-owned enterprises in China are directed that when they go to buy ships, they buy Chinese-built ships, and I’m sure that applies to other goods as well.
[00:20:00] I can believe that, but we also need to recognize that when the government directs resources to less productive ends than markets, When that takes place, which I think is what takes place, I do think the markets are better at allocating resources than the government, but there’s a cost to that. and in the real story in China, from my perspective, is not the central planning.
[00:20:23] That’s not new. China’s been doing this For decades, you can go back to the Great Leap Forward, when they directed, I think they had millions of farmers that had, smelters in their backyards to try to boost steel production because that was the key to industrialization. Of course, that was a failure, and farmers were out trying to make steel, so feeding people led to lots of starvation.
[00:20:43] What’s really interesting about China in recent, more recent decades has been the move away from central planning and letting market forces play more of a role. I think that is what has undergirded their prosperity. So to me, that’s the key lesson there. And then lastly, for all the strides China has made, let’s keep in mind, this is a country whose per capita GDP, I believe is something like one-sixth that of the United States.
[00:21:10] So, I think we should all be pretty leery about using a country that’s significantly poorer than us as a role model.
[00:21:16] Joe Selvaggi: Yes, indeed. I think they produce just a little bit more than we do as a country, but they do it with a billion more people, so that should give people a sense of the relative productivity of the two different countries.
[00:21:25] But let me push back. Last time you were on the show, you were on once before, we talked about the Jones Act and all the negative externalities, all the unintended consequences that follow from this, perhaps, well-intentioned law. I don’t know if you can see that, but, hasn’t China, you mentioned shipbuilding, hasn’t been able to invest in shipbuilding and ensure that they have now a very robust shipbuilding industry in China?
[00:21:46] Colin Grabow: Yes, it’s undeniable China is the world’s leading, shipbuilding country. I think they account for roughly half of all, delivered tonnage, in recent years. But then you have to step back and think of the alternative, right? What happens absent, Chinese industrial policy? Should we believe that the world’s largest country, the world’s largest manufacturing power would be a bit player or irrelevant in shipbuilding?
[00:22:11] I’m skeptical of that. If for no other reason, this is a path we’ve seen other Asian countries take. If you go back to the 1960s, Japan was the world’s leading shipbuilder. It was then replaced by South Korea, and now it seems to be China’s turn to replace South Korea. But furthermore, I can even believe that Chinese policies have made China’s shipbuilding industry bigger than what would otherwise be the case.
[00:22:39] But then we have to back up and again, ask ourselves, okay, that may be good for the shipbuilding industry, but what about China’s economy as a whole? Is that a useful, direction or allocation of resources? And I think there’s a lot of reason for doubt and there’s been academic. Work suggests that there is a fair amount of waste involved there.
[00:22:58] And then lastly, you may push back on me and say, well, okay, but then they get these ships set at cheaper rates, which is good to grow your economy, helps carry your exports, and whatnot. Well, that’s true. Everyone is out buying ships. Lots of people, say, in Europe and whatnot, they’ll buy Chinese-built ships.
[00:23:15] So. The Chinese are subsidizing, Europe, European and other people’s consumption of ships, which helps their industries. So I think you can make an arg a plausible argument. It’s been good for China’s shipbuilding industry, but I’m skeptical of the notion it’s been good for China’s economy overall.
[00:23:31] And then I’m also skeptical of the notion that absent, these industrial policy measures China would have, a very minor or modest shipbuilding industry.
[00:23:41] Joe Selvaggi: That’s a good point. The subsidies, and I think you referenced another paper where it effectively says what China’s put into shipbuilding, yeah, in subsidies, it really doesn’t get out at all in, in sort of profit, but the subsidy actually goes to ship consumers, which is the rest of the world.
[00:23:55] So China’s paying for the rest of the world to have cheap ships. and calling it industrial policy.
[00:24:00] Colin Grabow: Well, then, and one other thing I’ll add Joe, is, well, we can’t point to the United States and go, we’re not doing industrial policy in our shipbuilding industry. Well, of course, we did a whole podcast on the Jones Act, which is industrial policy.
[00:24:11] We have, protectionism that mandates Americans use U.S.-built vessels in domestic trade. We also have, tax credits, for people to encourage the purchase of U. S. ships. We have, the federal government provides financing for the purchase of U.S.-built ships, so let’s not pretend that, well, the reason China’s doing so well is because we haven’t tried, oh, yes, we very much tried industrial policy for shipbuilding.
[00:24:32] We’re just not doing it very well.
[00:24:34] Joe Selvaggi: Well, Dee, this is a good segue to my next myth, which you say that Senator Rubio characterizes, again, something that would appeal, I think, to both you and me, deregulation as industrial policy, as to say, when we make rules simpler or that’s industrial policy as well.
[00:24:51] I would agree. I think deregulation in general and lowering taxes is encouraging, but I wouldn’t call it industrial policy, would you? In a sense, industrial policy implies that it’s directed at a particular outcome in a particular firm, right? It’s not, let’s deregulate everything. It’s rather, let’s help out my favored industry.
[00:25:10] Am I right?
[00:25:11] Colin Grabow: Yes, exactly. As you point out, just the very name, industrial policy, suggests the promotion of particular industries. This isn’t, let’s promote, the U. S. economy writ large, it’s favoring certain industries because of national security reasons or whatever. And so it’s hard to mesh deregulation with this sector-specific approach.
[00:25:35] If, for example, we were to say, we’re going to reform the National Environmental Policy Act (NEPA), because that would be good. That’s good industrial policy. Well, the term just loses meaning because if you reform NEPA, that would apply to all sectors of the U.S. economy would benefit. And it’s hard for me to imagine saying, okay, well, this one sector is exempt or faces a different set of NEPA requirements than others. That’s just hard to contemplate. So I’m 100 percent for deregulation. In fact, I think that whenever the conversation, we have conversations about why is this particular industry, maybe not where we think it should be, or what’s holding that back, we need to look at the role of regulation and what obstacles may be in place that are imposed by the government before we start, getting involved in new government adventures, trying to promote that industry.
[00:26:22] Joe Selvaggi: Yeah. I often enjoy, having conversations with people, friends of mine who are on the, let’s see, solidly on the left. And we talk about local. Local industrial policy, if you want to call it that. Here in Boston, we love movies. We want movies to be shot here in Boston, and what we do to do that is we give them tax incentives, reduce their taxes, make it easy, streamline the deregulation, and make it easier to make a movie.
[00:26:42] I say, well, if we can accept that works for movies, why don’t we accept it for everything else, right? Like, why only movies? why not all industries? Is there a bad industry that we don’t want? why do we love movies? So, say more about, in a sense, the real secret here is Less regulation, less tax is beneficial to everyone and everything.
[00:27:02] Fair enough?
[00:27:02] Colin Grabow: Yes. I just, fundamentally, philosophically, I don’t think the government should be in the business of trying to, for lack of a better term, pick winners and losers. favoring certain sectors over others, absent some, perhaps absent some very compelling national security reason, which I certainly don’t think the movie industry, or the film industry falls under.
[00:27:25] I think, in that particular example, this is more about, hey, it’s pretty cool to see us, our city, our state, whatever, featured. And then you can see, the Hollywood actors move around and spend their money. and, so that has a certain appeal to people.
[00:27:36] But just as an economic proposition, I think my understanding of the literature on this stuff is, Pretty universally shows that it’s not a job creator. And, as you said, if we’re going to reduce taxes, well, let’s do it for everybody. and, they should all benefit from a low-tax environment.
[00:27:53] and, of course, it also concedes the argument that lower taxes are better. Beneficial, which I appreciate, but yeah, let’s extend that logic to everyone and just not, certain favored sectors. Of course.
[00:28:02] Joe Selvaggi: you mentioned just briefly, but I want to really dilate on this because I think people might be along with us for our argument all the way through these, myths so far, but they’re all going to have in that back of their mind, like, what about our strategic industries?
[00:28:15] Like, warships and bombers and missiles and all that kind of thing. don’t we have an interest in ensuring that at least those things that we might use in wartime are made in the U S and therefore should be protected and cultivated,
[00:28:29] Colin Grabow: Yeah, I think my answer to that is maybe.
[00:28:32] So for example, let’s go with the warship example. I don’t think, I think most people would agree. We probably don’t want to be in a position where, we say, well, it’s just. outsourced it to whoever’s the cheapest. Maybe that’s China, and then we’re dependent on China for all this construction of our naval vessels.
[00:28:48] It’s probably not a place we want to be, but maybe, South Korea, a treaty ally, maybe, and even then, it doesn’t make sense to buy all our ships from them, but maybe some of them, because when it comes to national security, yes, having, U. S. built ships, that’s a nice, that, that’s nice to have, but also say if you could buy, a ship for one third the price in South Korea.
[00:29:09] So your national, your defense budget goes further. So you can get, three ships for the price of one. Hey, that’s good for national security too. And there are some very important trade-offs that need to be weighed there. of course, this mentality of, well, we need to do it all ourselves.
[00:29:22] Well, this is, this ties in directly. this is the underpinning of the Jones Act, which we spent that episode on. The idea we need to be self-reliant in shipbuilding and shipping. And where has it gotten us? How are we doing there? And for those who didn’t listen to the episode, well, U.S. shipbuilding is doing terribly. last year, Just a single ocean-going cargo ship was delivered by a U. S. shipyard with the Jones Act in place because the industry has become so wildly uncompetitive. The number of ships in the fleet has been declining. The ships tend to be old because they’re so expensive because we have this mentality of self-reliance.
[00:29:56] Don’t go buy ships from other countries. So, self-reliance has value, but other things need to factor in here too. And I think a good compromise place that perhaps we can land is that, for certain products, yes, maybe it doesn’t make sense to buy from your adversaries, but what about your trusted friends and allies, like NATO partners, for example, and the fact that the Japanese and Chinese have some of the best shipbuilding industries in the world.
[00:30:21] To me, that seems like a resource to be harnessed. And the last thing I’ll say is, Understandable reasons people bring up the pandemic and say, well, what about that? we need to be self-reliant. Well, that’s one possible lesson, but two things. One is that another possible lesson is we should stockpile.
[00:30:37] We should be ready. So, let’s say China produces PPE, materials at the cheapest price. maybe the lesson there is you go load up, and stock up on stuff from them so that when the pandemic comes around, you’re prepared. You’ve got it on hand. So the other point to remember is that there’s actually been some literature on this that suggests that during the pandemic some countries we weren’t especially friendly with were not averse to supplying us with goods, because people like to make money.
[00:31:04] So we shouldn’t even take that as a given necessarily. It’s worth considering, I’m not sure these are automatic assumptions we should also make.
[00:31:12] Joe Selvaggi: And finally, I just wanted the last point that, Senator Rubio makes that you refute in your final myth is that he wants to reassure us that, he really is looking out for the best interests of Americans, so he wants to, leave the free market alone, but he wants to set, benchmarks and goals, where he thinks, rather than the free market deciding what should be produced, he’s got a better idea of, of, what the benchmarks are that would benefit all Americans.
[00:31:39] So, I hear this is a more familiar argument on the left, the Elizabeth Warrens and Bernie Sanders of the world saying, do we really need,17 kinds of deodorant? Let’s make what we need in the right amount, and, the free market can do its own thing within our parameters.
[00:31:52] What would you say to that?
[00:31:54] Colin Grabow: Yeah, and in Senator Rubio’s essay, he said something like, we won’t dictate to companies how to invest and compete. We’ll just tell them, here are the benchmarks you need to hit. and, for example, certain production benchmarks and who the accomplishments must benefit.
[00:32:09] And he says, for example, i. e. the American people. Well, that’s incredibly nebulous. I think that the American people obviously have a field day with something like that. I think anybody could justify something by saying, oh, this absolutely benefits the American people. So this is really no kind of benchmark.
[00:32:28] And what’s striking to me is this is the kind of language he uses. In a piece, this is a piece he obviously gave a lot of thought to and the best he can come up with is to benefit the American people. Imagine what kind of benchmarks will be set once lobbyists get their say when these things are hashed out in Washington back rooms.
[00:32:49] So this is just an absolute open invitation for people to manipulate this kind of industrial policy machinery, not to benefit the American people, but their particular industry, their particular company. and I have a hard time, with the notion that this is ultimately going to prove beneficial for the American people writ large.
[00:33:08] To me, that is not one of the lessons I take out of government interventions. this notion they’ll operate free of lobbyist influence and that they’re all only thinking of, the big picture and not narrow, special interests.
[00:33:20] Joe Selvaggi: Well, I don’t want to make this, show just talk about negative things that, Senator Rubio has said or negative things about industrial policy, though there are many.
[00:33:28] We could just have our audience put a negative sign next to everything Senator Rubio recommends and suggest that would be your preferred policy. Preference, what would you do again, I’d like to ask before we close out the king for a day question, which is, were you to be in charge or advising Senator Rubio or be King for a day?
[00:33:47] What do you think the federal government, could do proactively to ensure American jobs are plentiful? We are well paid, our industries are competitive and we prosper for generations. What would you recommend in general?
[00:34:03] Colin Grabow: Well, of course, the first thing we do is we repeal the Jones Act, as previously discussed, and then adopt, open and free trade more broadly and dispense with all other forms of protectionism.
[00:34:14] But more seriously, I think, well, I do in fact think the Jones Act would be good for U. S. manufacturing and for the economy as a whole, but are there plenty of other things that we can do? We need a sensible immigration policy that assures that the country’s manufacturers and other sectors can get access to the talent that they need.
[00:34:34] Reduce, barriers for talented immigrants and even unskilled immigrants to fill needs here in our country. We need a sensible tax policy that should be as flat as possible. Minimal number of distortions. We shouldn’t tax capital so much. We’ve made some progress there in recent years, so hooray for that.
[00:34:58] But then also, beyond the federal level, I think a lot of attention needs to be paid to, for example, zoning policies and housing. The fact that some of our most prosperous, economic centers, are very costly to live in, and there’s a real barrier to workers, taking part in some of that prosperity.
[00:35:16] Places like the Bay Area, up at where you live, Boston, New York City, places like that, these are economic engines, and we make it difficult for people to partake in that. so I think we can’t overlook efforts on the state and local levels. I think if we had a better health care system be more efficient, that would be a massive de facto tax cut. So much of the compensation that workers receive is in the form of health insurance. There’s, if we could free up some of that money to put in people’s pockets, that would be, I think a potential engine of prosperity. So there’s a lot, there’s a lot that can be done.
[00:35:49] I don’t have all the answers. So, you check with some of my colleagues on these different areas that do. but there’s certainly no shortage of things that can be done to improve U. S. economic efficiency and make this a more attractive place to invest and do business. And I think that when we talk about Improving U.S. manufacturing, and improving the U.S. economy, that’s where the conversation should start.
[00:36:10] Joe Selvaggi: Indeed. It sounds like you summarized the topics of the last six months of Hubwonk podcast, so I appreciate the intentional or unintentional shout-out to earlier shows.
[00:36:22] Colin Grabow: You guys have your fingers on the economic pulse, what can I say?
[00:36:25] Joe Selvaggi: Well, and I think, again, our listeners, contrary to say the dominant narrative that there are these mustache-twirling capitalists preying on poor consumers, I think, you know, when you step back, you realize we’re all producers, consumers, we’re all participants in the market, we all benefit from cheaper, better, more abundant products, and rather than have an industrial policy run by I guess, people like Senator Rubio, instead, a free market really is run by you and me, by individual choices of individual consumers, each expressing our own preference and interpretation of value.
[00:36:57] That sounds very uncomfortable for those people with seven PhDs or in places of power that the man on the street gets to decide, but I think that’s the thesis of what you and I might recommend.
[00:37:08] Colin Grabow: Absolutely. I think, we all get votes. People think about voting as a political exercise.
[00:37:12] Every day we have to vote with our dollars for the kind of world that we want to live in, the kind of goods that we want to see on our shelves, the kind of economy we want. so, yeah, I think that’s often overlooked and underappreciated aspect of capitalism and the market, the free market.
[00:37:26] Joe Selvaggi: So for our listeners who’ve, it piqued their interest and they want to maybe even challenge your ideas or reread them or, access all the links in all your papers, where can our listeners find you and read more about your work?
[00:37:38] Colin Grabow: Sure. Well, if you just Google my name, Colin Grabow, why the first thing that will come up is my Cato page and all my work is right there.
[00:37:44] I would also invite people who are on social media that like, Twitter. It’s my, social media drug of choice to go to, you can find me at C P Grabow, C P G R A B O W. And then I also just invite people more generally to go to our website, Cato.org, and I’m just one scholar. We have many other scholars here with all kinds of interesting insights on various topics, and I think listeners would enjoy a lot of what’s on our website.
[00:38:10] Joe Selvaggi: Well, I certainly enjoy your work and the work of Cato. you guys are, nonpartisan, so while you might get things wrong, you don’t get it wrong for the wrong reasons. You play, you call it like you see it, and that’s what I appreciate here on Hubwonk. Thank you very much for joining me today on Hubwonk, Colin.
[00:38:24] You’re a great guest.
[00:38:25] Colin Grabow: Well, thanks so much, Joey. I hope we can do this again.
[00:38:29] Joe Selvaggi: This has been another episode of Hubwonk. If you enjoyed today’s show, there are several ways to support Hubwonk and Pioneer Institute. It would be easier for you and better for us if you subscribed to Hubwonk on your iTunes Podcatcher.
[00:38:41] It would make it easier for others to find Hubwonk if you offered a 5-star rating or a favorable review. Of course, we’re grateful if you share Hubwonk with friends. If you have ideas, comments, or suggestions for me about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
Joe Selvaggi discusses industrial policy, its aspirations, and limitations, with CATO Institute Associate Director Colin Grabow, in response to Senator Rubio’s thought piece advocating for a more active role for government in the economy.
Guest:
Colin Grabow is a research fellow at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies where his research focuses on domestic forms of trade protectionism such as the Jones Act and the U.S. sugar program. His writings have been published in a number of outlets, including USA Today, The Hill, National Review, and The Wall Street Journal. Prior to joining the Cato Institute, he performed political and economic analysis for a Japan-based trading and investment firm and published research and analysis for an international affairs consulting firm with a focus on U.S.-Asia relations. Grabow holds a BA in international affairs from James Madison University and an MA in international trade and investment policy from George Washington University.
This week on The Learning Curve, guest co-hosts University of Arkansas Prof. Albert Cheng and Dr. Jocelyn Chadwick interview renowned poet and Boston University professor, Robert Pinsky. He discusses his memoir Jersey Breaks: Becoming an American Poet; the enduring influence of sacred texts like the Psalms; and the wide cultural significance of classic poets like Homer and Shakespeare. Through his book Democracy, Culture and the Voice of Poetry, he shares his views on the vital role of poetry in shaping a vibrant American democracy. Pinsky also talks about the power of poetry in inspiring social change, the importance of reading poetry aloud, and the timeless wisdom embedded in classic poetry, like his translation of Dante’s Inferno. In closing, Pinsky reads his poem “Shirt.”
Stories of the Week: Albert addressed an article from Education Next questioning the conventional wisdom around advanced education; Jocelyn recited the poem “Harlem” in celebration of National Poetry Month.
Guest:
Robert Pinsky is the William Fairfield Warren Distinguished Professor at Boston University. From 1997 to 2000, he served as the thirty-ninth United States Poet Laureate and Consultant in Poetry to the Library of Congress. Pinsky is the author of numerous collections of poetry, including Proverbs of Limbo; Selected Poems; and The Figured Wheel: New and Collected Poems 1966–1996, which received the 1997 Lenore Marshall Poetry Prize and was a Pulitzer Prize nominee. He is also the author of several prose titles, including his memoir Jersey Breaks: Becoming an American Poet; Singing School: Learning to Write (and Read) Poetry by Studying with the Masters; Democracy, Culture, and the Voice of Poetry; and The Sounds of Poetry: A Brief Guide, which was a finalist for the National Book Critics Circle Award. Pinsky published the acclaimed translation The Inferno of Dante, which was a Book-of-the-Month-Club Editor’s Choice, and received both the Los Angeles Times Book Prize and the Harold Morton Landon Translation Award. He earned his B.A. from Rutgers University and his M.A. and Ph.D. in philosophy from Stanford University.
Tweet of the Week:
The House wants to transfer $314 million to the MBTA for operations and the governor wants to transfer $254 million. Perhaps those numbers could be made a bit smaller if the MBTA and Keolis do their job: collect fares.
Let me hedge. My comments are based on what I observe. I take an express train to Boston three times a week from Framingham. For the most part, fares for Framingham riders are collected. They are for those boarding in West Natick, too. But after the train crosses into Boston, fare collection seems to simply stop. Boston Landing, Lansdowne and Back Bay riders all travel for free as the train ventures east.
On the return trip, from what I see, it’s the same story. Get on in Boston, get off in Boston no charge.
So the worst kept secret in Boston is out.
“She’s a good girl. She helps me a lot. She has big, big dreams. I don’t have the money, but she has big dreams. I hope she’s going to get everything, but she works so hard. She works so hard in school.”
“Our family is needing to make some really big sacrifices because we believe this is important, and so, we’re basically going to do whatever it takes… Sometimes we look at each other and go ‘I don’t know if I can do it again another month…’”
“A lot of the families have to sacrifice and work multiple jobs… And just scraping together enough money to just make tuition, just the basics.”
“It is discriminatory, that parents who want to choose an alternative to public school for their children, would not in any way receive any compensation for that, whether it be tax credit, whether it be a voucher…”
In the 1840s, nativist movement leaders formed official political parties and local chapters of the national Native American Party (later the American Party), although they continued to be commonly known as the Know-Nothing Party. Politicians sought to insert provisions into state constitutions against Catholics who refused to renounce the pope. The Know-Nothing movement brought bigotry and hatred to a new level of violence and organization.
The party’s legacy endured in the post-Civil War era, with laws and constitutional amendments it supported, still today severely limiting parents’ educational choices. A federal constitutional amendment was proposed by Speaker of the House James Blaine prohibiting money raised by taxation in any State to be under the control of any religious sect; nor shall any money so raised or lands so devoted be divided between religious sects or denominations. These were then named the Blaine Amendments of 1875.
in recent decades, often in response to challenges to school choice programs, the U.S. Supreme Court has demonstrated great interest in examining the issues of educational alternatives and attempts limit parental options. Massachusetts plays a key role in this debate. The Bay State was a key center of the Know-Nothing movement and has the oldest version of Anti-Aid Amendments in the nation, as well as a second such amendment approved in 1917. Two-fifths of Massachusetts residents are Catholic, and its Catholic schools outperform the state’s public schools, which are the best in the nation.
Click here to read a transcript
[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi. Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. There’s a notable shift occurring in the constituencies of both Republican and Democratic voter bases, reflecting a broader reevaluation of traditional political ideologies. Republican Senator Marco Rubio’s recent opinion piece in National Affairs, titled Industrial Policy, Right and Wrong, underscores this shift by challenging longstanding conservative views.
[00:00:32] Senator Rubio argues that the traditional embrace of free market principles has contributed to the decline of American manufacturing. Senator Rubio’s concerns with the current administration’s industrial policy are based on his view that they’re misguided, driven by a progressive agenda that neglects the interests of American workers, and are essential industries.
[00:00:53] Instead, Senator Rubio proposes redirecting industrial policy towards supporting the common good, focusing on job creation, industry stability, and national security. But does Senator Rubio’s argument withstand historical and factual scrutiny? Can an industrial policy directed by temporary majorities provide lasting solutions?
[00:01:16] And what lessons can free market advocates glean from his arguments to address legitimate concerns about the disruptions caused by capitalism? Joining me today is Colin Grabow, the Associate Director at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. His research primarily focuses on examining domestic trade protectionism, with a keen interest in policies such as the Jones Act and the U.S. sugar program. Mr. Grabow recently penned an insightful article for Cato titled, What Senator Rubio Gets Wrong About Manufacturing and Industrial Policy. In this piece, he dissects eight myths that form the foundation of Senator Rubio’s arguments. We will delve into the transformations taking place within the U.S. manufacturing sector and explore how shifts in productivity and changing consumer demands have contributed to the discontent that Senator Rubio addresses in his controversial piece. When I return, I’ll be joined by Cato Institute’s Associate Director, Colin Grabow. All right, we’re back. This is Hubwonk.
[00:02:20] I’m Joe Selvaggi, and I’m now joined by Colin Grabow, Associate Director at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Welcome back to Hubwonk, Colin.
[00:02:30] Colin Grabow: Thanks for having me on, Joe.
[00:02:32] Joe Selvaggi: All right, well, I’m thrilled to have you on because I was intrigued by your recent piece in Cato.
[00:02:37] It was entitled, What Senator Rubio gets wrong about manufacturing and industrial policy. I’ll say, this was in response to a piece that, Senator Rubio, Florida Senator Rubio wrote in National Affairs that was entitled Industrial Policy, Right and Wrong. and why I thought it was important to cover this is it seems his article and your response to it seems to capture a debate that’s emerging.
[00:02:56] Really, it’s without a party. Both voices on the left and the right, Republicans, and Democrats are all in this election season, starting to whisper about the value and the importance and the need for a quote-unquote industrial policy. So, so, let’s, for the benefit of our listeners who haven’t read either your piece or Senator Rubio’s piece, at a very high level, sketch out for our listeners what the case, Senator Rubio makes for a quote-unquote industrial policy.
[00:03:25] Colin Grabow: Yeah, well, I’ll first note that I don’t want to put words in his mouth, so I’ll just quote what Senator Rubio himself, posted to Twitter just, shortly before our conversation, just, I think, 30 minutes ago. He said, as a recap, my argument is that markets are efficient, but don’t always work in the best interest of our country, especially when adversaries like China skew global markets in their favor with theft and subsidies, that’s not good for America.
[00:03:53] Obviously, his essay was quite long in National Affairs, my kind of summary of it. Is that he believes U. S. manufacturing has collapsed. In fact, he flatly states that it has collapsed in his essay, I think twice, to the detriment of our economy and our national security, while China has risen with attendant economic and national security benefits.
[00:04:14] And to reverse this trend, he believes the U. S. needs to take a page out of China’s playbook. but it’s also, it’s not purely about China. I think Rubio clearly believes the United States needs to be more self-reliant as a matter of national security and needs to produce more of what it consumes, and therefore we need national policy to correct the free market and bias us more back in that manufacturing direction.
[00:04:38] Joe Selvaggi: So at a high level, the U. S. economy is not where it should be. Its manufacturing has collapsed and to use China as an example, a more engaged, government intervention into free markets is preferable to, let’s say, What classic free market people would say, less government is in general better.
[00:04:55] Is that the broad stroke of this?
[00:04:57] Colin Grabow: Yeah, I think he believes that unbridled capitalism does not get us where we need to be to compete with China and assure our national security. That’s a fair summary of where, of his perspective.
[00:05:09] Joe Selvaggi: If only, unbridled capitalism was where we lived, but let’s move on from that assertion and go into it.
[00:05:15] What I like about your paper is you break it down. I think you, you distill out the eight myths you identify in Senator Rubio’s, piece. But I think it’s also eight myths that, in general, people who don’t follow economics or microeconomics, macroeconomics, trade policy, industrial policy, those people who sort of know it in vague terms, these are myths everyone shares, both on the left and the right.
[00:05:36] So let’s take them each at a time and then just offer some real information. You do a lot of research in this area. let’s put some numbers and some ideas of where you consider the myths and have our listeners for themselves. either accept it or reject it. So, let’s start at the beginning.
[00:05:50] I think you made it very clear that about two times in his piece, Senator Rubio had characterized his U. S. manufacturing as having collapsed. your piece cites many other papers that challenge that. Share with our listeners, has it collapsed and if it hasn’t, why might someone perceive it to have collapsed?
[00:06:09] Colin Grabow: So, I think, so, to give a very short answer, no, it has not collapsed. Let me address that head-on. The United States is a manufacturing giant. we account for a, greater share of global manufacturing output than traditional manufacturing powers like Japan, Germany, India, and South Korea.
[00:06:26] Take all those, we put out more manufacturing output in those four countries combined. Combined. in 2022, the United States exported one, I think, roughly 1.6 trillion worth of manufactured goods. this includes tens of billions of dollars for things like medical instruments, integrated circuits, aerospace, and Autos.
[00:06:47] In 2021, we’re the world’s fourth-largest steel producer, it’s second-largest automaker, and its largest aerospace exporter. If U.S. manufacturing was its own country by GDP, I think we’d be something like the, it would be like the eighth largest economy in the world, so it would be top ten. But you’re correct, that there’s nonetheless this perception among many that the U.S. manufacturing sector is not doing well, so what explains this? How do we have these? Why do these perceptions not line up with the facts? I think it’s very much rooted in employment. Employment has declined in manufacturing. At its peak back in 1979, I think there was something like 20 million people employed in manufacturing today.
[00:07:31] We’re around 13 million. So, it’s significantly smaller. And then also, as a percentage of GDP, in fact, I was at a, think tank hearing event earlier this week, in which a member of Congress, said something like, decades ago, manufacturing was a priority. 35 percent of our GDP and, now it’s like 10 to 15%.
[00:07:52] And I think that alarms people. So, it’s a story, ultimately, how you reconcile these two things is that it’s a story of U. S. manufacturers doing more with less. Yes, there are fewer people employed, but they’re producing, our actual output is at or near record highs. Yes. I’ll give you just one example, the U.S. steel industry output is something like, I think it’s 8 percent higher now, or a few years ago it was 8%, in 2017 it was 8 percent higher than it was in 1980, yet employment has declined by 79%. It’s gone from almost 400,000 to just a little over 80,000. So I think that’s what’s good.
[00:08:31] That’s the story of manufacturing in the United States. Lots of output, but, its prominence in the U. S. economy, relative prominence is smaller, and in terms of employment, it’s declined.
[00:08:41] Joe Selvaggi: So we don’t want to trivialize the pain of, let’s say, a steel worker who’s been displaced by this automation, but at the same token, what you’re saying is, we’re producing things that are of higher value and produced in a more automated way.
[00:08:55] So the worker that remains in the steel factory is, I guess by your estimate, five times more productive. They’re able to make five times the wage or, certainly a greater wage, and that sort of job that is gone has gone to automation, but it’s, if manufacturing has gone elsewhere, it’s to places where the cost of labor is substantially lower.
[00:09:16] So, I don’t think anybody would want a job that pays what, let’s say, a very poor country that still does manufacturing. By hand, would want, right?
[00:09:26] Colin Grabow: Yeah, so, I, again, I think the story is largely one of automation and productivity, improvements, but that’s not the whole story. Yes, there are manufacturing jobs that have gone overseas.
[00:09:36] For example, textiles. people aren’t making socks, in the United States anymore. Maybe they are. They’re very high-end specialty socks. But, your T-shirts and things like that. It’s gone to Central America and other in Southeast Asia and other places like that. I’m not sure how much we should mourn the fact that we’ve lost those jobs and your kids won’t be able to grow up to work in a textile mill.
[00:09:55] Also, another trend that I think is often overlooked is one of dematerialization. Just a lot of things have disappeared or become digitized or just become smaller. For example, it wasn’t that long ago people had CD collections. I don’t own any CDs anymore.
[00:10:11] It’s all on your hard drive or in the cloud, somewhere. Same thing with DVDs or a DVD player. I got rid of mine, a few years ago. Or a road atlas, there’s no point to that thing. And even some of the things we have, like, the laptop I’m talking to you on, this is much smaller and consumes less materials than the big bulky desktop I used to use when I was in college.
[00:10:33] So these are other factors that I think help explain what’s going on in manufacturing.
[00:10:38] Joe Selvaggi: Part of the, let’s say consequence of fewer people working in actual manufacturing jobs, Senator Rubio, also in his article, draws a line between the decline in actual manufacturing jobs to a decline in marriage rates and childbirth rates.
[00:10:53] This seems to be quite a leap. Of course, they’re correlated because both are, going down. but to assert that one is caused by the other, you characterize that as myth number two, that there’s some of that the loss of manufacturing jobs, is undermining our culture, our marriage rates, and our birth rates.
[00:11:11] What do you have to say about that?
[00:11:13] Colin Grabow: Yeah, so, the underlying argument there is a respectable element to it. It’s not hard to understand that if manufacturing workers lose their jobs, that their marriage prospects and their ability to afford children declines. But with that said, there are a few things to point out.
[00:11:27] First, that’s true of all workers. That’s not something unique to manufacturing workers. All workers, experience, job churn, job loss. That’s not a unique feature of manufacturing. And then furthermore, the job losses that have resulted from trade are relatively modest in the context of the U.S. economy. I think the best estimates are something that somewhere around a million jobs were lost due to competition from China, the so-called China shock. It’s also keep in mind that in the U.S. each year, tens of millions of jobs are lost and gained. Job loss is just a normal part of a well-functioning economy.
[00:12:07] An economy with no job loss is an economy that’s trapped in amber, that’s completely sclerotic, with no improvement in our standard of living. I think our focus here in these conversations needs to be about, what are the barriers that, once these workers lose their jobs, what are barriers that stop them from reentering the workplace?
[00:12:26] That is the problem that we need to identify and remedy. Maybe is it the high cost of housing and more prosperous places? There are places where there are jobs, but just moving there is difficult because of things like, again, the high cost of housing, and maybe a lack of child care.
[00:12:41] What’s going on? That’s, I think, where the conversation needs to be. Furthermore, as I point out, my response to Rubio, notions that, well, if we reindustrialize, this will solve some of those issues. well, look at China. China’s the world’s biggest manufacturer and they have a falling, they have falling child birth rates and marriage rates. So, let’s also step back and recognize that declining birth rates are a feature across the developed world. Actually, I think it even extends beyond the developed world to many developing countries as well. And then lastly, I pointed out earlier, there was something like a million jobs lost due to trade.
[00:13:19] And I think overall in manufacturing, again, back in the 70s, we’re like 20 million, we’re at 13 million. I think since 2000, it’s gone down by like 5 million, something like this. Well, it’s hard to explain broad societal trends based on a few in a country of close to 350 million people based on a few million workers, I think.
[00:13:39] So, well, I don’t want to say that, it’s had no effect whatsoever. I think we need to keep the larger context in mind as well.
[00:13:47] Joe Selvaggi: Indeed. And again, if you’ve lost your job, if we follow the other principles, it’s more likely you lost your job to another American company than it is to China, right?
[00:13:56] Let’s face it, either automation or another U. S. economy, competing with other Americans is a lot harder than competing with China, right?
[00:14:02] Colin Grabow: Yeah, that’s a great point that’s often overlooked is that we often see a factory that closed and we assume, oh, well, production went to China, went to Mexico, something like that.
[00:14:12] Well, a lot of those, rust belt factories that closed, auto, autos being, or steel being classic examples, well, a lot of them, they just, they move south. they went down to Alabama or South Carolina, someplace like that. Steel, I think, last couple of years, a new steel plant opened in Arkansas.
[00:14:28] So, as you put it, there’s actually a very good chance you just lost your job to another American. Right.
[00:14:34] Joe Selvaggi: Well, I’ll say, one of your next myths is about the fact that Senator Rubio concedes that It’s also a good idea. President Biden thinks industrial policy is good, but he gets it wrong. In other words, President Biden believes in an industrial policy that helps good industries and good companies, but Rubio disagrees with what he perceives as good and has his own version of what’s good.
[00:14:55] He characterizes Biden’s industrial policy as corrupted by, I want to get it right, aligned with special interests and progressive ideologies. That’s why his industrial policy is not so good. Rubio says he would favor the right industries. Again, I set up the question pretty well. What could be wrong with that logic, right?
[00:15:12] Take that away there.
[00:15:14] Colin Grabow: Yeah, so Biden is also pro-industrial policy. The problem is he’s doing it wrong. He is too beholden to these progressive, ideologies and special interests, as you point out. I will dispense with that. I can do it right. Well, let’s just say for the sake of argument, he can.
[00:15:30] That, Senator Rubio and his fellow travelers, those he associates with, all have special insights, that they are immune from the pressures of special interests. Well, how can we maintain that? control of the presidency and Congress are constantly in flux, and not even just from a party perspective, but just from a personality and ideological one.
[00:15:51] Biden, President Biden was Obama’s vice president. President Obama belatedly but finally championed free trade. He endorsed the Trans-Pacific Partnership and did a lot of work to try to get that passed. He signed a few bilateral free trade agreements. Biden has done very little on trade.
[00:16:09] These are both Democrats, but, with different outlooks, on trade policy. And, furthermore, even if an industrial policy can be well crafted, what’s to ensure that it stays that way and remains well managed when new legislators enter office? What’s to ensure that they will, keep the same policies in place?
[00:16:27] Once Rubio constructs this industrial policy machinery, the folks that follow on from him, will maintain that and won’t, divert course. I see no reason to think that won’t be the case.
[00:16:38] Joe Selvaggi: Right, we have to, he has to either live forever or, and never lose an election, or face the consequence of someone else having, their hand on the rudder as well.
[00:16:46] Going further into that discussion, he characterizes who, and which industries he would help as only being those that are essential, leaving the rest of the economy alone. I suppose speaking to, let’s say, more free market advocates, I would characterize myself that way, he wants to assure someone like me that he’s not going to touch all industries, only the essential ones, which begs the question, How does one determine, which are essential and which should be subject to free market forces?
[00:17:09] What would you say about that?
[00:17:11] Colin Grabow: Yeah, that, it’s an excellent question. In his essay, Senator Rubio says, I just want, we’ll limit these interventions to essential industries, and I think that sounds fairly reasonable. But, Well, you also note that in his essay, Rubio, when he starts to list examples of some of these industries, he says, well, the mining industry, oil and gas, metallurgy, agriculture, chemistry, medicine, and he says, et cetera.
[00:17:35] So that’s not even a comprehensive list. and, that’s a That’s the nontrivial part of the U. S. economy right there. And let’s further keep in mind that Senator Rubio is a guy that, in past years, he’s notorious for, his support of the sugar industry and the protectionism that supports that industry there in Florida.
[00:17:55] And he’s described that as a national security interest, issue before, saying that, if we didn’t have this kind of protectionism, that basically our sugar, farms would get paved over by shopping malls and we can’t feed ourselves. So given that kind of underlying mentality, where’s the limiting, what’s the limiting principle to all this?
[00:18:12] Where do we draw that line? How do we delineate this? and it’s not obvious to me. I’ll also just point out one other thing, I think you can make a pretty good case, At the very least, Rubio’s outlook, dovetails very nicely with the U. S. sugar industry. And yet, we also have to assume this is a guy that’s going direct industrial policy while not being captured by special interests.
[00:18:31] I have my doubts about that. So yeah I think we can all get in a room and agree, yes, we should, support essential industries, but then I think we’d have a really tough time coming up with exactly what constitutes essential, and I don’t think Senator Rubio in his essay does a good job of spelling out what exactly that entails or what the criteria are to be used to judge and evaluate these things.
[00:18:53] Joe Selvaggi: Yes, and quickly, I think we can imagine everything, every worker, every industry, every business being essential, which leads me to another myth you have. Again, I’m going to I know in broad strokes say, there are a lot of people even on the right, but there are certainly on the left who romanticize China’s power to be able to manage its economy.
[00:19:11] In other words, if they consider everything essential and they get involved, it looks like they’re going gangbusters. isn’t this a, a success story about, command economies? if China has been able to do it successfully, why can’t we? What would you say to, those who say, China is indeed an example of.
[00:19:27] What can be done if the government gets more involved in industry?
[00:19:31] Colin Grabow: Yeah, well, you refer to this so that other people might see this as a success. I think we first have to step back and ask ourselves, well, what’s success? what are the criteria that we’re using to evaluate this? it’s true. I think that some of China’s industries are larger than would otherwise be the case without certain government interventions through things like Cheap financing, for example, I believe state-owned enterprises in China are directed that when they go to buy ships, they buy Chinese-built ships, and I’m sure that applies to other goods as well.
[00:20:00] I can believe that, but we also need to recognize that when the government directs resources to less productive ends than markets, When that takes place, which I think is what takes place, I do think the markets are better at allocating resources than the government, but there’s a cost to that. and in the real story in China, from my perspective, is not the central planning.
[00:20:23] That’s not new. China’s been doing this For decades, you can go back to the Great Leap Forward, when they directed, I think they had millions of farmers that had, smelters in their backyards to try to boost steel production because that was the key to industrialization. Of course, that was a failure, and farmers were out trying to make steel, so feeding people led to lots of starvation.
[00:20:43] What’s really interesting about China in recent, more recent decades has been the move away from central planning and letting market forces play more of a role. I think that is what has undergirded their prosperity. So to me, that’s the key lesson there. And then lastly, for all the strides China has made, let’s keep in mind, this is a country whose per capita GDP, I believe is something like one-sixth that of the United States.
[00:21:10] So, I think we should all be pretty leery about using a country that’s significantly poorer than us as a role model.
[00:21:16] Joe Selvaggi: Yes, indeed. I think they produce just a little bit more than we do as a country, but they do it with a billion more people, so that should give people a sense of the relative productivity of the two different countries.
[00:21:25] But let me push back. Last time you were on the show, you were on once before, we talked about the Jones Act and all the negative externalities, all the unintended consequences that follow from this, perhaps, well-intentioned law. I don’t know if you can see that, but, hasn’t China, you mentioned shipbuilding, hasn’t been able to invest in shipbuilding and ensure that they have now a very robust shipbuilding industry in China?
[00:21:46] Colin Grabow: Yes, it’s undeniable China is the world’s leading, shipbuilding country. I think they account for roughly half of all, delivered tonnage, in recent years. But then you have to step back and think of the alternative, right? What happens absent, Chinese industrial policy? Should we believe that the world’s largest country, the world’s largest manufacturing power would be a bit player or irrelevant in shipbuilding?
[00:22:11] I’m skeptical of that. If for no other reason, this is a path we’ve seen other Asian countries take. If you go back to the 1960s, Japan was the world’s leading shipbuilder. It was then replaced by South Korea, and now it seems to be China’s turn to replace South Korea. But furthermore, I can even believe that Chinese policies have made China’s shipbuilding industry bigger than what would otherwise be the case.
[00:22:39] But then we have to back up and again, ask ourselves, okay, that may be good for the shipbuilding industry, but what about China’s economy as a whole? Is that a useful, direction or allocation of resources? And I think there’s a lot of reason for doubt and there’s been academic. Work suggests that there is a fair amount of waste involved there.
[00:22:58] And then lastly, you may push back on me and say, well, okay, but then they get these ships set at cheaper rates, which is good to grow your economy, helps carry your exports, and whatnot. Well, that’s true. Everyone is out buying ships. Lots of people, say, in Europe and whatnot, they’ll buy Chinese-built ships.
[00:23:15] So. The Chinese are subsidizing, Europe, European and other people’s consumption of ships, which helps their industries. So I think you can make an arg a plausible argument. It’s been good for China’s shipbuilding industry, but I’m skeptical of the notion it’s been good for China’s economy overall.
[00:23:31] And then I’m also skeptical of the notion that absent, these industrial policy measures China would have, a very minor or modest shipbuilding industry.
[00:23:41] Joe Selvaggi: That’s a good point. The subsidies, and I think you referenced another paper where it effectively says what China’s put into shipbuilding, yeah, in subsidies, it really doesn’t get out at all in, in sort of profit, but the subsidy actually goes to ship consumers, which is the rest of the world.
[00:23:55] So China’s paying for the rest of the world to have cheap ships. and calling it industrial policy.
[00:24:00] Colin Grabow: Well, then, and one other thing I’ll add Joe, is, well, we can’t point to the United States and go, we’re not doing industrial policy in our shipbuilding industry. Well, of course, we did a whole podcast on the Jones Act, which is industrial policy.
[00:24:11] We have, protectionism that mandates Americans use U.S.-built vessels in domestic trade. We also have, tax credits, for people to encourage the purchase of U. S. ships. We have, the federal government provides financing for the purchase of U.S.-built ships, so let’s not pretend that, well, the reason China’s doing so well is because we haven’t tried, oh, yes, we very much tried industrial policy for shipbuilding.
[00:24:32] We’re just not doing it very well.
[00:24:34] Joe Selvaggi: Well, Dee, this is a good segue to my next myth, which you say that Senator Rubio characterizes, again, something that would appeal, I think, to both you and me, deregulation as industrial policy, as to say, when we make rules simpler or that’s industrial policy as well.
[00:24:51] I would agree. I think deregulation in general and lowering taxes is encouraging, but I wouldn’t call it industrial policy, would you? In a sense, industrial policy implies that it’s directed at a particular outcome in a particular firm, right? It’s not, let’s deregulate everything. It’s rather, let’s help out my favored industry.
[00:25:10] Am I right?
[00:25:11] Colin Grabow: Yes, exactly. As you point out, just the very name, industrial policy, suggests the promotion of particular industries. This isn’t, let’s promote, the U. S. economy writ large, it’s favoring certain industries because of national security reasons or whatever. And so it’s hard to mesh deregulation with this sector-specific approach.
[00:25:35] If, for example, we were to say, we’re going to reform the National Environmental Policy Act (NEPA), because that would be good. That’s good industrial policy. Well, the term just loses meaning because if you reform NEPA, that would apply to all sectors of the U.S. economy would benefit. And it’s hard for me to imagine saying, okay, well, this one sector is exempt or faces a different set of NEPA requirements than others. That’s just hard to contemplate. So I’m 100 percent for deregulation. In fact, I think that whenever the conversation, we have conversations about why is this particular industry, maybe not where we think it should be, or what’s holding that back, we need to look at the role of regulation and what obstacles may be in place that are imposed by the government before we start, getting involved in new government adventures, trying to promote that industry.
[00:26:22] Joe Selvaggi: Yeah. I often enjoy, having conversations with people, friends of mine who are on the, let’s see, solidly on the left. And we talk about local. Local industrial policy, if you want to call it that. Here in Boston, we love movies. We want movies to be shot here in Boston, and what we do to do that is we give them tax incentives, reduce their taxes, make it easy, streamline the deregulation, and make it easier to make a movie.
[00:26:42] I say, well, if we can accept that works for movies, why don’t we accept it for everything else, right? Like, why only movies? why not all industries? Is there a bad industry that we don’t want? why do we love movies? So, say more about, in a sense, the real secret here is Less regulation, less tax is beneficial to everyone and everything.
[00:27:02] Fair enough?
[00:27:02] Colin Grabow: Yes. I just, fundamentally, philosophically, I don’t think the government should be in the business of trying to, for lack of a better term, pick winners and losers. favoring certain sectors over others, absent some, perhaps absent some very compelling national security reason, which I certainly don’t think the movie industry, or the film industry falls under.
[00:27:25] I think, in that particular example, this is more about, hey, it’s pretty cool to see us, our city, our state, whatever, featured. And then you can see, the Hollywood actors move around and spend their money. and, so that has a certain appeal to people.
[00:27:36] But just as an economic proposition, I think my understanding of the literature on this stuff is, Pretty universally shows that it’s not a job creator. And, as you said, if we’re going to reduce taxes, well, let’s do it for everybody. and, they should all benefit from a low-tax environment.
[00:27:53] and, of course, it also concedes the argument that lower taxes are better. Beneficial, which I appreciate, but yeah, let’s extend that logic to everyone and just not, certain favored sectors. Of course.
[00:28:02] Joe Selvaggi: you mentioned just briefly, but I want to really dilate on this because I think people might be along with us for our argument all the way through these, myths so far, but they’re all going to have in that back of their mind, like, what about our strategic industries?
[00:28:15] Like, warships and bombers and missiles and all that kind of thing. don’t we have an interest in ensuring that at least those things that we might use in wartime are made in the U S and therefore should be protected and cultivated,
[00:28:29] Colin Grabow: Yeah, I think my answer to that is maybe.
[00:28:32] So for example, let’s go with the warship example. I don’t think, I think most people would agree. We probably don’t want to be in a position where, we say, well, it’s just. outsourced it to whoever’s the cheapest. Maybe that’s China, and then we’re dependent on China for all this construction of our naval vessels.
[00:28:48] It’s probably not a place we want to be, but maybe, South Korea, a treaty ally, maybe, and even then, it doesn’t make sense to buy all our ships from them, but maybe some of them, because when it comes to national security, yes, having, U. S. built ships, that’s a nice, that, that’s nice to have, but also say if you could buy, a ship for one third the price in South Korea.
[00:29:09] So your national, your defense budget goes further. So you can get, three ships for the price of one. Hey, that’s good for national security too. And there are some very important trade-offs that need to be weighed there. of course, this mentality of, well, we need to do it all ourselves.
[00:29:22] Well, this is, this ties in directly. this is the underpinning of the Jones Act, which we spent that episode on. The idea we need to be self-reliant in shipbuilding and shipping. And where has it gotten us? How are we doing there? And for those who didn’t listen to the episode, well, U.S. shipbuilding is doing terribly. last year, Just a single ocean-going cargo ship was delivered by a U. S. shipyard with the Jones Act in place because the industry has become so wildly uncompetitive. The number of ships in the fleet has been declining. The ships tend to be old because they’re so expensive because we have this mentality of self-reliance.
[00:29:56] Don’t go buy ships from other countries. So, self-reliance has value, but other things need to factor in here too. And I think a good compromise place that perhaps we can land is that, for certain products, yes, maybe it doesn’t make sense to buy from your adversaries, but what about your trusted friends and allies, like NATO partners, for example, and the fact that the Japanese and Chinese have some of the best shipbuilding industries in the world.
[00:30:21] To me, that seems like a resource to be harnessed. And the last thing I’ll say is, Understandable reasons people bring up the pandemic and say, well, what about that? we need to be self-reliant. Well, that’s one possible lesson, but two things. One is that another possible lesson is we should stockpile.
[00:30:37] We should be ready. So, let’s say China produces PPE, materials at the cheapest price. maybe the lesson there is you go load up, and stock up on stuff from them so that when the pandemic comes around, you’re prepared. You’ve got it on hand. So the other point to remember is that there’s actually been some literature on this that suggests that during the pandemic some countries we weren’t especially friendly with were not averse to supplying us with goods, because people like to make money.
[00:31:04] So we shouldn’t even take that as a given necessarily. It’s worth considering, I’m not sure these are automatic assumptions we should also make.
[00:31:12] Joe Selvaggi: And finally, I just wanted the last point that, Senator Rubio makes that you refute in your final myth is that he wants to reassure us that, he really is looking out for the best interests of Americans, so he wants to, leave the free market alone, but he wants to set, benchmarks and goals, where he thinks, rather than the free market deciding what should be produced, he’s got a better idea of, of, what the benchmarks are that would benefit all Americans.
[00:31:39] So, I hear this is a more familiar argument on the left, the Elizabeth Warrens and Bernie Sanders of the world saying, do we really need,17 kinds of deodorant? Let’s make what we need in the right amount, and, the free market can do its own thing within our parameters.
[00:31:52] What would you say to that?
[00:31:54] Colin Grabow: Yeah, and in Senator Rubio’s essay, he said something like, we won’t dictate to companies how to invest and compete. We’ll just tell them, here are the benchmarks you need to hit. and, for example, certain production benchmarks and who the accomplishments must benefit.
[00:32:09] And he says, for example, i. e. the American people. Well, that’s incredibly nebulous. I think that the American people obviously have a field day with something like that. I think anybody could justify something by saying, oh, this absolutely benefits the American people. So this is really no kind of benchmark.
[00:32:28] And what’s striking to me is this is the kind of language he uses. In a piece, this is a piece he obviously gave a lot of thought to and the best he can come up with is to benefit the American people. Imagine what kind of benchmarks will be set once lobbyists get their say when these things are hashed out in Washington back rooms.
[00:32:49] So this is just an absolute open invitation for people to manipulate this kind of industrial policy machinery, not to benefit the American people, but their particular industry, their particular company. and I have a hard time, with the notion that this is ultimately going to prove beneficial for the American people writ large.
[00:33:08] To me, that is not one of the lessons I take out of government interventions. this notion they’ll operate free of lobbyist influence and that they’re all only thinking of, the big picture and not narrow, special interests.
[00:33:20] Joe Selvaggi: Well, I don’t want to make this, show just talk about negative things that, Senator Rubio has said or negative things about industrial policy, though there are many.
[00:33:28] We could just have our audience put a negative sign next to everything Senator Rubio recommends and suggest that would be your preferred policy. Preference, what would you do again, I’d like to ask before we close out the king for a day question, which is, were you to be in charge or advising Senator Rubio or be King for a day?
[00:33:47] What do you think the federal government, could do proactively to ensure American jobs are plentiful? We are well paid, our industries are competitive and we prosper for generations. What would you recommend in general?
[00:34:03] Colin Grabow: Well, of course, the first thing we do is we repeal the Jones Act, as previously discussed, and then adopt, open and free trade more broadly and dispense with all other forms of protectionism.
[00:34:14] But more seriously, I think, well, I do in fact think the Jones Act would be good for U. S. manufacturing and for the economy as a whole, but are there plenty of other things that we can do? We need a sensible immigration policy that assures that the country’s manufacturers and other sectors can get access to the talent that they need.
[00:34:34] Reduce, barriers for talented immigrants and even unskilled immigrants to fill needs here in our country. We need a sensible tax policy that should be as flat as possible. Minimal number of distortions. We shouldn’t tax capital so much. We’ve made some progress there in recent years, so hooray for that.
[00:34:58] But then also, beyond the federal level, I think a lot of attention needs to be paid to, for example, zoning policies and housing. The fact that some of our most prosperous, economic centers, are very costly to live in, and there’s a real barrier to workers, taking part in some of that prosperity.
[00:35:16] Places like the Bay Area, up at where you live, Boston, New York City, places like that, these are economic engines, and we make it difficult for people to partake in that. so I think we can’t overlook efforts on the state and local levels. I think if we had a better health care system be more efficient, that would be a massive de facto tax cut. So much of the compensation that workers receive is in the form of health insurance. There’s, if we could free up some of that money to put in people’s pockets, that would be, I think a potential engine of prosperity. So there’s a lot, there’s a lot that can be done.
[00:35:49] I don’t have all the answers. So, you check with some of my colleagues on these different areas that do. but there’s certainly no shortage of things that can be done to improve U. S. economic efficiency and make this a more attractive place to invest and do business. And I think that when we talk about Improving U.S. manufacturing, and improving the U.S. economy, that’s where the conversation should start.
[00:36:10] Joe Selvaggi: Indeed. It sounds like you summarized the topics of the last six months of Hubwonk podcast, so I appreciate the intentional or unintentional shout-out to earlier shows.
[00:36:22] Colin Grabow: You guys have your fingers on the economic pulse, what can I say?
[00:36:25] Joe Selvaggi: Well, and I think, again, our listeners, contrary to say the dominant narrative that there are these mustache-twirling capitalists preying on poor consumers, I think, you know, when you step back, you realize we’re all producers, consumers, we’re all participants in the market, we all benefit from cheaper, better, more abundant products, and rather than have an industrial policy run by I guess, people like Senator Rubio, instead, a free market really is run by you and me, by individual choices of individual consumers, each expressing our own preference and interpretation of value.
[00:36:57] That sounds very uncomfortable for those people with seven PhDs or in places of power that the man on the street gets to decide, but I think that’s the thesis of what you and I might recommend.
[00:37:08] Colin Grabow: Absolutely. I think, we all get votes. People think about voting as a political exercise.
[00:37:12] Every day we have to vote with our dollars for the kind of world that we want to live in, the kind of goods that we want to see on our shelves, the kind of economy we want. so, yeah, I think that’s often overlooked and underappreciated aspect of capitalism and the market, the free market.
[00:37:26] Joe Selvaggi: So for our listeners who’ve, it piqued their interest and they want to maybe even challenge your ideas or reread them or, access all the links in all your papers, where can our listeners find you and read more about your work?
[00:37:38] Colin Grabow: Sure. Well, if you just Google my name, Colin Grabow, why the first thing that will come up is my Cato page and all my work is right there.
[00:37:44] I would also invite people who are on social media that like, Twitter. It’s my, social media drug of choice to go to, you can find me at C P Grabow, C P G R A B O W. And then I also just invite people more generally to go to our website, Cato.org, and I’m just one scholar. We have many other scholars here with all kinds of interesting insights on various topics, and I think listeners would enjoy a lot of what’s on our website.
[00:38:10] Joe Selvaggi: Well, I certainly enjoy your work and the work of Cato. you guys are, nonpartisan, so while you might get things wrong, you don’t get it wrong for the wrong reasons. You play, you call it like you see it, and that’s what I appreciate here on Hubwonk. Thank you very much for joining me today on Hubwonk, Colin.
[00:38:24] You’re a great guest.
[00:38:25] Colin Grabow: Well, thanks so much, Joey. I hope we can do this again.
[00:38:29] Joe Selvaggi: This has been another episode of Hubwonk. If you enjoyed today’s show, there are several ways to support Hubwonk and Pioneer Institute. It would be easier for you and better for us if you subscribed to Hubwonk on your iTunes Podcatcher.
[00:38:41] It would make it easier for others to find Hubwonk if you offered a 5-star rating or a favorable review. Of course, we’re grateful if you share Hubwonk with friends. If you have ideas, comments, or suggestions for me about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
Joe Selvaggi discusses industrial policy, its aspirations, and limitations, with CATO Institute Associate Director Colin Grabow, in response to Senator Rubio’s thought piece advocating for a more active role for government in the economy.
Guest:
Colin Grabow is a research fellow at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies where his research focuses on domestic forms of trade protectionism such as the Jones Act and the U.S. sugar program. His writings have been published in a number of outlets, including USA Today, The Hill, National Review, and The Wall Street Journal. Prior to joining the Cato Institute, he performed political and economic analysis for a Japan-based trading and investment firm and published research and analysis for an international affairs consulting firm with a focus on U.S.-Asia relations. Grabow holds a BA in international affairs from James Madison University and an MA in international trade and investment policy from George Washington University.
This week on The Learning Curve, guest co-hosts University of Arkansas Prof. Albert Cheng and Dr. Jocelyn Chadwick interview renowned poet and Boston University professor, Robert Pinsky. He discusses his memoir Jersey Breaks: Becoming an American Poet; the enduring influence of sacred texts like the Psalms; and the wide cultural significance of classic poets like Homer and Shakespeare. Through his book Democracy, Culture and the Voice of Poetry, he shares his views on the vital role of poetry in shaping a vibrant American democracy. Pinsky also talks about the power of poetry in inspiring social change, the importance of reading poetry aloud, and the timeless wisdom embedded in classic poetry, like his translation of Dante’s Inferno. In closing, Pinsky reads his poem “Shirt.”
Stories of the Week: Albert addressed an article from Education Next questioning the conventional wisdom around advanced education; Jocelyn recited the poem “Harlem” in celebration of National Poetry Month.
Guest:
Robert Pinsky is the William Fairfield Warren Distinguished Professor at Boston University. From 1997 to 2000, he served as the thirty-ninth United States Poet Laureate and Consultant in Poetry to the Library of Congress. Pinsky is the author of numerous collections of poetry, including Proverbs of Limbo; Selected Poems; and The Figured Wheel: New and Collected Poems 1966–1996, which received the 1997 Lenore Marshall Poetry Prize and was a Pulitzer Prize nominee. He is also the author of several prose titles, including his memoir Jersey Breaks: Becoming an American Poet; Singing School: Learning to Write (and Read) Poetry by Studying with the Masters; Democracy, Culture, and the Voice of Poetry; and The Sounds of Poetry: A Brief Guide, which was a finalist for the National Book Critics Circle Award. Pinsky published the acclaimed translation The Inferno of Dante, which was a Book-of-the-Month-Club Editor’s Choice, and received both the Los Angeles Times Book Prize and the Harold Morton Landon Translation Award. He earned his B.A. from Rutgers University and his M.A. and Ph.D. in philosophy from Stanford University.
Tweet of the Week:
The House wants to transfer $314 million to the MBTA for operations and the governor wants to transfer $254 million. Perhaps those numbers could be made a bit smaller if the MBTA and Keolis do their job: collect fares.
Let me hedge. My comments are based on what I observe. I take an express train to Boston three times a week from Framingham. For the most part, fares for Framingham riders are collected. They are for those boarding in West Natick, too. But after the train crosses into Boston, fare collection seems to simply stop. Boston Landing, Lansdowne and Back Bay riders all travel for free as the train ventures east.
On the return trip, from what I see, it’s the same story. Get on in Boston, get off in Boston no charge.
So the worst kept secret in Boston is out.
Industrial Policy Reimaged: Can Government Improve Free Markets
/in Featured, News, Podcast Hubwonk /by Editorial StaffClick here to read a transcript
[00:00:00] Joe Selvaggi: This is Hubwonk. I’m Joe Selvaggi. Welcome to Hubwonk, a podcast of Pioneer Institute, a think tank in Boston. There’s a notable shift occurring in the constituencies of both Republican and Democratic voter bases, reflecting a broader reevaluation of traditional political ideologies. Republican Senator Marco Rubio’s recent opinion piece in National Affairs, titled Industrial Policy, Right and Wrong, underscores this shift by challenging longstanding conservative views.
[00:00:32] Senator Rubio argues that the traditional embrace of free market principles has contributed to the decline of American manufacturing. Senator Rubio’s concerns with the current administration’s industrial policy are based on his view that they’re misguided, driven by a progressive agenda that neglects the interests of American workers, and are essential industries.
[00:00:53] Instead, Senator Rubio proposes redirecting industrial policy towards supporting the common good, focusing on job creation, industry stability, and national security. But does Senator Rubio’s argument withstand historical and factual scrutiny? Can an industrial policy directed by temporary majorities provide lasting solutions?
[00:01:16] And what lessons can free market advocates glean from his arguments to address legitimate concerns about the disruptions caused by capitalism? Joining me today is Colin Grabow, the Associate Director at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. His research primarily focuses on examining domestic trade protectionism, with a keen interest in policies such as the Jones Act and the U.S. sugar program. Mr. Grabow recently penned an insightful article for Cato titled, What Senator Rubio Gets Wrong About Manufacturing and Industrial Policy. In this piece, he dissects eight myths that form the foundation of Senator Rubio’s arguments. We will delve into the transformations taking place within the U.S. manufacturing sector and explore how shifts in productivity and changing consumer demands have contributed to the discontent that Senator Rubio addresses in his controversial piece. When I return, I’ll be joined by Cato Institute’s Associate Director, Colin Grabow. All right, we’re back. This is Hubwonk.
[00:02:20] I’m Joe Selvaggi, and I’m now joined by Colin Grabow, Associate Director at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Welcome back to Hubwonk, Colin.
[00:02:30] Colin Grabow: Thanks for having me on, Joe.
[00:02:32] Joe Selvaggi: All right, well, I’m thrilled to have you on because I was intrigued by your recent piece in Cato.
[00:02:37] It was entitled, What Senator Rubio gets wrong about manufacturing and industrial policy. I’ll say, this was in response to a piece that, Senator Rubio, Florida Senator Rubio wrote in National Affairs that was entitled Industrial Policy, Right and Wrong. and why I thought it was important to cover this is it seems his article and your response to it seems to capture a debate that’s emerging.
[00:02:56] Really, it’s without a party. Both voices on the left and the right, Republicans, and Democrats are all in this election season, starting to whisper about the value and the importance and the need for a quote-unquote industrial policy. So, so, let’s, for the benefit of our listeners who haven’t read either your piece or Senator Rubio’s piece, at a very high level, sketch out for our listeners what the case, Senator Rubio makes for a quote-unquote industrial policy.
[00:03:25] Colin Grabow: Yeah, well, I’ll first note that I don’t want to put words in his mouth, so I’ll just quote what Senator Rubio himself, posted to Twitter just, shortly before our conversation, just, I think, 30 minutes ago. He said, as a recap, my argument is that markets are efficient, but don’t always work in the best interest of our country, especially when adversaries like China skew global markets in their favor with theft and subsidies, that’s not good for America.
[00:03:53] Obviously, his essay was quite long in National Affairs, my kind of summary of it. Is that he believes U. S. manufacturing has collapsed. In fact, he flatly states that it has collapsed in his essay, I think twice, to the detriment of our economy and our national security, while China has risen with attendant economic and national security benefits.
[00:04:14] And to reverse this trend, he believes the U. S. needs to take a page out of China’s playbook. but it’s also, it’s not purely about China. I think Rubio clearly believes the United States needs to be more self-reliant as a matter of national security and needs to produce more of what it consumes, and therefore we need national policy to correct the free market and bias us more back in that manufacturing direction.
[00:04:38] Joe Selvaggi: So at a high level, the U. S. economy is not where it should be. Its manufacturing has collapsed and to use China as an example, a more engaged, government intervention into free markets is preferable to, let’s say, What classic free market people would say, less government is in general better.
[00:04:55] Is that the broad stroke of this?
[00:04:57] Colin Grabow: Yeah, I think he believes that unbridled capitalism does not get us where we need to be to compete with China and assure our national security. That’s a fair summary of where, of his perspective.
[00:05:09] Joe Selvaggi: If only, unbridled capitalism was where we lived, but let’s move on from that assertion and go into it.
[00:05:15] What I like about your paper is you break it down. I think you, you distill out the eight myths you identify in Senator Rubio’s, piece. But I think it’s also eight myths that, in general, people who don’t follow economics or microeconomics, macroeconomics, trade policy, industrial policy, those people who sort of know it in vague terms, these are myths everyone shares, both on the left and the right.
[00:05:36] So let’s take them each at a time and then just offer some real information. You do a lot of research in this area. let’s put some numbers and some ideas of where you consider the myths and have our listeners for themselves. either accept it or reject it. So, let’s start at the beginning.
[00:05:50] I think you made it very clear that about two times in his piece, Senator Rubio had characterized his U. S. manufacturing as having collapsed. your piece cites many other papers that challenge that. Share with our listeners, has it collapsed and if it hasn’t, why might someone perceive it to have collapsed?
[00:06:09] Colin Grabow: So, I think, so, to give a very short answer, no, it has not collapsed. Let me address that head-on. The United States is a manufacturing giant. we account for a, greater share of global manufacturing output than traditional manufacturing powers like Japan, Germany, India, and South Korea.
[00:06:26] Take all those, we put out more manufacturing output in those four countries combined. Combined. in 2022, the United States exported one, I think, roughly 1.6 trillion worth of manufactured goods. this includes tens of billions of dollars for things like medical instruments, integrated circuits, aerospace, and Autos.
[00:06:47] In 2021, we’re the world’s fourth-largest steel producer, it’s second-largest automaker, and its largest aerospace exporter. If U.S. manufacturing was its own country by GDP, I think we’d be something like the, it would be like the eighth largest economy in the world, so it would be top ten. But you’re correct, that there’s nonetheless this perception among many that the U.S. manufacturing sector is not doing well, so what explains this? How do we have these? Why do these perceptions not line up with the facts? I think it’s very much rooted in employment. Employment has declined in manufacturing. At its peak back in 1979, I think there was something like 20 million people employed in manufacturing today.
[00:07:31] We’re around 13 million. So, it’s significantly smaller. And then also, as a percentage of GDP, in fact, I was at a, think tank hearing event earlier this week, in which a member of Congress, said something like, decades ago, manufacturing was a priority. 35 percent of our GDP and, now it’s like 10 to 15%.
[00:07:52] And I think that alarms people. So, it’s a story, ultimately, how you reconcile these two things is that it’s a story of U. S. manufacturers doing more with less. Yes, there are fewer people employed, but they’re producing, our actual output is at or near record highs. Yes. I’ll give you just one example, the U.S. steel industry output is something like, I think it’s 8 percent higher now, or a few years ago it was 8%, in 2017 it was 8 percent higher than it was in 1980, yet employment has declined by 79%. It’s gone from almost 400,000 to just a little over 80,000. So I think that’s what’s good.
[00:08:31] That’s the story of manufacturing in the United States. Lots of output, but, its prominence in the U. S. economy, relative prominence is smaller, and in terms of employment, it’s declined.
[00:08:41] Joe Selvaggi: So we don’t want to trivialize the pain of, let’s say, a steel worker who’s been displaced by this automation, but at the same token, what you’re saying is, we’re producing things that are of higher value and produced in a more automated way.
[00:08:55] So the worker that remains in the steel factory is, I guess by your estimate, five times more productive. They’re able to make five times the wage or, certainly a greater wage, and that sort of job that is gone has gone to automation, but it’s, if manufacturing has gone elsewhere, it’s to places where the cost of labor is substantially lower.
[00:09:16] So, I don’t think anybody would want a job that pays what, let’s say, a very poor country that still does manufacturing. By hand, would want, right?
[00:09:26] Colin Grabow: Yeah, so, I, again, I think the story is largely one of automation and productivity, improvements, but that’s not the whole story. Yes, there are manufacturing jobs that have gone overseas.
[00:09:36] For example, textiles. people aren’t making socks, in the United States anymore. Maybe they are. They’re very high-end specialty socks. But, your T-shirts and things like that. It’s gone to Central America and other in Southeast Asia and other places like that. I’m not sure how much we should mourn the fact that we’ve lost those jobs and your kids won’t be able to grow up to work in a textile mill.
[00:09:55] Also, another trend that I think is often overlooked is one of dematerialization. Just a lot of things have disappeared or become digitized or just become smaller. For example, it wasn’t that long ago people had CD collections. I don’t own any CDs anymore.
[00:10:11] It’s all on your hard drive or in the cloud, somewhere. Same thing with DVDs or a DVD player. I got rid of mine, a few years ago. Or a road atlas, there’s no point to that thing. And even some of the things we have, like, the laptop I’m talking to you on, this is much smaller and consumes less materials than the big bulky desktop I used to use when I was in college.
[00:10:33] So these are other factors that I think help explain what’s going on in manufacturing.
[00:10:38] Joe Selvaggi: Part of the, let’s say consequence of fewer people working in actual manufacturing jobs, Senator Rubio, also in his article, draws a line between the decline in actual manufacturing jobs to a decline in marriage rates and childbirth rates.
[00:10:53] This seems to be quite a leap. Of course, they’re correlated because both are, going down. but to assert that one is caused by the other, you characterize that as myth number two, that there’s some of that the loss of manufacturing jobs, is undermining our culture, our marriage rates, and our birth rates.
[00:11:11] What do you have to say about that?
[00:11:13] Colin Grabow: Yeah, so, the underlying argument there is a respectable element to it. It’s not hard to understand that if manufacturing workers lose their jobs, that their marriage prospects and their ability to afford children declines. But with that said, there are a few things to point out.
[00:11:27] First, that’s true of all workers. That’s not something unique to manufacturing workers. All workers, experience, job churn, job loss. That’s not a unique feature of manufacturing. And then furthermore, the job losses that have resulted from trade are relatively modest in the context of the U.S. economy. I think the best estimates are something that somewhere around a million jobs were lost due to competition from China, the so-called China shock. It’s also keep in mind that in the U.S. each year, tens of millions of jobs are lost and gained. Job loss is just a normal part of a well-functioning economy.
[00:12:07] An economy with no job loss is an economy that’s trapped in amber, that’s completely sclerotic, with no improvement in our standard of living. I think our focus here in these conversations needs to be about, what are the barriers that, once these workers lose their jobs, what are barriers that stop them from reentering the workplace?
[00:12:26] That is the problem that we need to identify and remedy. Maybe is it the high cost of housing and more prosperous places? There are places where there are jobs, but just moving there is difficult because of things like, again, the high cost of housing, and maybe a lack of child care.
[00:12:41] What’s going on? That’s, I think, where the conversation needs to be. Furthermore, as I point out, my response to Rubio, notions that, well, if we reindustrialize, this will solve some of those issues. well, look at China. China’s the world’s biggest manufacturer and they have a falling, they have falling child birth rates and marriage rates. So, let’s also step back and recognize that declining birth rates are a feature across the developed world. Actually, I think it even extends beyond the developed world to many developing countries as well. And then lastly, I pointed out earlier, there was something like a million jobs lost due to trade.
[00:13:19] And I think overall in manufacturing, again, back in the 70s, we’re like 20 million, we’re at 13 million. I think since 2000, it’s gone down by like 5 million, something like this. Well, it’s hard to explain broad societal trends based on a few in a country of close to 350 million people based on a few million workers, I think.
[00:13:39] So, well, I don’t want to say that, it’s had no effect whatsoever. I think we need to keep the larger context in mind as well.
[00:13:47] Joe Selvaggi: Indeed. And again, if you’ve lost your job, if we follow the other principles, it’s more likely you lost your job to another American company than it is to China, right?
[00:13:56] Let’s face it, either automation or another U. S. economy, competing with other Americans is a lot harder than competing with China, right?
[00:14:02] Colin Grabow: Yeah, that’s a great point that’s often overlooked is that we often see a factory that closed and we assume, oh, well, production went to China, went to Mexico, something like that.
[00:14:12] Well, a lot of those, rust belt factories that closed, auto, autos being, or steel being classic examples, well, a lot of them, they just, they move south. they went down to Alabama or South Carolina, someplace like that. Steel, I think, last couple of years, a new steel plant opened in Arkansas.
[00:14:28] So, as you put it, there’s actually a very good chance you just lost your job to another American. Right.
[00:14:34] Joe Selvaggi: Well, I’ll say, one of your next myths is about the fact that Senator Rubio concedes that It’s also a good idea. President Biden thinks industrial policy is good, but he gets it wrong. In other words, President Biden believes in an industrial policy that helps good industries and good companies, but Rubio disagrees with what he perceives as good and has his own version of what’s good.
[00:14:55] He characterizes Biden’s industrial policy as corrupted by, I want to get it right, aligned with special interests and progressive ideologies. That’s why his industrial policy is not so good. Rubio says he would favor the right industries. Again, I set up the question pretty well. What could be wrong with that logic, right?
[00:15:12] Take that away there.
[00:15:14] Colin Grabow: Yeah, so Biden is also pro-industrial policy. The problem is he’s doing it wrong. He is too beholden to these progressive, ideologies and special interests, as you point out. I will dispense with that. I can do it right. Well, let’s just say for the sake of argument, he can.
[00:15:30] That, Senator Rubio and his fellow travelers, those he associates with, all have special insights, that they are immune from the pressures of special interests. Well, how can we maintain that? control of the presidency and Congress are constantly in flux, and not even just from a party perspective, but just from a personality and ideological one.
[00:15:51] Biden, President Biden was Obama’s vice president. President Obama belatedly but finally championed free trade. He endorsed the Trans-Pacific Partnership and did a lot of work to try to get that passed. He signed a few bilateral free trade agreements. Biden has done very little on trade.
[00:16:09] These are both Democrats, but, with different outlooks, on trade policy. And, furthermore, even if an industrial policy can be well crafted, what’s to ensure that it stays that way and remains well managed when new legislators enter office? What’s to ensure that they will, keep the same policies in place?
[00:16:27] Once Rubio constructs this industrial policy machinery, the folks that follow on from him, will maintain that and won’t, divert course. I see no reason to think that won’t be the case.
[00:16:38] Joe Selvaggi: Right, we have to, he has to either live forever or, and never lose an election, or face the consequence of someone else having, their hand on the rudder as well.
[00:16:46] Going further into that discussion, he characterizes who, and which industries he would help as only being those that are essential, leaving the rest of the economy alone. I suppose speaking to, let’s say, more free market advocates, I would characterize myself that way, he wants to assure someone like me that he’s not going to touch all industries, only the essential ones, which begs the question, How does one determine, which are essential and which should be subject to free market forces?
[00:17:09] What would you say about that?
[00:17:11] Colin Grabow: Yeah, that, it’s an excellent question. In his essay, Senator Rubio says, I just want, we’ll limit these interventions to essential industries, and I think that sounds fairly reasonable. But, Well, you also note that in his essay, Rubio, when he starts to list examples of some of these industries, he says, well, the mining industry, oil and gas, metallurgy, agriculture, chemistry, medicine, and he says, et cetera.
[00:17:35] So that’s not even a comprehensive list. and, that’s a That’s the nontrivial part of the U. S. economy right there. And let’s further keep in mind that Senator Rubio is a guy that, in past years, he’s notorious for, his support of the sugar industry and the protectionism that supports that industry there in Florida.
[00:17:55] And he’s described that as a national security interest, issue before, saying that, if we didn’t have this kind of protectionism, that basically our sugar, farms would get paved over by shopping malls and we can’t feed ourselves. So given that kind of underlying mentality, where’s the limiting, what’s the limiting principle to all this?
[00:18:12] Where do we draw that line? How do we delineate this? and it’s not obvious to me. I’ll also just point out one other thing, I think you can make a pretty good case, At the very least, Rubio’s outlook, dovetails very nicely with the U. S. sugar industry. And yet, we also have to assume this is a guy that’s going direct industrial policy while not being captured by special interests.
[00:18:31] I have my doubts about that. So yeah I think we can all get in a room and agree, yes, we should, support essential industries, but then I think we’d have a really tough time coming up with exactly what constitutes essential, and I don’t think Senator Rubio in his essay does a good job of spelling out what exactly that entails or what the criteria are to be used to judge and evaluate these things.
[00:18:53] Joe Selvaggi: Yes, and quickly, I think we can imagine everything, every worker, every industry, every business being essential, which leads me to another myth you have. Again, I’m going to I know in broad strokes say, there are a lot of people even on the right, but there are certainly on the left who romanticize China’s power to be able to manage its economy.
[00:19:11] In other words, if they consider everything essential and they get involved, it looks like they’re going gangbusters. isn’t this a, a success story about, command economies? if China has been able to do it successfully, why can’t we? What would you say to, those who say, China is indeed an example of.
[00:19:27] What can be done if the government gets more involved in industry?
[00:19:31] Colin Grabow: Yeah, well, you refer to this so that other people might see this as a success. I think we first have to step back and ask ourselves, well, what’s success? what are the criteria that we’re using to evaluate this? it’s true. I think that some of China’s industries are larger than would otherwise be the case without certain government interventions through things like Cheap financing, for example, I believe state-owned enterprises in China are directed that when they go to buy ships, they buy Chinese-built ships, and I’m sure that applies to other goods as well.
[00:20:00] I can believe that, but we also need to recognize that when the government directs resources to less productive ends than markets, When that takes place, which I think is what takes place, I do think the markets are better at allocating resources than the government, but there’s a cost to that. and in the real story in China, from my perspective, is not the central planning.
[00:20:23] That’s not new. China’s been doing this For decades, you can go back to the Great Leap Forward, when they directed, I think they had millions of farmers that had, smelters in their backyards to try to boost steel production because that was the key to industrialization. Of course, that was a failure, and farmers were out trying to make steel, so feeding people led to lots of starvation.
[00:20:43] What’s really interesting about China in recent, more recent decades has been the move away from central planning and letting market forces play more of a role. I think that is what has undergirded their prosperity. So to me, that’s the key lesson there. And then lastly, for all the strides China has made, let’s keep in mind, this is a country whose per capita GDP, I believe is something like one-sixth that of the United States.
[00:21:10] So, I think we should all be pretty leery about using a country that’s significantly poorer than us as a role model.
[00:21:16] Joe Selvaggi: Yes, indeed. I think they produce just a little bit more than we do as a country, but they do it with a billion more people, so that should give people a sense of the relative productivity of the two different countries.
[00:21:25] But let me push back. Last time you were on the show, you were on once before, we talked about the Jones Act and all the negative externalities, all the unintended consequences that follow from this, perhaps, well-intentioned law. I don’t know if you can see that, but, hasn’t China, you mentioned shipbuilding, hasn’t been able to invest in shipbuilding and ensure that they have now a very robust shipbuilding industry in China?
[00:21:46] Colin Grabow: Yes, it’s undeniable China is the world’s leading, shipbuilding country. I think they account for roughly half of all, delivered tonnage, in recent years. But then you have to step back and think of the alternative, right? What happens absent, Chinese industrial policy? Should we believe that the world’s largest country, the world’s largest manufacturing power would be a bit player or irrelevant in shipbuilding?
[00:22:11] I’m skeptical of that. If for no other reason, this is a path we’ve seen other Asian countries take. If you go back to the 1960s, Japan was the world’s leading shipbuilder. It was then replaced by South Korea, and now it seems to be China’s turn to replace South Korea. But furthermore, I can even believe that Chinese policies have made China’s shipbuilding industry bigger than what would otherwise be the case.
[00:22:39] But then we have to back up and again, ask ourselves, okay, that may be good for the shipbuilding industry, but what about China’s economy as a whole? Is that a useful, direction or allocation of resources? And I think there’s a lot of reason for doubt and there’s been academic. Work suggests that there is a fair amount of waste involved there.
[00:22:58] And then lastly, you may push back on me and say, well, okay, but then they get these ships set at cheaper rates, which is good to grow your economy, helps carry your exports, and whatnot. Well, that’s true. Everyone is out buying ships. Lots of people, say, in Europe and whatnot, they’ll buy Chinese-built ships.
[00:23:15] So. The Chinese are subsidizing, Europe, European and other people’s consumption of ships, which helps their industries. So I think you can make an arg a plausible argument. It’s been good for China’s shipbuilding industry, but I’m skeptical of the notion it’s been good for China’s economy overall.
[00:23:31] And then I’m also skeptical of the notion that absent, these industrial policy measures China would have, a very minor or modest shipbuilding industry.
[00:23:41] Joe Selvaggi: That’s a good point. The subsidies, and I think you referenced another paper where it effectively says what China’s put into shipbuilding, yeah, in subsidies, it really doesn’t get out at all in, in sort of profit, but the subsidy actually goes to ship consumers, which is the rest of the world.
[00:23:55] So China’s paying for the rest of the world to have cheap ships. and calling it industrial policy.
[00:24:00] Colin Grabow: Well, then, and one other thing I’ll add Joe, is, well, we can’t point to the United States and go, we’re not doing industrial policy in our shipbuilding industry. Well, of course, we did a whole podcast on the Jones Act, which is industrial policy.
[00:24:11] We have, protectionism that mandates Americans use U.S.-built vessels in domestic trade. We also have, tax credits, for people to encourage the purchase of U. S. ships. We have, the federal government provides financing for the purchase of U.S.-built ships, so let’s not pretend that, well, the reason China’s doing so well is because we haven’t tried, oh, yes, we very much tried industrial policy for shipbuilding.
[00:24:32] We’re just not doing it very well.
[00:24:34] Joe Selvaggi: Well, Dee, this is a good segue to my next myth, which you say that Senator Rubio characterizes, again, something that would appeal, I think, to both you and me, deregulation as industrial policy, as to say, when we make rules simpler or that’s industrial policy as well.
[00:24:51] I would agree. I think deregulation in general and lowering taxes is encouraging, but I wouldn’t call it industrial policy, would you? In a sense, industrial policy implies that it’s directed at a particular outcome in a particular firm, right? It’s not, let’s deregulate everything. It’s rather, let’s help out my favored industry.
[00:25:10] Am I right?
[00:25:11] Colin Grabow: Yes, exactly. As you point out, just the very name, industrial policy, suggests the promotion of particular industries. This isn’t, let’s promote, the U. S. economy writ large, it’s favoring certain industries because of national security reasons or whatever. And so it’s hard to mesh deregulation with this sector-specific approach.
[00:25:35] If, for example, we were to say, we’re going to reform the National Environmental Policy Act (NEPA), because that would be good. That’s good industrial policy. Well, the term just loses meaning because if you reform NEPA, that would apply to all sectors of the U.S. economy would benefit. And it’s hard for me to imagine saying, okay, well, this one sector is exempt or faces a different set of NEPA requirements than others. That’s just hard to contemplate. So I’m 100 percent for deregulation. In fact, I think that whenever the conversation, we have conversations about why is this particular industry, maybe not where we think it should be, or what’s holding that back, we need to look at the role of regulation and what obstacles may be in place that are imposed by the government before we start, getting involved in new government adventures, trying to promote that industry.
[00:26:22] Joe Selvaggi: Yeah. I often enjoy, having conversations with people, friends of mine who are on the, let’s see, solidly on the left. And we talk about local. Local industrial policy, if you want to call it that. Here in Boston, we love movies. We want movies to be shot here in Boston, and what we do to do that is we give them tax incentives, reduce their taxes, make it easy, streamline the deregulation, and make it easier to make a movie.
[00:26:42] I say, well, if we can accept that works for movies, why don’t we accept it for everything else, right? Like, why only movies? why not all industries? Is there a bad industry that we don’t want? why do we love movies? So, say more about, in a sense, the real secret here is Less regulation, less tax is beneficial to everyone and everything.
[00:27:02] Fair enough?
[00:27:02] Colin Grabow: Yes. I just, fundamentally, philosophically, I don’t think the government should be in the business of trying to, for lack of a better term, pick winners and losers. favoring certain sectors over others, absent some, perhaps absent some very compelling national security reason, which I certainly don’t think the movie industry, or the film industry falls under.
[00:27:25] I think, in that particular example, this is more about, hey, it’s pretty cool to see us, our city, our state, whatever, featured. And then you can see, the Hollywood actors move around and spend their money. and, so that has a certain appeal to people.
[00:27:36] But just as an economic proposition, I think my understanding of the literature on this stuff is, Pretty universally shows that it’s not a job creator. And, as you said, if we’re going to reduce taxes, well, let’s do it for everybody. and, they should all benefit from a low-tax environment.
[00:27:53] and, of course, it also concedes the argument that lower taxes are better. Beneficial, which I appreciate, but yeah, let’s extend that logic to everyone and just not, certain favored sectors. Of course.
[00:28:02] Joe Selvaggi: you mentioned just briefly, but I want to really dilate on this because I think people might be along with us for our argument all the way through these, myths so far, but they’re all going to have in that back of their mind, like, what about our strategic industries?
[00:28:15] Like, warships and bombers and missiles and all that kind of thing. don’t we have an interest in ensuring that at least those things that we might use in wartime are made in the U S and therefore should be protected and cultivated,
[00:28:29] Colin Grabow: Yeah, I think my answer to that is maybe.
[00:28:32] So for example, let’s go with the warship example. I don’t think, I think most people would agree. We probably don’t want to be in a position where, we say, well, it’s just. outsourced it to whoever’s the cheapest. Maybe that’s China, and then we’re dependent on China for all this construction of our naval vessels.
[00:28:48] It’s probably not a place we want to be, but maybe, South Korea, a treaty ally, maybe, and even then, it doesn’t make sense to buy all our ships from them, but maybe some of them, because when it comes to national security, yes, having, U. S. built ships, that’s a nice, that, that’s nice to have, but also say if you could buy, a ship for one third the price in South Korea.
[00:29:09] So your national, your defense budget goes further. So you can get, three ships for the price of one. Hey, that’s good for national security too. And there are some very important trade-offs that need to be weighed there. of course, this mentality of, well, we need to do it all ourselves.
[00:29:22] Well, this is, this ties in directly. this is the underpinning of the Jones Act, which we spent that episode on. The idea we need to be self-reliant in shipbuilding and shipping. And where has it gotten us? How are we doing there? And for those who didn’t listen to the episode, well, U.S. shipbuilding is doing terribly. last year, Just a single ocean-going cargo ship was delivered by a U. S. shipyard with the Jones Act in place because the industry has become so wildly uncompetitive. The number of ships in the fleet has been declining. The ships tend to be old because they’re so expensive because we have this mentality of self-reliance.
[00:29:56] Don’t go buy ships from other countries. So, self-reliance has value, but other things need to factor in here too. And I think a good compromise place that perhaps we can land is that, for certain products, yes, maybe it doesn’t make sense to buy from your adversaries, but what about your trusted friends and allies, like NATO partners, for example, and the fact that the Japanese and Chinese have some of the best shipbuilding industries in the world.
[00:30:21] To me, that seems like a resource to be harnessed. And the last thing I’ll say is, Understandable reasons people bring up the pandemic and say, well, what about that? we need to be self-reliant. Well, that’s one possible lesson, but two things. One is that another possible lesson is we should stockpile.
[00:30:37] We should be ready. So, let’s say China produces PPE, materials at the cheapest price. maybe the lesson there is you go load up, and stock up on stuff from them so that when the pandemic comes around, you’re prepared. You’ve got it on hand. So the other point to remember is that there’s actually been some literature on this that suggests that during the pandemic some countries we weren’t especially friendly with were not averse to supplying us with goods, because people like to make money.
[00:31:04] So we shouldn’t even take that as a given necessarily. It’s worth considering, I’m not sure these are automatic assumptions we should also make.
[00:31:12] Joe Selvaggi: And finally, I just wanted the last point that, Senator Rubio makes that you refute in your final myth is that he wants to reassure us that, he really is looking out for the best interests of Americans, so he wants to, leave the free market alone, but he wants to set, benchmarks and goals, where he thinks, rather than the free market deciding what should be produced, he’s got a better idea of, of, what the benchmarks are that would benefit all Americans.
[00:31:39] So, I hear this is a more familiar argument on the left, the Elizabeth Warrens and Bernie Sanders of the world saying, do we really need,17 kinds of deodorant? Let’s make what we need in the right amount, and, the free market can do its own thing within our parameters.
[00:31:52] What would you say to that?
[00:31:54] Colin Grabow: Yeah, and in Senator Rubio’s essay, he said something like, we won’t dictate to companies how to invest and compete. We’ll just tell them, here are the benchmarks you need to hit. and, for example, certain production benchmarks and who the accomplishments must benefit.
[00:32:09] And he says, for example, i. e. the American people. Well, that’s incredibly nebulous. I think that the American people obviously have a field day with something like that. I think anybody could justify something by saying, oh, this absolutely benefits the American people. So this is really no kind of benchmark.
[00:32:28] And what’s striking to me is this is the kind of language he uses. In a piece, this is a piece he obviously gave a lot of thought to and the best he can come up with is to benefit the American people. Imagine what kind of benchmarks will be set once lobbyists get their say when these things are hashed out in Washington back rooms.
[00:32:49] So this is just an absolute open invitation for people to manipulate this kind of industrial policy machinery, not to benefit the American people, but their particular industry, their particular company. and I have a hard time, with the notion that this is ultimately going to prove beneficial for the American people writ large.
[00:33:08] To me, that is not one of the lessons I take out of government interventions. this notion they’ll operate free of lobbyist influence and that they’re all only thinking of, the big picture and not narrow, special interests.
[00:33:20] Joe Selvaggi: Well, I don’t want to make this, show just talk about negative things that, Senator Rubio has said or negative things about industrial policy, though there are many.
[00:33:28] We could just have our audience put a negative sign next to everything Senator Rubio recommends and suggest that would be your preferred policy. Preference, what would you do again, I’d like to ask before we close out the king for a day question, which is, were you to be in charge or advising Senator Rubio or be King for a day?
[00:33:47] What do you think the federal government, could do proactively to ensure American jobs are plentiful? We are well paid, our industries are competitive and we prosper for generations. What would you recommend in general?
[00:34:03] Colin Grabow: Well, of course, the first thing we do is we repeal the Jones Act, as previously discussed, and then adopt, open and free trade more broadly and dispense with all other forms of protectionism.
[00:34:14] But more seriously, I think, well, I do in fact think the Jones Act would be good for U. S. manufacturing and for the economy as a whole, but are there plenty of other things that we can do? We need a sensible immigration policy that assures that the country’s manufacturers and other sectors can get access to the talent that they need.
[00:34:34] Reduce, barriers for talented immigrants and even unskilled immigrants to fill needs here in our country. We need a sensible tax policy that should be as flat as possible. Minimal number of distortions. We shouldn’t tax capital so much. We’ve made some progress there in recent years, so hooray for that.
[00:34:58] But then also, beyond the federal level, I think a lot of attention needs to be paid to, for example, zoning policies and housing. The fact that some of our most prosperous, economic centers, are very costly to live in, and there’s a real barrier to workers, taking part in some of that prosperity.
[00:35:16] Places like the Bay Area, up at where you live, Boston, New York City, places like that, these are economic engines, and we make it difficult for people to partake in that. so I think we can’t overlook efforts on the state and local levels. I think if we had a better health care system be more efficient, that would be a massive de facto tax cut. So much of the compensation that workers receive is in the form of health insurance. There’s, if we could free up some of that money to put in people’s pockets, that would be, I think a potential engine of prosperity. So there’s a lot, there’s a lot that can be done.
[00:35:49] I don’t have all the answers. So, you check with some of my colleagues on these different areas that do. but there’s certainly no shortage of things that can be done to improve U. S. economic efficiency and make this a more attractive place to invest and do business. And I think that when we talk about Improving U.S. manufacturing, and improving the U.S. economy, that’s where the conversation should start.
[00:36:10] Joe Selvaggi: Indeed. It sounds like you summarized the topics of the last six months of Hubwonk podcast, so I appreciate the intentional or unintentional shout-out to earlier shows.
[00:36:22] Colin Grabow: You guys have your fingers on the economic pulse, what can I say?
[00:36:25] Joe Selvaggi: Well, and I think, again, our listeners, contrary to say the dominant narrative that there are these mustache-twirling capitalists preying on poor consumers, I think, you know, when you step back, you realize we’re all producers, consumers, we’re all participants in the market, we all benefit from cheaper, better, more abundant products, and rather than have an industrial policy run by I guess, people like Senator Rubio, instead, a free market really is run by you and me, by individual choices of individual consumers, each expressing our own preference and interpretation of value.
[00:36:57] That sounds very uncomfortable for those people with seven PhDs or in places of power that the man on the street gets to decide, but I think that’s the thesis of what you and I might recommend.
[00:37:08] Colin Grabow: Absolutely. I think, we all get votes. People think about voting as a political exercise.
[00:37:12] Every day we have to vote with our dollars for the kind of world that we want to live in, the kind of goods that we want to see on our shelves, the kind of economy we want. so, yeah, I think that’s often overlooked and underappreciated aspect of capitalism and the market, the free market.
[00:37:26] Joe Selvaggi: So for our listeners who’ve, it piqued their interest and they want to maybe even challenge your ideas or reread them or, access all the links in all your papers, where can our listeners find you and read more about your work?
[00:37:38] Colin Grabow: Sure. Well, if you just Google my name, Colin Grabow, why the first thing that will come up is my Cato page and all my work is right there.
[00:37:44] I would also invite people who are on social media that like, Twitter. It’s my, social media drug of choice to go to, you can find me at C P Grabow, C P G R A B O W. And then I also just invite people more generally to go to our website, Cato.org, and I’m just one scholar. We have many other scholars here with all kinds of interesting insights on various topics, and I think listeners would enjoy a lot of what’s on our website.
[00:38:10] Joe Selvaggi: Well, I certainly enjoy your work and the work of Cato. you guys are, nonpartisan, so while you might get things wrong, you don’t get it wrong for the wrong reasons. You play, you call it like you see it, and that’s what I appreciate here on Hubwonk. Thank you very much for joining me today on Hubwonk, Colin.
[00:38:24] You’re a great guest.
[00:38:25] Colin Grabow: Well, thanks so much, Joey. I hope we can do this again.
[00:38:29] Joe Selvaggi: This has been another episode of Hubwonk. If you enjoyed today’s show, there are several ways to support Hubwonk and Pioneer Institute. It would be easier for you and better for us if you subscribed to Hubwonk on your iTunes Podcatcher.
[00:38:41] It would make it easier for others to find Hubwonk if you offered a 5-star rating or a favorable review. Of course, we’re grateful if you share Hubwonk with friends. If you have ideas, comments, or suggestions for me about future episode topics, you’re welcome to email me at hubwonk@pioneerinstitute.org. Please join me next week for a new episode of Hubwonk.
Joe Selvaggi discusses industrial policy, its aspirations, and limitations, with CATO Institute Associate Director Colin Grabow, in response to Senator Rubio’s thought piece advocating for a more active role for government in the economy.
Guest:
39th U.S. Poet Laureate Robert Pinsky for National Poetry Month
/in Education, Featured, Learning Curve, News, Podcast /by Editorial StaffRead a transcript
TheLearningCurve_RobertPinsky
Albert: [00:00:00] Well, hello, everybody. Hope you’re doing well today. Welcome to another episode of the Learning Curve podcast. I’m one of your co-hosts this week, Albert Cheng from the University of Arkansas. And this week, my co-host is Dr. Jocelyn Chadwick. Jocelyn, good to meet you, and great to have you on with me.
Jocelyn: It’s great to be with you, Albert. I am a college professor, high school English teacher before, and author. I work with teachers and students around the country, which I absolutely love, and glad to be here today.
Albert: yeah, I’m glad that you’re gonna be here with me for our guests coming up later Professor Robert Pinsky, former poet laureate actually as well.
So, I think we’re gonna have a lot of great discussions and conversations with him. And in case you didn’t know, April is National Poetry Month as well. So, I want to wish everyone a happy National Poetry Month and hope you spend some time engaging with excellent poetry. Well, before we get to [00:01:00] Professor Pinsky let’s talk some, some news.
And, I think you know, since we’re talking about poetry you wanted to share a poem as well to set the stage, so to speak. So, let me start with an article that was released in education next. It’s actually a study that Jonathan Plucker, Jennifer Madsen, and Paul DiPerna did.
It’s entitled, could our assumptions about who receives advanced education be wrong? And you know, I was fascinated by the study. I think they, took Data from some surveys that they did asking families about the kinds of ways they, get their kids to have, get advanced education.
So things like honors classes, formal GTE, GATE programs, and other means. And really the picture had some surprises. And so I want to direct readers to that, but you know, I want to bring this back to poetry really. You know, speaking of advanced education You know we have this, I guess, a conversation, a policy conversation these days of getting kids to have more access to, more rigorous learning opportunities and then that sort of thing.
But, you know, [00:02:00] one of the things that, struck me and I don’t know what your observation is, is that kids really aren’t covering poetry as much as we used to. I don’t know if I’m right about that. I think that’s my suspicion. And I’m reminded of uh, Really famous article by Dana Gioia, another poet laureate who talked about how poetry has kind of left our, not only just our schools, but the mainstream there’s like a 19, sometime in the 1990s, a really famous Atlantic article, but what’s your take?
Do you have any sense of this, Jocelyn, about just poetry instruction in our schools?
Jocelyn: Well, poetry is still a requirement. One of the great things about English language arts is that every student is required to take it from pre-k through 12th grade and poetry is in every part of the curriculum.
Now, the question becomes which poems are included, and which ones are deleted. And so, One of the favorite ones that I like, and it’s still, thank goodness, it’s still in the curricula, much of it depends on the districts and the states [00:03:00] and so forth, but because of today and, Professor Pinsky, I wanted to read Langston Hughes Harlem mainly because even though Hughes writes it during the Harlem Renaissance, the theme of the poem resonates so clearly today
Jocelyn: Our students as you mentioned earlier Albert some students feel that they’re not right for college some think they’re great for college But it’s all about dreams and aspirations.
And so here’s this point What happens to a dream deferred? Does it dry up like a raisin in the sun or fester like a sore and then run? Does it stink like rotten meat or crust and sugar over like an apple? A syrupy sweet? Maybe it just sags like a heavy load. Or does it explode? And he puts, does it explode in italics and I just think, okay, that is so phenomenal because it’s an emotional [00:04:00] poem.
It’s a psychological poem. And as I said, my comment is that it’s more relevant today than it was. He wrote it, and that’s what great literature’s supposed to do.
Albert: Yeah, yeah, yeah. No, and, great literature is, is memorable. I mean, I, remember this poem you know, coming across it for the first time in 11th grade we read it and actually we read the Play Raisin in the Sun as well alongside it.
And actually, I remember our English teacher also as part of that same unit integrated it with Death of a Salesman. And, you know, we talked about Just dreams deferred. And think it was an American lit class. So, so certainly talks about the American dream, and what that means.
And yeah, I think these poems and great literature, as you say they teach us a lot, you know, it’s not just about analyzing the poem, it’s actually learning from them, I think.
Jocelyn: Absolutely. That is absolutely correct.
Albert: Well, let’s not linger too much any longer and we’ll get to our, guest Dr. Robert Pinsky is on the other side of this break so stick around.[00:05:00]
Albert: Professor Robert Pinsky is the William Fairfield Warren Distinguished Professor at Boston University. From 1997 to 2000, he served as the 39th United States Poet Laureate and Consultant in Poetry to the Library of Congress. Pinsky is the author of numerous collections of poetry, including Proverbs of Limbo, Selected Poems, And The Figured Wheel, new and collected poems from 1966 to 1996, which received the 1997 Lenore Marshall Poetry Prize and was a Pulitzer Prize nominee.
He is also the author of [00:06:00] several prose titles, including his memoir, Jersey Breaks, Becoming an American Poet, Singing School, Learning to Write and Read Poetry by Studying with the Masters, Democracy, Culture, and the Voice of Poetry. And The Sounds of Poetry, A Brief Guide, which was a finalist for the National Book Critics Circle Award.
Pinsky published the acclaimed translation, The Inferno of Dante, which was a Book of the Month Club Editor’s Choice and received both the Los Angeles Times Book Prize and the Harold Morton Landon Translation Award. He earned his B. A. from Rutgers University and his Master’s and Ph.D. in Philosophy from Stanford University.
Robert, it’s a pleasure to have you on the show. Welcome.
Robert: Thanks for the invitation.
Albert: Well, so let’s start with your uh, before we get to poetry, your autobiographical prose work, Jersey Breaks, Becoming an American Poet. So this is a self-portrait that also offers a wider understanding of American [00:07:00] poetry and culture.
As we celebrate National Poetry Month, would you share with us your background and how you became interested in being a poet, and some of the formative literary and poetic influences on your life? What are some of those?
I grew up in Long Branch, New Jersey, which is a historic resort town. A great Winslow Homer here in Boston’s Museum of Fine Arts near where I live is entitled Long Branch, New Jersey.
Homer also did many engravings of fashionable people walking on the Long Branch boardwalk. The town’s slogan, Was and is America’s first seashore resort. I like to say it’s where the American idea of celebrity was invented. The old obsolete idea of high society went to Newport, Rhode Island, or Saratoga Springs, New York.
Long Branch is where the famous [00:08:00] gamblers and show business people, actors, and patent medicine millionaires came to be on the ocean. My grandfather, Dave Pinsky, was a tough guy, immigrant, and part-time criminal who had a bar, the Long Branch Broadway, his bar, the Broadway Tavern was across the street from City Hall and the police station.
My father, his son, Milford Pinsky. Was an optician, which is a trade. It’s you don’t, it’s not a medical degree. My father was an optician in Long Branch and my other grandfather, my mother’s father, my mother was born in Little Rock, Arkansas. They moved around. But he, when I knew him, my other grandfather was a kind of a part-time window washer, Taylor Venetian, blind man, and so forth.
And the town people used to say of the town, the [00:09:00] town isn’t what it used to be. And that sometimes meant the days when presidents came there. It’s where Garfield, James Garfield died after he was shot. They took him there for the ocean breezes.
Albert: But when I was there, it was an ethnic resort town with the honky tonk boardwalk and swimming pools and a lot of Italian and Jewish and Irish immigrant families.
And I grew up, as I like to say among people who were not college educated, but they were extremely proficient joke tellers, gossipers, complainers, and liars. that’s fascinating. And I suppose all that formed you and are who you are today because of them.
Robert: There’s no question of that language was highly prized in my family and in the family of their friends and my friends were not readers of Virginia [00:10:00] Woolf or James Joyce, but they had in Long Branch High School, which was attended by both my parents, that’s where they met all my aunts and uncles and my many cousins, my brother and sister all went to Long Branch High and Miss Davis, the English teacher there made sure that people they’d read a Shakespeare sonnet or two.
Albert: Well, so, let’s get onto some poetry, and let’s start with maybe some of the oldest poetry.
Robert: Enough with Shakespeare, let’s get to some poetry.
Albert: Hey, well, so let’s start with the oldest or one of the oldest sets of poems, the Psalms. So these are sacred songs, sacred poems, you know, they’re meant to be sung and they’re widely used.
In religious ceremonies today, prayers, weddings, funerals, you name it. And so yeah, could you talk about the enduring influence of the Psalms and in particular what teachers and students today should learn from them you know, with respect to the ability of words and language to inspire us?[00:11:00]
The Psalms are just
Robert: one example of how much the 16th-century English translation of the Hebrew Bible has affected the speech, the novels, the stories, the jokes, the screenplays, the sitcoms, and all the uses of language in the Hebrew Bible. American English and I often think, not only of the Hebrew Bible, when people say, does anybody read poetry anymore?
One has to be delicate about this. I don’t want to blaspheme but inform the Holy Quran. is in a metrical form. It is part of what makes it easy to memorize compared to some other text. And so when somebody says, do people read poetry anymore? I feel like saying, have you heard of the Hebrew Bible? Have you heard of the Holy Quran?
in the case of the Psalms, And [00:12:00] the other books of the Hebrew Bible, and including the Gospels, the Christian Bible we know those through a 16th-century translation that there have been many modern revisions and amendations of, none has had that eloquence and the writing from Emily Dickinson to Mel Brooks.
Has been profoundly affected by that 16th-century eloquence. It’s all over the place. And it’s the power of language that is partway towards the song, sometimes all the way towards the song. I have never had anybody challenge me when I say, I don’t know of any culture In which that is not a powerful, important factor.
It’s easier to see in a culture like the Eastern European or an [00:13:00] Arabic culture. But in American culture, where our virtue is our ability to mix and mingle and hybrid, it’s not as obvious, but it is still quite powerful. I believe.
Albert: Well, speaking of culture and American life you’ve spoken about how the restoration of democratic culture is essential to American life and the intellectual health.
Of our civilization. talk about Poetry’s role in this, for instance, how’s poetry from say, Homer or Virgil, Dante, I know you have that translation. We mentioned Shakespeare Milton, you can add him to the mix. how has their poetry played a role in, culturally elevating and unifying Western civilization?
Robert: The immigrant Jews of a generation before me and a generation before that often named their male children, Herbert, Sidney, Milton, I think that [00:14:00] reflected the authority and prestige of the English language In its roots and its greatest accomplishments in a diluted form that came to me in the sense that I didn’t reflect on it this way, but as a reflect on it now, when I went to college after rather trouble than undistinguished high school career, I liked that the teachers did not call me Robert.
My teacher, Paul Fussell, addressed me as Mr. Pinsky, as I called him Mr. Fussell, and part of that social, let’s call it equality rather than democracy, or that generosity, included that if I was reading a poem by George Herbert or John Milton I was reading what [00:15:00] generations of the ruling class and of the newly educated classes in my country considered the best.
I think that in my parent’s generation, among their friends, they were mostly tradespeople that had little stores, a plumber, an oil burner, a man, a carpenter By the eighth grade, they had read a lot more. People today often get into high school, and though they didn’t quote a lot of poetry to one another, they spoke a kind of lively, I’ve already said inventive English language that I think had a lot to do with wanting the best.
You might want the best woolen garments. The best-corned beef sandwich, the best motorcycle, and the best language had to do with classic English [00:16:00] beginning with the King James Bible, but certainly including Emily Dickinson and Walt Whitman and who knows all what. So these are not peripheral values.
Their central values. And it’s got to do with my patriotism. I’ve never had a strong group identity with any religion or ethnicity or certainly race, which is commercial, what I feel a kind of immediate recognition of that could be called patriotic is The idiomatic English that I have heard since I was a very small child.
The English I learned as a baby, and in which you and I now, Albert, are talking to one another.
Albert: Yeah. I’m absorbing all this in, [00:17:00] but so speaking of actually even some more wisdom here. So, in your book Democracy, Culture, and the Voice of Poetry just quote you here, poetry’s place in the United States is often presented, I think inaccurately as no place presents a note of anxieties about culture itself and about the idea of democracy.
unpack that for us, what do you mean by that? And, so what is poetry’s place and how did some of these 19th-century American poets really shape our forms of government today?
Robert: There are poets in African countries, in Asian countries, in South American Portuguese-speaking and Spanish-speaking countries, and all over the world, there are poets who, like their teachers and predecessors, were profoundly influenced by Walt Whitman.
As a place for poetry, I’ll suggest favoritepoem.org, [00:18:00], and the videos at favoritepoem. org, you will see no poets reading poems, and no professors lecturing or talking about poems. You will certainly not see actors reading poems. You will see. American readers, poems, mostly American, and you will see a construction worker have very cogent things to say about the Walt Whitman lines that he reads.
You’ll see the hockey hero of the American Miracle on Ice read a different Whitman poem and a Chinese filmmaker read the lines that he read in Mandarin that he gave to a girl he had a crush on when he was a teenager and that got him briefly into jail during the cultural revolution.
You will see a Cambodian American high school student in San [00:19:00] Jose read a poem by Langston Hughes. And how it makes her think about her family’s trial, and escaping the Pol Pot regime in Cambodia. So, again, if poetry is not important, Or Americans don’t read poetry.
are those people fake or invented? Is this part of artificial intelligence? No, they are real readers. So, I recommend, in response to the question, Albert, I do recommend favoritepoem.org.
Albert: yeah, I’ll be sure to check that out and hope others will as well. Well, one last question from me before I turned you over to Jocelyn and her questions. You just mentioned Langston Hughes and actually Jocelyn before um, you came on recited his poem Harlem.
And so, I think this is maybe our listeners might know that Langston Hughes did have some influence on Martin Luther King’s sermons and speeches. Certainly this one, I mean, [00:20:00] resonates with his talk on dreams and the future. So could you talk about just how a deep knowledge of, poetry hymns, spirituals, you know, how did these things inspire Martin Luther King in particular and his civil rights era leadership?
Robert: The American South was a surprisingly rich source, when people were invited to say a few sentences, to write a few sentences about a poem they loved, for that favorite poem project website, the Southern culture and the American culture. These, in particular, the Baptist churches, black and white, put a tremendous emphasis on music and on language, and American popular music American thought for good or ill American politics, have all been influenced by that culture, as [00:21:00] I understand it, compared to today.
The Presbyterians uh, the Episcopalians, the people who settled the South, lived far apart. You could not have one central place where people went to the church the authorities had set up. It was more reliant on very small, improvised prayers and on circuit riders. So that language and eloquence, what I’ve heard and read about the Southern culture music and eloquence were very important.
So I don’t really know a lot about this, but I would say it’s more that Langston Hughes. And Martin Luther King Jr. had shared roots, a very strong musical and poetical culture.
Jocelyn: I am so enjoying this, Robert. I mean, and being from the South, from Texas, you certainly honed [00:22:00] in on my background as a child growing up with all of this. So, in your book, The Sounds of Poetry, A Brief Guide, which I absolutely love. You wrote, quote, poetry is a vocal. This is to say, a bodily art, the medium of poetry is the human body, the column of air inside the chest, shaped into signifying sounds in the larynx and the mouth, unquote. Will you talk about how poetry is often best appreciated and most powerfully expressed when it is read aloud or performed?
Robert: I would say that the last word, or performed, gives me an opportunity to quibble. As at FavoritePoem. org, for me, when I write my poems, and when I read, I’m not concerned mainly with an expert performer. I perform my poems, sometimes with musicians. I have three [00:23:00] CDs where I do that. But performance, I’ll make the distinction, poetry is essentially a vocal art, for sure, not necessarily, but sometimes a performative art.
So the voice I am most interested in is in the title of the book Democracy The Culture and the Voice of Poetry voice. I am thinking of the voice of every reader, possibly not even reading aloud, but imagining what it would feel like to say all out of doors, look darkly in at him or further in summer than the birds pathetic from the grass, a minor nation celebrates its unobtrusive mass.
It’s each reader. Saying aloud or imagining saying aloud the words [00:24:00] of Dickinson or whoever. I’m very proud of the subtitle, Sounds of Poetry, a brief guide. I’ll use my brief example from that book of how physical art is. It’s a two-line 19th-century poem by a poet most people have never heard of.
This is a two-line poem. On love, on grief, on every human thing, time sprinkles Lethe’s water with his wing. when I say that poem, three times at the beginning, I physically, in my body, put my upper teeth onto my lower lip. On love, on grief, on every human thing, time sprinkles Lethe’s water with his wing. I don’t think [00:25:00] Walter Savage Lander was thinking about my upper teeth or anybody else’s or lower lip.
But he was an expert, and after many years of having read that poem, one day when I was reading it to myself, I noticed that, and it is confirmation for me that this is a bodily art, and This Walter Savage Lander, this upper class, very learned Englishman in the 19th century was orchestrating what my not very learned, not upper class, not English, not 19th-century body was doing.
On love, on grief, on every human thing. Moreover, in the second line, I end, as in the orchestration that Lander created without having to think about it, I purse my lips three times. Time [00:26:00] sprinkles Lethe’s water. With his wing, and that’s what I did is like analyzing music or analyzing the way somebody hits a tennis ball or shoots a basketball, it’s breaking down something that is done well to try to understand it, and it is, in all of these examples, bodily.
Jocelyn: I’m familiar with the poem, but I love your brilliant reading of the excerpt. that is just a joy. this is a really, I’m having a great day here.
Robert: Thank you, Jocelyn.
Jocelyn: let’s move on to something else. Well, another favorite guy of mine, is Plato. Plato wrote, quote, musical training is a more potent instrument than any other because rhythm and harmony find their way into the air.
inward places of the soul, on which they mightily fasten, imparting grace, and making the soul of him who is rightly educated, grateful. [00:27:00] Unquote. So Robert, will you share a few thoughts about what 21st-century Educators can learn from Plato’s ancient wisdom regarding the power of poetry?
Robert: There was a time when we thought it was very funny to learn by rote, and we laughed at sometimes in Asian countries, the children all saying something together in unison and memorizing, and for me, it’s related to another bodily practice that’s being revived cursive writing.
It turns out the physical act of writing cursively by slowing us down, can make information penetrate more deeply or more effectively. And when the favorite poem, Project was more active. I often heard about children, but also people who are suffering from dementia or terrible stroke. And to the family’s amazement, [00:28:00] the person somehow as a child had memorized a lot of, Oh, say it was Longfellow and now could recite as is true with speech defects stammerers and do not stammer when they sing or when they recite poetry. Possibly there’s a lesson in that. In my mind, it’s similar to the lesson that phonetic learning to read is quite effective. And again, may last longer because it is bodily Plato is right. I would just quibble pedantically as I quibbled with the word performative.
I think in the quotation, I don’t know what the Greek is it’s harmony and cadence. I would add melody. I think it’s a neglected aspect of poetry is that every sentence has a melody. We tend to [00:29:00] talk a lot about rhythm in poetry and clearly harmony has to do with like sounds, like rhyme or assonance.
But every sentence has a melody, Robert Frost’s letters about sentence sounds are very good at this. Emily Dickinson demonstrates it all the time in the poem that I quoted before Further in Summer than the Birds. Yeah, there’s harmony between the vowel and further in birds, but yada da da da da da da.
Pathetic from the grass, ya da da da da. A minor nation celebrates yada da da da da. So there is melody, harmony, and rhythm in music. It is also in language.
particularly in the degree of intensity in language that we call poetry.
Jocelyn: As you were [00:30:00] talking, I was thinking about Robert Frost, and then you said Robert Frost. So, wow. I don’t know any other accolades to keep saying, so I’ll just keep moving with the questions. I’m just enjoying hearing your thoughts.
.
Jocelyn: In addition to being a world-renowned poet, you’ve also won awards and wide acclaim as the first translator of Dante Alighieri’s masterpiece, Inferno. Will you discuss translating Dante into English and some elements of Inferno, which you hope modern readers will draw from your translation?
Robert: I’ll return to the idea of idiom and how When I hear a person speak, if I recognize the idiom, it’s not only American, all the stronger, if it’s Northeastern, if it’s New Jersey, I feel at home with that person, even if the person is saying something I disagree with violently, or saying something awful, I [00:31:00] also know This is part of my world.
I recognize this person culturally and it’s in many ways much stronger than the more obvious aspects of physical appearance, age, color, ethnicity, all of that. The language is very powerful to me and the Inferno of Dante comes, as I understand it, very much from his experience of exile.
Thank you. He was an exile and the home city in Italy of his time it was like a family, a nation. It was extremely important. He was unjustly accused of political wrongdoing in a post he held and he spent his life and wrote. His celebrated account of [00:32:00] hell, purgatory, and heaven in exile, and when, after it became an extremely well-known work the people running Florence at the time invited him back, all he had to do was apologize for having done something wrong.
He hadn’t done anything wrong. So, painfully, He said, no, I want deeply to be back at my birthplace, my home city, but I will not lie in order to get there. So he declined that and the fact that this is an epic scale work and a mental work that embraces everything in the world and he wrote it in Italian.
And in an Italian that often comments on the regional languages of people, memorably, one of the damned souls that converses with Dante says, I can tell from the way you talk I can, I think you’re a [00:33:00] Florentine like me. And indeed that is the case. So the importance of language, not as expressing, but as a central part of one’s communal identity and personal identity, is powerfully implicit in the Inferno.
He didn’t write it in Latin. He wrote it in what was still being invented, which is the idiomatic, normal language of his time and place and his native city.
Jocelyn: Brilliant. Finally, Dante’s Inferno is among the greatest poems ever written. Absolutely. It describes the journey of a fictional version of Dante through hell, guided by the ancient Roman poet Virgil.
Will you share with us what teachers and students in the 21st century can learn from [00:34:00] this timelessly classic poem that will help them live more fulfilling lives?
Robert: The theme of the Inferno. In my way of understanding it, is the most common failure of spirit on college campuses in the United States.
the absence or lack of self-wounding, and that was the Thomistic definition of sin for Dante. In that Catholic tradition, sin is an absence. It’s a negative evil is a failure of being, so that each person’s sin is as though you’re ripping a hole in yourself. You’re making your soulless.
And Dante’s sin that he is most preoccupied with, in himself, implicitly, is sin. Is the one that prevails most amongst undergraduates Dante, the English word for it in [00:35:00] 15th, 14th, 16th centuries was one hope, failure of faith, in our modern jargon, we call it a failure of faith. Depression. I consider Inferno by Dante the greatest work ever written about depression.
Jocelyn: That I, okay. I don’t have words anymore, Robert, to tell you how much this is really helping me with the work that I have loved for so long. And I, I think that you’re saying depression gives me an entirely different perspective, which means I’ve got to go back and reread Inferno for the umpteenth time, which I intend to do.
Robert: He says in the second canto, which is really the first canto of Inferno because the first canto is a preface to all three books, making a hundred, he says, I have the sin of fear.
Jocelyn: Yeah,
Robert: He resolves to go on a journey through hell, purgatory, and heaven. And then at the beginning of the very next canto, [00:36:00] having made that promise and commitment, he says, I don’t know if I can do it.
I don’t have confidence. He despairs. He gets cold feet, and I recognize that, and I believe many others recognize it. As well, he presents the writing of this large ambitious poem as a commitment in the opposite direction of depression and despair, and dealing with despair is the most vicious of all crimes because it keeps you from thinking you can be saved.
You can do anything better, right? I should add that I am not a learned translator. If the virtues in my translation of Inferno have to do with what I’ve said about idiom, and it’s physical, it’s not a feat of linguistic ability. It’s a metrical feat. It has to do with the sounds and creating a plausible, American idiom that doesn’t go out [00:37:00] of its way to be contemporary, but that is credibly somewhere between Dante’s Italian and the way I speak to people every day.
It’s physical, it’s as though I’m a horse, is what I did in translating in creating an English version of Inferno. It was not a feat of understanding the Italian language for Dante. I was like being a horse. Let’s leave it at that.
Jocelyn: Okay, let’s leave it at that. Your award-winning book, Figured Wheel, New and Collected Poems 1966 1996 includes poems like Avenue, The City Elegies That Portray Urban Safety and Pain, and the title poem, The Figured Wheel. and history of my heart express images of shopping malls, prisons, the environment, and human desire. Do you want to talk about the significance of a few key poems from this [00:38:00] collection?
Robert: Well, I, probably because I’ve opened it before to a poem of mine that people have noticed before. maybe it’s an appropriate finish. And, it has got a lot to do with commerce. Not only with shopping, also manufacturing, in the wonderful, uh, public television series, Poetry in America, there’s an episode of that series devoted to this poem, my poem, Shirt, in which, workers in the garment factory, and a famous, shoe designer. talk about the poem in ways that please me a lot. So do we have time for me to read it maybe as our finish?
Jocelyn: We would love to hear you read an excerpt from Shirt.
Robert: Shirt. The back, the yoke, The yardage, lapped seams, the nearly invisible stitches along the collar turned [00:39:00] in a sweatshop by Koreans or Malaysians, gossiping over tea and noodles on their break, or talking money or politics, while one fitted this armpiece with its over seam to the band of the cuff, eye button at my wrist, the presser.
The cutter, the ringer, the mangle, the needle, the union, the treadle, the bobbin, the code, the infamous blaze at the Triangle Factory in 1911, 146 died in the flames on the ninth floor. No hydrants, no fire escapes. The witness in a building across the street watched how a young man helped a girl to step to the windowsill, then held her out away from the masonry wall and let her drop, and then another, as if he were helping them up to enter a streetcar, [00:40:00] and not eternity.
A third, before he dropped her, put her arms around his neck and kissed him. Then he held her into space and dropped her. Almost at once, he stepped to the sill himself. His jacket flared and fluttered up from his shirt as he came down, air filling up the legs of his gray trousers. Like heart cranes fluttering.
Shrill shirt, ballooning, wonderful. How the pattern matches perfectly across the placket and over the twin bar-tacked corners of both pockets like a strict rhyme or a major chord. Prince, Prince. Plads, checks, houndstooth, tattersall, madras, the clan tartans invented by mill owners inspired by the hoax of Oshun to control their savage Scottish workers, tamed by a [00:41:00] fabricated heraldry.
McGregor, Bailey, McMartin, the kilt devised for workers to wear among the dusty clattering looms. Weavers, carters, spinners, the loader, the docker, the navvy, the planter, the picker, the sorter sweating at her machine in a litter of cotton as slaves in calico head rags sweated in fields. George Herbert, your descendant is a black lady in South Carolina.
Her name is Irma, and she inspected my shirt. Its color, and fit, and feel, and its clean smell have satisfied Both her and me, we have called its cost and quality down to the buttons of simulated bone. The buttonholes, the sizing, the facing, the characters printed [00:42:00] in black on the neckband and tail. The shape.
The label, the labor, the color, the shade, the shirt.
We’re just having that you know, you just have to sit in the silence to receive that at the, at the end of that. So thanks for that wonderful reading of your poem and, and for spending your time with us today.
Robert: I’ve had a good time. Thank you.
Thank you very much, Jocelyn.
Jocelyn: It’s been wonderful. Thank you so much, Robert.
Albert: I really enjoyed that interview as well. Well, that’s going to take us to the end of our show this week. But before we sign off first there’s the tweet of the week, which comes from Liz Willen from the Hechinger report. The tweet simply says interesting findings on teacher shortages and incentives to keep them.
and I’ll refer folks to that article. I think it’s a fascinating summary. About what some districts and states are doing with financial incentives you know, teacher compensation packages to, try to attract teachers to their schools. whether it be high-needs areas or areas where there are shortages.
So, anyway, I will refer readers to that. think this is a nice summary piece of some of the latest research on this topic. So check that out on our website for next week. Stick with us because we’re going to have Dr. Ashley Berner from Johns Hopkins University talk about her new book on educational pluralism.
And finally, before we sign off, Jocelyn, it was great to co [00:44:00] host with you. Glad to run the show with you this week.
Jocelyn: I always enjoy helping Pioneer Institute. So it was, and it’s always an honor.
Albert: All right. And of course, thanks for your reading again Langston Hughes, and for everyone else again, happy National Poetry Month pick up a poem or two in the next couple of days and see what you might learn from it.
Enjoy. See you next time.
This week on The Learning Curve, guest co-hosts University of Arkansas Prof. Albert Cheng and Dr. Jocelyn Chadwick interview renowned poet and Boston University professor, Robert Pinsky. He discusses his memoir Jersey Breaks: Becoming an American Poet; the enduring influence of sacred texts like the Psalms; and the wide cultural significance of classic poets like Homer and Shakespeare. Through his book Democracy, Culture and the Voice of Poetry, he shares his views on the vital role of poetry in shaping a vibrant American democracy. Pinsky also talks about the power of poetry in inspiring social change, the importance of reading poetry aloud, and the timeless wisdom embedded in classic poetry, like his translation of Dante’s Inferno. In closing, Pinsky reads his poem “Shirt.”
Stories of the Week: Albert addressed an article from Education Next questioning the conventional wisdom around advanced education; Jocelyn recited the poem “Harlem” in celebration of National Poetry Month.
Guest:
Robert Pinsky is the William Fairfield Warren Distinguished Professor at Boston University. From 1997 to 2000, he served as the thirty-ninth United States Poet Laureate and Consultant in Poetry to the Library of Congress. Pinsky is the author of numerous collections of poetry, including Proverbs of Limbo; Selected Poems; and The Figured Wheel: New and Collected Poems 1966–1996, which received the 1997 Lenore Marshall Poetry Prize and was a Pulitzer Prize nominee. He is also the author of several prose titles, including his memoir Jersey Breaks: Becoming an American Poet; Singing School: Learning to Write (and Read) Poetry by Studying with the Masters; Democracy, Culture, and the Voice of Poetry; and The Sounds of Poetry: A Brief Guide, which was a finalist for the National Book Critics Circle Award. Pinsky published the acclaimed translation The Inferno of Dante, which was a Book-of-the-Month-Club Editor’s Choice, and received both the Los Angeles Times Book Prize and the Harold Morton Landon Translation Award. He earned his B.A. from Rutgers University and his M.A. and Ph.D. in philosophy from Stanford University.
Tweet of the Week:
https://x.com/L_willen/status/1777315434179506289
A Practically 100% Guaranteed Free Ride
/in News /by Mary ConnaughtonThe House wants to transfer $314 million to the MBTA for operations and the governor wants to transfer $254 million. Perhaps those numbers could be made a bit smaller if the MBTA and Keolis do their job: collect fares.
Let me hedge. My comments are based on what I observe. I take an express train to Boston three times a week from Framingham. For the most part, fares for Framingham riders are collected. They are for those boarding in West Natick, too. But after the train crosses into Boston, fare collection seems to simply stop. Boston Landing, Lansdowne and Back Bay riders all travel for free as the train ventures east.
On the return trip, from what I see, it’s the same story. Get on in Boston, get off in Boston no charge.
So the worst kept secret in Boston is out.