Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 1: I'm Joe Wisenthal and I'm so Tracy. Obviously, we've been
Speaker 1: covering this NonStop story of the virus and the crisis
Speaker 1: from different from various economic and market angles for the
Speaker 1: last several weeks now, but today we're going to do
Speaker 1: something a little bit different than some of our recent episodes.
Speaker 1: What are we doing today? We're actually going to be
Speaker 1: talking to someone who's involved in formulating the policy response
Speaker 1: how the US anyway is addressing the economic crisis that's
Speaker 1: coinciding with the public health crisis. Right, So it sounds
Speaker 1: like this is our chance to sort of put a
Speaker 1: lot of the theory that we've been discussing into actual practice.
Speaker 1: And it's one thing to talk about what governments should do, uh,
Speaker 1: and of course we do quite a lot of that
Speaker 1: on the podcast already, but it's quite another thing to
Speaker 1: talk about what governments are actually doing or how they
Speaker 1: should put those ideas into actions. Yeah, that's exactly right,
Speaker 1: Like there is this general idea out there that we know.
Speaker 1: He's like, Okay, there needs to be a fiscal response
Speaker 1: to this crisis, which we've seen to quite a large degree.
Speaker 1: In some countries, people sort of overwhelmingly agree that it
Speaker 1: can't just be monetary. There's this idea I would say,
Speaker 1: I was sort of freezing or winter arizing the real
Speaker 1: economy so that people can continue to make their payments,
Speaker 1: make payroll things like that while their bills are coming
Speaker 1: to so that they could simultaneously pay their bills but
Speaker 1: now work right. And of course with all of those ideas,
Speaker 1: there are sort of all these different trade offs that
Speaker 1: policymakers have to start considering. And a big one that
Speaker 1: comes up time and time again is the idea of
Speaker 1: moral hazard. You know, are you going to end up
Speaker 1: rewarding people for bad behavior? How you calibrate one program
Speaker 1: so that it doesn't interfere with another program? How do
Speaker 1: you incentivize people to take up the programs that you
Speaker 1: actually want them to take up. And of course all
Speaker 1: of this is happening under immense time pressure, during the
Speaker 1: time of coronavirus, when everyone is quite stressed and worried
Speaker 1: about a lot of things. Right, there's so many aspects
Speaker 1: of this current economic crisis that are extraordinary. The time
Speaker 1: pressure is one. The scale of the layoffs that we've seen,
Speaker 1: at least in the US have been so far off
Speaker 1: the charts that past periods don't even register. Is a
Speaker 1: blip if you were to say, look at initial claims.
Speaker 1: And because this isn't just a normal recession, because it's
Speaker 1: a complete shutdown, so many whether it's households or businesses,
Speaker 1: are essentially in the position in where one day they
Speaker 1: were doing fine and then the next day they were
Speaker 1: on the brink of crisis and layoff right exactly. So
Speaker 1: the scale is different, the speed is different. Possibly you
Speaker 1: could say that our political situation is a little bit
Speaker 1: different in the US at the moment. So who are
Speaker 1: we talking to about all of this? Well, I think
Speaker 1: what you said about the politics is exactly right, because
Speaker 1: one of the things that we saw during the rush
Speaker 1: to pass the legislation at the end of March was
Speaker 1: sort of, at least temporarily, a high degree of political
Speaker 1: unanimity and politicians on sort of both sides of the
Speaker 1: aisle agreeing that whatever people think about government spending, deficits
Speaker 1: moral hazard, paying people who are unemployed, and so on,
Speaker 1: they all put their views on that aside, at least temporarily,
Speaker 1: and we'll see how long that last. So today on
Speaker 1: the podcast, we are going to be talking to a
Speaker 1: very active policy maker in this space. He's Florida's Senator
Speaker 1: Marco Rubio. He's been championing, in particular the small business
Speaker 1: loans aspects of the deal that attempt to keep people
Speaker 1: on their payrolls during this crisis. Senator Rubio, thank you
Speaker 1: very much for joining us at this extraordinary time. In
Speaker 1: your view, let's just sort of set the stage right now.
Speaker 1: Do you have a sense for how well the payroll
Speaker 1: protection part of the CARES Act is working? And do
Speaker 1: you have visibility and do how much money has been dispersed.
Speaker 1: Are you able to see that data billions of dollars
Speaker 1: have been dispersed. We won't. I think one of the
Speaker 1: fundamental misunderstanding because people think that the money being dispersed
Speaker 1: is coming out of the treasury. The money the treasury
Speaker 1: that we allocated, that we appropriated in the bill is
Speaker 1: guarantees that the cash that's actually dispersed it is from
Speaker 1: the banks, so it's the bank's cash. And then this
Speaker 1: money is there on the federal side to guarantee the vaults,
Speaker 1: and that's why they're making them. So unless the banks
Speaker 1: are announcing it publicly or updating it regularly. You know,
Speaker 1: in a public form, we're not going to have a
Speaker 1: total real time insight into what's been dispersed. Suffice it
Speaker 1: to say, like JPMorgan this morning had already dispersed nine billion.
Speaker 1: We know that they have to disperse it within ten
Speaker 1: days of approval. So you're gonna see a big bumping
Speaker 1: in those, uh in those disbursements here coming up as
Speaker 1: we're getting on the you know, the ten day mark
Speaker 1: of the first approvals, and in some cases we're at
Speaker 1: it and for some people, and so anyway, the it's
Speaker 1: moving along. My sense of it is, I think we
Speaker 1: have to have some perspective here. Let's do the timeline. Okay,
Speaker 1: Seventeen days ago, on March seven, the President signs the
Speaker 1: Cares Act, which creates a three hundred and fifty billion
Speaker 1: dollar brand new program that basically half to businesses in
Speaker 1: America are eligible for. Seven days later, they begin taking applications,
Speaker 1: and eleven days ten to eleven days after that, they're
Speaker 1: dispersing billions of dollars to cover the paychecks of millions
Speaker 1: of American workers. All of that in the span of
Speaker 1: seventeen days. I know of no other program with this
Speaker 1: reach that has moved that quickly, and I think it's
Speaker 1: a combination of things. It's the fact that we're relying
Speaker 1: on the private sector through banks to distribute it, and
Speaker 1: a lot of hard work. And yeah, there were some
Speaker 1: issues in the early part of it, because when anytime
Speaker 1: you start something that's big and new, you're going to
Speaker 1: have some issues. But I don't think you can sit
Speaker 1: back seven. I mean it's it's dispersed funds faster than
Speaker 1: the I R S did two taxpayers. It's dispersed funds
Speaker 1: faster than the direct payments to entire industries. So you know,
Speaker 1: I think it's a program that's getting better every single day.
Speaker 1: It will never be without issues, because nothing that you do,
Speaker 1: especially in a crisis emergency situation, is going to be perfect,
Speaker 1: but it's going to be very good and it's going
Speaker 1: to continue to improve. Just on the subject of scale,
Speaker 1: even though the Treasury isn't actually dispersing this money, it is,
Speaker 1: as you say, just guaranteeing the loans. The program is
Speaker 1: never the less capped at three billion, and it's also
Speaker 1: capped at length. I think it's eight weeks. Would you
Speaker 1: expect that cap to get lifted at some point? Well,
Speaker 1: the eight week issues. From the time you get the disbursement,
Speaker 1: you're supposed to spend it on payroll and then and
Speaker 1: the rationale for that is the purpose of this program
Speaker 1: was to uh keep employees attached to their employers. We
Speaker 1: had companies coming to us saying, we don't want to
Speaker 1: let go of our workers, even if the government's forced
Speaker 1: us to close. We value our workers and we want
Speaker 1: to continue to pay them the way other companies are,
Speaker 1: even if they're not working full time and in some
Speaker 1: cases not even coming in at all. We don't want
Speaker 1: to lose them. We feel bad for them, and I
Speaker 1: think that's especially true in small business. And so we said, well,
Speaker 1: we're going to provide a vehicle for that to happen
Speaker 1: so people don't have to go into the unemployment system.
Speaker 1: And but in order to do that, you have to
Speaker 1: sort of define what the time period is so you're
Speaker 1: not sitting on this for two years and in fact
Speaker 1: not hiring people back. In terms of the amount, the
Speaker 1: amount is important because once once the amount that the
Speaker 1: Treasury and the government has to guarantee loans is reached,
Speaker 1: the banks will stop issuing these loans. They're not going
Speaker 1: to issue loans unless the guarantee is there. That's why
Speaker 1: it's important to replenish these funds. So look, it's so
Speaker 1: I can't tell you a specificity a specific day, but
Speaker 1: if you look at it, we're started the day about
Speaker 1: two hundred over two d forty billion dollars of of
Speaker 1: commitments already, So it's hard to imagine finishing the week
Speaker 1: without being very very close to that number. Given now
Speaker 1: the fact that you've got UM pay pals now in
Speaker 1: UM you know, a bunch of other fencins are in,
Speaker 1: and we're keep adding community banks. So I think the
Speaker 1: pace in the scope of this is going to pick
Speaker 1: up pretty quickly. M So, just to talk politics for
Speaker 1: one second, UM, there seems to be a wide consensus
Speaker 1: that it's worth topping up the program. Democrats want to
Speaker 1: pair this with more money for city states hospitals, maybe
Speaker 1: more on the you ey side. Do you see a
Speaker 1: path forward if it's uh, the program is going to
Speaker 1: soon run dry, whether it's this week or next, to
Speaker 1: replenish it and come to some sort of agreement with
Speaker 1: the Democrats again with kind of with the same level
Speaker 1: of unanimity that we saw the first time the first
Speaker 1: go round. Yeah, except that I don't know why the
Speaker 1: two have to be paired. I think the issue of
Speaker 1: paycheck protection, we know that's very simple. That's just as
Speaker 1: a program that's now up and running, we have a
Speaker 1: pretty good sense of how to outlay it, and it
Speaker 1: just needs additional funds so we don't have to stop
Speaker 1: with and guarantees. Every single member of the Senate Republican,
Speaker 1: Democrat and Independent has hospitals and has cities who are
Speaker 1: not even receiving direct monies from the original Cares Act,
Speaker 1: and we want to help them to The problem is
Speaker 1: you've got to design a formula for distributing the funds.
Speaker 1: You know, what is the formula that's going to be
Speaker 1: used to determine how much they say, with thirty thousand
Speaker 1: people gets versus a city with two hundred thousand people,
Speaker 1: And that's going to take some time to devise a
Speaker 1: formula that works. I'll give you as an example. You know,
Speaker 1: we passed this care Is Act and it had money
Speaker 1: being distributed, but because of the unique structure of its finances,
Speaker 1: Jackson Memorial Hospital in Miami, Florida, the second largest hospital
Speaker 1: in the country, the second largest public hospital in the country,
Speaker 1: was being badly hurt by the formula that that they
Speaker 1: came up with an HHS. It was fixed. But that's
Speaker 1: just an example of why when you distribute that amount
Speaker 1: of money, you have to have a formula in place
Speaker 1: that everybody signs out. That's more complicated than saying, let's
Speaker 1: just put more money into a program that's up and
Speaker 1: running and we know how it's distributed, so that that's
Speaker 1: the that's the issue with that one. It's not that
Speaker 1: anyone's against it, is we got you know, everyone wants
Speaker 1: to know how that's how it's going to be designed,
Speaker 1: and how we're going to determine how much cities get.
Speaker 1: Is it per capita? Is it there's population size alone,
Speaker 1: and not account for some of the costs they have.
Speaker 1: You know, in our intro, Joe and I were talking
Speaker 1: a little bit about the difficulty of calibrating public policy,
Speaker 1: especially under this kind of time pressure, and also balancing
Speaker 1: it with a lot of the other initiatives that the
Speaker 1: government is currently unrolling. So I was wondering, when it
Speaker 1: comes to the p p P, how do you balance
Speaker 1: that with the expanded unemployment benefits, Because of course there's
Speaker 1: a discussion now that some workers might be better off
Speaker 1: taking unemployment rather than being kept on the payroll. And
Speaker 1: these are all decisions and discussions that small businesses are
Speaker 1: having to have at the moment right well. And I
Speaker 1: think the answer to that question is that since you
Speaker 1: can't have both, you can't you can't both be on
Speaker 1: the payroll of your employer to the p p P
Speaker 1: and also on unemployment. Um, whatever you're spending on one side,
Speaker 1: you're you're saving on the other. So um. But it's,
Speaker 1: as you said, it's very difficult right now to predict
Speaker 1: exactly what people are going to do because there's no
Speaker 1: sustinct as business. There's every business makes a different decision.
Speaker 1: There's not one set across the board of however one's
Speaker 1: going to decide. So we have seen I mean, look,
Speaker 1: there are going to be cases of people that decide
Speaker 1: I'm not going to go back to work because in
Speaker 1: my state, I'm actually making more on unemployment than I
Speaker 1: would by working. Obviously, there's an impediment to that, and
Speaker 1: that is that many states have had their systems crash.
Speaker 1: So there I know people have been waiting for three
Speaker 1: weeks to get into the Florida system because the phones
Speaker 1: are being answered. You know, the website was overwhelmed, etcetera.
Speaker 1: Some people are gonna say, you know, I'd rather just
Speaker 1: have my job back because I know I'm gonna get
Speaker 1: paid and it's going to be there when this all ends.
Speaker 1: The unemployment benefit goes away in four months, some people
Speaker 1: and some businesses are going to decide when I was
Speaker 1: a perfect time to lay people off. You know, we
Speaker 1: have a issue emerging with the hotels and restaurant particular hotels,
Speaker 1: A lot of them came to us and asked for
Speaker 1: special language. Many of them are franchises of big companies,
Speaker 1: and but they're not owned by the company, so we
Speaker 1: created special language for them to be included in the
Speaker 1: Small Business Protection Program. And now some of them are saying, well,
Speaker 1: we want you to change the law. We don't want
Speaker 1: to use the money for payroll. We want to use
Speaker 1: it to pay franchise fees and things of that nature.
Speaker 1: And I was like, well, that's why it's called the
Speaker 1: Paycheck Protection Act. The reason why we carved you in
Speaker 1: this because you told us you wanted to keep your
Speaker 1: workers on payroll even if you had no people staying.
Speaker 1: We're not going to do that. So you know, there's
Speaker 1: a lot of that kind of stuff going on. And
Speaker 1: I'm not saying they're not going through tough times, but
Speaker 1: our program the wrong one for them to come to
Speaker 1: for for the assistance they're seeking. If it's about keeping
Speaker 1: people on the payroll, well for it. So the bottom
Speaker 1: line is, in an emergency, unprecedented situation, you're going to
Speaker 1: have a lot of unanticipated things come up. And what
Speaker 1: we have to do is are on the side of action.
Speaker 1: The worst thing that could happen is we don't do
Speaker 1: anything real quickly. While we're in this situation now, and
Speaker 1: there's this widespread view that it's nobody's fault that we
Speaker 1: want to keep jab businesses and payrolls alive to get
Speaker 1: through this health crisis, why not apply some of the
Speaker 1: principles of payroll protection to some of the larger companies,
Speaker 1: more direct cash grants to larger corporations that are currently
Speaker 1: getting helped maybe through the FED programs and so forth,
Speaker 1: to either through suasion or force have them keep more
Speaker 1: people on the payroll. Well, I think if this is
Speaker 1: a model that we can make work. Some people would
Speaker 1: argue that, and in fact, I remember nearing the end
Speaker 1: of our deliberations and Senate one of the senator lunches
Speaker 1: in the Republicly conference. We had a number of people
Speaker 1: stand up and say, hey, why aren't we doing that
Speaker 1: for everybody? You know? But of course I'm the chairman
Speaker 1: of the Small Business Committee, and all we we took
Speaker 1: we so we we didn't have that in our mandate.
Speaker 1: We actually took on additional things like the no profit
Speaker 1: sector and independent contractors and ten ninety nine employees that
Speaker 1: qualifying or this as well for the first time. So
Speaker 1: but I agree, I mean, I think there's a model
Speaker 1: there that could be followed. Obviously a lot more money,
Speaker 1: because when you're talking now about entities that employed thousands
Speaker 1: of people, you're not talking about ten billion dollar loans
Speaker 1: will pay roll over eight weeks. You're talking about multi
Speaker 1: multibillion dollar loans. But I think it's a concept that
Speaker 1: could theoretically work in those settings as well. I think
Speaker 1: that the notion in that front was just um trying
Speaker 1: to Most of those companies were just asking for access
Speaker 1: to some credit vehicle that they could use to ride
Speaker 1: through the short term of what they were facing. But
Speaker 1: but I agree, I mean, I think it's a model
Speaker 1: that could be applied to different businesses of different sizes.
Speaker 1: Have you had any discussions with anyone else in government
Speaker 1: about expanding it. Are people asking you how it's going
Speaker 1: with the small business p p P. Yeah. So you know,
Speaker 1: it's interesting because it's the one that's gotten the most
Speaker 1: attention early on. And you know, when we started this process,
Speaker 1: I would say, you know, the first day that came
Speaker 1: out with the REGs was that Friday, we had a
Speaker 1: list of like thirty things that we were hearing from
Speaker 1: bankers and lenders all across the country. And that list
Speaker 1: has basically been narrowed down to minute little details. In essence,
Speaker 1: it was a lot of work that went into sort
Speaker 1: of getting these questions answered. Ivan Treasury today released its
Speaker 1: third set of guidance that dealt with some additional questions
Speaker 1: that were lingering. And in that process is you know,
Speaker 1: I will tell you that every day is the first
Speaker 1: day that this came out, I had twelve senators called
Speaker 1: and even the second day we had eight. So people
Speaker 1: are watching and there. Now what's happening now is people
Speaker 1: are hearing from businesses that are actually having funds dispersed.
Speaker 1: But I can tell you that during the process of
Speaker 1: this conversation, there was talk about even among our work group,
Speaker 1: are by partisan work group. Who else could we include?
Speaker 1: And it really just came down as a function of dollars,
Speaker 1: you know, when they originally told us we had three
Speaker 1: hundred billion and then increased to three fifty. But if
Speaker 1: they wanted us to take on some of the other
Speaker 1: sectors that some people were talking about, it would need
Speaker 1: a lot more than three fifty. It will probably take
Speaker 1: up most of the bills. So um, there's been some
Speaker 1: talk about it, but really the focus over the last
Speaker 1: week has been about improving the program and the questions
Speaker 1: that we're holding back lenders, and luckily we've been able
Speaker 1: to do most of that. And then one of the
Speaker 1: things I focused on a lot is some of the
Speaker 1: underserved communities, uh small, really small micro businesses, minority communities
Speaker 1: that may not have sta strong banking relationships and therefore
Speaker 1: having access problems. And that's why I've been harping all
Speaker 1: week on the need to bring in non bank lenders,
Speaker 1: which is in the bill right. This is not something
Speaker 1: we came up with. Now. The bill specifically talks about
Speaker 1: fin techs and non bank lenders being on ramped into
Speaker 1: the system, and that's beginning to happen where approximately individual
Speaker 1: lenders now are participating, from credit unions to small banks,
Speaker 1: and as they're as they're ramping up and coming on
Speaker 1: the system, it creates more access points. And I'm really
Speaker 1: excited about payper au and fin techs because PayPal told
Speaker 1: me the first leon they made was five thousand dollars,
Speaker 1: So that gives you an idea of the small, small, small,
Speaker 1: micro business impact this could happen and m and I
Speaker 1: think as that ramps up, I think those access issues
Speaker 1: are going to be improved. That's really what we've been
Speaker 1: focusing on here in the last few days. Senator, before
Speaker 1: you have to go in a few more minutes, let's
Speaker 1: talk about the sort of post crisis period. Hopefully the
Speaker 1: health crisis ends quickly and businesses of various sorts can reopen,
Speaker 1: and everyone wants that, but I also think that sort
Speaker 1: of realistically, we know not all businesses are going to reopen.
Speaker 1: Most economists expect unemployment to remain somewhat elevated for quite
Speaker 1: some time. What do you see as either in a
Speaker 1: round four or round five of what the government can
Speaker 1: be doing to get us We were at what a
Speaker 1: lot of people thought was full employment, three point five
Speaker 1: percent unemployment, the best levels in decades. How what could
Speaker 1: the government do to get us is back to that
Speaker 1: as fast as possible. Well, I think it really begins
Speaker 1: by people in positions of influence and leadership being brutally honest,
Speaker 1: and that is we're not going to go back immediately
Speaker 1: the way things were March first. I think when you
Speaker 1: start to see here whenever that is different jurisdictions and
Speaker 1: states begin to modify the restrictions they've put in place,
Speaker 1: it isn't gonna be zero to sixty. It's gonna be
Speaker 1: you know, we're gonna reopen parks and we're gonna allow
Speaker 1: kids to go to school for two hours, but you're
Speaker 1: still gonna have a lot of the same regulations in
Speaker 1: place for a while. And that includes, you know, how
Speaker 1: close you can stand in line to people, how many
Speaker 1: people can gather into place. That's just a fact that
Speaker 1: people need to absorb that that we're not going to
Speaker 1: go back to just March first right away. The second
Speaker 1: point I would make is I will try to divide
Speaker 1: this up into three buckets. The first is, we don't
Speaker 1: know yet how bad the damage is. This reminds me
Speaker 1: of a hurricane. You're sitting at home and hurricane is
Speaker 1: howling outside and it sounds really bad, and you know
Speaker 1: it's really bad, and you see some trees falling and
Speaker 1: branches breaking, but you have no idea how widespread the
Speaker 1: damage is. Until it's over and you come outside and
Speaker 1: you start to do a damage assessment. We won't know
Speaker 1: the full economic damage. And some of it's gonna have
Speaker 1: a tail to It's gonna linger for some period of time,
Speaker 1: so that before we can even talk about exactly how
Speaker 1: to solve that, we have to know the full extent
Speaker 1: of it. I think we're related to that is not
Speaker 1: just how to recover, but some strategic decisions we're gonna
Speaker 1: have to make about the structure of our economy. And
Speaker 1: in particular, I am a huge supporter of capitalism because
Speaker 1: capitalism always reaches the most efficient outcome. But every now
Speaker 1: and then, the most efficient outcome is not in our
Speaker 1: national interest, and we have faced that here with critical
Speaker 1: shortages of certain things. You know, we don't have a
Speaker 1: critical shortage, for example, in our food supply. We may
Speaker 1: have some disruptions eventually, but not shortages because we can
Speaker 1: domestically feed ourselves, but we can't make pep you know. Uh.
Speaker 1: Personal protection equipment. We struggle to make ventilators. We had
Speaker 1: to repurpose industries for that. Some of the basic active
Speaker 1: ingredients and our leading pharmaceuticals come from abroad, I think,
Speaker 1: and not to mention if you want to get into
Speaker 1: other realms, things like rarest minerals and telecommunication and so
Speaker 1: the question be times when is something so critical to
Speaker 1: our national security or national well being, But we have
Speaker 1: to have a domestic capacity to do it. Even if
Speaker 1: it's from a pure market perspective, it's not the most
Speaker 1: efficient place to do it. And that's a that leads
Speaker 1: us to industrial policy, which is something we've talked about
Speaker 1: for a couple of years. I'm not saying that applies
Speaker 1: to every industry, but there are some. We're gonna have
Speaker 1: to define what they are and we're gonna have to
Speaker 1: have policies around that. Well, just on that point, I mean,
Speaker 1: you yourself put out a paper about how you see
Speaker 1: the economy last year. Do you think there's a broader
Speaker 1: rethink in the GOP about economics and how it should work,
Speaker 1: maybe moving away from free markets towards a system where
Speaker 1: there is a greater role for the government. And secondly,
Speaker 1: if that's the case, how do you get Republican voters
Speaker 1: to actually vote for government rule or government policy that
Speaker 1: could be in their interests. Well, I would argue to
Speaker 1: you that we already have government policy that makes those
Speaker 1: sources of decisions. No, I'm not talking about government owning
Speaker 1: the means of production or even directing the means of production.
Speaker 1: I'm talking about government having policies that incentivize certain capacities
Speaker 1: domestically that wouldn't otherwise exist. But we do that now.
Speaker 1: We do that now through our tax code. Our tax
Speaker 1: code has an immediate tax benefit to for example, returning
Speaker 1: value to your investors to share by back, so that, um,
Speaker 1: we we incentivize that. There's nothing inherently evil about it,
Speaker 1: but we incentivize it. And maybe we should be incentivizing
Speaker 1: investment instead. And then there are some industries, for example,
Speaker 1: that it will never be cost effective to mind for
Speaker 1: rare earth minerals in the US, because the Chinese are
Speaker 1: subsidizing their industry and are going to undercut our price point.
Speaker 1: But we don't want to be dependent on them, and
Speaker 1: so we're gonna have to come up with some government
Speaker 1: policies to even the playing field. You see that somewhat
Speaker 1: in telecommunications in this whole five G issue with Huawei,
Speaker 1: where there are there are no non Chinese companies that
Speaker 1: are able to offer the product of always offering because
Speaker 1: they're able to do it at a lower cost because
Speaker 1: they're subsidized and protected domestically as well in their market
Speaker 1: by the Chinese government. So that is not We're not
Speaker 1: We're we're not. We're not talking about socialism, not talking
Speaker 1: about communism, We're not talking about government ownership of the
Speaker 1: telecommunications industry. But we are saying, to the extent you're
Speaker 1: going to have incentives for certain outcomes in your economy,
Speaker 1: should they not be incentives towards outcomes that serve the
Speaker 1: national interest, which include national security. But I would argue
Speaker 1: also in food, the creation of dignified work that's widely
Speaker 1: available so that you can have strong communities and strong families.
Speaker 1: But just real quickly and then we'll wrap up. I mean,
Speaker 1: Tracy mentioned this report you put out a year ago,
Speaker 1: and I was pretty astonished at the time, this called
Speaker 1: American Investment in the twenty first century. Fascinating paper. It's
Speaker 1: cited a number of like random obscure left wing economists
Speaker 1: that like I follow on Twitter, I couldn't even really
Speaker 1: believe it was coming from a senator, let a loan,
Speaker 1: a Republican senator in your caucus. Do you sense some
Speaker 1: sort of shift or some sort of um, you know,
Speaker 1: increased skepticism or rethinking about some of the lease a
Speaker 1: fair views. It did not seem like the sort of
Speaker 1: the Heritage Institute views that I was sort of used
Speaker 1: to seeing from Republicans for many years. And I'm curious
Speaker 1: if you think there is some general shift in sort
Speaker 1: of this philosophy. You know, it's a work in progress.
Speaker 1: I would argue to you that most of us in
Speaker 1: Republican politics are a product of, you know, twenty or
Speaker 1: twenty five years of sort of uh, the you know,
Speaker 1: the LEAs a fair libertarian view of economics, and that's
Speaker 1: deeply embedded in in a lot of the decisions and
Speaker 1: policies that Republicans of pursuit. And generally they're right, I mean,
Speaker 1: low taxes, less spending, all these this is the ideal outcome.
Speaker 1: And I don't argue against any of that. I'm not
Speaker 1: arguing that we should be a high tax environment or
Speaker 1: a high regulatory environment, but I am arguing that within
Speaker 1: that framework, there are certain exceptions that are in our
Speaker 1: national interests, and I think the crisis has revealed some
Speaker 1: of them, um, in terms of the inability to ramp
Speaker 1: up production of certain things without massive disrupt asking, you know,
Speaker 1: Ford and General motors to make ventilators and so forth.
Speaker 1: So I think there's a growing sense of it. I'm
Speaker 1: not sure it's still I can tell you when we
Speaker 1: did the tax bill, there was a tremendous amount of
Speaker 1: pushback against the child tax credit. A lot of people
Speaker 1: viewed it as some sort of a welfare payment. And
Speaker 1: my argument was, whether they're paying it in payroll tax
Speaker 1: or they're paying it in income tax, it's still a tax.
Speaker 1: It's money that's coming out of their paycheck. And and
Speaker 1: and our tax coach should reflect what we say is
Speaker 1: one of our priorities, which is strong families. I think
Speaker 1: that ironically, that turned out to be the most popular
Speaker 1: part of the tax bill that we've passed, and UM
Speaker 1: and I wanted to actually do more in that regard
Speaker 1: than we ended up doing. We've got an increased but
Speaker 1: we wanted to do more. So I'd say this is
Speaker 1: still a work in progress, but there are certainly a
Speaker 1: growing number of people today in the Senate and in
Speaker 1: the House who share these views to some degree. A
Speaker 1: Senator Rubio, really appreciate you taking the time and thank
Speaker 1: you for coming on the podcast. Thanks for having me.
Speaker 1: Thanks so much. Well, Tracy, I really enjoyed sort of
Speaker 1: getting the chance to um. I would say, you know,
Speaker 1: it's a cliche, but here how the sausage is made
Speaker 1: just a little bit, because you know, on the one hand,
Speaker 1: the Cares Act, it was incredibly rapid from the onset
Speaker 1: of the downturn in late February early March, it was
Speaker 1: just a few weeks by lightning. You know, that's lightning
Speaker 1: by Washington standards. On the other hand, there's so much
Speaker 1: damage and even by early March. I remember we were talking,
Speaker 1: you know, we talked with Claudia sam in early March.
Speaker 1: It's like send the checks out now. And so it's
Speaker 1: kind of interesting hearing from his perspective all the different
Speaker 1: calculations and the sort of different factors that have to
Speaker 1: go into a bill of this size. Yeah, it was
Speaker 1: also interesting to hear him talk about the role of
Speaker 1: the inks, and he sounded pretty pleased with it. One
Speaker 1: of the criticisms of the program has been the idea
Speaker 1: that the money is running through banks which actually have
Speaker 1: to make the loans even though they're guaranteed by the government.
Speaker 1: Could that function have been better fulfilled by something else,
Speaker 1: such as, you know, some sort of government body. So
Speaker 1: it's interesting to hear him talk about that, as well
Speaker 1: as the participation of the fintech firms. One other thing
Speaker 1: I was thinking during the discussion was just how important
Speaker 1: hierarchy and incentives are in government. So he mentioned, you
Speaker 1: know that this had happened for small businesses partly because
Speaker 1: he was head of the Small Business Committee and so
Speaker 1: that was his job. He was tasked to help that
Speaker 1: particular component of the economy, and that's how this program
Speaker 1: came about. Yeah. Absolutely. I also thought it was interesting
Speaker 1: that he did say that it could be a model
Speaker 1: and we haven't seen it yet, but it could be
Speaker 1: a model in the future for Okay, well, if you're
Speaker 1: going to give company small businesses grant to not do layoffs,
Speaker 1: why not do something similar for large companies. And the
Speaker 1: fact that it had been discussed within the center, within
Speaker 1: the Republican Caucus, the fact that he was open to it,
Speaker 1: I thought was pretty interesting, and just generally it was
Speaker 1: you know, he's been like on Twitter talking a lot
Speaker 1: about the rollout, so I guess it was good to
Speaker 1: hear his view that things are getting better and getting
Speaker 1: smoother on the disbursement of fund standpoint absolutely. And then
Speaker 1: the other interesting thing was, of course, the broader discussion
Speaker 1: about how the Republican Party is thinking about economics at
Speaker 1: the moment. If you haven't read the policy paper, American
Speaker 1: Investment in the twenty one Century is definitely worth reading.
Speaker 1: Perhaps something you wouldn't necessarily expect to be coming from
Speaker 1: a Republican senator. But one thing that always interests me
Speaker 1: in this discussion is I feel like, even if Republicans
Speaker 1: are moving towards a position where there is potentially a
Speaker 1: role for greater participation by the government, I always wonder
Speaker 1: if voters are going to be on board with that,
Speaker 1: especially since voters have been told, you know, for three
Speaker 1: decades now that the government should be as small as possible,
Speaker 1: that intervention regulation, it's all bad for them. I always
Speaker 1: wonder if that public shift is possible or can happen
Speaker 1: as quickly as some people might want it to. I
Speaker 1: think it'll be really interesting. I mean, we're going to
Speaker 1: be in this country, for sure, dealing with the sort
Speaker 1: of economic and political fallout prices. Right, so maybe this
Speaker 1: is the moment when that shift happens. Well yeah, I
Speaker 1: mean a we were just at you know, three point
Speaker 1: four or three point five unemployment. The number of people
Speaker 1: who are either seeing their small businesses or businesses of
Speaker 1: any size go from drop lose revenue in a matter
Speaker 1: of days. The number of people who are experienced seeing
Speaker 1: job procarity or job straight up job laws, people in
Speaker 1: all kinds of areas. I mean, think about it. If
Speaker 1: you imagine if you were a dentist before you never
Speaker 1: thought okay, you didn't think teeth are recession. But suddenly
Speaker 1: here you have an economic crisis in which no one
Speaker 1: is going out, no one is going to the dentist.
Speaker 1: So the idea of sort of labor market procarity economic
Speaker 1: procarity is reaching a whole new realm of people in
Speaker 1: this crisis. So it does feel like and for better
Speaker 1: or worse, this could open up sort of new thinking
Speaker 1: and new opportunities, sort of the new ideas among people
Speaker 1: that it's like, oh wow, I am really exposed to
Speaker 1: economic volatility in a way that I had previously realized.
Speaker 1: And again I think people should really read this paper.
Speaker 1: As you mentioned, because I wasn't kidding. It's like, you know,
Speaker 1: one of these points, it is like going after a
Speaker 1: shareholder primacy and how that's hurt the role of American businesses.
Speaker 1: The It will be interesting to see if these ideas
Speaker 1: and this crisis allows some of these ideas to further
Speaker 1: take root within the party. This discussion always makes me
Speaker 1: think of relativism versus absolutism, So I always think of
Speaker 1: the Republican Party is sort of a relativist party in
Speaker 1: the sense that if a policy is enacted people Republicans
Speaker 1: tend to get upset. I'm basing a lot of this
Speaker 1: off my dad, by the way. Um, but Republicans tend
Speaker 1: to get upset if it benefits someone else more than them.
Speaker 1: There's this sort of sense of unfairness, I guess about it.
Speaker 1: But maybe this is the moment when that starts to
Speaker 1: change and it shifts more towards a sort of absolute
Speaker 1: gains kind of regime. But um, yeah, let's see, there's
Speaker 1: a we'll be talking about this for a long time.
Speaker 1: There'll be a lot to a lot to a lot
Speaker 1: to chew over. Indeed, all right, well, this has been
Speaker 1: another episode of the All Thoughts podcast. I'm Tracy Alloway.
Speaker 1: You can follow me on Twitter at Tracy Alloway and
Speaker 1: I'm Joe Why Isn't All? You can follow me on
Speaker 1: Twitter at the Start Work, And you should follow our
Speaker 1: guest on Twitter, Florida Senator Marco Rubio. He's at Marco
Speaker 1: Rubio and follow our producer on Twitter, Laura Carlson. She's
Speaker 1: at Laura M. Carlson. Followed the Bloomberg head of Podcasts
Speaker 1: on Twitter, Francesca Levi at Francesca Today, and check out
Speaker 1: all of our podcasts unto the handle at podcasts. Thanks
Speaker 1: for listening.