Marco Rubio: ‘Equal Opportunity…Defines The American People’

As many of you know, I record a monthly podcast on public policy for Ricochet called “American Wonk.” The latest episode is a conversation with Florida Sen. 

Marco Rubio, which was recorded live at the AEI-Ricochet Podcast Summit in Washington. I think you’ll be intrigued by the distinct evolution in Rubio’s thinking, in the aftermath of his loss to Donald Trump in the 2016 presidential campaign and his eventual return to the U.S. Senate.

As Rubio put it in a recent interview with The Economist, “I spent a tremendous amount of time [in 2016] focused on the opportunities I had as the son of a bartender and a maid in the past century. I didn’t spend nearly enough time talking about what the bartender and the maid face today.”

Below is a lightly edited transcript from our conversation, in which Rubio touches on a wide range of topics related to expanding economic opportunity to those who least have it. (I’ve mostly left out our discussion of foreign policy; for that, play the video or audio above.)

Reflections on the 2016 campaign

Avik Roy: Obviously, everyone who runs for president says it’s the hardest thing they’ve ever done. And you never know how hard it is until you actually try to do it. I’m interested in what your reflections are on top of the difficulty of it.

Did anything about your views, or your philosophy change having the opportunity to travel the country, talk to voters, the debate you engaged in with all those other candidates?

Marco Rubio: So it’s hard. The work part of it is hard, but it’s actually one of the most fulfilling things I’ve ever done. And sometimes we focus on the outcome of something you engage in, and not the process, and the things that you learn along the way. I don’t know if the term is change. When you are exposed to that many people, and that many different places, so many different backgrounds and points of view, if it doesn’t impact you you’re either not listening, or you’re not alive. And I was both listening and alive, and so I learned.

There’s no doubt that I am a better senator, a better representative of the state of Florida, hopefully a better public policymaker because I ran for president. Because I saw things, and met the people, and heard things across the country that I would not otherwise have been able to do, and perspectives that, perhaps, I knew were there but took for granted, or maybe not fully realized. And we obviously would love to explore some of those here today.

Avik Roy: Yeah, so what are some examples of that?

Those left behind by globalization

Marco Rubio: Equal opportunity is kind of like a throwaway line, but it really is at the essence of what defines the American people. We’re not a people united by common ethnicity, race, religion, any of these things. What is it that unites us? What is the one thing that we all believe in? And that is that everybody should have the opportunity, the equal opportunity to go as far as your talent and your work will take you.

And we have built a country around that. The dynamic of it was pretty straightforward, and that is, if you work hard, and you get the right education, and a good education, you will have a prosperous and successful life. Not, millionaire, billionaire, but you will be at least as well off as your parents and, at least for multiple generations, better off than your parents. And that is what’s being challenged now for millions of Americans.

So we spend a lot of time in America talking about all the great things that are happening economically, we celebrate people that are benefiting from the new economy. And there is not doubt that there is incredible benefits to the new economy, to globalization, to the tearing down of barriers, to the ability to sell to a global middle class. A lot of positives, and we know what those are, and what those industries are.

I don’t think that there was a sufficient amount of time spent on the other side of that equation, and that is that with every transformative even in human history there are people who win and there are people who are left behind, or at least left insecure about it. And we did not spend enough time on that as a Republican in the Republican Party.

Not only did we not spend enough time about it, even to this day you see, for lack of a better term, the intellectual elites in both parties and the like, are almost condescending toward it. And the notion is, “Well, you need to go back to school and get retrained.” Or, “You need to pick up and move to where the jobs are.” And that’s easier said than done.

Why don’t people relocate to where the jobs are?

Marco Rubio: And particularly in the case of a working family, or working class family, that moving isn’t just a geographic relocation, it is leaving behind the entire support network of your life. And I’m in a unique position that this campaign really illustrated to me, and that is I am from a working class background, I still live in working class neighborhood in West Miami, where the median income is below 40,000 a year.

All my neighbors work jobs, not “careers” necessarily. And I have a working class family populated by firefighters, teachers, nurses, realtors. (In Miami, everyone’s a realtor at some point in their life.) But I work every week in one of the most elite institutions in America, in one of the most elite cities in the world. So I’m constantly migrating back and forth from that world. But I’ll tell you one thing we’ve thought about a lot over the years, and that is, “Let’s move to D.C.”

Because life would be easier for me if I was here with them Monday through Thursday, and fly to Florida Friday and Saturday, and then spend Sunday at home with the family, and start again the following week. Moving for us would mean leaving my mother-in-law, or our extended family, who are the people that watch our kids when we have something to do. Leaving means being far from my elderly mother, who literally lives two blocks away from where I live in the house that I grew up in. Leaving would mean leaving behind the cousins.

Well, in my case, I own the pickup truck. So leaving behind the ability so use the pickup truck because I want to go pickup that new refrigerator at Best Buy, I’m not going to pay them to deliver it. And that’s just me. I mean a senator is not a working class job, but that’s the culture and the background I come from. So when you tell someone, “Well, there’s these great jobs in California. Why don’t you just get up and move?” Well, that’s difficult, and nearly impossible.

So these are the things that took for granted, and didn’t focus on enough. And the other is, how disruptive it has been for millions of people.

The new forms of economic insecurity

Marco Rubio: We look at unemployment. We’ll they’re employed. Well, being employed alone is not enough. If you know enough people that are unemployed, and are fearful that you, yourself, will either be unemployed or underemployed because the job you do doesn’t pay enough to sustain the sort of standard of living you used to have for many years, and equivalent to maybe what your parents had. You feel like you’re falling behind, or on the verge of falling behind, and no one is talking about you? You really start to get very anxious. One last point, true story. I got an email about 10 days ago from my cousin who lives in Florida, not in Miami. His son is second or third in his class, maybe first. You know one of these ridiculous 8.0 GPAs. I don’t know how we got to eight, but honors courses, all that kind of thing. Gets accepted into the finest institution of the southeast: The University of Florida. (Go Gators!)

And they have this thing called the Bright Future Scholarship that pays for tuition. But the cost of being there, living, books, everything is about 10 to 12 grand a year. And he could have worked for some of it, but he’s going to go into robotics and all this scientific fields, so they can’t afford it. Now, they make too much money for financial aid, they’re over the limit on financial aid, but they don’t make enough to pay for it. So they apply for a loan themselves, the parents.

Well, his wife had a car accident a few years ago and was not able to work for a few months, and so their credit got ruined. Between that and ’07 to ’09. And so they were turned down. So here he is saying, “If I didn’t work, or if she didn’t work we’d have this all taken care of. There’d be all kinds of stuff out there for us. If I was rich it would be taken care of. But I’m in between, and therefore now my son’s not going to get to potentially go. And he did everything that we asked him to do. Go to school, get good grades, and graduate.”

And there’s a lot of people out there that feel that way. They pay their mortgage on time, they work hard, and no one fights for them. There are plenty of programs for poor people, rich people can take care of themselves, and they’re always on television talking about the needs of the business community, but no one fights for them. So, I knew it, but I saw it, and I felt it, and I recognize even myself, that at times we didn’t focus on that enough in the right of center, in terms of our public policy. The left of center is a whole other story. I’m not going to reform the left, but I do believe we need to reform the right.

How free trade disrupts economic relationships

Avik Roy: One thing I hear you saying as you go through those descriptions is that, in a sense, the now president won the argument in the primaries that he was actually talking about the forgotten Americans, and a lot of us weren’t to the same degree. And in a sense, Donald Trump, the president, has influenced your policy thinking, or at least the arguments that he was making.

Marco Rubio: Well, Donald Trump didn’t create these factors, these factors led to his rise. And the second thing he did is, he talked about these issues the way people going through these issues talk about these issues. And so we can stand there and say, “Trade is good.” And I think that’s true. Free trade, barriers down, everybody trading with each other, in a laboratory setting, and in the purest form point of view, that’s true. What we don’t take into account is the 21st century doesn’t work that way.

To begin with, yes, trade and globalization, and automation advances, and technological advances wipes out some jobs and creates new ones. That’s what all the social scientists tell us, that’s what all the economists say. But, in the real world, the new jobs that are being created are not going to be filled by the people who lost the old jobs.

So if you’re a cashier at McDonald’s and your job is wiped out by a touch screen, which are increasingly coming in, you’re not going to be the person installing, building, and maintaining those. I mean, you could be. But you’re probably not going to be.

And so therefore, now you have less opportunity, you’re frustrated, and someone gives voice to that in terms and in ways that you express yourself, and I don’t think he went into it as a planned thing, but he most certainly tapped into that. We shouldn’t ignore it. You don’t have to like [Trump’s] brand or style of politics to acknowledge that his campaign revealed something that’s happening in the country, that if we continue to ignore, will not only get worse, but will fracture us as a nation and as a people. If we’re not already there.

Rubio’s ‘catastrophic mistake’ on China

Avik Roy: You’ve introduced a bill, I believe today, about China in this regard. Trying to address some of the cheating that China does on trade. Limiting the ability of Chinese entities to own U.S. corporations, changing the way corporate income for Chinese corporations is treated. Why don’t you talk about that, and how that ties into this?

Marco Rubio: And let me tell you, on this one I kind of came to that new, the whole issue of China. First of all, for me it’s not a trade issue, it’s a geopolitical issue. And that’s how I got to it. I traditionally voted against the currency manipulation laws that have been proposed in the past. Because, while I’ve always been suspicious of the Chinese Communist Party because I don’t like Communists, I’ve always felt I, to some extent, was an adherent to the idea, the consensus that eventually China will develop and they’ll become more like us. And that was a catastrophic mistake. That is not the way it’s played out.

And so today, as an example, the Chinese have a “Made in China 2025” initiative, which sounds really good, but here’s what it is. Basically, they’re are going to try to dominate the 10 most important technologies of the 21st century. Now, if they achieve that because they are more innovative, and more creative, and invest more in research, then that’s fair. But that’s not how they’re getting there. They’re getting there by reverse engineering intellectual property, or stealing it.

By utilizing our academic institutions to embed researchers, steal information, cyber intrusions and the like. They are cheating. They are also undermining the domestic capacity by not allowing foreign competitors to enter their marketplace by forcing partnerships on them until they know what you do, and then kick you out. So, yes, in the laboratory, theoretically there would be a competition, these great ideas would work. That’s not the way they are behaving. We’ve known that forever.

Avik Roy: Can’t the World Trade Organization do something?

Marco Rubio: They don’t want to, that’s the problem. That’s the fundamental challenge, is The World Trade Organization is not functioning. In fact, it is part of this consensus that, “Yes, we know China’s cheating. But it’s okay, they’re a developing country. Eventually they’ll behave like the rest of us.” That’s not what China intends to do. They are doing, frankly, what you would do if you were a policymaker in their situation. You are taking advantage of your rights under the global system, but not adhering to its responsibilities unless someone forces you to do it. That needs to be rebalanced.

I am not a China container person—I believe you need to contain them—I don’t think that’s what we want. The 21st century will be defined by the relationship between the United States and China, and it needs to be balanced, reciprocal, and fair for the good of the world. I would welcome a China that’s a responsible stakeholder, and engaged. And, frankly, if they become that powerful, that large, as they’re headed, the international system is going to look a little different than it did after World War II because you’ve got a new player there. But it cannot be a system in which they dominate it at everyone else’s expense.

There is no time in human history in which a unipolar, dominant society and country, and economy has over a long and extended period of time been good for the world. The U.S. had that position, but our values were a little different. And that’s coming to an end, and naturally it wasn’t something we created, it was the fall of The Soviet Union that led us there. And the success, not just of us, but our allies that brought us to this point.

But if we live in a world where they dominate, biomedicine is an example, and they control whether or not we can cure Alzheimer’s, which would bankrupt our country if we don’t address that, think about the kind of geopolitical leverage, and that’s just one sliver of an issue. So we need to begin to work on that, and that’s what this law does is, it begins to say, among other things, there are these important technologies for America’s national security, and no American company would be allowed to transfer it to them.

More importantly, if you’re going to partner up with China there’s been a premium paid for it over there. If you’re going to be making profits over in China that investment will be taxed, on an American company, equal to the amount of intellectual property they stole on a given year so that we can bring some balance and hopefully reach a point where we can work with them to create a system of trade and commerce that’s not just geopolitically stable, but fair.

Tax reform for the American worker

Avik Roy: One area where you’ve taken at least a distinctive position relative to traditional supply side orthodoxy is on corporate tax reform. There was obviously this brouhaha recently about whether The Economist had pulled some of your quotes out of context, but I have here the article you wrote for National Review online, and you say, effectively, “I express skepticism about the belief that no strings attached corporate tax cuts are always in the best interest of American workers and families.” I’d love for you to talk about that.

Marco Rubio: Yeah. So first of all, they didn’t take the quote out of context, they put the quote but not the context. And the context was actually part of a one hour interview, this is not revisionism. We’ve put up the whole transcript for anybody who wants to see it, it’s on our Senate website. And here’s what I was talking about, and what that quote was related to. We came to a point in the tax debate. I wanted to cut corporate taxes.

I campaigned on it, as you know, at 25%. We arrived at 20% as the starting point, and I said, “Well, what it if was 20.9%?” And we took the 0.9% and we used it to fully expand the child tax credit for working families. People making $30—, $40—, $50—, $60,000 a year. They said, “We can’t do that. 0.9% would be catastrophic for growth. Catastrophic.” 20% is ideal, [but] 20.9% and we’re going to collapse into the abyss. I thought that was absurd. And my argument was, “No one can tell me that 0.9% is going to help workers more in the hands of the corporation, particularly in a multinational, large corporation, than it would in the hands of the worker.”

That is the orthodoxy. As it turns out, the new tax rate is 21%. Not catastrophic anymore. It wasn’t used for the family tax credit, it was used for pass-throughs, S corporations, which is fine. I’m in favor of all that stuff. But it exposed this notion that, if I am in favor of making American companies more competitive in the world—I think when it comes to large multinationals we have to be fair, but we are under no special obligation to go above and beyond.

Large multinational corporations have addresses in the United States, but they do not behave as an American company did 50 or 60 years ago, and that’s their right. Their fundamental obligation is to their shareholders, who are located all over the world. And their primary motivator in many cases is their quarterly reports. So that’s their primary goal.

And my argument is, just because they’re making more profits, does not necessarily translate to more prosperity for an American worker because of issues like automation, because of the ability to locate jobs overseas. Because of the ability to buy back shares to drive up the value of your own shares. And my argument was, I know if we give that 0.9% to workers through the child tax credit expansion, it’s going to help workers. I don’t think that 0.9% is going to be as meaningful in the hands of the corporation. And that’s what that whole debate was about. But it exposes this orthodoxy that we need to have a broader debate about.

Avik Roy: Isn’t part of why those multinational corporations are located elsewhere is because our corporate tax rate has been so high?

Marco Rubio: Partially. And so going from 35% to 25%, by the way 25% was the holy grail, right? That was the number everybody campaigned on, and then it became 20%. So I felt anything under 25% was gravy, but 21% is great. It does make us globally competitive to a point. So you have all this money now available to invest, what are you going to invest it in? Where are you going to get productivity?

In the old economy it was almost invariably workers. “I’m going to open a factory, I’m going to hire 100 human beings to work in that factory.” Today it might be, “I’m going to open a factory, and I’m going to hire 10 human beings who are going to operate machines that are going to make each of those workers as productive as 10 workers in the old economy.” Again, not negative. Someone still has to build and install those machines, but it’s not the same as it used to be.

The future of work: ‘Government needs to be of assistance’

Marco Rubio: Now, productivity growth right now has kind of flattened out, but I do think that in the years to come, maybe not right away, but in the years to come automation and technology will continue to challenge us as public policymakers because it will make us more productive.

But it will begin to infringe, not just on traditional blue collar jobs, you’re going to begin to see artificial intelligence, and automation and technology begin to affect traditionally white collar jobs. Clerical level jobs, and perhaps even more professional services. And I think that’s going to be traumatic for our economy if we don’t get ahead of it and begin to address that years before it begins to happen.

Avik Roy: What do you think we really can do? I mean, one of the things, when I have conversations with all sorts of people about this topic, about the people who are being left behind, the changes, the globalization of the economy, industrialization. When I talk to the experts, who study this stuff academically all the time, and you ask them, “What’s the solution?” They just kind of shake their heads: “We just don’t know.”

Marco Rubio: First of all, if we aren’t even talking about it we’ll never get to the answer. Many of the solutions will emerge from the private sector itself. But some of them can be incentivized by government, and that’s another interesting point about orthodoxy.

At the extremes of American politics, to the far left, there’s the idea, and especially in Communism, which is not representative of American politics, but nevertheless, the notion that the market is inherently greedy, run by greedy people, and so we need a heavy handed government to ensure that there is not just inequality but unfairness, because people are going to be unfair unless you keep them from doing it.

To the extreme right is the idea that the market is perfect, and everything always reaches equilibrium. And obviously I come from the right of center in that spectrum, but even people like me, who deeply believe in limited government and free enterprise, and in the market, also recognize that there are moments of transition where gaps are created that government needs to be of assistance.

One, for example, is job training. A throw away line, people use it all the time. Here’s a fact: in the 21st century, number one, we have to make sure we are training people with the right basic set of skills. It does us no good to prepare people for the jobs of 1975 because those jobs are not going to come back.

Number two, we have to have a system in place to retrain people multiple times in their life. We do not have a system that does that now. And number three, they have to be geographically matched. So the jobs of the future in one part of our country may be nothing like the jobs of the future you might see in another part of the country because of the industries that have built up.

I don’t want government to take over the job of job training, I think the private sector’s willing to do a lot of it now. But there are things we can do to assist it. There are people that will continue to be displaced by trade and globalization.

We need to figure out a way to get those people back online, and back on the path of being able to provide for themselves and for their families. That needs to be confronted. And then there are more fundamental issues that are cultural and social, which government cannot play a predominant role in at all. And that is, whether or not we are instilling in Americans the values that there are certain things you need to do in life in order to live productive, meaningful, orderly lives.

And those values cannot be instilled by the law, they have to be instilled in strong families, reinforced in strong communities, and that’s why we should have government policies that, at a minimum, do not hurt communities and families, and churches, and the faith community. And when possible, partners with them, with the limitations that exist in our Constitutional system. So those are the sorts of things that you look at.

And then when you are being targeted in a predatory way, the way China is targeting American industry, we have an obligation to step forward and protect our national security and our future.

Not to protect one company or another company, but to protect our capacity as a nation to not lose the ability to do certain things that are vital, not just for our economic future, but our national security future.

Will minorities ever return to the GOP?

Avik Roy: Going back to something we talked about at the outset. You know, one of the things that got people excited about you running for president, also returning to the Senate after you left the presidential campaign, is your intuitive grasp for the aspirations of minorities, and how the conservative movement and the Republican Party, what they have to offer minorities, and how the Republican message is compatible with the aspirations of immigrants and minorities.

The conventional wisdom is that’s something the Republican Party continues to struggle with. When you were reelected to the Senate in Florida, you won 48% of the Latino vote, you won 17% of the African-American vote, which is roughly double what the last several Republican presidential nominees have done at the national level. Do you think the Republican Party are going to be able to transcend this challenge of appealing to a more diverse country, and how do you do it?

Marco Rubio: Sure. So there are two ways that people make decisions about how to vote. One is their interests. What they care about in their lives, and whether the people running for office are talking about the things that people like them care about. And there’s still Americans that vote that way. As I told you, I live in a working class neighborhood in West Miami, the overwhelming majority of my neighbors, I would say over 85% are either immigrants or first generation, maybe second generation by and large would be considered minorities under the definition of that. And they are working class people who want a better life.

And it is especially pronounced, and immigrant who, one of the reasons why you leave your country, and your home, and everything you’ve ever known and go to the United States is because you want a better life. You want to work hard so you can achieve a certain standard of living, and you want your kids to be able to do anything you want. So, to the extent that we are seen as the part that’s fighting for that? We can appeal to people’s self interest, which also happens to be good for the country.

There is a growing phenomenon in America, however, where a lot of people are not voting, and that includes a lot of minorities, have a political identity that overwhelms whatever might be in your best interest. And therefore, whether a party, or a candidate is fighting for something that’s good for you, or bad for you, is less relevant than the fact that I am a Republican, or I am a Democrat, and whatever Republicans are for is good, and anything that makes Democrats angry is good.

And so that has grown in this country, and there’s research out there that shows that the more politically engaged you are, the more you feel that way, the more you vote that way. And that sort of political tribalism brings with it some significant danger. Because then politics becomes basically entertainment and sport. And every single day is not about right or wrong, or what’s good or bad. It’s about whether my team won or your team won…That’s the point we’ve reached in American politics. And also the way politics is now covered is not conducive to being able to reach out to people on public policy that’s good for them versus bad for them.

Because basically here’s how news works in America. Producers get in early in the morning, they ask themselves, “What should people be outraged by today?” And then they’ll do segments on the outrage of the day, and then they’ll bring a panel of so-called experts to have a fight about it on television.

So, it’s the way news is covered, that’s what drives ratings, and that’s how politics is covered today, hence to space for any sort of nuanced public policy debate. You’re either yes or no, for it or against it, on this side or that side. We’re not going to change that either, but that influences politics because, if you want to get noticed in politics you get noticed by being a participant in that sort of environment.

Avik Roy: And that’s why a lot of people saw you as a threat, both Democrats and Republicans, in 2016.

Marco Rubio: How wrong they were.

What the 2024 presidential election will be about

Avik Roy: Yeah. Well! You know we’re recording this in 2018. To pick a future year entirely at random, 2024. What’s an issue that you think we’ll be talking about in 2024 that we’re not talking about today?

Marco Rubio: Well, we’ll be talking a lot more about China than now simply because their ambitions are beyond commercial [advancement]…We’ll be dealing with the fact that we’ll now have a cohort of Americans who are of working age, who have spent the better part of a decade or more out of the workforce. For reasons that no one fully understands what’s behind it. People speculate, [but] not enough research has been done as to why working age men in particular are not entering the workforce at a time when we have a historic number of job openings and wages comparable to what you could’ve earned before the meltdown of ’07–’08.

If that goes unabated, we’ll be dealing with that. Our national debt will pose an even greater threat than it does today. Those will most certainly be topics that people will be talking about.

And I think, unless we address it, the skills gap will have grown to a dangerous level where people will now be at a point in life where it’s impossible for them to acquire skills they need to be able to achieve a better future. Thereby permanently trapping them in a sense of anger.

And the last thing to keep careful watch on is all these developments in technology and the like are going to begin to disrupt some of the developing countries in the world as well. The countries who were able to build kind of a global middle class as a low cost labor [economy]. When that low cost labor gets attacked by the ability to do the same work back in the United States or somewhere else because of automation and the like, they’re are going to be a lot of angry people in countries where, for a little while, people tasted prosperity and then it was taken away from them.