Marco Rubio On The Effort To Save Jobs And Get People Working Again

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:17)

So Tracy, obviously we've been covering this nonstop story of the virus and the crisis from various economic and market angles for the last several weeks now. But today we're gonna do something a little bit different than some of our recent episodes.

Tracy Alloway (0:34)

What are we doing?

Joe Weisenthal (0:35)

Today we're actually going to be talking to someone who's involved in formulating the policy response, how the US anyway is addressing the economic crisis that's coinciding with the public health crisis.

Tracy Alloway (0:49)

Right, so it sounds like this is our chance to sort of put a lot of the theory that we've been discussing into actual practice. And it's one thing to talk about what governments should do.

And of course, we do quite a lot of that on the podcast already, but it's quite another thing to talk about about what governments are actually doing or how they should put those ideas into action.

Joe Weisenthal (1:13)

Yeah, that's exactly right. Like there is this general idea out there that we know is like, okay, there needs to be a fiscal response to this crisis, which we've seen to quite a large degree in some countries. People sort of overwhelmingly agree that it can't just be monetary.

There's this idea, I would say, of sort of freezing or winterizing the real economy so that people can continue to make their payments, make payroll, things like that, while their bills are coming due so that they could simultaneously pay their bills, but not work.

Tracy Alloway (1:49)

And of course, with all of those ideas, there are sort of all these different trade-offs that policymakers have to start considering. And a big one that comes up time and time again is the idea of moral hazard, you know, are you going to end up rewarding people for bad behavior? How do you calibrate one program so that it doesn't interfere with another program? How do you incentivize people to take up the programs that you actually want them to take up?

And of course, all of this is happening under immense time pressure during the time of coronavirus when everyone is quite stressed and worried about a lot of things.

Joe Weisenthal (2:31)

Right. There are so many aspects of this current economic crisis that are extraordinary.

The time pressure is one. The scale of the layoffs that we've seen, at least in the US, have been so far off the charts that past periods don't even register as a blip if you were to say, look at initial claims. And because this isn't just a normal recession, because it's a complete shutdown, so many, whether it's households or businesses, are essentially in the position where one day they were doing fine and then the next day they were on the brink of crisis and layoff.

Tracy Alloway (3:06)

Right, exactly. So the scale is different. The speed is different. Possibly you could say that our political situation is a little bit different in the US at the moment.

So who are we talking to about all of this?

Joe Weisenthal (3:20)

Well, I think what you said about the politics is exactly right, because one of the things that we saw during the rush to pass legislation at the end of March was sort of at least temporarily a high degree of political unanimity and politicians on sort of both sides of the aisle agreeing that whatever people think about government spending, deficits, moral hazard, paying people who are unemployed and so on, they all put their views on that aside, at least temporarily, and we'll see how long that lasts. So today, on the podcast, we are going to be talking to a very active policy maker in this space. He's Florida Senator Marco Rubio. He's been championing, in particular, the small business loans, aspects of the deal that attempt to keep people on their payrolls during this crisis.

Senator Rubio, thank you very much for joining us at this extraordinary time.

In your view, let's just sort of set the stage right now. Do you have a sense for how well the payroll protection part of the CARES Act is working? And do you have visibility into how much money has been disbursed? Are you able to see that data?

Marco Rubio (4:34)

Billions of dollars have been disbursed. We won't, I think one of the fundamental misunderstandings is people think that the money being disbursed is coming out of the treasury. The money, the treasury that we allocated, that we appropriated in the bill is the guarantees. The cash that's actually disbursed is from the banks.