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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  May 9, 2021 2:00pm-2:30pm EDT

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♪ david: this is my kitchen table and also my filing system. over much of the past three decades i have been an investor. the highest calling of mankind, i have often thought, was private equity. and then i started interviewing. i have watched your interviews, so i know how to do some interviewing. i have learned from doing my interviews how leaders make it to the top. >> i asked him how much he wanted. he said 250 and i did no due diligence. david: i have something i would like to sell. david: you don't feel inadequate now as only the second
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wealthiest man in the world. is that right? i am in the hall of flags of the commerce department in downtown washington. for my conversation with secretary of commerce, gina raimondo. harvard graduate, rhodes scholar, venture capitalists, treasurer of rhode island, two turned -- two-term governor of rhode island. president biden asked her to serve as secretary of commerce. many presidents have proposed infrastructure proposals and bills, but very through of got it through. why do you think president biden's bill will likely get through if you do? sec. raimondo: i think we will. i have had numerous conversations with people on capitol hill. there is bipartisan support for the bill. maybe not all of the bill, all aspects of it, but i think there is a growing recognition that we have kicked the can long enough, and there is a backlog of
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infrastructure in every state in america. and i think this will be the moment. and the president is determined. so that helps. david: the president has two types of infrastructure. traditionally its bridges, airports, toll roads, he has that in the first part. in the second part, the caring part which deals with elderly care, child care, kindergarten, so forth. why did he do it that way and are people confused when he calls things related to people infrastructure? sec. raimondo: yeah, i guess people are confused. i think he did the right thing. investments in care economy, and in those systems, which by the way are fraying all over america, we need to rebuild systems of training. id, so these workers can have i.t.. wages. by the way, you can go to work and be productive if you can't
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have good access to childcare or eldercare. so, are people confused? yes. are there those who are bulking at the inclusion of the care economy? yes. but i like the chances. david: explain this to the american people -- we have a 1.9 trillion dollars stimulus package, there were no tax increases, we borrowed all that money. why not do the same thing with the infrastructure bill? sec. raimondo: i'm old-fashioned, the president thinks we ought to pay for our investment. as any family one. you have to pay the bill. you can't put everything on the credit card and not pay it. the rescue package was an emergency. lives on the line, you have to get the vaccine out. we have to meet the needs of the pandemic. that was a crisis. an emergency response. he felt it appropriate to push for that.
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these investments, we feel very strongly us to be paid for. if proposal is to go ahead and raise taxes. on companies. because, he is very clear, the redline is no one making less than $200,000 a year will see a penny of tax increase. by the way, i think that is responsible. we can afford it. businesses -- you know better than i do, there were dozens and dozens of profitable, multibillion dollar companies last year that paid nothing in taxes. closing those loopholes, using that money to invest in infrastructure is a good investment. david: there are two different types of tax increases yes proposed. on the first part, he has proposed raising the corporate tax. some people say the president might be prepared to compromise and a lower rate. what is a review on how high the rate needs to be in order to pay for some of the things in that bill? sec. raimondo: he has come out
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where he has come out at 28%. and, we are willing to compromise. to answer your question. we think this is a reasonable proposal. it isn't as high as it was. 21% was unreasonably low. and, by the way, most business people limit that. they were expecting it to go back up to something reasonable. so, anyway, we put forth one proposal. investments, over an eight-year. paying for over a 14 year period. this compromise, and if her publicans were to come back with a slightly lower rate, maybe pay for it over a longer period of time. i'm sure we could find that common ground. david: your job, among other things, is to be a liaison with the business community. as a liaison with the business
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community come over they say to you? they say i don't want a higher tax increase, i could live with something but don't quote me, what to they tell you? sec. raimondo: some have been for it. microsoft, salesforce, a number of companies. they have come out for it. in favor of the package. others have said yes, there ought to be an increase in a corporate tax rate. everyone seems to agree. that is wrong that we have so many companies who pay no taxes last year. we have to close loopholes that enable that. a lot of people, maybe they feel 28 is a bit too high. 26, 27, might be of better number. but i have made dozens and dozens a phone call to ceo's. across industries. they agreed that we need big
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investments in infrastructure. they apply the president for not calling just traditional infrastructure. like research and development, broadband, technology, semiconductors. and, they know that higher corporate taxes are way to pay for it. david: people in washington often measure one's power by how long it takes to get there call returned. when you are the governor of rhode island, calling a ceo, did you get your call returned right away? what about when you are secretary of commerce? sec. raimondo: pretty quick so far. because of my career in business and my career in public service, i already have strong relationships with many people in corporate america. they know me, they returned my call. but, here's what i would say. there is a general desire to help this administration be successful.
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because, people realize we have to be successful. you know? business leaders i am talking to, they know we need to make these investments. we need to compete. with china. at they want to help us be successful. so, when i call on behalf of the administration, so far calls are returned. and they are engaged. david: let's talk about the individual tax increases part of the care part of the infrastructure bill. the president has said no tax increases ready buddy making 400,000 or below. the people above that will see a tax increase is highest when he 6%. the expect that will be a compromise as well? or do you think he is determined to get everything he is proposing? sec. raimondo: he is proposing it today. i would not want to lead with our chin and say we will compromise on day one.
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but i will say this -- this president wants bipartisan accident. -- action. if compromising is a part of that, that is what he will do. the only thing that is unacceptable and getting nothing done. we have to get things done. the capital gains, treating capital games like ordinary income, absolutely will be controversial. is there room for compromise? maybe. but, you know, he feels that we have to raise those taxes and we will compromise as we go. ♪
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♪ david: let's talk about your back on for a moment. some people might not know it. you grew up in rhode island, where you the child of privilege or wealthy parents? sec. raimondo: no, my dad worked his whole life at a watch factory. rhode island was once the jewelry manufacturing capital of america. my mom stayed at home with three kids. i grew up in a small house. there were six of us, my grandfather lived with us. aiden -- an italian immigrant. joked when i went to college, i went to harvard, i shared a bed
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with my sister. we were a working class family. we were not poor. my dad lost his job in his late 50's something's got tougher after that. but, we were just working class rhode island. david: rhode island is a small state, everybody must know everybody. senator reid from rhode island said he was your babysitter. sec. raimondo: [laughter] that's a fact. he was my next-door neighbor. we went to the same high school. we all knew each other. the donlon's and my family, we all made a living as kids working at the same summer club at the same beach. david: all talented people. the only one of them became a rhodes scholar, that would be you. only 32 are picked every year. after that, you want to yell law school. very few people get into yell
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law school. with a harvard, oxford, yale degree, you could have gone anywhere. why did you go back to rhode island? not that it is not a great place, but many people go to new york, washington, los angeles. what is you go back? sec. raimondo: because i loved it. i love the place. i felt i owed something to the community. there is something special about building in the community you are from. david: you ran originally for secretary of treasurer position. what is you want to be treasurer of rhode island? madison: it's funny -- sec. raimondo: it's funny, when i ran, that was the reaction i received. they said i have such a good job, mother started to drop -- started to cry. politics is a dirty business. i believe in service.
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and, i'm qualified for the job. i had a finance, investing a background which is what treasurer does. the chair of the investing committee. i believe in service. david: when you got the job, you started cutting pensions. why did you do that? and how did you take in opposition to that to enable you to become governor? sec. raimondo: i didn't cut pensions, i would say. everyone capped what they earned. the system is broken. for better or for worse, i was able to do the math. and understand very quickly that the system would run out of money before too long. and we would have to go to people and say i'm sorry, we are going to cut your pension in half. it was dishonest. i could not live with the dishonesty of telling teachers and firefighters that their pension would be there when i knew it wouldn't. so, we fixed it, by the way. the pension system today is stronger than it's been in
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decades. everyone also said i wouldn't be reelected but i was elected handily. because i think people want the truth. people want people like me to solve problems. david: you were reelected, elected governor of rhode island. many people said you would not be elected governor as well. reelected as well. so, you are governor of rhode island, many people thought you could be running for president. you chose not to do so. why did you decide to give that position up to become secretary of commerce? in rhode island, you were the 800 pound gorilla, you were the governor. and you are very powerful and the governors associations and so forth. i secretary of commerce, it's a great job but not the president. so why did you decide to do this? sec. raimondo: i wanted to be on the team that helped america movil back. in many ways, we are struggling
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right now. as a nation, and economy. -- and economy. i wanted to be back on the team that got us on our feet, it was important to me. david: you were a governor, treasurer, you are in the venture world. what was it that you did? sec. raimondo: for about 11 years i was in the venture capital business. first at a firm in new york. with the cofounder of a capital investment form. -- capital investment form -- firm. which i love. that experience, it enables me to be a better commerce secretary. i know entrepreneurs, but it takes to have an. another thing -- to have innovation. another thing that we run is the patent office. i saw that patents matter in
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order to protect innovation. david: yours is an unusual position. so many parts of the commerce department, so many different things that are put together. the weather bureau is here. tariffs, so many things. sec. raimondo: based commerce. david: when you took the job, did you realize how many things you have to deal with? did other secretaries of commerce a this is what you had to worry about? sec. raimondo: i talked with many, terrific advice. it's hard to learn about the details of fisheries, fishery management. trade. based commerce. tariffs. semiconductors. for me, it is intellectually fascinating. i would like to think if you put your back into it, you will have a big impact across a whole
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range of topics. david: you decided to take this position. you call your mother and say you're giving up being governor, what is your mother say? sec. raimondo: she is 90, and she said i hope you can help biden. ♪
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♪ david: let's talk about your job as secretary of commerce. historically, secretary would say i have two jobs. one to represent the president's views to the business community and the other to represent the business community's views to the president. both are not easy. do you have those perspectives as well? sec. raimondo: that is a big part of the job.
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i think it's important for the business community to know that we want to hear from them. that is very important. i am very available to the business community. and, we want engagement. and i bring that information to the president. who, by the way, is genuinely very interested to know what we have to do so american businesses can compete? david: right now there is a shortage of semiconductors in the united states. is that because of supply chain problems? what are you doing about this? sec. raimondo: it is. it we have to shore up our supply chains. we have become overly dependent on a few suppliers and a few countries. and we need to make investments. what we are doing is working with congress to pass a $50 billion semiconductors supply chain fund.
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so we can incentivize semiconductor companies to manufacture chips in america. david: when you were working -- looking at the campaign, president biden didn't support a lot of things president trump did but some people are surprised he has kept tariffs in place. oversee tariffs. the steel tariffs are still there. tariffs on aluminum are still there. tariffs to a lot of products relating to china are still there. any insight you can give us as to why they are still there? sec. raimondo: although we don't agree with the way the trump administration handled many things, one of the things is they brought to light the fact that our competition with china is serious. it is a strategic competition --
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from unfair practices by the chinese government. and, so, the reason that we haven't made those changes is really that. we need to continue to be aggressive with china. sec. raimondo: they are allies. europe is not a threat. china's oversupply -- to prevent
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china from doing that. david: some of your predecessors have done trade missions. right now, you can't do that because of covid. but the administration and said we don't want to have greater access to foreign markets so people can build factories overseas, we want them to be built here. is that part of your thoughts as well? not necessarily having people build overseas but build more here. sec. raimondo: we need to do both. i plan to be active in export promotion. we do need to continue to have free markets. even with respect to china. we need to do business there. we need to export there. but, right now, we need a domestic focus. at least for the first 18 months. a lot of my focus will be domestic. david: you have been running the
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department to some extent, remotely. do you expect some point that people will come back and you will be going back to the way the department was run before, what you think will happen? sec. raimondo: maybe not five is a week every week but certainly, predominately, yes, back in the office. it will be like business. i think, work from home is here to stay. for a certain part of the week. but, look around, this is a ghost town. i hope a few months from now, we will see some vibrancy here. david: the american people watching, if they don't know much about the commerce department, what would you like people to know about the commerce department and what your principal goal is? sec. raimondo: to help people get back to work with decent paying job. it's quite simple. create policies that level the playing field so american workers can compete. i.t. policy that allows
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innovation to continue. helping start up companies so they can evolve. all of that fundamentally at the end of the day, i learned this is governor, david. americans don't want to hand out. they just want a chance to have a decent job. and so i'm obsessed with that. i was obsessed as governor, i'm obsessed with that now. everything i do will be through that lens, creating decent jobs. david: when you decided to take this position, did you call your mother and say i'm giving up, being governor, what did she say? sec. raimondo: she was excited. she's 90 now, she said i hope you can help biden. biden has to be successful, i hope you can help. ♪
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