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As global and domestic businesses enter a new and potentially-fraught economic environment, the relationship between the U.S. government and American business – always evolving – will face new challenges: Inflation, fair trade vs. free trade, China, protectionism, labor, supply chains, taxes, and of course, the massive humanitarian devastation and economic dislocation from Russia’s attack on Ukraine.
So how can – and should – government and business work together to maximize American competitiveness, navigate these shifting dynamics, and manage the tensions underlying global trade today?
U.S. Rep. Stephanie Murphy has a point of view. Murphy represents a Central Florida district that covers much of downtown and northern Orlando, and other cities. She serves on the House Ways and Means Committee and Armed Services Committee. She also is a co-chair of the Blue Dog Coalition, an official caucus in the U.S. House of Representatives comprised of 19 self-described “centrist” and “fiscally-responsible Democrats.”
We wanted to know from Rep. Murphy: How should Washington, DC and the business world interact, and what could they learn from each other?
Chris Riback: Rep. Murphy. Thanks for joining. I appreciate your time.
Rep. Murphy: So great to be with you, Chris.
Chris Riback: I look forward to this conversation, of course, and getting your professional insights on important policies, including how D.C. and the business world interact, and based especially on your time as a US Representative, what each could law learn from each other. But, of course, for many of us, our professional views are built on our personal experiences, and your personal journey is quite extraordinary. Fair to say, you didn't follow a typical path to entering the US Congress?
Rep. Murphy: I think that's very fair to say.
Chris Riback: So, tell me if you would about your background and how you got here, please.
Rep. Murphy: Well, so I was a refugee and an immigrant from Communist Vietnam and my parents, and I escaped in the late 70s, after the end of the war because the new Vietnamese government was persecuting people who had been affiliated with the US military or the South Vietnamese government. And my parents were one of each.
And so we got on a boat in the dead of night with some other families and escape by sea only to run out of fuel in international water. And so a US Navy ship found my family and found our boat and they gave us the food fuel and water that we needed to make it to a Malaysian refugee camp. And then from there, we were sponsored by a Lutheran church and relocated to Virginia. And so I grew up in rural Virginia with very limited means, watching my parents work super hard and with their efforts and a hand up from the government, a public K to 12 education Pell grants that enabled me to go to college. All of these things gave me opportunities that my parents never dreamed of. And it gave me an opportunity live what is essentially the American dream. It's the reason why I love this country so much. It's the reason why I have chosen moments in my career to work in the public sector as a way of trying to pay off this debt of gratitude that I have. But this perspective and this experience also shaped my view on policy making and what I think will help move this country forward and has certainly played a significant role in my time in Congress.
Chris Riback: How old were you when you got on that boat with your parent?
Rep. Murphy: I was six months old. My brother was eight. I barely want to fly with my kids across country.
Chris Riback: Yes.
Rep. Murphy: So I can't imagine my parents putting us on this boat, but it tells you that people will do anything to enable their children to have better opportunities than they have. They will do anything for a better future. And I think the United States is the reason why we are such a big draw to people all across the world is that we have this duality, this democratic governance system with a capitalist economic system. And that combination is so incredibly powerful. It's the reason why we are one of the greatest, I think the greatest nation in the world. It has brought innovation to the world. It has brought prosperity to Americans and it is a model. But I have to say, I think our model is being challenged right now. It's being challenged and we are watching it be challenged in Ukraine by Russians. We are experiencing the Chinese, challenging our model all across the world. There are actors that want to see authoritarian government controlled markets prevail. They want to demonstrate that they are the better model. And I just simply don't believe that. I believe our democratic capitalism is the right model. We have to just keep working on it.
Chris Riback: So everything you are saying, not surprisingly, is consistent with everything that I have read about you. So let's talk a little bit more about that combination, our form of governance, plus our economic system and the challenges that you described. Some of those challenges have come internally as well. And some of the challenges around the balance and around some of the tensions perhaps that can occur even in capitalism have come from the left and the right. And I'm curious how you view those particularly given your private sector experience before you came into office. In reading about, I believe it's fair to say that you strongly support what you and others call a rules-based trading system. And I'm curious how you balance those beliefs with, as you just identified, particularly with China, some of the current global trade practices. Are trading partners like China sufficiently following a rules-based system and if not, how can or should government and US business work together to address that type of challenge?
Rep. Murphy: First, let me just say that I understand that there's a populist and maybe isolationist vein that is running through American politics today, but I don't have a ton of sympathy for it. The US needs to lead. When we lead, we make ourselves more prosperous and more secure as a nation. And those values spread around the world also help create a better system. As it relates in particular to a rules-based trading system, I think it's incredibly important that we have a rules-based trading system. The development of the rules-based trading system first with the GATT and the WTO is the reason why we saw such historic advancements and growth and interconnectivity between nations over the last half century or more. And I on any given day would put US companies and US workers toe to toe with any other country. And I think that if we are able to compete on an even playing field, the United States will win every single time.
And so that's why it's important that we have a rules-based trading system. What really is concerning to me that trade has become almost a four letter word here in Washington. And as a result, we are pursuing policies that I think in the end will create more self-harm rather than self-preservation. And I'll give you a couple of examples.
Chris Riback: Please.
Rep. Murphy: You asked me if I thought China were playing by the rules. I think you can definitively say China is not necessarily playing by the rules. We allowed them into the WTO over two decades ago and that experiment has shown mixed results. We thought that engaging with them economically would them along both politically and also economically.
Chris Riback: Yes.
Rep. Murphy: And that just simply hasn't manifested itself the way that we had expected. And while they violate the letter and the spirit of the WTO rules, we haven't done ourselves any favors by undermining elements of the WTO, like the appellate body. So the Trump administration basically handicapped the appellate body by not appointing new judges. They don't have a quorum anymore. And the Biden administration has continued that approach basically citing concerns with the appellate body...
Chris Riback: Appellate body within the World Trade Organization.
Rep. Murphy: That's right.
Chris Riback: Yes.
Rep. Murphy: The appellate body within the World Trade Organization where trade disputes get resolved.
Chris Riback: Yes.
Rep. Murphy: And if we have problems with the way that the appellate body is operating, we should work with our allies and other nations to fix the system and make it better. But we shouldn't abandon in it all together because without a forcing function... We like to talk a lot about enforcement here in Congress. Without an enforcement mechanism, how do you compel players like China and others who are violating the rules, how do you compel them to abide by the rules?
Chris Riback: And one can understand how it starts getting defined downward that if others aren't playing by the rules, then people internally, maybe within the US don't want to then have to abide by those judgements because the other players in the system aren't agreeing to the judgements or aren't playing fairly and all of a sudden it spirals downward.
Rep. Murphy: Exactly. It's about a level playing field.
Chris Riback: Yes. You've characterized the US as being a strategic competitor with China. I was wondering about that term strategic competitor. What does it mean to you? What do you mean by that term? What's the current status of that competition? Is the US on the right track?
Rep. Murphy: Well, let me just say for context though, that in this moment we are very heavily focused on Russia's despicable invasion of Ukraine right now.
Chris Riback: Yes.
Rep. Murphy: And when we talk about our near peer competitors or big competitors, Russia, China, those are the ones that we usually name drop. This particular invasion has required us to lead a global coalition to provide military in humanitarian aid and pose sanctions and a lot of other steps. But from a long term perspective, China is the primary long term challenge to the United States interest in values. And it has an economy that is much more of a strategic threat and a strategic competitor than say Russia or some of the other countries that keep me up at night like Iran and North Korea. But what China is doing is that it's challenging US global supremacy across virtually every geographic and functional domain. And I'm in Florida. So I just got a bill pass that requires an assessment of China's efforts to increase their presence and influence in Latin America and the Caribbean. They're buying up ports. They have satellite sites. There's just all kinds of things that they're doing.
Chris Riback: Belt and Road has extended to Africa, to LatAm, not just in other Southeastern Asian countries absolutely
Rep. Murphy: That's right. And so they are using a very coordinated effort to expand their influence and also to sell their model. And if you think the last a few decades were dominated by United States, let's take technology, for instance. The fact that our was the innovative platform, it was adopted by other countries, enabled us to set the standards. We were at the table setting the standards with our values. And our technology is about democratization. It is about allowing small businesses to flourish, allowing anybody to have a voice sometimes at the detriment to our democracy, but basically a democratization approach. Whereas if you look at Chinese technology, their technology is about ensuring authoritarian rule. You have to look no further than Shenyang or Hong Kong to see them implement this kind of technology and with it, the values that they have as an authoritarian nation.
And now we're seeing them spread all across the world with these tools and the value use, which I would say are not liberal values. They're not liberal democratic values and they're spreading quite rapidly. And as Americans, we should be concerned about this and focused on it. It's the reason why we should pass this. I don't even know what they're calling it these days. The name has changed so much, but the competes act, or they said the bill that allows us to make investments into our semiconductor manufacturing, as well as enables us to be more strategic about our competition with China.
Chris Riback: So much of Chinese foundries are based on semiconductor capability, made from the US, and to what extent do you keep providing that capability? And if you don't, does it then put China in a situation where they created on their own and in the short term, maybe they fall behind, but in 10 years, maybe they leap ahead. I know there's a lot of discussion around the whole semiconductor component.
Rep. Murphy: I agree with you that it is an issue that we have to look at closely. And my hope is that we here between the Senate and House come to a conference on that bill and strip the stuff that isn't necessary out and pass it quickly so that we can begin the efforts of competing with them in this area and make the necessary investments into R and D in other areas so that we can be competitive with China, especially since the Chinese have made no bones about the fact that they intend to, in a number of tech areas, outcompete us. And so they told us what they're going to do. We should believe them and we should be responding.
Chris Riback: We should believe them when they say it. And in addition to your point, the House and the Senate coming together, and sure surely that'll happen one can't imagine the House and Senate not seamlessly coming together to pass legislation. With you behind it, I'm sure that it'll get done.
Capitalism and protectionism. You mentioned earlier populism, and I know protectionism and populism kind of end up getting merged or conflated and influenced each other. Even in a system a capitalist system, I assume that you would believe me – and if you don't, you'll tell me, I'm sure – that even that system may not work flawlessly 100 percent of the time. That there are tensions and trade-offs and adjustments, even at times, there's regulation that must occur. And one such tension that one hears from the left and the right, is around what might be called protectionism. The push for fair trade rather than free trade. How do you think about that balance? Is a balance required and has your perspective shifted at all since entering elective office?
Rep. Murphy: I think that our capitalism does not work without representative government to provide the guardrails. So democratic capitalism is the way that you have an economic system that is governed by a government system reflective of the will of people. And that's so critically important. You can't really have one without the other. And you can see in other countries where they try to liberalize their economic system, but still try to hold on to up authoritarian political power that inevitably there's that friction that just doesn't work. And so we are lucky enough to live in a country that has democracy and capitalism so that the democracy part can be responsive to the people and make the necessary changes and create the guardrails on capitalism so that we make it a better system that's more fair and creates the opportunities that the American dream. And so that's critically important that these two things go hand in hand.
As it relates to protectionism, I think we are sometimes driven... And I know this is true of the democratic party. We are sometimes driven by forces that are reflexively anti-trade because they seem to think that somehow it takes jobs away from American workers. That trade negatively impacts American workers. But I think the truth is that trade helps more American workers than it hurts. And not enough Democrats are willing to say that. In Florida, one in five jobs in Florida are trade related. As we look at supply chain issues that we're dealing with right now, as well as inflation, imports actually lowers the cost and creates choices for our Americans. We shouldn't take any of that for granted, especially in this moment, but we aren't talking about trade, unfettered trade. We are talking about trade and I don't love the term free trade because it implies unfettered trade.
What is very successful in us advancing our economic goals, our value based goals, and our government model is for us to have trade that is regulated, that there are rules. And I'll just take, for example, the big win we had last Congress, which was to pass USMCA, the NAFTA 2.0, so to speak. Within that bill, we encapsulated so many American values to the point where I'm actually kind of surprised some of our trading partners accepted those terms, labor terms, environmental terms, things that we were able to use the carrot of trade with our nation, with the stick of the rules that we want these other countries to raise their standards and be on a level playing field with us and that helps their workers and helps their environment. So trade can be an awesome and powerful tool and way for us to export our model of democratic capitalism. And I wish that we didn't have so many forces making trade a four letter or word. I wish that more forces saw the opportunities that are present in engaging with the world on our terms
Chris Riback: To close out. I am sure that you are not yet in the reflective stage. You've announced that you're not going to run for a fourth term, and you have plenty of time before your current term is up. But I'm curious about lessons that you are coming away with around how D.C. and the business world interact. How would you describe the relationship and interactions between D.C. and the business world? Are there realities about business that you wish that your colleagues, your current colleagues better appreciated? And what lessons will you most significantly take with you should you return to the private sector? I don't know. Maybe you've announced what you're going to do. If you did announce it, I didn't see it. What will you take when you leave office next year?
Rep. Murphy: For the first time in my life, I don't actually know what I'm going to be doing next, but what I...
Chris Riback: Congratulations, good for you. Take a gap year.
Rep. Murphy: Yes. It's kind of nice to think about. When I worked in investments and in business, we were always so heads down building the next cool thing, hiring more people, expanding and growing and focused on that, and really felt like we were not only trying to make money, but also doing good for the world. And so I think when these companies I worked with felt the long arm of government, I guess, is the term, they always surprised because they were like, "Huh, we don't spend a whole lot of time thinking about government, but apparently government thinks a lot about us. And now maybe we should kind of see what regulatory risks or legislative risks exist in various in industries."
And so now that I've spent some time in Congress, what I realize is that a lot of my colleagues, it's very in vogue to be pro worker, but you really can't claim to be pro worker unless you're also pro-business, because I think most workers are employed by businesses. So we have to see this not as a zero sum game, but rather that employers and employees, businesses, and workers, management and labor, they have compatible interests. So in fact, they're mutually dependent on one another. So you shouldn't have to pick sides. How do we craft legislation? How do we think about the relationship wherein we can move both forward together as opposed to pitting one against the other? And I hope my colleagues come around to that perspective as opposed to continuing to pick a villain in that matchup.
Chris Riback: I hope that they do on both sides and that in the business world, they see the lessons that you are bringing as well. And I imagine that upon exit, should the role, I don't know who's in it now, so I'm not saying that anyone's leaving the role, but should the role of running US Soccer open up, it occurs to me that you might accept some role like that. Would you give up a gap year to have a role with US Soccer?
Rep. Murphy: Well, so you must have done a lot of good research because I would consider myself a soccer hooligan until I became a public figure. And my staff told me I could no longer heckle the referees, the way that I did. And yes. Oh, I would love that, but I'll settle for just going to see the World Cup.
Chris Riback: This fall, I think that is. Well, my guess is that you'll be able to get a ticket somehow. Rep. Murphy, thank you. Thank you for your time.
Rep. Murphy: It's so good to be with you. Thanks so much.