1. Florida Politics
  2. /
  3. The Buzz

Rubio sounds alarm on U.S. business investing: ‘The stock market is not the economy’

The Florida senator says companies are too focused on quarterly earnings and not investing in themselves or their employees.
DIRK SHADD | Times U.S. Sen. Marco Rubio, R-Florida, addresses the audience as the keynote speaker for the Pinellas County Republican Party's annual Lincoln Day Dinner at the Hilton St. Petersburg Carillon, 950 Lake Carillon Dr., in St. Petersburg Friday evening (05/19/17).
Published Jun. 20
Updated Jun. 20

Florida Senator Marco Rubio wants you to stop focusing on the stock market for a moment. Your job — and America’s future — may depend on it.

If that sounds unusual for a Republican and steady Trump supporter to say, you may have some new reading to do.

Last month, Rubio published “American Investment in the 21st Century,” a 40-page analysis of how U.S. businesses are sacrificing long-term viability for short-term market gains.

“The stock market is not the economy,” Rubio said in a recent phone interview from Washington. “We now have two or maybe three networks who dedicate most of their time to covering the stock market — they’re like the ESPN of stock markets. There’s a lot more to the economy than the stock market.”

Too many U.S. companies, he says, are no longer investing in the things they used to invest in, like capital improvements, productivity, or, for that matter, the workers that allow companies to become more productive in the first place.

“Less investment in our own future productivity represents a lack of will to build an economy and country that can sustain and renew itself for generations to come,” the report states.

In the interview, Rubio put companies’ relentless focus on boosting shares more bluntly.

“They’re eating themselves — they’re committing suicide,” he said. “That’s impacting industries and having a long-term impact on our national security.”

Prominent economists have taken notice of Rubio’s analysis. In an op-ed following the report’s publication, former Treasury Secretary Larry Summers and Anna Stansbury, an economic Ph.D. candidate at Harvard, praised Rubio for thinking outside of typical conservative market orthodoxy.

“We welcome Rubio’s investment is central to economic growth — particularly in the growth of productivity and therefore the growth of workers’ pay,” the pair writes. “The pervasive weakness of investment relative to saving has also resulted in a period of secular stagnation, in which we can attain reasonable growth only with a combination of large budget deficits, extraordinary monetary policies and high levels of leverage.”

Rubio said the report simply grew out of his recent lived experience and readings — though if you listened closely in his run for the presidency in 2016, you could hear someone who was already sounding the alarm about cracks in the business landscape.

In particular, he has bemoaned the loss of America’s industrial base, and the vanishing of “dignified” work that that has entailed. While he does not believe in slowing down technological progress, he says too little is being done to manage the pace of disruption.

“I’ve read a lot on this, and I’m not convinced that tech is going to destroy work,” he said. “But I am certain it’s going to disrupt the labor market more rapidly than it has before.”

Another top threat for Rubio: China. Despite markets’ seemingly negative response to Trump’s trade war, the senator supports confronting what he sees as a rival poised to become more competitive than the U.S.

“We have to get over this notion that just because businessmen from China wear suits like ours, that they’re equivalent to a Western company,” he said. “They’re not.”

China has a nation-focused business strategy, he said, where the state dictates investment priorities from above. Even Chinese firms that have a U.S. presence are often, if not always, backed by the government, he said.

Rubio is not calling for direct U.S. government intervention. But he does say China has an unfair advantage that must be addressed.

“This is a national competition,” he said. “Chinese companies, from construction companies operating here to Huawei, backed by the Chinese government, are able to price and compete in ways that our businesses cannot.” Huawei is one of China’s largest telecom companies.

Among the economists cited by Rubio in the report is Jo Michell, an associate professor in economics at the Bristol Business School in England. Michell has gained prominence in recent years for describing how China’s economy works.

In an email, Michell said Rubio’s report highlights an important trend that he says has been largely ignored by conservative commentators: declining corporate investment, and the consequent tendency for businesses to hold large cash surpluses.

“The report is right to note that historically business investment has been the driving force of sustained capitalist growth,” Michell wrote.

But Michell called some of the analysis in Rubio’s report “faulty.”

“I think the importance of shareholder primacy and short-termism is overstated: this is probably a small part of the story at best,” Michell wrote.

Michell, a progressive, said one response to low U.S. corporate investment is for government investment to fill the gap. Michell backs the Green New Deal, a jobs- and environment-focused strategy put forward by progressive Democrats like Alexandria Ocasio-Cortez.

Rubio does not believe the answer lies in massive government spending increases. Among the specific policy prescriptions he offers up instead:

  • Eliminating the tax preference given to share buybacks
  • Immediate write-offs on capital expenses
  • Incentives for worker retraining by companies

Rubio, a lifelong Miami Dolphins fan, uses the analogy of the National Football League for how he would tackle the problems he lays out. While a given NFL team only cares about winning — whether it’s 3-0 or 50-0 — the league wants to make sure fans are being entertained. So the NFL decided to make rule changes they believed would make for a faster, more high-scoring game.

“Now equate that to the economy,” Rubio said. “I still think companies can be making money, but our national objective needs to be ensuring we are creating productive, dignified work.”

Rubio believes the current hyper-partisan environment has actually made Americans more receptive to unorthodox ideas to address current challenges. Even though he disagrees with her, he said, Elizabeth Warren deserves credit for recognizing that there is a need to “fundamentally reshape the direction of our current policies.”

In the report, Rubio cites both Trump’s and former president Barack Obama’s Council of Economic Advisers, noting that the former’s admits there is now a “disconnect between America’s real wages and America’s corporate profits,” while the latter’s described a “broad-based investment slowdown.”

“The status quo that exists today, maybe it wasn’t even a good idea 20 years ago, but what you’re seeing today is catastrophic,” Rubio said in the interview. “The question is, coming from the right, how do we create a holistic and concise agenda that addresses these issues?”

-- Rob Wile


  1. Vice President Mike Pence reacts during an immigration and naturalization ceremony in the Eisenhower Executive Office Building on the White House grounds, Tuesday, Sept. 17, 2019, in Washington. (AP Photo/Alex Brandon) ALEX BRANDON  |  AP
    Katie Waldman, a former University of Florida student senator, was accused of helping discard independent student newspapers with a front-page endorsement of a rival party’s candidate. | Analysis
  2. Richard Swearingen, Florida's Commissioner of the Department of Law Enforcement, testifies before state lawmakers on Monday. Florida Channel
    But law enforcement officials are getting behind a “threat assessment system.”
  3. Rep. Geraldine Thompson, D-Orlando, urges the Florida Board of Education to hold schools accountable for teaching the Holocaust and African-American history, as required by lawmakers in 1994. The board was considering a rule on the matter at its Sept. 20, 2019, meeting in Jacksonville. The Florida Channel
    School districts will have to report how they are providing the instruction required in Florida law.
  4. The Mar-a-Lago Resort in Palm Beach. JOE RAEDLE  |  Getty Images
    It wasn’t immediately clear how much Mar-a-Lago would charge to host the Marine Corps Birthday Ball — or even if it might do so for free.
  5. In this March 24, 2018, file photo, crowds of people participate in the March for Our Lives rally in support of gun control in San Francisco. JOSH EDELSON  |  AP
    ‘Guns are always a volatile topic in the halls of the legislature,’ one Republican said.
  6. Pasco County school superintendent Kurt Browning says Fortify Florida, the new state-sponsored app that allows students to report potential threats, is "disrupting the education day" because the callers are anonymous, many of the tips are vague and there's no opportunity to get more information from tipsters. "I have an obligation to provide kids with a great education," Browning said. "I cannot do it with this tool, because kids are hiding behind Fortify Florida." JEFFREY SOLOCHEK  |
    Vague and anonymous tips often waste law enforcement’s time and disrupt the school day, says Kurt Browning, president of Florida’s superintendents association.
  7. Tonight's LGBTQ Presidential Forum is hosted by Angelica Ross of FX's Pose. Twitter
    A live stream of the event and what to watch for as 10 candidates meet on stage in Iowa.
  8. In this April 11, 2018, file photo, a high school student uses a vaping device near a school campus in Cambridge, Mass.  [AP Photo | Steven Senne] STEVEN SENNE  |  AP
    "The department does not appear to have the authority to do anything.”
  9. Clearwater Mayor George Cretekos listens to a speaker share an opinion about a city matter during a city council meeting at Clearwater City Hall in Clearwater, Fla. on Thursday, April 20, 2017.  On Thursday, the Clearwater City Council rejected the mayor's resolution urging lawmakers to ban assault weapons.  [Times files] TIMES FILES  |  Tampa Bay Times
    However, the city did pass a resolution calling for more modest gun control measures.
  10. Maurice A. Ferré at his Miami home earlier this year. JOSE A. IGLESIAS  |  Miami Herald
    He served as mayor for 12 years and set the stage for Miami to become an international city.