313. How to Be a Modern Democrat — and Win

Gina Raimondo, the governor of tiny Rhode Island, has taken on unions, boosted big business, and made friends with Republicans. She is also one of just 15 Democratic governors in the country. Would there be more of them if there were more like her?

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Stephen J. Dubner?

  Freakonomics Radio is sponsored by PNC Bank. Boring. Great word, bad rep. Yet, time and time again, here at Freakonomics, we find that when something culture-changing happens, boring things like calculations and careful planning are usually behind it. Which begs the question, why not apply it to other aspects of life? Like banking, for example. Well, PNC Bank did, since its inception, proving time and again that the best banking strategy isn't the exciting type, but the steady, reliable, definitely-not-yolo type. PNC Bank. Brilliantly boring since 1865. Brilliantly boring since 1865 is a registered mark of the PNC Financial Services Group, Inc. PNC Bank, National Association, Member FDIC.

• 0:48Stephen J. Dubner?

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• 1:20Stephen J. Dubner?

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• 1:53Stephen J. Dubner?

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• 2:29Stephen J. Dubner?

  Okay, it's Stephen Dubner. Is that Governor Raimondo?

• 2:32Speaker 01

  It is. Hi, Stephen. It's Gina. How are you?

• 2:34Stephen J. Dubner?

  Hi, Gina. Very nice to meet you. Thanks so much for doing this.

• 2:36Speaker 01

  Yes, I'm happy to. I'm a secret closet economist.

• 2:40Stephen J. Dubner?

  You are 46 years old, and you've done a lot. You have an undergrad econ degree from Harvard, a PhD in sociology from Oxford, as a Rhodes Scholar, a JD from Yale, and then 10 years in venture capital focused on healthcare, and then general treasurer of Rhode Island before your election as governor in 2014. So I have to say, when I think of Rhode Island, I think of the tiny state next to Massachusetts, a state whose most famous resident is probably Peter Griffin from the animated comedy Family Guy, who's a dumpster fire of a man.

• 3:17Speaker 02

  Geez, Lois, I just spent all morning on a boat with my friends, drinking beer, telling jokes, and screwing around. How about a little me time?

• 3:24Stephen J. Dubner?

  I think of a state whose tourism ad campaign accidentally featured restaurants from Massachusetts and a scene shot in Iceland.

• 3:32Speaker 03

  But just 10 seconds in, it takes us to a shot 2,500 miles away.

• 3:36Stephen J. Dubner?

  I think of a state that I rarely hear about in discussions of forward-thinking technology, or economics, or society. I think of a sort of a land that time forgot. So a state that's had one of the highest unemployment rates in the US, one of the highest rates of death from opioid abuse, one of the highest rates of unfunded or underfunded pension liability. And then when it comes to politics, I think of, this is Just me, I think of former Providence mayor Buddy Cianci, one of the most corrupt mayors in modern American history. So that's what I think of when I think of Rhode Island, kind of knee jerk. I'm guessing that's not what you think of when you think of Rhode Island. So give me, give me your version.

• 4:14Speaker 01

  So, you know, those are the lowlights, I guess, but I can give you the highlights. You know, when I think of Rhode Island, I think of the, some of the best beaches in America. I think of Brown University and RISD and Johnson and Wales. We are nestled between New York and Boston, which means if you want to start a company and be part of the ecosystem of Northeast talent, but you can't afford the eye popping prices of New York and Boston, you should come to Rhode Island. And having said that, we were stuck. You know, it was kind of a tragedy. There's no reason that a state with our resources and strategic location should have had the

• 4:57Speaker 01

  highest unemployment rate in the country for as long as we did. But today, our unemployment rate's below the national average. In the past year and a half, companies like GE Digital and Johnson and Johnson and, you know, 17 other companies have moved here. So my experience is it's an amazing state. People just don't know about us. And when I tell a story, people fall in love, they just don't know the story.

• 5:28Stephen J. Dubner?

  Today on Freakonomics Radio, we will hear the story of the Rhode Island recovery as told by its unconventionally Democratic governor, Gina Raimondo. We'll hear how the old story went.

• 5:40Speaker 01

  We had a model, which I often refer to as train and prey.

• 5:45Stephen J. Dubner?

  We'll hear some of Raimondo's plot twists.

• 5:47Speaker 01

  My tagline at the time was, this is math, not politics.

• 5:51Stephen J. Dubner?

  And some surprise endings.

• 5:53Speaker 01

  One of the places I got that idea was from the Republican governor of Tennessee, Bill Haslam.

• 6:00Stephen J. Dubner?

  We'll get to all that right after this.

• 6:15Speaker 04

  From WNYC Studios, this is Freakonomics Radio, the podcast that explores the hidden side of everything. Here's your host, Stephen Dubner.

• 6:30Stephen J. Dubner?

  Why did you want to be governor of Rhode Island?

• 6:34Speaker 01

  Because in order to help create jobs in the state, you have to be the governor. I had been state treasurer and spent four years working really hard to fix our broken pension system. But I realized what Rhode Island really needed was more jobs, a better economy. We were stuck.

• 6:56Stephen J. Dubner?

  Gina Raimondo had personal experience with this economic stuckness. She grew up in Smithfield, Rhode Island, in a tight-knit Italian-American family. Her grandfather had immigrated at age 14, and he learned English in the public library. Her father, a World War II veteran, worked for 26 years at a Bulova watch factory. But when the factory moved overseas, her family took a big financial hit. Later came more sad news. In order to fix its broken budget, Rhode Island was cutting funding for the libraries where her grandfather learned English. One big cause of the budget trouble? A $7 billion shortfall in pension funding.

• 7:38Stephen J. Dubner?

  So Rhode Island was in pretty terrible shape with unfunded or underfunded pensions, pension liability. You undertook pension reform back when you were treasurer, before you became governor. And this involved raising the retirement age and cutting cost of living adjustments, which are the things that people talk about, but rarely do. I know this made you extremely popular among unions and retiree groups. How did you get it done? And talk about how effective it has been. I know that there was a suit and that there was a settlement where the state did pay some money to those retired groups.

• 8:16Speaker 01

  Yeah, so it wasn't easy. It wasn't easy to do, not something that you ever really want to do. But I felt it had to happen because... We had one of the worst, if not the worst funded, systems in America.

• 8:31Stephen J. Dubner?

  You were below 50%, I believe, yes?

• 8:33Speaker 01

  We were, yeah, we were. You know, pensions weren't going to be there for people when they needed them. And at the time I was doing this, we had a small city in Rhode Island, Central Falls, go bankrupt.

• 8:47Speaker 01

  In large part because of unfunded pension liabilities.

• 8:50Speaker 05

  Rhode Island's poorest and smallest city, Central Falls, is now the state's first and only city ever to file for bankruptcy.

• 8:58Speaker 06

  I've been telling my firefighters and police that we need concessions for the past six years, that we needed concessions, we need concessions, we need concessions.

• 9:05Speaker 05

  Central Falls is the canary in the coal mine of Rhode Island.

• 9:08Speaker 01

  When they went bankrupt, they cut the pensions in half of already retired people. And I have to say, it broke my heart to see, like, you know, 70, 75-year-old firefighters saying, "I can't buy my food, I can't buy my medicine, I can't stay in my house, I can't live on $14,000 a year." So I decided, I'm not doing that. You know, it's not about my politics, it's about shoring up the system. Because the reality is, our system would have been fine for like, five years, maybe 10 years, but there's a lot of people in the system who need their pension to be there in 30 years, or, you know, when it

• 9:51Speaker 01

  wasn't going to be. So, anyway, my tagline at the time was, "This is math, not politics." I went around, I talked to anybody who would listen, including many people who did not want to hear from me. And I basically said, "Look, I got some bad news, this is the math of it. I know we need to solve this."

• 10:11Stephen J. Dubner?

  So, when Central Falls went bankrupt, I don't mean to sound cynical here, but politicians do talk about never letting a good crisis go to waste. Was it the kind of crisis that got the attention of voters and others in the state, and then let you say, "Look, if we want to have it not be that bad, we have to at least take some medicine now"?

• 10:31Speaker 01

  I think it lent credibility to what I was saying. It was hard for people to say, "Oh, she's fear mongering, or she's not right, this won't happen," because it was happening. So it just made it very real.

• 10:48Speaker 01

  At the time, I don't want to sugarcoat this. There was a huge amount of resistance. Many people did not agree. However, the legislature overwhelmingly voted for my proposal. So it was vast majorities bipartisan voting in favor of the proposal.

• 11:05Stephen J. Dubner?

  And then you did, we should say, get elected in a statewide election to governor. This move was made as treasurer, correct?

• 11:12Speaker 01

  Yes, yes. No, you're right. You're right. It made for a very difficult election. I had a very difficult Democratic primary, running for governor. You know, frankly, as a result of this.

• 11:23Speaker 07

  Look, the treasurer has stood for Wall Street. I believe that we need to stand for you and invest here in Rhode Island. And that's what I'm going to do as governor.

• 11:33Speaker 01

  Right, I made for a very difficult election, but I won.

• 11:37Stephen J. Dubner?

  So how do you explain that you did something that would be theoretically so politically unpopular, especially for a Democrat, and yet you then won governorship as a Democrat?

• 11:47Speaker 01

  I think it was the right thing to do when people realized that. You know, I told the truth to people. I was honest. I was sincere. And we solved the problem. You know, we did solve the problem.

• 12:01Stephen J. Dubner?

  So what is the state of pension funding in Rhode Island today? I realize it's a marathon, not a sprint, but where are you at and how's it looking?

• 12:09Speaker 01

  It's looking quite good. It's improving its funding level. But just as important, we also have money in our budget to invest. So since I've been governor, we've had the money to triple the number of public pre-K classrooms in Rhode Island. We've brought about all-day public kindergarten for every kid in Rhode Island. We are, for the first time in a long time, fixing our roads and rebuilding our bridges. So, yeah, we took the medicine, as you said, but now we're investing like crazy. And again, we were in the dumps. We had the highest unemployment in America years after everyone else had come out of

• 12:52Speaker 01

  the recession, and now the winds are back. Our job growth in certain sectors like advanced manufacturing is the highest in New England. When I look out my window from the State House, I see three cranes in the sky. The investments are paying off.

• 13:09Stephen J. Dubner?

  The investments Raimondo is talking about sometimes come in the form of business subsidies, the kind of incentives offered to lure big out-of-state companies to set up shop and create local jobs. This practice has plenty of detractors, including Raimondo's predecessor as governor, Lincoln Chaffee.

• 13:26Speaker 08

  I've never liked corporate welfare because it's unfair to the existing businesses. That's what I've always felt. The ones that have been here for years, loyally paying their property taxes and their sewer taxes and their water taxes, and then all of a sudden, some outside company comes in and gives them the candy store. I just don't like it. I don't think it's fair. We're seeing that money go out the door to General Electric, to Johnson & Johnson, billion-dollar companies.

• 13:55Stephen J. Dubner?

  We know that governments offering tax breaks and other incentives does work to draw firms and therefore employment. Of course, there's a cost to that, too. Talk to me about what you've done, maybe in addition to the tax breaks and incentive, but especially beyond that in drawing these firms and increasing employment.

• 14:13Speaker 01

  Yeah. That's actually a pretty small piece of the puzzle. I mean, those are the things that grab the headlines because they are big, big, brand-name companies. But most of the reason that we have had this economic comeback in the past couple of years is because we're investing in our people. We have job training programs, which I've completely retooled since becoming governor, that are working. We've created tight partnerships between our high schools and our companies. I've started the first, some people say the first ever, but maybe the first in a long time, small business loan fund that's run out of the Rhode Island Commerce Corporation. And these are like microloans,

• 14:56Speaker 01

  you know, somewhere between $5,000 and $100,000.

• 15:01Speaker 01

  And it's pretty amazing how well it's working. I was with a roundtable of a couple dozen businesses yesterday, and their stories are all the same. Like, "We are a small business in Rhode Island. We're too small for the bank to lend to us. We got turned down by a bank. We came to you, and the money you gave us allowed us to go to a trade show. We got a new client. We tripled our business." One woman who owns a great restaurant now, she's like, "I needed a few thousand dollars to move an oil tank from the basement. I couldn't do my business without that."

• 15:40Stephen J. Dubner?

  So, one constant friction between governments and business is that a lot of businesses complain that governments are mostly a hindrance, whether it's with regulations or obligations. You know, small businesses will say, "We don't necessarily need you to do something for us. Just stop doing things to us."

• 15:57Speaker 01

  Yeah. When you're getting a business going, you're like paying the bills on your credit card, and you're trying to find a place to set up shop. It is very annoying if you have to take time out of work to go to City Hall to stand in line to get a permit. If you have to call to get some kind of permit or license or whatever and call back four times and hang on line for half an hour every time. Like, that's real. And so, since I've been governor, I've eliminated a ton of regulations. We're moving to put all our permitting systems online.

• 16:40Speaker 01

  Having said all of that, government does help, right? Like, these job training programs I just told you about, these companies need it, and we're providing it. And we just made, I'm proud of the fact that we just became the fourth state in America to make community college tuition-free.

• 16:58Stephen J. Dubner?

  What kind of residency requirement is there afterwards? If I get a free community college degree from you, and then I move immediately to Massachusetts or California, do I have to pay you back?

• 17:09Speaker 01

  We ask them to make a pledge that they'll stick around for a couple of years. So, yes, the deal is you have to go full-time because we want people to graduate. You have to keep up a minimum grade point average. Can't get into trouble. Got to be in academic good standing. And we want you to live in Rhode Island for at least two years after you graduate.

• 17:30Stephen J. Dubner?

  Tell me how many students either are taking advantage or you expect to take advantage of this free community college? And then I want to know what it costs the state and where the money comes from.

• 17:41Speaker 01

  We know that this year, on account of the scholarship, the first time, full-time students is up 43% over last year. So 43% more kids this year than last year. And 1,500 enrolled with this scholarship. By the way, interesting fact, Hispanic enrollment, enrollment of Latinos, is up 70%. African-American enrollment, up 52%. So...

• 18:13Stephen J. Dubner?

  Which I guess is, among other things, really good indicator that cost was a huge barrier for certain groups, right?

• 18:19Speaker 01

  That's exactly what I was... Cost is the reason. You know, in America, four out of 10 kids drop out of college. And cost is the number one determinant. People make life-determining decisions, often over a very small amount of money. Like the SAT, give you a perfect example. One of my initiatives is, this year, we're putting the SAT during school, not on a Saturday, and we're making it free for everybody. The number, it's just like skyrocketing, how many people are taking it. And I sit with kids, and I'm like, why didn't you take it before? This will change your life. Like, where am I going to get the 80 bucks, governor? Where do you want me to get it? This is another thing that motivated me with the Promise Program.

• 19:03Speaker 01

  Kids drop out every day over 400 bucks. I'm like, really? Honestly? You dropped out of college over 400 bucks? It might as well be 40,000, because they don't know where to get it. Let me tell you how we're paying for it. It's less than $4 million a year. It's like, $3.5 million a year.

• 19:23Speaker 01

  By the way, our total budget is nine billion. And where are we getting it? We're, you know, we are prioritizing. It's coming out of our budget. We, I found the money in a balanced budget. It's not that much money.

• 19:35Stephen J. Dubner?

  Three and a half million for 1,500 kids, though. That sounds like super cheap tuition. What's the-

• 19:40Speaker 01

  Well, do you know why, though? The way we've structured this, it's what they call a last dollar scholarship. So in order to get the scholarship, you have to apply for all federal aid you're available for, like Pell Grants, for example. You have to apply for any kind of other scholarships. And then there's often a gap, you know, like a thousand bucks. So the average size of our scholarship is, is not huge, you know? It's a thousand bucks, 2,000 bucks. Because they get their Pell money, we've seen a huge increase in the Pell recipients because now that people know they have a shot at going to college, they're more likely to apply for Pell and they're not leaving that money on the table.

• 20:31Stephen J. Dubner?

  Coming up on Freakonomics Radio, why have Democratic governors become an endangered species?

• 20:37Speaker 01

  The Republican Party and Republican Governors Association and Republican donors have just done a better job focusing on states.

• 20:45Stephen J. Dubner?

  But governors, we're told, can't afford to be as partisan as the politicians in Washington.

• 20:51Speaker 01

  It's real. You know, the camaraderie is real.

• 20:55Stephen J. Dubner?

  And if you enjoy Freakonomics Radio and if you'd like to help us out, please leave a review or rating on Apple Podcasts or whichever podcast app you use. It helps more than you think. Thanks for that and we will be right back.

• 21:23Stephen J. Dubner?

  Freakonomics Radio, sponsored by Granola. You know that moment when a meeting ends and someone says, let's circle back on this next week, and everyone nods, but no one writes it down? Then next week rolls around and it's radio silence? That's why Granola exists. Granola is an AI-powered notepad built for the way real people actually meet. You take rough notes like you normally would, and in the background, Granola securely transcribes the meeting. Then it turns everything into clean, structured, actually useful notes when the meeting ends. And the best part? Granola works through your device's audio, which means it integrates seamlessly into the video conferencing tools you already use. No setup, no awkward bots. It's just your normal meeting with superpowers. If meetings are eating up your day, Granola is a no-brainer. You can try it totally free.

• 22:07Stephen J. Dubner?

  Just head to granola.ai/freakonomics. That's granola.ai/freakonomics to get your time back. Try it for free at granola.ai/freakonomics. Freakonomics Radio is sponsored by PNC Bank. Boring. Great word, bad rep. Yet, time and time again, here at Freakonomics, we find that when something culture-changing happens, boring things like calculations and careful planning are usually behind it. Which begs the question, why not apply it to other aspects of life? Like banking, for example? Well, PNC Bank did, since its inception, proving time and again that the best banking

• 22:50Stephen J. Dubner?

  strategy isn't the exciting type, but the steady, reliable, definitely not YOLO type. PNC Bank: brilliantly boring since 1865. Brilliantly boring since 1865 is a registered mark of the PNC Financial Services Group, Inc. PNC Bank, National Association, Member FDIC. Freakonomics Radio is sponsored by hotels.com. Hotels.com helps you find and book the right stay for work faster. With business preferences, save your travel must-haves, like gym access or breakfast, just once, then get tailored results whenever you search for work travel. Plus, with a free membership, you can save up to 20% on hotels and earn rewards on every stay for future travel.

• 23:35Stephen J. Dubner?

  Book now at hotels.com. Visit hotels.com for details.

• 23:47Stephen J. Dubner?

  Gina Raimondo is a business-friendly politician who took on labor unions to push pension reform. And yet, she's a Democrat. In other ways, she's more typically Democratic. Her views on the Republicans' federal tax reform, for instance. We spoke about it before things were finalized, but the gist was pretty clear.

• 24:07Speaker 01

  So, whenever I look at any policy on a federal level, the question I always say is, is this good for Rhode Island? And I can say unambiguously, the versions of the tax bills that I've seen are bad for Rhode Island. We don't have that many multimillionaires who this is geared towards. And rich people don't need a tax break, period. I think the wealthiest Americans should be paying higher taxes at a federal level.

• 24:38Stephen J. Dubner?

  What would you like to see that rate? Do you want it like Scandinavian level?

• 24:41Speaker 01

  You know, I don't know. I do think carried interest should be taxed like ordinary income. We need money to invest in our roads, in higher education, in like the Promise Program we just talked about, the community college program. The federal government ought to be doing that. That's a drop in the bucket. They ought to be doing that. So, with respect to companies, look, and I understand the argument, which is the corporate tax rate for the biggest companies in America is the highest in the developed world. Now, footnote, most companies don't actually pay that rate because we have so many loopholes. So, I understand. I, you know, I get it. I'm a businessperson. I'm OK with becoming competitive, and I think that would be advantageous.

• 25:24Speaker 01

  I do think there's a lot of cash of American companies being held overseas, and I would like to provide an incentive for companies to bring that cash home to America. But, from what I can tell... This particular tax deal, it's just a giveaway to the wealthiest Americans, and they don't need it.

• 25:44Stephen J. Dubner?

  I'm always curious, you're a governor, which, you know, there's only 50 of you in the country. And when we citizens hear about this proposed legislation at the federal level, I think we always assume, or I guess I like to assume, that you governors are like, you're on the bat phone, you have the red line, you're hearing stuff from the federal government, like, this is where it's at. In other words, I assume that there's this massively awesome pipeline of information. Sounds like you know about what the rest of us know about the proposed tax plan.

• 26:13Speaker 01

  Absolutely. There's no such bat phone. I wish there were. Like Rhode Island, thank goodness, we have terrific US senators. They both opposed repeal of the Affordable Care Act. I don't even know if they're in the room. They can't get the information.

• 26:29Stephen J. Dubner?

  This doesn't sound like the way federalism is supposed to work, does it?

• 26:31Speaker 01

  I couldn't agree more. I couldn't agree more. And it hasn't always. This is a new phenomenon. Talk to people who've been in Senate, the Senate for a long time, and they'll tell you, yes, it's always been nasty, it's always been partisan, but we used to have hearings and work groups and actually pass laws and actually get the work of the people done.

• 26:52Stephen J. Dubner?

  One of my favorite theories, I have no idea if there's any truth at all to this, but one of my favorite theories is that when that comedy, comedy with a T, not comedy with a D, when that began to break down was when a lot of people in Congress, particularly senators, got a little bit more maybe health conscious and a little bit image conscious, stopped drinking so much. But when you drank, you would naturally drink with people from the other party all the time. And that, that kind of social lubricant, you know, helped create a more amicable working environment. Do you, I mean, do you have cocktails with Rhode Island Republicans regularly? Do you try to bring back that tradition?

• 27:33Speaker 01

  I do, actually. It's the only way to get things done. And by the way, so, you know, we had a storm a handful of weeks ago here in Rhode Island. And the first call I made that morning, at like 6:00 in the morning after the storm, was to the Republican mayor of Warwick. I don't care if he's a Republican. You know, he had thousands of people without power. The guy needed a hand. And I have lunch with him, too. He's not going to support my reelection. But that's OK.

• 28:03Stephen J. Dubner?

  We often hear about the fraternity of governors across the US and that party affiliation matters a lot less among governors than among other high-level politicians. I guess naturally because, you know, they don't really affect your state and your fate so much. Can you talk just for a moment about that fraternity of governors? And just kind of how the dynamics of that works? And whether that is a useful push against the way that federalism isn't working out the way that we might all like?

• 28:33Speaker 01

  Hmm. It's real. You know, the camaraderie is real. I'll give you a great example. Back to the community college program. One of the places I got that idea was from the Republican governor of Tennessee, Bill Haslam. And I spent a lot of time talking to Bill because he did the same program a couple of years ago. And we tweaked their proposal based on lessons learned. He actually did a public conference call with members of the media and the chambers of commerce in Rhode Island for me to help me pitch the program. I've spent a lot of time talking to Republican governors about pension reform. You know, hey, Gina, how'd you get that done?

• 29:17Speaker 01

  So it's real. It's helpful. It's productive.

• 29:22Stephen J. Dubner?

  It's also encouraging to those of us who aren't in government and who kind of think of government as maybe even more dysfunctional than it is. Do you think that, given that sort of relationship between governors from different states who are in different parties, do you think maybe we, the public, the media, whatever, should pay more attention to state-level politics and the governors? Because really, if you think about it, all the oxygen gets sucked out of the room looking at the stuff at the federal level. And honestly, my argument, the argument of this show for years, has been that an awful lot of legislation that happens at the federal level doesn't really affect people in their daily lives so much, whereas at the state level, it truly does. Do you think we kind of have our eye on the wrong capitals sometime?

• 30:05Speaker 01

  Absolutely. I think that all the time. For so many reasons. I mean, first of all, I think, as you say, people would be heartened by it. Like, my neighbor to the north, Charlie Baker, governor of Massachusetts, Republican. He and I work on stuff all the time. We're together tackling the opioid overdose problem. We're working together on renewable energy, because we want to do a renewable energy procurement. And I may join our state into like, a regional procurement. So when you talk about energy policy, or a public health crisis, you want us collaborating. But here's the other thing, which is something that I think very few people realize. We're

• 30:48Speaker 01

  all very focused on the fact that Republicans dominate Washington. Most people don't know that, right now, there's only 15 Democratic governors in America. That's unusually low. And there's a lot of us on the ballot next year. I don't think that's good for democracy, to have such an imbalance of power, from the White House, all the way down. I think there's a story there, and folks ought to cover it, instead of just covering inside the Beltway.

• 31:20Stephen J. Dubner?

  Well, one story that an economist might tell, or another social scientist, is that, wow, people, voters are really expressing their preferences, and they're really voting for, across the board, not just on the national level, but on a state level. You know, 35 out of 50 times, they're saying, oh, yeah, we kind of like that party position more. What makes you an unapologetic Democrat, looking at those numbers, as opposed to saying, oh, man, our party really isn't doing a very good job, either coming up with the right ideas, or communicating those ideas?

• 31:49Speaker 01

  Well, that could be part of it, by the way. I'm not saying that that isn't a part of it. But I also think, if I'm very honest about it, the Republican Party, and Republican Governors Association, and Republican donors, have just done a better job focusing on states. You know, so, guys like the Koch Brothers just decided, many years ago, they cared about state legislatures, they cared about governors' mansions, and they've tactically invested, and it's working, frankly. Like, it's working.

• 32:21Stephen J. Dubner?

  Indeed, in 2016, the Republican Governors Association raised more than twice as much money as the Democratic Governors Association, and Koch Industries was the Republicans' largest donor with just over $2 million. And they don't appear among the top 20 contributors to the Democrats. Blue Cross Blue Shield, meanwhile, was number one on the Democrats' list and number two on the Republicans', with just under $2 million in each case, giving slightly more to the Republicans.

• 32:50Speaker 01

  Well, the other thing, governors control, in most states, redistricting lines. So if your goal is domination of your party, you're smart to focus on governors. It's not by accident that we may never have another Democratic governor of Texas. The lines are drawn by governors such that that state is firmly in control of Republicans.

• 33:21Stephen J. Dubner?

  So we talk a lot on this show about the rise in evidence-based medicine and evidence-based education and so on. So I know you studied econ as an undergrad and then were a venture capitalist for years, and those are two realms that certainly thrive on evidence, numerical or otherwise. So to what degree would you say that the evidence-based movement is gaining even a little bit of momentum within national and particularly state-level politics? Can you talk about that?

• 33:48Speaker 01

  It is gaining momentum, but I will say it's not the way most of government is run. When I took office, I knew that I wanted to really focus on job training. Job training, education, apprenticeships. I would talk to guys in the building trades who had been out of work for years, losing their houses, losing their marriages. So I said, "We have to completely turn upside down the way we do workforce development." We had a model, which I often refer to as "train and pray." Train people and pray they get a job. And it turns out, that's not effective. And we actually called a team up at the Harvard Kennedy School to come down here and spend

• 34:30Speaker 01

  a lot of time putting in place a way that we could really measure the outcome of our job training. And I have to say, it's pretty awesome. We have hundreds and hundreds of employers deeply engaged in the program. We've gotten well over a thousand people good jobs. But we have, we get rid of programs that don't work. You know, like you say, okay, this program, working with the maritime industry, I'm just using examples, is great. You know, everybody's gotten a job. This other program over here, working with the IT industry, not working so well. The results aren't there. Maybe we ought to shut it down and go to another thing. And so for me, I'm a believer in it because it's got to work.

• 35:14Stephen J. Dubner?

  Some of the things you're mentioning now about employment, especially the apprenticeships and especially the state working within industries, that sounds practically European. I mean, the German model, which has proven incredibly successful at staving off recession and unemployment. What's been your inspiration for these kind of ideas?

• 35:35Speaker 01

  That in part, by the way. I was a little bit late running over here today because I had a dozen people in my office who were engaged in the apprenticeship model in Rhode Island. And we spent a lot of time talking about the German model. I'm a big believer in pushing the limits of apprenticeship, not just for traditional, you know, plumbing, pipe fitting, welding. But what we're doing in Rhode Island around apprenticeship is cybersecurity technicians, community nurses, public health people, IT employees, computer techs. The days of going to high school and getting a decent job are sadly behind us. So we got to retool.

• 36:19Speaker 01

  And apprenticeship models can be very effective to get folks high-end skills, advanced skills, to get a decent job and keep a decent job.

• 36:29Stephen J. Dubner?

  In terms of preparing the populace for the work, you know, the labor scenario that's coming down the road, I know you've been pushing to have every student in Rhode Island take computer programming classes. I don't know if that's happening now or that's still in progress. Is that, is that a thing already?

• 36:45Speaker 01

  It's happening now. We set a goal, I think a year or so ago, that by the end of this year, We would be teaching computer science in every district and every grade starting kindergarten, and we're going to hit that goal this year.

• 36:57Stephen J. Dubner?

  So I hear about this kind of thinking a lot, and I certainly understand the appeal and the resonance, but I do also wonder if there's a proven upside of having everyone learn computer science or programming. It strikes me a little bit like the equivalent of having, you know, every student in America during the boom of the internal combustion engine learn to take apart a carburetor. And then I think, you know, if you look at the history of economics and progress, that one of the main strengths of economic progress is the division of labor and specialization, rather than everybody chasing after the latest trends. So I'm curious what the evidence was that inspired that move of yours.

• 37:38Speaker 01

  I think of it as access and exposure, and also just providing people with a basic level of essential skills. So everyone has to take math. They may become a writer. They may become an actor, but they ought to have a certain basic level of math skills. First of all, because it's an essential skill to function, and by the way, they might like math. I think digital skills are the same thing. No matter what job you have, you have to have some basic familiarity with computer skills and digital skills. And so it is as essential in this economy as any other skill that we teach. But also, we know, and there's

• 38:23Speaker 01

  loads of data on this, girls, people of color, and low-income folks are less likely to go into IT fields, which tend to be higher-paying. However, if they're exposed to some computer training, they're much more likely to go into the field and do well at it.

• 38:45Stephen J. Dubner?

  Yeah, that was an excellent answer to my churlish question, I have to say.

• 38:49Speaker 01

  No, no.

• 38:54Stephen J. Dubner?

  So if you're not careful and you keep having these kinds of successes as a pro-business Democrat who took on, you know, unions for pensions and things like that, someone's going to want you to run for president plainly. Are you interested?

• 39:07Speaker 01

  No. I do want to get re-elected next year as governor of Rhode Island.

• 39:13Stephen J. Dubner?

  But you can do that first, correct?

• 39:15Speaker 01

  Yeah. Well, I think I'm in the fourth inning of economic turnaround in Rhode Island, and I want to get it done. And then, who knows what comes after that.

• 39:26Stephen J. Dubner?

  So you're a relatively anomalous Democratic governor in that you've got a business background in venture capital and so on, and in bringing along small businesses. Do you think that that is the sort of component that's necessary for modern Democrats to get elected?

• 39:42Speaker 01

  I don't know if you have to have come from business, but you have to understand value and respect businesses, and small business in particular, and understand the fact that really what most people crave and deserve is a decent job with economic security. So in other words, if you're afraid to talk about business, or to appear too close to business, it's hard to actually tap into people's real and legitimate anxiety about the economy, because folks just want a job. That's what I want for my kids. I don't know

• 40:27Speaker 01

  if you have kids, but like, what do you want for your kids? You want them to be happy and have a steady job.

• 40:31Stephen J. Dubner?

  No, I want my kids to be layabouts. I want to work so hard and so well during my career that I just give them the checkbook when I die and say, "Go for it."

• 40:39Speaker 01

  Okay. Well, I'm in public service, so there's nothing left to bequeath.

• 40:43Stephen J. Dubner?

  Oh, yeah. Great. Good point. Good point.

• 40:46Speaker 01

  So they're on their own.

• 40:48Stephen J. Dubner?

  All right. I should let you go.

• 40:49Speaker 01

  All right. I gotta go. Thank you, Steve.

• 40:50Stephen J. Dubner?

  It's been a great pleasure. I really enjoyed it. Thank you so much.

• 40:57Stephen J. Dubner?

  Coming up next time on Freakonomics Radio, what comes to mind when I say CEO? Lots of golf and private planes? A paycheck so big that it blocks the sun? We'll hear from the CEOs of PepsiCo and Microsoft. Good morning. Hi, how are you? We'll chat with Mark Zuckerberg from Facebook and Virgin founder Richard Branson.

• 41:19Speaker 07

  Thank you. This was really fun. I'm sitting here with a cup of tea in my hand and I wish we were talking in person.

• 41:25Stephen J. Dubner?

  Next week, we launch a special series that gets inside the life of these rare and rarified creatures. And we ask a lot of questions. For instance, what do CEOs actually do? What makes a good CEO? And how can you even tell? Why do they make so much money? And is it lonely at the top? Well, I would say that it is a very lonely job. No, it's not lonely at all. That's the biggest myth in the world.

• 41:51Speaker 05

  It's frankly a horrible job. I wouldn't want it.

• 41:55Stephen J. Dubner?

  That's next time on Freakonomics Radio.

• 42:00Stephen J. Dubner?

  Freakonomics Radio is produced by WNYC Studios and Dubner Productions. This episode was produced by Stephanie Tam. Our staff also includes Alison Hockenberry, Merritt Jacob, Greg Rosalsky, Harry Huggins, and Brian Gutierrez. The music you hear throughout the episode was composed by Luis Guerra. You can subscribe to Freakonomics Radio on Apple Podcasts or wherever you get your podcasts. You should also check out our archive at Freakonomics.com where you can stream or download every episode we've ever made. You can also find the transcripts and links to the underlying research. We can be found on Twitter, Facebook, or via email at [email protected]. Thank you for listening.

• 42:59Stephen J. Dubner?

  Freakonomics Radio is sponsored by Ozempic. Innovation happens through rethinking what's possible. And when it comes to GLP-1s, Ozempic pill does just that. Learn more about Ozempic semaglutide tablets, 4 and 9mg, by calling 1-833-OZEMPIC or visit Ozempic.com to view the medication guide and ask your doctor what's possible with FDA-approved Ozempic pill. Freakonomics Radio is sponsored by Southern Company. The world and its energy needs are always changing. Southern Company's commitment to meeting this demand stays the same. That's because Southern Company believes energy is more than a utility, it's what powers possibilities.

• 43:43Stephen J. Dubner?

  So they are looking ahead and investing $80 billion in infrastructure upgrades and are committed to fueling growth in ways that benefit all customers so that reliable and affordable energy is accessible for generations to come. Go to southerncompany.com to learn more. Southern Company, building the future of energy.

• 44:09Speaker 09

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• 44:54Speaker 09

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• 45:08Speaker 10

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