Latest / The Capitalism and Freedom in the Twenty-First Century Podcast / Doug Ducey (Former Arizona Governor) on Passing Universal School Choice and Universal Licensing Recognition

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Doug Ducey (Former Arizona Governor) on Passing Universal School Choice and Universal Licensing Recognition · The Capitalism and Freedom in the Twenty-First Century Podcast

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>> John Carley: Welcome to the new Books Network.
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>> Jon Hartley: This is the capitalism and freedom in the 21st century podcast where
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we talk about economics, markets and public policy.
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I'm Jon Hartley, your host.
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Today I'm joined by Doug Ducey,
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who served as 23rd governor of Arizona from 2014 to 2022.
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While in office, Governor Ducey was truly instrumental as a policy entrepreneur with
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huge policy achievements, including spearheading and
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signing into law the first universal licensing recognition law in America and
1:00
the first universal school choice law in America.
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He also passed a flat income tax rate of 2.5%, balanced the budget, reverting
1:07
deficits to surpluses, and reduced the size of the government workforce.
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Before becoming governor, he was CEO of ColdStone Creamery from 1995 to 2007 and
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helped grow the company into the massive international ice cream company we know it
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is today.
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Now, after leaving the governor's office,
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Governor Ducey now leads the CEO citizens for free enterprise.
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Welcome Governor Ducey.
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>> Doug Ducey: Thanks for having me, John.
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Good to be with you, happy new year.
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>> Jon Hartley: Happy new year to you as well.
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So tell us a little bit more about your background.
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You were born in Toledo, Ohio, then moved to Arizona for college,
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where you began your career and became a highly successful business person and
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eventually became the CEO of Cold Stone Creamery.
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Were you always interested in politics?
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It seems like increasingly fewer highly successful business
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people today are wanting to run for office, maybe for obvious reasons,
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given sort of how polarized things are right now, and
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maybe that sort of benefits the more career politician mold.
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I'm curious, like, what in your early days might have enabled you to
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become both such a successful business person and such a successful governor?
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>> Doug Ducey: Well, thank you.
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Thanks for having me, I'm looking forward to the conversation.
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I wasn't so interested in politics as a young man or even as a businessman.
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I think I've always had interest in being a good citizen.
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So who I was voting for, especially for president, was important to me.
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But I was more focused on my career and building my business and raising a family.
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As you mentioned, I grew up in Toledo, Ohio.
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My dad was a cop, my mom was a waitress, and basically a stay at home mom.
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She'd work part time to help with my brother and sister and I.
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And I came to Arizona in 1982.
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I was in a different position.
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I had never been here.
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I didn't know anyone.
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My folks had split up.
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My mom moved out west, and I was in a position where I had to pay for
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my own schooling.
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So I came out here, I studied business and
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paid my way through college working for the local Anheuser Busch franchisee.
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Started my career with Procter and gamble.
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Eventually built ColdStone creamery, sold that in 2007.
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And I'd never been to Washington DC until I was 44 years old.
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And that's when I got some interest in public policy after I'd sold the business.
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The role of governor is something I wanted to pursue.
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I really thought Arizona was a great state, and
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I didn't like the way we were being portrayed around the country.
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And I thought as governor, you could be the chief spokesperson.
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>> Jon Hartley: Well, that's amazing, and Arizona has attracted so
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many people to the state over the decades.
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And I think most people who live in Arizona today are a big fraction.
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We're not born in Arizona.
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It's just an amazing story.
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In terms of Arizona's growth, which you've been an integral part of.
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I'm just curious, in terms of your philosophy to both economics or
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policy in general and governing, what has your core philosophy been?
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And were there particular economics facet or
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economists that were influential to you along the way?
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I understand that Texas was sort of a model or a template for
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your policy agenda in Arizona, but you certainly went beyond Texas in many ways.
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Often hear you use the word policy entrepreneur.
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I'm curious, what does that mean to you?
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>> Doug Ducey: So, I developed my philosophy over time.
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I certainly didn't or wasn't born with a philosophy,
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although I think growing up in the Midwest, middle America,
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son of a police officer, it was conservative by nature.
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I did have good economics professors in school, and
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I also think going to Procter and gamble was a great education on what
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drives profit for what was one of their smaller divisions,
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which I took out of a leadership role at one point.
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I also regularly read national review.
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So, I think the idea of the Chicago school or
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Milton Friedman Frederick Hayek type economics made sense to me.
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It's something I believed in.
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I thought it is what built the nation's economy.
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Adam Smith writing the wealth of nations in 1776 and the country being
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founded in 1776, to me always seemed like somewhat divine providence.
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So, I would say over the course of time and then being a small business
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owner myself, Colstone Creamery grew into a large international brand.
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But it started as one single ice cream store in Tempe, Arizona.
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So, I was able to actually apply a lot of this philosophy to
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the building of that business.
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The incentives for the franchisees, the measurements of the headquarter office.
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I came to believe in that, and that's really when I ran for governor.
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I ran as a businessman.
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I ran as somebody who wanted to kickstart our economy,
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somebody that had built the business and now wanted to shrink a government.
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I believed all that could be done.
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I think our eight years demonstrate that it can be done.
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And I think that those principles and values are applicable not only in
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the state of Arizona, but all 50 states, and certainly at the federal level.
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>> Jon Hartley: Well, it's amazing what you've done in Arizona during both your
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terms across eight years.
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I want to get a little bit more into some of your big policy achievements, and
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I wanna start with occupational licensing.
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How did you orchestrate Arizona becoming the first state in
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America to pass universal licensing recognition?
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I think a lot of people don't really understand licensing or
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appreciate the economic costs it imposes on licensed workers,
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maybe across states who often skew toward lower incomes.
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The idea that you have to recertify, you have to take more tests and so forth for
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a very similar license after you've moved states.
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Not a lot of people, I think, are necessarily aware of that.
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For those who don't know, since you passed universal licensing recognition,
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about 12 or so states have followed your lead on this,
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both Republican and some Democratic states as well.
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I'm curious, how did you orchestrate universal licensing recognition, and
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how did you get interested in that?
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>> Doug Ducey: So, you mentioned policy entrepreneur, and that's something that I
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said to my team, that I wanna be somebody who leads and innovates on policy.
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But that was a few years into the governor's office.
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As I did my diligence on running for governor,
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I noticed all the good things that Texas had done over the last 20 years.
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I really admired governors like Mitch Daniels and Indiana and
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what Jeb Bush had done on education in Florida.
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And we very much took this like a Procter and gamble search and reapply initiative.
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We took those best practices and applied them to Arizona, and
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it took us a couple terms to get that done.
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Then, moving forward, I said to my team,
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I wanna be the one leading on the innovations.
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And on the things that can be breakthrough and
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make Arizona the top state in the nation in which to live, work,
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do business, get an education across the board.
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So we basically brainstormed ideas on how do you make the economy work better?
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And part of it was making it freer for people to pursue happiness or
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to pursue opportunities they wanted it.
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And the other thing was to get government and obstacles out of the way.
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So in terms of universal licensing, we stood on the shoulders of a good idea,
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which was to give an opening to military spouses.
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I think everybody loves our folks in the military, they relocate every 18 months.
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Oftentimes the trailing spouse has a license or
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certificate that is not applicable in the state in which they reside.
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So we had the opportunity for military spouses to waive that.
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And once we saw that, that worked, Americans do love and crave fairness.
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It was only fair that was open to all individuals.
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I was somewhat shocked as to what a breakthrough idea it was because it
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seems somewhat simple.
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And we played a little bit on my conservative reputation in saying
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that we were gonna trust your government in your state.
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If you were somebody in good standing with a certificate or a license or
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a credential, we were gonna recognize that as long as you were in good standing.
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And I think that this is an idea of this universal recognition
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should be available in all 50 states.
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Was somewhat strange some of the opposition from my side,
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from the conservative side, still, folks thought that it was unfair
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that an Arizona moving to Illinois wouldn't enjoy the same benefit.
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And I had to remind them that we were in charge of the state of Arizona, and
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Illinois would have to take care of themselves.
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But, I think, across the board, there's these ideas on how you lower taxes or
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reduce regulations or get obstacles out of the way.
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There's always an unintended consequence where every law that is passed,
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that they are, I imagine, passed with good intentions.
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Very rarely are they repealed, I wish we had sunsets on these laws.
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If something was a good idea and it's working well, you can pass it again.
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If it's a bad idea, it can expire, if it needs tweaks or reforms,
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I think that you can address it.
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And that's basically how we looked at the portfolio of laws and
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regulations and ideas on what we could move forward over the next six years of
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the eight year of the two terms we were fortunate to have.
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>> Jon Hartley: That's amazing.
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And you mentioned Milton Friedman as an influence, it's funny.
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He wrote his doctoral dissertation in the early 20th century on
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occupational licensing.
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Often critical of doctors in certain professions that use occupational
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licensing as a gatekeeping mechanism to keep their wages high and
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extract rents and so forth.
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So it's amazing to hear that there was a lot of conservative opposition, certainly
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you think, from certain professions that are a bit more well off, maybe.
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But not necessarily thinking about what might be best for
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all Arizona in terms of price and so forth.
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I want to jump into the next topic here,
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which I think is an amazing trend that's sweeping the nation.
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And I think it's probably the biggest policy shift in 2023 and
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in recent years, which is this topic of universal school choice.
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I'm curious, how do you orchestrate Arizona becoming the first state in
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America to pass universal school choice?
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I'm amazed by the story I've heard from you before, the behind the scenes story of
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how it happened, or during COVID it almost kind of happened.
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Or there was sort of a big battle in 2017.
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And for those who don't know, amongst our listeners, about a dozen states have
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similarly followed in passing some form of universal school choice,
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with about eight or nine states going in 2023 and
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many more expected to come in 2024 in the years ahead.
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I think you're a policy trendsetter across states, to say the least.
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I'm curious, what was the story behind going all in on universal school
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choice toward the end of your second term as governor?
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>> Doug Ducey: First, real honor to Milton Friedman,
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who not only preached freedom and free enterprise.
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One of the first laws that we passed in Arizona was the American Civics Act.
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So that every child that graduated high school had to pass the same
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civics exam than a newly naturalized American has to pass.
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If I would have had a third term,
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I would have passed a law that every child in Arizona would have to watch
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the free to choose series that is available for free on YouTube.
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And Milton Friedman talked about school choice, and I think this was in the 70s or
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early 80s, and it really animated my run for governor in 2014.
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I said I wanted to get taxes as close to zero as possible, our income taxes, and
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I wanted universal school choice.
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Arizona had been a leader on school choice.
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We've been a leader with charter schools, and we'd seen great success with that.
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We were able to pass one of the first ESA bills in the nation in 2017,
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my second year, it was a very limited ESA program,
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that's educational savings accounts.
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It's basically when somebody receives their taxpayer dollars and
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they can apply them however they want, whether that's Catholic school,
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Christian school, Hebrew school, private school, homeschooling, or innovations.
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Hey, mirror zone, it's an anomaly of our constitution that laws can
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be referred back to the voters with enough signatures.
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And that ERISA in 2017 was referred to the voters, and it was crushed by the voters.
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It was crushed 65 to 35, so
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they were being very clear that they didn't want ESAS.
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And I said to my team, I think we need to do a better job communicating and
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persuading on this issue.
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And coming back to Milton Friedman, he also said that in a crisis,
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people look for the ideas that are lying around.
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And the crisis that we had in 2020 was COVID, and
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parents were able to see what their children were or were not being taught.
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They were able to see a lack of rigor and
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much indoctrination around critical race theory.
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And other things that have nothing to do with reading, writing,
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arithmetic, character formation, or American cynics.
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So we took another run in essays, and this time we want much larger,
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it's a universal educational savings account program.
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And one of the stories I love to tell about this is a woman
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that I met through into the summer of 2020.
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The George Floyd riots was someone named Janelle Wood, and
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she was the leader of the Black Mothers Form.
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And Janelle wasn't very happy with me because I put out the National Guard and
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called an 8 PM curfew that summer.
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And she said a lot of her members and
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young people in her organization were angry.
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And we agreed to disagree on how I was gonna handle the unrest and
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make certain there wasn't rioting in Arizona.
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But we found an issue of common interest, and that was school choice.
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And Janelle Wood sat next to Angela Ducey, the first lady.
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At my last state of the state, from the podium, I said that 50 years ago,
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politicians stood in the schoolhouse door and wouldn't let minorities in.
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And today, 50 years later,
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politicians stand in the schoolhouse door and won't let minorities out.
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These kids are trapped in failing public schools.
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It's time to set these families free.
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It was Janelle Wood who led the standing ovation, also helped organize
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all the African American pastors in Maricopa county to help with these votes.
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Not one of them a registered Republican.
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And we were able to pass this.
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We only have a one seat majority in our house and
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a one seat majority in our Senate.
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Unfortunately, not one Democrat saw fit to vote for
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universal school choice, but it was led by a very diverse coalition.
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Today, it's the law of the land.
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They anticipate that there will be over 100,000
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families participating in this program by this time next year.
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If you search this and you look at how the mainstream media is painting it, they're
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all pointing to the fact that there's more spending on it than was anticipated.
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How you can translate that is that it's wildly popular.
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More families want it than anyone could have ever anticipated.
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If public education is about educating the public,
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we are educating more people for less money in the school of their choice.
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Since we did this, many other states have followed suit.
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Texas and Tennessee are on the 1 yd line, and I believe this is something that
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every parent in the nation should enjoy and be able to take advantage of.
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Not only do I believe it can reform k twelve education,
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I think it can help renew our country because it brings communities together.
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They care about what their kids are learning and
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have high expectations for them.
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It's also a way to get more money into the classroom to better reward our teachers,
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which are critical in a good education in a classroom environment.
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So, so far, so good, there's no lost causes in American
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public policy because there are no gained causes.
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Just as we're doing this, the left is working very hard.
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The current governor in Arizona who is a Democrat, is opposed to this program.
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She pledged to terminate it in her first year.
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She was unsuccessful.
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Now she's trying to eliminate it.
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So it's very important that we not only get the law passed, but
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then we bring it to life and make it successful.
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>> Jon Hartley: Well, it's amazing how successful it's been and
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how much it has influenced other states.
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Again, with eight or nine states going in 2023 after Arizona went in 2022.
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And many more are expected to come this year, this coming year.
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I think it's very fair to say that you've started a school choice
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revolution in terms of governance and actually getting it done.
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It's amazing those who have followed sort of school choice as a Milne Friedman idea.
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It seemed almost like an abstract academic topic with sort of limited
19:34
programs across states, which Jeb Bush passed in his time in governor.
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But the idea of having universal school choice for all children,
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it's almost unbelievable just how successful this has been over the past
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just a couple of years and how it's continuing again.
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I really think that this is probably the most significant policy change that's
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happening across the United States.
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And strangely, I think doesn't get enough attention nationwide,
20:02
even though it is a state issue.
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I predict in coming years almost half the states in America could
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very well have universal school choice thanks to your pioneering efforts.
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So I want to just shift a little bit to fiscal policy and
20:15
just your other accomplishments here.
20:17
So you pass a flat tax rate of 2.5%, you balance the budget,
20:21
reverting deficits to surpluses and reduce the size of government.
20:25
Unlike the federal government, states cant really borrow or
20:28
print money, so you have to cut spending if you wanna cut taxes.
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I'm sure that was not easy.
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I'm curious that along with what other policy accomplishments you're most proud
20:38
of as governor.
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And I highly recommend that our listeners check out your website,
20:43
theduceyears.com comma, which lays out all of your policy accomplishments.
20:47
There's way too many to cover just in this interview, but I'm curious,
20:51
what other policy accomplishments were you particularly proud of and
20:55
what other ones were tough wins in your mind?
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>> Doug Ducey: Well, I think you're pointing out the real highlights,
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of course, universal school choice.
21:03
The fact that we inherited a billion dollar deficit and
21:07
left billions of dollars in surplus while we were gone.
21:11
We balanced that budget.
21:12
We applied the same principles you apply to your own household or
21:16
any small business does.
21:18
We just spent less than we brought in, so it's really not that hard.
21:22
It's more having the political will to make the difficult decisions,
21:27
to tighten your belt, to take some of the heat from the media and
21:32
the special interests down at the Capitol.
21:35
But the other things that I beat a drum on would be, of course, the civics.
21:40
I had no idea that we're gonna be where we are today in terms of
21:44
divided as a country we stand in 2024.
21:48
I came into office in 2014 and it seems rather than a decade ago, but
21:52
it seems almost like 100 years ago.
21:55
But I do think that our kids need to know more about our history and
22:00
informed and patriotic and heroic history, and
22:03
that can include all the good and the bad and the ugly,
22:07
because I believe as a nation we've always been in search of a more perfect union.
22:13
Look at what's going on our elite college campuses with these kids
22:18
seeming to know nothing of the true history of the United States or
22:23
even the nation of Israel and how it was formed and the ongoing conflict
22:28
that's been happening there for decades and centuries before that.
22:33
That's all an indictment on K-12 and higher education.
22:37
And if there was a silver lining in Covid, it was universal school choice.
22:42
If there's a silver lining in October 7, may it be a reform of
22:47
our higher education and the way that we form our children in
22:52
the knowledge of the United States and western civilization.
22:58
So we could go on and out about other things.
23:01
But I think you're hitting the highlights.
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The other thing that I would want to say to people,
23:06
we had a secure border in Arizona, and
23:08
we had a secure border in 2020 because we had a partner in the federal government.
23:14
Border security is not immigration.
23:17
Border security is public safety and national defense.
23:22
During the pandemic, it's also public health.
23:25
So the way you secure the border is you make sure that the border has enough
23:29
resources.
23:31
Walls work, surveillance works, enforcement of the law works.
23:35
Along with conversation with Mexico,
23:37
Mexico's Arizona's number one trading partner times four.
23:42
My first visit internationally as governor was to Mexico City.
23:46
My first visit internationally upon re-election was New Mexico City, and
23:51
my last official visit as governor was to Mexico City.
23:54
I had a wonderful relationship with the nation of Mexico while being asked to
23:59
tough or tougher on the border than any other governor in the United States.
24:04
These are separate and mutually exclusive issues.
24:07
So you can have a great trade policy, you can have border security and
24:12
stability in those communities.
24:14
And then Washington, DC,
24:16
the halls of Congress is where immigration reform happens.
24:19
And that can be done as well.
24:21
They shouldn't try to be done comprehensively, that's not going to work,
24:25
that's a non starter.
24:26
That's a game both parties play for political advantage.
24:30
Step one is to secure the board, get that done, and then go.
24:34
And let's have the debate around immigration.
24:36
I'm leading an organization right now called Citizens Board Free Enterprise.
24:41
We promote and advocate for free enterprise.
24:44
I talk with small business owners every day.
24:47
Everybody needs to hire workers, and in the past,
24:51
we solved this through proper immigration programs.
24:55
Most of these folks are republican or right leaning.
24:59
There's no appetite for immigration reform with a wide open and unprotected border.
25:03
Secure that border, and then we can talk about improving immigration.
25:08
Whether you want to call it merit based or needs based in need of reform,
25:13
I've got a lot of ideas and passion around it, but step one is to secure the border.
25:19
>> Jon Hartley: That's fantastic.
25:20
One last question here.
25:22
Can you tell us a little bit more about Citizens for Free Enterprise,
25:25
which you're the CEO of and what its goals are and what it's doing?
25:28
>> Doug Ducey: So Citizens for
25:29
Free Enterprise is headquartered here in Arizona.
25:33
It's an all 50 state organization.
25:36
We're getting started here and in Georgia right now, we'll expand out over time.
25:41
We're gonna educate and advocate around free enterprise.
25:45
I think it should scare everyone that if you held up a sign that said capitalism
25:49
and socialism in most college classrooms today, it'd be a 50 50 proposition.
25:54
That changes a little bit when you frame it as free enterprise or
25:59
free market capitalism versus big government socialism.
26:03
But we wanna make sure that we protect it,
26:04
there's a lot of freedoms in the United States.
26:07
We enjoy freedom of religion, freedom of speech, freedom of assembly, but
26:11
it's economic freedom that underlies it all.
26:14
It has built the strongest military machine in the history of the world and
26:19
has also allowed us to get away with all these stupid spending decisions.
26:24
It's because our economy is dynamic and we're prosperous as a people.
26:29
We're also gonna organize people around free enterprise.
26:33
We're gonna hold candidates accountable for free enterprise policies.
26:37
These should not be partisan issues, these are all things that Citizens for
26:41
Free Enterprise are going to do.
26:43
You can check us out at citizens for free enterprise.com.
26:47
And there will be more to follow beyond this, but please sign up for
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our emails, we wanna keep you informed.
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And this is a way Thomas Sowell we can break from Milton Friedman, but
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Thomas Sowell said, you don't need to know much about brain surgery or
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botany if you run for office.
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But you should know something about economics
27:06
because nearly every decision you make will affect the economy.
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And we wanna make sure that people elected office are making good economic and
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economic policy decisions.
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>> Jon Hartley: I couldn't agree with you more, governor.
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I really wanna thank you so much for joining us today.
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It's been a real joy and honor for us to hear about your career and
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your thoughtful, very thoughtful approach to policy and
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revolutions that you've started in school choice.
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Universal school choice, and universal licensing, recognition across
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the country and being a model governor for many governors across the nation.
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Thank you so much for joining us today.
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>> Doug Ducey: Thank you, John, Happy New Year.
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Happy New Year.
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>> John Carley: Today our guest was Governor Doug Ducey,
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who served as 23rd governor of Arizona from 2014 to 2022, was previously
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CEO of Cold Stone Creamery, and is now the CEO of Citizens for Free Enterprise.
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This is the capitalism and freedom in the 21st century podcast where we talk about
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economics, markets and public policy.
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I'm John Carley, your host.
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Thanks so much for joining us.
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[MUSIC]