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Economic Impact of Coronavirus on U.S. Economy; Numbers behind Biden's Win; Judge Rules on Cuccinelli Case; Biden Tries for Twi-Man Race with Sanders. Aired 8:30-9a ET

Aired March 02, 2020 - 08:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[08:30:00]

PAUL KRUGMAN, AUTHOR, "ARGUING WITH ZOMBIES": Thirty percent of the room to cut that we have in the face of an ordinary garden variety recession. And this could be a lot worse than a garden variety recession. And, Europe, you know, they've got negative interest rates, which we didn't even think was possible, that they can't go really lower than they are now. So this is a -- this is -- that's the first line of defense. That's the thing you do when the economy stumbles is the central banks, the Fed, the ECB cut rates and they've got no room to cut. And then --

JOHN BERMAN, CNN ANCHOR: Not much.

KRUGMAN: Yes. And -- yes.

BERMAN: What are you looking for here? When will you know, do you think, whether this is a blip or something -- this is a few weeks and inconvenient, or something that will be a long-term, lasting crisis?

KRUGMAN: If we start to see -- at first we're just going to watch the -- the spread of cases. And the problem right now is that we're having very incomplete testing and data collection, so we don't really know. I mean a lot of what we see in the increase in reported cases is just the better testing.

But want to see if this thing is peaking. We want to see if the U.S. starts to look like South Korea, where the economy is largely in lockdown already. If that's happening, then it's really bad. And if it starts to fade out, if it -- if it looks, you know, that maybe it's a one or two quarter blip. But I -- I have to say, I'm extremely nervous about the economics.

BERMAN: This books, which goes over a lot of things, and we're going to talk about the basic theme in a second, but it also -- you reprint many of your past columns. A lot of them were in the 2008 financial crisis.

What lessons do you think we have learned from 2008 that are applicable now?

KRUGMAN: Oh. Well, the things that I have learned --

BERMAN: You, OK.

KRUGMAN: I'm not sure that our leadership has learned them. But, no, what you learned from 2008 was that when you had this kind of shock, when you don't have room to cut interest rates, you need to respond hard and fast. You need to go very aggressive. As I said, it -- in something written right at the beginning of that crisis, we'd entered a world in which prudence is folly, in which, you know, better to overdo it, because you can -- you can unwind that, than to wait and let a deflationary mentality really set in. And that's -- that's certainly the economic lesson now.

BERMAN: One of the things you've written in the last few weeks is that you think for President Trump you've been musing this could be his Katerina. But then you suggested maybe it's not his Katerina it's his WMD, weapons of mass destruction. What do you mean?

KRUGMAN: OK, we're starting to get, you know, the insider reporting from "The Post" and "The Times" of what went on in the last few weeks. And it's very clear that the -- Trump and the people around him made it clear to everyone else in the government that they did not want to hear that this was going to be bad. And basically people were punished for suggesting that it might be bad.

And it was very similar in psychology to what happened in the buildup of the Iraq War when it was clear they wanted to be told that there were weapons of mass destruction. So it's the same distortion of the -- you know, the very -- it takes great effort for a president of the United States to get told things he doesn't want to hear. He has to make it really clear that he doesn't -- he wants to be told things that he doesn't want to hear. This is not that kind of president.

BERMAN: And lives are at stake with this one.

All right, the book is titled "Arguing with Zombies." What's a zombie?

KRUGMAN: OK, the zombies are not people. Maybe there are a few of those too, but they --

BERMAN: My son was super excited when I was reading this --

KRUGMAN: Yes.

BERMAN: Because he thought I was reading a sci-fi book over the weekend. It's not that.

KRUGMAN: Yes. No, a zombie idea is an idea that should be killed by evidence, should have been dead long ago but just keep shambling along eating people's brains. So it's things like tax cuts pay for themselves, or climate change is a hoax. And what -- the theme of my book, the theme of "Arguing with Zombies," is that an awful lot of our political discussion is not between rival ideas, each of which can be defended, but between some fairly sensible idea and a zombie idea on the other side.

BERMAN: You say we need to be honest about our dishonesty. You suggest that there aren't necessarily people -- you think there are people arguing with bad faith. It's not just that they're wrong, you say --

KRUGMAN: Yes.

BERMAN: It's that they have bad faith.

KRUGMAN: Yes. There are plenty of places where you can have legitimate disagreements. There are -- some of the fields I work in, actually, there's a lot of it. Conservative economists who are good economists and are honest. None of those people are working in the Trump administration. None of those people are advising Republicans in Congress. The -- the -- almost all the -- these zombie ideas are kept alive by essentially hired guns. They're kept alive by think tanks financed by right wing billionaires. They're kept alive by Fox News. They're -- they're -- it's -- that this is -- we're not having -- if you -- if you -- if I write that we're having a serious discussion, I'm actually lying to my readers. The truth is, on most of the important issues, we're not having an honest discussion. One side of the discussion is deliberately saying things they have to know are not true.

BERMAN: Well, Paul, I think we had a serious discussion here, at least.

KRUGMAN: OK (ph).

BERMAN: I'm so glad you had a chance to come on and talk to us this morning. The book is "Arguing with Zombies." It's really good. It's a really good read. And it's on a range of subjects very applicable to this exact moment.

KRUGMAN: Thank you very much.

BERMAN: Appreciate it.

Alisyn.

ALISYN CAMEROTA, CNN ANCHOR: You're no zombie, John, despite what viewers ask me.

Meanwhile, those who --

[08:35:02]

BERMAN: Except for the rivets behind my ear.

CAMEROTA: Well, I mean, yes, sometimes.

Those who counted Joe Biden out of the race were proven stunningly wrong. The numbers behind Biden's comeback in our "Reality Check," next.

(COMMERCIAL BREAK)

CAMEROTA: Former Vice President Joe Biden's blowout win in South Carolina's primary has shaken up the race. What does this tell us about Super Tuesday? John Avlon has some answers and our "Reality Check."

Hi, John.

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Hey, guys.

Look, it's no secret that we live in polarized times where both parties seem inclined to elevate radical candidates. And that's why Joe Biden's blowout in South Carolina was such a big deal. It's a Lazarus-like comeback for his campaign that could reshape the race. And after losses in Iowa, New Hampshire and Nevada, Biden won every county in South Carolina, every single one. It's almost like South Carolina voters were channeling Lindsey Graham about Biden circa 2015.

(BEGIN VIDEO CLIP)

SEN. LINDSEY GRAHAM (R-SC): He is as good a man as God ever created.

(END VIDEO CLIP)

AVLON: A massive turnout. Biden won more than 256,000 votes, nearly two and a half times Bernie Sanders, who came in second with over 105,000.

[08:40:02]

Now, to put this in perspective, Biden won more votes in South Carolina than Bernie won in the first three states combined. In fact, while Bernie currently leads in delegates, Biden has actually won more votes in the Democratic contest to date.

South Carolina is also most representative of the overall Democratic Party in terms of ideology. Nineteen percent of South Carolina primary voters describe themselves as very liberal, 30 percent somewhat liberal, 41 percent as moderates, 9 percent conservative. That's according to CNN exit polls. This is broadly in line with the 2019 Pew analysis of Democrats ideology. And Biden won across all those ideological groups, across the board.

Now, African-Americans made up a majority of South Carolina primary voters, and Biden won 61 percent of the black vote, thanks in large part to Jim Clyburn's decisive endorsement, while Bernie Sanders carried just 17 percent. Biden cleaned up across most demographics, in fact, winning women and men, white, non-white, urban, suburban, and rural voters, college graduates and folks with no college degree, veterans and independents, as well as first time Democratic party voters, while Sanders carried voters under 30. People who say they never attend religious services and non-college educated white men.

Now, the momentum may have shifted back to Biden, led in most polls throughout 2019, but he's just got one more day to translate that energy into Super Tuesday, when roughly a third of all Democratic delegates are going to be decided.

Now, because of early voting, Bernie Sanders early wins may prove very helpful in harvesting delegates. But x factors abound. Super Tuesday's going to be the first time we'll see Mike Bloomberg on the ballot. And the center lane got a lot less crowded last night with Pete Buttigieg's decision to suspend his historic campaign. Likewise, we'll see if Biden's strong showing with African-Americans helps him in Super Tuesday states like Alabama, Arkansas, North Carolina, Tennessee, and Virginia, where Biden recently received the endorsements of Senator Tim Kaine, former Governor Terry McAuliffe and former Republican Senator John Warner.

But as we sift through those Super Tuesday votes totals, including California and Texas, it's also worth asking which candidate has the best chance of carrying purple and even red-leaning states in the fall, not just in a Democratic primary, because to win the presidency, the Democratic nominee is going to have to build a broad coalition, including swing voters in swing states and then be in a position to try to reunite the nation when the election's over.

And that's your "Reality Check."

BERMAN: You know, our friend Ryan Lizza had a great line in "Politico." He said Wednesday was the start of Lent and Joe Biden gave up losing.

All right, John, thanks very much.

A federal judge has ruled that immigration hardliner Ken Cuccinelli was unlawfully appointed by President Trump to lead the agency responsible for processing U.S. immigration requests. The judge also ruled that Cuccinelli lacked authority to issue two directives challenged in the lawsuit.

CNN's Ariane de Vogue live in Washington with the implications of all this.

Ariane.

ARIANE DE VOGUE, CNN SUPREME COURT REPORTER: Right. You know, the president has suffered three big losses recently on his immigration policy, particularly asylum. Those are asylum seekers who want to come to the United States because they fear if they're sent back, they're going to be persecuted or even put to death.

The latest loss came yesterday, on a Sunday no less, when this federal judge said that Cuccinelli, who is serving as an acting -- in an acting role, had been unlawfully appointed. And, remember, John, Cuccinelli, he is the guy who -- he's a former attorney general from Virginia, he's the one who wanted to tweak Emmet Lazarus' (ph) iconic people about who can come into the country. This judge said, look, he was serving as an acting capacity and that over 53 pages the judge said that the government really tried to circumvent how you can make these kind of nominations.

And then the judge went even further and he invalidated some of the directives that Cuccinelli had put forward. One of the directives had to do with how an asylum seeker, how quickly that they could get legal help. So that has been put on hold. The judge has said, look, I want to hear from both sides on March 13th, in a few days. And the government said in response last night, we obviously disagree with the court's decision and we'll be looking closely at the decision.

One more thing to keep in mind is that the Trump administration has increasingly used these acting designations. And this particular judge having to do with immigration, he wasn't buying it, Alisyn.

CAMEROTA: Ariane, that is really interesting. Thank you very much for the update from Washington.

DE VOGUE: Thank you.

All right, so what has changed today as we head into Super Tuesday? Dana Bash gives us "The Bottom Line," next.

(COMMERCIAL BREAK)

[08:48:28]

BERMAN: We have breaking news for you, Jake Welch, the longtime chair of CEO of General Electric, has died. CNBC confirmed the news of his death with his wife. Welch led the conglomerate for two decades before retiring in 2001. He grew the company's value from $12 billion to more than $400 billion during his tenure. Part of his signature acquisitions included the purchase of RCA, which owned NBC. Jack Welch, just a towering figure in business and media and all over the place. He was 84 years old.

CAMEROTA: Our thoughts are with his family today. I mean, obviously, he is an iconic figure, a household name, and we're sorry for their loss.

Meanwhile, Joe Biden's big win in South Carolina has shaken up the race right before tomorrow, Super Tuesday. And Pete Buttigieg dropping out has also changed the equation.

So let's get "The Bottom Line" with CNN chief political correspondent Dana Bash.

So, Dana, where are we today heading into Super Tuesday? Is there any way to predict with -- given those two big developments over the weekend what we're going to see tomorrow?

DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: No, I think we're all out of the prediction business, as we should be. But I've been thinking about it this morning, the best way to kind of look at where we are right now in the race and I was thinking it's kind of the 3 m's, momentum, money, and math. Momentum is what Joe Biden has right now, finally. This is what he has been waiting for, what he has been looking for.

And that, generally speaking, begets money. He really needs the money to compete in all of the Super Tuesday states.

[08:50:03]

I mean we already know it's maybe a little bit late to spend a lot on advertising and other things that usually get the votes there. But because he has the momentum and because he has what they call in the biz earn media, we're talking about him a lot, that is worth a lot.

And then the last thing is the math. And we are at the point where the delegate count is the whole ballgame. And that actually is -- speaks to another issue. We talked a lot about Pete Buttigieg dropping out of the race and questioning whether others will fall behind. And I just want to re-up what Jeff Zeleny reported over the weekend, which is that this is kind of counter-intuitive. But the Biden campaign, they want Amy Klobuchar and Elizabeth Warren to stay in because of that math, because if you look at their home states, Massachusetts and Minnesota, those delegates, even in those two states, combined are more than every single delegate combined in February. And so if they -- thinking in camp Biden -- if they can do well, that will keep Bernie Sanders from getting more delegates because they don't think that Joe Biden will do very well right now. Those are some of the really important things to look at going into tomorrow.

BERMAN: They want them to stay in until Wednesday. I don't think they want them to stay in indefinitely. But at least --

BASH: Exactly.

BERMAN: At least for a few more days.

BASH: Through those -- through those dates.

BERMAN: I'm so glad to do the three m's, first of all, because alliteration makes it easier for me to understand.

CAMEROTA: For sure.

BERMAN: There's a fourth m you could add to this, which is mayhem.

BASH: Yes.

BERMAN: Which is a little bit of what has been created by Joe Biden's big victory Saturday night and the departures of Buttigieg and Tom Steyer, because look at California --

BASH: Yes.

BERMAN: Three million people have voted already in California I think I was reading. There are so many early voters have cast their ballots already. And some of these ballots were printed when they had, you know, a dozen names or even more.

CAMEROTA: Right, they may have voted for Tom Steyer and Pete Buttigieg.

BASH: Right. Right. And the rules and the laws are that there's nothing they can do about it. They can't recast their votes now that the person that they voted for is no longer running. And so that could change the dynamic there for -- obviously for someone like Joe Biden who was, you know, just not that long ago was desperate to get over the 15 percent threshold so at least -- he at least got any delegates at all. But on California, I was reading in the "L.A. Times" that one of the

private firms out there, there's no actual data from the state. But one of the firms that looks at this suggests that 40 percent of those will -- who will participate have already voted. So if they voted for Bernie Sanders or Joe Biden or anybody in the race, that's great. If they didn't, they're out of luck.

CAMEROTA: Dana, if I were Amy Klobuchar or Elizabeth Warren, I'd be really aggravated that people are telling me to drop out. They can get more delegates. They can win a state or maybe more. I mean I guess my point is, voters are full of surprises, OK --

BASH: Yes.

CAMEROTA: As we've learned along this whole path. So am I buying naive that they are -- should stay in?

BASH: Well, no, that's completely legitimate. But it goes back to the last m, the math. And that is the reason that Pete Buttigieg gave very explicitly when he dropped out. He didn't see the math adding up in any way, shape, or form, in any potential path to victory. And so that is what all of the campaigns are looking at, in particular, Amy Klobuchar and Elizabeth Warren, to see where and if they can win.

Look, Elizabeth Warren was hoping to do better than she did in Iowa. She did in New Hampshire, her neighboring state, she didn't. South Carolina, she didn't. I mean look at where the delegates are right now, eight and seven. That's not great. And if they don't get at least a large portion of the 1,344 delegates at stake tomorrow night, it's hard to make that math add up.

BERMAN: Well, there was a moment, to take a side step away from all of this yesterday, that I think is worth noting, and that is the commemoration of the March on Selma. And John Lewis, congressman from Georgia, who, of course, is a civil rights icon, he was there. He has been battling cancer. This is the first we've heard from him in some time and I want to play that.

(BEGIN VIDEO CLIP)

REP. JOHN LEWIS (D-GA): I thought I was going to die on this bridge, but somehow and some way God almighty kept me here. We cannot give up now. We cannot give in. We must keep the faith. Keep our eyes on the prize. We must go out and vote like we never, ever voted before.

(END VIDEO CLIP)

BERMAN: Vote like we've never voted before, Dana. What was it like to watch that?

BASH: Amazing. I had the honor of being there on that bridge with him a few years ago, and it was really a spiritual event for me, one of the most amazing things that I've ever, ever done. And it is because of the message that he was sending and the message that he was sending when he got his head bashed in 55 years ago.

[08:55:00]

And that message was, we need the right to vote. And the fact that he's still -- given how ill he is, is walking across that bridge, reminding people that the right to vote should mean -- should not be taken for granted is very, very telling.

BERMAN: So interesting. One of the things he said, he said, I thought I would die on this bridge. Well, that was, what, 55 years ago. And here he is today still delivering an important message.

CAMEROTA: It's really powerful.

Dana, thank you very much for sharing all of that and your wisdom.

BASH: Thanks, guys.

CAMEROTA: Super Tuesday is the most important test for the presidential candidates yet. CNN's special live coverage begins tomorrow at 4:00 p.m. Eastern. We will be on bright and early at 5:00 a.m. on Wednesday. Set your alarm clocks for that.

BERMAN: A wicked good Wednesday after Super Tuesday.

CAMEROTA: Awesome. With all of the results and the analysis.

BERMAN: All right, we have new developments in the deadly coronavirus outbreak. Two deaths now in Washington state. New developments right after this.

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