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Coronavirus Outbreak Threatens To Plunge U.S. Into Recession; Private Job Numbers Clash With Coronavirus Economic Worry; CNN: President Trump's Coronavirus Messaging Complicated By Outside Advisers; Senator Bernie Sanders & Former Vice President Joe Biden Gear Up For One-On-One Battle; Joe Biden Touts His Record & Auto Bailout Ahead Of Michigan Race. Aired 12-12:30p ET
Aired March 6, 2020 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
NICK VALENCIA, CNN CORRESPONDENT: They're certainly ready for them. We also saw some campaign signs here out front. So mixed reactions about the President's visit but this part of its base, I think it serves him well to show up here, Kate.
KATE BOLDUAN, CNN HOST: The worsen times the best of humanity does come out with those folks. Great to see you Nick, thank you. Thank you all so much for joining me. "Inside Politics" with John King starts right now.
JOHN KING, CNN HOST: Welcome to "Inside Politics." I'm John King. Thank you for starting your day with us. A stunning then and now view of the economy. The new report on February jobs growth is gangbusters, but the markets in March tell us a different story the Coronavirus the risk of a global recession.
Plus, Michigan is the biggest prize as the 2020 Democratic race head now into Super Tuesday 2. Bernie Sanders won the Michigan Primary four years ago. Joe Biden is hoping his work on that big auto industry bailout gives him some blue collar credibility.
And President Trump listen here makes it crystal clear he doesn't think ever about asking his predecessor for advice.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT, UNITED STATES OF AMERICA: I was told by President Obama sitting in the Oval Office in probably our only meeting, essentially. That was enough for me. But I was told--
UNIDENTIFIED MALE: And you haven't talked to him since?
TRUMP: I was at the funeral of President Bush, sat next to him, and I said hello, and then I said goodbye. That's about it.
(END VIDEO CLIP) KING: We begin the hour with the economy. New wow jobs numbers from last month clashing with today's volatile reality. The Coronavirus crisis is putting the brakes on growth and raising the risks of the U.S. and a global recession.
Impressive top numbers this morning look at them right here from the Labor Department 273,000 jobs added last month, unemployment back to a 50-year low. By themselves an election year gift to the President.
(BEGIN VIDEO CLIP)
TRUMP: The job numbers were tremendous, and we picked up close to 80,000 new jobs from last report. And if you add that up, it's over 350,000 jobs. The job numbers just came out a little while ago, and they were shocking to the people that were analyzing.
(END VIDEO CLIP)
KING: But there is just no way of avoiding the, that was then, this is now. February's jobs growth was before Coronavirus concerns spiraled into a Coronavirus crisis. The President was speaking there as he signed a multibillion-dollar Coronavirus Emergency Response Plan and as Wall Street spent another day deep in negative territory the President though trying to find a silver lining.
(BEGIN VIDEO CLIP)
TRUMP: A lot of people are staying here and they're going to be doing their business here, they're going to be traveling here, and they'll be going to resorts here. So far people come, but we're going to have Americans staying home instead of going and spending their money in other countries, and maybe that's one of the reasons the job numbers are so good. We've had a lot of travel inside the USA.
(END VIDEO CLIP)
KING: More on the President's comments and his options in a moment. But first inside the new numbers with our Chief Business Correspondent, Christine Romans.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: John, this is the rearview mirror for the American economy, and look at that, a very strong jobs market at the end of last year heading into these winter months.
Look at February, 273,000 net new jobs, same as January. December revised higher. This is the strongest jobs growth we've seen in a year and a half, almost two years. It brings the unemployment rate down to 3.5 percent. That is a 50-year low really instructive where the hiring was in health care.
Every month health care is a driver of the American economy. Food services, bars and restaurants have seen a surge in hiring over the past two or three months. Ironically, these are the very jobs that tend to have less they guarantee of paid sick time that could be an issue as we go forward, right if the Coronavirus persists. Construction 42,000 jobs there this was unseasonably warm weather in February any kind of outdoor jobs construction workers, new home building, home renovations, mason work, tree cutting, all of these kinds of jobs seeing an awful lot of activity in the month.
Again, John, this is the rearview mirror. 3 percent wage growth, very strong jobs growth. This is before corporate America had kind of a reckoning with the Coronavirus risk. John?
KING: Christine Romans, appreciate the numbers there. Let's look forward now with me to share their reporting and their insights CNN's Kaitlan Collins Damian Paletta he is the Economics Editor of "The Washington Post" Mark Zandi the Chief Economist from "Moody's Analytics".
Damian, I want to start with you in the sense that it's probably a bad metaphor but you look at this report about the economy last month and then you look at what's happening in the markets, you look at the markets analysis in a minute about what might be around the corner, and this is like a car that's leading a NASCAR race that suddenly hits the wall.
DAMIAN PALETTA, ECONOMIC EDITOR, THE WASHINGTON POST: It's right. It's amazing what has happened in two to go from, having one of the most economic runs in the last 100 years to a point now where they're talking about may be government assistance for the airline industry and other industries that are on the brink.
Just in two weeks, we've seen trillions of dollars erased from the stock market. This virus is spreading. The White House has been having some happy talk about get into the stock market it's going to be okay.
PALETTA: But things are changing by the day and not in the way that White House wants. And so these numbers are good, it shows the economy had momentum. But that momentum all seems to have disappeared and now we don't know what's going to happen next.
KING: So Mark, connect the dots further then and I want to put on the screen here, couple of slides from a presentation you've done trying to get a sense of how bad the Coronavirus impact could be.
Number one is look at a global recession risk. And you just look at this map and it's just sad and stunning in the sense that you believe if this is a pandemic, and if it continues, that a good chunk of the globe, including you see the United States there, is going to go into the red, into recession as we go into the months and months ahead.
And then just if you bring it back at home, the United States economic outlook, you have a line that says here's where we are and here's about where we were. Things were looking better and then this dip, this giant precipitous dip if it gets worse. How guaranteed is that?
MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, it's not guaranteed, John. I mean, if the CDC is right, and the virus is widespread and we have school closings and daycare centers and businesses can't operate, then recession seems more than likely. But it's not guaranteed. Obviously, we'll have to see how the virus plays out. If you buy into the CDC's scenario, it's going to be pretty tough to avoid an economic downturn.
KING: And so if you look at the jobs report, which again, any President running for reelection would love it, any economist would look at that and say, wow, this economic situation that we all thought at some point you know now well into what - almost 113 months of continued growth. What's the hit on it from the Coronavirus?
ZANDI: Well, first let me say John, those numbers were inflated and we had really warm weather over the last couple or three months. So even if we didn't have the virus, the numbers were going to get dead ahead over the next two three months we're going to be on the soft side just because there is going to be payback for that.
There was also a lot of census hiring you know temporary hiring for the census taking, which is inflating things this month and for the next couple of months and that will come out all the numbers as we move into the summer.
But now you have the virus. The virus is going to be very disruptive. It already is. Businesses are responding. They're shutting down travel for their employees. They're battening down the hatches and they're not doing any hiring.
I mean, just think about the hiring process. You can't have people come in for interviews, that kind of thing, so I think the jobs market is going to be meaningfully weaker, even if we don't have a recession, even if the CDC is wrong and we don't have a widespread virus, the jobs market is going to be a lot weaker over the next few months.
KING: And so the President was signing this Coronavirus Emergency Response bill today, 8 billion plus, a lot more than the administration initially asked for, Democrats even Republicans on Capitol Hill saying they understood the scope of it at the beginning.
But now those bipartisan pieces they have signed it but the President says thinking about the economy he wants and he has done this before the Fed just gave him an emergency rate cut the other day. The President says I want more.
(BEGIN VIDEO CLIP)
TRUMP: We have a Fed that is not exactly proactive. I'm being very nice when I say that. I think what happens is the Fed should cut and the Fed should stimulate, and they should do that because other countries are doing it and it puts us at a competitive disadvantage.
(END VIDEO CLIP)
KING: I mean the economics of this first, I will come to Kaitlan for the politics. But the economics of this first, how much more can the Fed do? And you mentioned you and your colleagues at the post were reporting the administration is considering mostly tax breaks or tax concessions to the industry being hardest hit.
PALETTA: There's almost nothing that Fed can do. I mean when the virus is spreading, people aren't going to spend money buy a new car, buy a new refrigerator because they're fearful of the future. It's not because the interest rates are too high.
So the Fed has done almost as much as they can do by making interest rates lower, but now it's going to be up to the health professionals and you know even the White House and Treasury Department to see what they can do to protect the economy. The Feds kind of almost added a bullet at this point.
KING: And in the middle of this the markets sometimes react to what the President says. The President has been kind of all over the place. And you have new reporting just about how the mixed advice he's getting as he not only listens to the experts and listens to his White House team. But as he always does on any issue, he picks up the phone and talks to people outside the White House.
KAITLAN COLLINS, CNN WHITE HOUSE CORRESPONDENT: Because he likes to have his opinions or his instincts reinforced and when they're not by the professionals in the field that is something that annoys the President. So he'll call someone who will tell him what he wants to hear, and that's something we are seeing happening with this.
And it goes as far as aides who you know you're seeing some people from the CDC, the Vice President, this Coronavirus task force, giving really sobering analysis of what's to come, what they do not know? And then you see other people like Larry Kudlow who is also on the task force the President's Economic Adviser saying, that this is contained.
Repeating a claim he has made that this is contained domestically. Something that Kellyanne Conway also said today. And those are things that the President wants to hear, but those are things we do not know. There are no health officials who are backing up statements like that.
So it's this you know point where they are trying to hammer these points to the President, briefing him multiple times a day on this. But he has other people who are giving him information that he does want to hear, so it's creating these mixed messages that you see come out of the White House.
KING: Mark Zandi, help me I'm not sure if this is a fair question but I'm going to try it anyway. When you look at the jitters that investors clearly have about the Coronavirus crisis, how much of it is the nuts and bolts of the economy supply issues with China. Worried if economic growth is going to slow down because factories aren't running, consumers aren't spending you know people have quarantines and closings in the like.
And how of it is lack of confidence in political institutions including at times the President of the United States when he says a vaccine will be out very soon and experts have to stop up and say, no, no, it's going to be a year and a half, so on and so forth? ZANDI: Yes, I think it's all of the above. Clearly they're nervous about the economy and the prospects of going into a recession. They're also nervous about the fact that the Federal Reserve can't do much here. Interest rates are already pretty close to zero there is no room to maneuver.
And then on top of that, it's the fiscal policy responses the Trump Administration in Congress, can they get it together come together and pass some legislations that's really going to help this economy out?
It doesn't harbor well when Larry Kudlow the - chief comes out and says, no big deal, we're not that worried about it. Well, even he is not that worried about it, markets are, and so I think he should really think about what to do if things go off the rails here?
KING: In the middle of all this, dealing with the crisis before us and the Coronavirus impact, the President was asked at the town hall last night don't you care about the Federal debt? This is a Republican President who for two years had a Republican Congress and deficits in long-term debt went way up.
He was asked this question last night and Martha MacCallum of Fox News essentially said you know you can't really get to the big structural problem with the debt unless you deal with entitlement, Medicare, social security.
(BEGIN VIDEO CLIP)
MARTHA MACALLUM, FOX NEWS HOST: But if you don't cut something in entitlement, you will never really deal with that.
TRUMP: We'll be cutting it, but we're also going to have growth like you've never had before.
(END VIDEO CLIP)
KING: Will be cutting but we're also going to have growth like you've never had before which in the context of entitlement changes. It doesn't make a lot of sense. The President then getting on Twitter this morning, this is I will protect your social security in Medicare just as I have for the past three years.
Here is another example where the President says one thing then his political team is aghast at what he said. So then he tweets something else. It's separate from the current issues in the economy, but it's another example of mixed messages.
COLLINS: And this has been a pattern with this issue specifically that the President has had since he was running on the campaign trail. He is essentially trying to make this argument so he can please both sides of the aisle. Like yes, I'm making going to make these cuts. No, I'm not, I'm going to protect your entitlements and these things that people have grown so accustomed to some of his own supporters.
And this is something he has done time and time again. It's really hard to even explain how many times we've had to say the President has tried to have it both ways on this. He did it just last year. Every time we have this discussion and the President just says both things and tries to essentially please both audiences.
PALETTA: And we're a trillion-dollar deficit, and what are we talking about this year but tax cuts and more spending, and that's just going to make the deficit bigger. And they're looking at growth later this year and next year of not record growth, you know weak growth. So they've got a lot of room make up.
KING: We cross out in a worst case scenario. Mark smartly lays out in that slide deck possible negative recession. Mark Zandi and Damian I appreciate your coming in. Kaitlan is going to stay with us as we move on to politics.
And when comeback Michigan is the big prize next Tuesday Bernie Sanders won it last time, Joe Biden wants to take it away this time.
(BEGIN VIDEO CLIP)
SEN. BERNIE SANDERS (D-VT) PRESIDENTIAL CANDIDATE: Does anybody seriously think that a candidate who takes money from Wall Street and the drug companies and has Super Pac is going to stand up for the working class and make the real changes that we need?
(END VIDEO CLIP)
KING: That was Bernie Sanders campaigning in Arizona yesterday. He's on his way to Michigan today. Michigan is the biggest prize next Tuesday, Super Tuesday 2.0. It's interesting, Bernie Sanders was supposed to go to Mississippi. Joe Biden is expected to win there on Tuesday. Bernie Sanders was going to go to try to cut the margins. Instead he's off to Michigan to campaign in that state.
You heard that message in Phoenix about who is going to represent the blue collar worker? Bernie Sanders is hoping to do in 2020 what he did in 2016. It was this win in the Michigan Primary in the Democratic Primary in 2016 that served big notice Bernie Sanders challenged Hillary Clinton was for real.
It also underscored some of her weaknesses with blue collar workers in industrial states like Michigan. Remember, in the General Election, President Trump went to very narrowly 10,700 votes win Michigan that is one of the reasons Donald Trump President.
So as we come back to 2020, Joe Biden says, no wait a minute, I was part of the auto bailout with Barack Obama in the Obama Presidency. I'm going to fight for these blue collar voters. A quick look as we look at the demographics of the biggest prize next week.
It's a really interesting state in the sense that Michigan has a couple different dynamics. On the one hand, it has a higher population of white voters by percentage than the national average, 75 percent to 60 percent. It also has by smaller margin a higher percentage of African-Americans. A little over 14 percent 13.5, 13.4 is the national average.
Bernie Sanders has done very well so far among Latino voters that are an issue in Michigan because the Latino population in Michigan is well below the national average. So this is a struggle for white blue color workers.
It's a test whether Biden can turn out African-Americans in the Midwest and urban areas as he just did in throughout the south both candidates now competing hard both candidates focusing on blue collar jobs.
(BEGIN VIDEO CLIP)
JOE BIDEN (D) PRESIDENTIAL CANDIDATE: I've been in union of auto workers since 2008. The community has been decimated by the trade deal. Only one candidate the President has consistently opposed every disastrous trade deal, and that candidate is Bernie Sanders.
BARACK OBAMA, FORMER U.S. PRESIDENT: This is an extraordinary - whether then extraordinary career in public service. The revitalized American manufacturing as the head of our middle class task force Joe's candid honest counsel made me a better President and a better Commander in Chief.
(END VIDEO CLIP)
KING: Joining our conversation Heather Caygle with "POLTICO" Brittany Shepherd with "Yahoo News' and Lisa Lerer with "The New York Times" Michigan is going to be fun. It's a very competitive state. It was competitive in the Sanders/Clinton race it was competitive in the Clinton/Trump race. Now Bernie Sanders who is back on this seals a little bit Joe Biden has the delegate lead.
KING: Needs a win, needs to prove the 2016 magic is still there, but Biden thinks he can take this away, that his current momentum will become wow momentum.
BRITTANY SHEPHERD, NATIONAL POLITICAL REPORTER, YAHOO NEWS: Yes, you know John Bernie saw - wins with working class white people in Michigan last time around, but this time he is fighting insurmountable odds with Joe Biden.
And we're seeing that he is not going to have the strong Latino coalition and the expected young vote that was supposed to come out for Bernie in all of Super Tuesday contest and in the first four early contests that frankly didn't happen, and he only has the city like Ann Arbor to give him those young votes, anyway.
So I think it is going to be kind of an uphill battle for Bernie to climb especially as people like Rep. Slotkin endorsed Joe in "The 11th Hour". And he has to prove that he has this electability magic that he had last time. KING: Right and Biden does have this rally around Biden Movement going on. The Governor --popular Democratic Governor of Michigan endorsed him. The African-American Lieutenant Governor endorsed him this morning.
Now Bernie tries to use this Senator Sanders I should say sorry, he tries to use this to his advantage saying, here's the establishment and the elites organizing against me, but there's no question that Biden is putting together not only names at the top of the letterhead but people in Michigan who have a political organization on the ground.
LISA LERER, NATIONAL POLITICAL REPORTER, THE NEW YORK TIMES: Yes, I think as sort of Brittany eluded to the question has always been for Bernie Sanders, we knew he had a high floor; he had a strong base of support. What is his ceiling, right? How high can he expand his coalition?
And what we saw on Super Tuesday is that he just didn't really do that. The people that were supposed to turn out for him didn't surge the polls. There was increased turnout in Super Tuesday, but that increased turnout went to Joe Biden.
Young voters their turnout decreased a little bit. Latinos have stayed fairly constant. And we see Joe Biden making inroads with some group of voters that was really Bernie's base and that is really important in Michigan which is why working class men.
So doesn't look like it's going to be a tough race in Michigan, and it doesn't look at all that Bernie Sanders has a lock on it, even though he won it last time around. So that's part of why everyone is looking to the state for clues for how this is all going to shake out going forward?
KING: And you see Sanders changing his schedule he gets the urgency here. He was supposed to go to Mississippi. He has no expectation of winning Mississippi if that's the African-American vote. If you look at what Joe Biden did on Super Tuesday you can just expect that blue to keep--
But if you're Sanders, Democratic Party rules you wanted to go in there, do the best you can, get some delegates. Boost your turnout, boost your performance get some delegates. The fact that he said never mind and went to Michigan tells me he understands. This is why the math matters.
Our new delegate, we continue to allocate delegates from the Super Tuesday contest. We're still counting in California we're also allocating in some other states. Joe Biden at 604 delegates to 534 for Bernie Sanders, Elizabeth Warren who dropped out yesterday 43 Mayor Buttigieg who dropped out 26 and you see how it goes down through the list there.
But 604 to 534 heading in Michigan is the biggest prize next week. Biden thought he would be trying to catching up this week. What he's trying to do now is pull away some. HEATHER CAYGLE, CONGRESSIONAL REPORTER, POLITICO: Yes, absolutely. I mean, you know Sanders going to Michigan is a telltale sign of where he thinks his campaign is. And we've seen him kind of switch in the last few days. He started airing in talk ads against Biden which he wasn't doing before; he is hitting Biden on social security cuts.
Now after the things that he think will not only hit home with the voters in Michigan but the huge delegate rich states on March 17th like Florida, Illinois, Ohio. I think he's hoping to either win Michigan obviously or keep enough momentum to go into those states and stay alive.
Let's see what his posture is this weekend when he's up there trying to rally the vote? Does he continue to attack Biden or does he focus on himself and try to position himself as the one and only frontrunner to take on Trump?
KING: And if he can do this in the context of the 2016 campaign, this was - the Sanders where everyone was saying, oh Sanders is real, Sanders is real, and then boom, he wins Michigan as wow, Sanders is the challenge to Clinton is very real.
And what it did was it showed A, Sanders' strength and his organization and his movement. But also underscored what we would see much later Hillary Clinton had a problem with some of these blue color workers especially white male blue color workers. And the President went on to win Michigan to win Wisconsin to win Pennsylvania.
So if you're Democrat and trying to figure out what's going to happen this time? This is what's interesting this is from a Quinnipiac University Poll that shows the President's approval rating is slightly under water in Michigan, but on the economy, 52 percent approve of the job the President of the United States is doing on the economy.
And here is what I look at 55 percent of voters in Michigan say they are better off than they were four years ago. So the Democrats they think they can get Michigan back, but these numbers tell you it's going to be a fight.
COLLINS: Well, and what the campaign - the Trump campaign is worried about is that essentially they are seeing this moment for Joe Biden, and it's not because Joe Biden has become a better candidate, but people coalesce around him, the Democrats obviously want someone who can beat Trump and that's why you're seeing him get this boost.
That worries the campaign because they feel like once the Democratic Party does coalesce around one person and there's less chaos, which they've been hoping to capitalize on over the last several months, they're worried that those numbers will shift even further and that the President may be down to Joe Biden if he points in states like Michigan and Pennsylvania which of course are so crucial.
COLLINS: So those are the things that they're watching. They're hoping that after a little bit of time they'll be able to get those numbers closer together, but that's something that internally they're watching very closely in the Trump's in the President's Campaign.
KING: And you saw in the ad snippets we showed, Sanders has a blue color worker not a worker testifying his behalf. Joe Biden uses Barack Obama which in a Democratic Primary is a pretty powerful weapon talking about how closely he worked with him. Joe Biden was on the NBC yesterday.
Senator Sanders criticizing him, saying you know you take Super Pac money, Bloomberg the billionaire now supports you, how can you relate to blue color workers and Joe Biden says, give me a break.
(BEGIN VIDEO CLIP)
BIDEN: Let's go to Michigan, Bernie, and see if that's true. I'm the guy that bailed out the auto industry. What to do you buddy? Come on, this idea that my record is a problem. This is a guy that voted against a Brady Bill five times for background checks on people. And I welcome the competition, Bernie.
(END VIDEO CLIP)
KING: It's going to be an interesting one, in the sense that and especially on the auto bailout. Biden does can say I was at President Obama's side early in the Administration when we were deep in recession. When George W. Bush did the first bail out the Obama Administration came in and made it stronger. Sanders has no argument there.
SHEPHERD: No and now Sanders is running out at Obama as well. So you are - it's really interesting to see how he trying to say, well, Joe, I'm very different than you but actually we're very much the same with our ties with Obama.
LERER: And I think look, Joe these Michigan voters they know Joe Biden. They feel comfortable with Joe Biden. He is the guy that has been on the stage that they see some of cultural similarities with for a long time. And so I think in a place like Michigan that can really work to his advantage.
KING: Interesting test. Clinton won California last time Sanders took it this time. Sanders won Michigan last time. Fun when the days ahead. Up next for us Elizabeth Warren is now out of the race and she is mulling whether she should endorse. An interview last night may provide some clues.