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Survey of Economists: U.S. Already in Recession; Trump Administration Pushing to Reopen U.S. in May; NY Governor Cuomo Gives Update on Coronavirus Response. Aired 11:30a-12p ET
Aired April 10, 2020 - 11:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN KING, CNN ANCHOR: Perhaps, but the current reality is beyond painful. A survey of 45 economists finds the U.S. economy is now in a recession and that survey predict things will get worse in the months ahead.
CNN chief business correspondent, Christine Romans, is here.
Christine, this is a pretty bleak prediction.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: It really is and what we were all fearing would happen in the last couple weeks.
They're saying, even the National Association for Business Economics says this will be a short, sharp recession. You'll see a cratering in the third quarter, the second and third quarter. The first quarter down, the second quarter down something like 25 percent, the worst we've seen in decades. It's a great recession. Look at that second quarter, 26.5 percent. Before bouncing back later in the year.
And the organization sees a 12 percent jobless rate by the middle of the year. I'll tell you, John, that's actually conservative of what we've been hearing. You have a forecast from JPMorgan as high as 20 percent, and the St. Louis Fed, 30 percent. Those are depression-level unemployment rates.
But it's on purpose. It's because you're sidelining people to keep American safe. So the question about when and how to reopen has really come into focus here the last few days.
And there are a lot of concerns among economists that if you shatter confidence by the American consumer, American workers by coming back too early and having a false start in the economy with some kind of outbreak, then you could have dangerous, dangerous territory for the U.S. economy heading into next year.
So a very careful moment we are in, even as the president is very optimistic about getting rid of this invisible enemy.
I'll point out, the last time the president was optimistic about the economy, turning over the stock market, turning over the quarter on February 29th, the Dow was down 15 percent.
KING: Whew. Not that long ago, the numbers were great.
KING: Now the numbers are beyond belief.
Christine Romans, appreciate that very much.
Recession is not a word any president wants to hear, especially in an election year.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think our country, from an economic standpoint, will end up being stronger than ever. We have tremendous stimulus, we have tremendous stimulus plans, we have things in the works that are going to really, I think, fire up the country. I think what's going to happen is we're going to have a big bounce rather than a small bounce. But we will be back.
(END VIDEO CLIP)
KING: Back when, is the big question. The president is pushing to get Americans out of the house and back to work next month, and his treasury secretary, Steve Mnuchin, says he thinks that is a realistic target.
Our White House correspondent John Harwood, is with us now.
John, we understand, any president, especially a president in an election year, wants to get people back to work, wants to put the recession in the rearview mirror. But is he going to listen to the political advisers and his economic friends or the scientists when we get to the end of the month?
JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: He certainly needs to listen to both, John. Look, as you know, Jimmy Carter was the last president to seek reelection during a recession. He got hammered by Ronald Reagan.
The challenge here is that trying to restart the economy prematurely, if people aren't ready for it, is simply going to backfire.
It's only partially, of course, in the president's control. He can call for guidelines to be lifted, but these are mostly state restrictions that have been put in place.
And even if states leave their restrictions, if people don't feel comfortable about resuming normal economic activity, if business doesn't have the confidence to invest, it isn't going to pay any dividends.
In our CNN poll this week, we showed 60 percent of the American people said they would not feel comfortable resuming their regular routines if the guidelines were lifted at the end of April. So it's a difficult calibration that the White House is about to make.
Everybody is concerned when you've got 16 million people going on unemployment the last couple of weeks, but you could make things worse if you go back too quick.
KING: You could make things worse if you go back too quick. Clearly, John, the president thinks that. A tweet from a few minutes ago: "The enemy will soon be in full retreat."
Again, the president says it's openly, he wanted to be optimistic. He wanted to convince the country we will beat this.
But you talk about the delicate balance. If Tony Fauci, Dr. Birx, for example, at the end of the month, says, can you give us two more weeks, and the economic people are saying, no, let's go on the 1st of May, the president is going to have a tough call to make.
HARWOOD: He made that tough call a couple weeks ago when he was speculating about reopening by Easter. It was easier for him to make that call when conditions were deteriorating than it will be now when some people see light at the end of the tunnel. That produces rising expectations, rising impatience. You heard it from Bill Barr this week saying --
KING: Sorry, John, I need to interrupt you. The governor of New York, Andrew Cuomo beginning his daily briefing.
My apologies to John Harwood.
Let's take you to Albany.
GOV. ANDREW CUOMO (D-NY); To my right, Dr. Howard Zucker, health commissioner. To my left, Melissa DeRosa, secretary to the governor. To the her left, Robert Hamika (ph).
To our friends celebrating Good Friday today, I wish them a Good Friday. To our friends celebrating Passover, I wish them the best.
Let's give you an update on where we are. To use an overused term, we are cautiously optimistic that we are slowing the infection rate. That's what the numbers say. That's what the data suggests to us.
Change in total hospitalizations is down not relative to yesterday, but when it's averaged, the three-day average on the hospitalizations, you see a dramatic decline in those numbers. And that's obviously very good news.
Change in ICU admissions is actually a negative number for the first time since we started this intense journey. That means there are fewer people in the intensive care units statewide than there were. And again, that's the first time we've seen a negative number, so that's good. The three-day average of that is down. A change in intubations. A little tick higher than it's been the last
few days, but it's overall down. The three-day average is also down.
The bad news is we continue to lose a tremendous number of lives and endure great pain as the state. And 777 lives lost. I understand intellectually why it's happening. It doesn't make it any easier to accept.
What's happening is the number of people who came in two weeks ago, when we had those very high hospitalization rates, either you get treated and get better and get discharged or you stay in the hospital and probably wind up on a ventilator. And the longer you're on a ventilator, the less likely you will come off the ventilator. And that's what's happening now.
These lives lost are people who came in at that height hospitalization period, and we're losing them.
The numbers are lower than yesterday for those who can take solace in that fact, as someone who searches for solace in all this grief. The leveling off of the number of lives lost is a somewhat hopeful sign.
The number of total lives lost, 7,844. Four people -- just to put this in perspective, I lived through 9/11, as many New Yorkers did, at somewhat of an advanced age. And I believed 9/11 was the worst situation I was going to deal with in my lifetime.
To put it in perspective, 2,753 people lost their lives in 9/11 where now it's 7,844. In terms of lives lost, this has exceeded my expectations, to tell you the truth.
And now in other areas across the state, like in Rockland, that seems to have stabilized.
Overall, we've been very aggressive in the suburban communities in jumping on those hot spots. And the percentage of growth in upstate New York and the suburban areas around New York City has basically been stabilized and flat, so that's good news, too.
Overall, New York is flattening the curve. And we have to flatten the curve because when they showed us the projection models of what the statisticians projected the curve would do, we have no capacity to meet those projections.
In other words, Columbia University, who is projecting the highest caseload, said we needed 136,000 hospital beds in New York City when we started. It was just several weeks ago, 136,000 hospital beds in New York City. We only have about 33,000 to 36,000 hospital beds in New York City. So that was obviously distressing, to say the least.
McKenzie had projected we would need 110,000 hospital beds. They had a second scenario, which they considered their moderate scenario, which was 55,000 hospital beds statewide. And again, we didn't have that capacity even on the moderate scenario.
[11:40:15] The Gates-funded IHME suggested we needed 73,000 beds. We didn't have that, either. So none of these projections were in any way comforting to us.
The actual curve is much, much lower than any of them projected. And what's the variance? How do you come up with an actual curve that is so much different than what those experts predicted?
First, in fairness to the experts, nobody has been here before. Nobody. So everyone is trying to figure it out the best they can. There's no model to track against.
Second, the big variable was, what policies do you put in place. And the bigger variable was, does anybody listen to the policies you put in place, right?
I'm governor of the state of New York. You can announce a policy. That doesn't mean anyone is going to follow it. You can announce a policy, we're going to close down all businesses, everybody must stay home. And if people don't follow it or they don't take it seriously or they believe you're being premature or you're being political, they wouldn't follow it.
And then what do we do? What, do we arrest 19 million people or ticket 19 million people?
So the big variable was, what policies do you put in place, and the bigger variable, does anybody care and does anyone follow it? And all these social distancing stay-at-home, nobody has ever done this before.
So the statisticians had to come up with a premise on how many would comply, and we've actually exceeded that.
But we have to keep doing it, you know. People tend to think, well, this is a natural trajectory of the disease. There's no natural trajectory. The trajectory is the trajectory that we create by our actions.
The natural trajectory would see that line continue to go up. It would continue to go up and up and up until you develop herd immunity whether you would see many more infections.
So we did that. We are doing that. And that's why we have to stay the course.
I said to someone this morning, you tell me how we behave today and I will tell you the infection rate two days from today or three days from today. What we do today will determine the infection rate two or three days from now.
So what we're doing is working to stay with it even though it is a grind and even though it is difficult. We have to stay with it.
We have to stay with it operationally on our hospital system where we're coordinating statewide in what we call the surge and flex system. We have 50 percent additional capacity on our hospital system. We're sharing equipment all across the system.
We have to continue helping people who are struggling every day. Food assistance is a real issue for people. We're going to add $200 million to provide more than 700,000 low-income households, more funding for food, basic food.
Continue to help our medical workers who are the frontline soldiers in this battle and have done a phenomenal job. I know I say it all the time, but every day they're out there doing truly the lord's work.
We're going to provide additional housing. I want to thank all the companies that have come forward to be part of this effort. Airbnb is contributing funding to provide housing for our health care workers, 1199 ICU are providing their members with additional benefits. We have hotels that are coming forward and offering free hotel rooms, so we thank them all very much.
Last night, as a signal of our thanks to the workers who are out there every day, we lit up our landmarks in the New York City area and in Niagara Falls blue in their honor, and that's a nice symbolic tribute.
What's even better is to take action that shows our gratitude. Saying it is nice, doing it is even better.
And after 9/11, Congress created a victims compensation fund. I've been working with our congressional delegation. We think the federal government should set up a heroes compensation fund to compensate our health care and other frontline workers for what they did here.
Saying thanks is nice. Actually providing assistance is even better.
The big question is going to turn to, when do we reopen, especially in places like New York, where we're going to see the numbers now starting to change.
The natural trajectory, the human movement is going to be, OK, now let's reopen. I need to get out of my house. I've been cooped up, cabin fever, I need funds, I have to work. And that's going to be the next question that's issued that we have to deal with.
What I say on that question, again, none of us have been here before, so let's learn from what has happened so far, and let's learn from what we have been seeing over these past few months so it informs what we're doing going forward.
First of all, the key to reopening is going to be testing. I've said that from day one. It's not going to be a light switch where you flip this economy like you flip a light switch. It's not going to be everybody goes back next Thursday. It's not going to happen that way.
It's going to be a gradual phased process. And it's going to be reliant on testing, testing of antibodies, testing for diagnostic results, and testing on a scale that we have not done before. Now, New York State has been very aggressive on testing. And our state
lab has been very aggressive on testing. Our state lab is now developing an antibody test, which is a fast and not invasive test.
Right now, the State Department of Health can do 300 tests a day. By next Friday they'll be able to do 1,000 tests, 2,000 tests the following week. That's great. Sounds like a lot. But 2,000 tests are still a drop in the bucket.
And I'm proud of how New York is advanced on testing. You look at how quickly New York State has moved on testing and how many tests we have done. We've done a higher percentage of tests in New York State than other countries have done. And New York State far exceeds what this nation as a whole is doing on testing.
Even with our high capacity and high-performance on performance it's still not enough. It's not enough if you want to reopen on a meaningful scale and reopen quickly. So the testing front is going to be a challenge for us.
Well, why can't New York just develop more tests and do more testing? How do we get New York State Department of Health to scale?
That's an issue that we've been working on. It's harder than it sounds. You need certain reagents so you can do the testing, you need certain materials so you can do the testing. And it's very hard to get these reagents. You're in a situation where countries all across the globe are trying to do the same thing.
The federal government has something called the Defense Production Act, DPA, they call it, which I've been saying from day one is a very powerful tool for the federal government to use when they need to secure a product in the defense of this nation. This is in the defense of this nation.
The federal government has used it effectively. They've used it in this situation more as a point of leverage than anything else, basically saying to a company, we need you to do this, we do have the Defense Production Act that we could use.
But we need an unprecedented mobilization where government can produce these tests in the millions. New York State Department of Health is doing several thousand. We have nine million people we want to get back to work. You need more than several thousand tests per week if this is going to happen any time soon.
Private-sector companies on their own I don't believe will be able to come to scale. We're working with the private-sector companies. They have the tests but they don't have the capacity to come to scale. You're going to need government intervention to make that happen. And the federal government is in the best position to do that.
New York State offers to be a full partner with the federal government. We do have the largest number of cases in New York. New York is an economic engine.
I can't do it as a state. If I had a Defense Production Act in the state, I would use it. I would use it. I don't have that tool. The federal government does. Any way, we can partner with the federal government to get these tests up to scale as quickly as possible, we are all in.
I like to operate as a coalition with New Jersey and Connecticut because we are the tri-state area. I have spoken to Governor Murphy of New Jersey. I've spoken to Governor Lamont of Connecticut. They'll join in a testing coalition.
So I asked the federal government if you are willing to step in and use the federal powers, New York State and New Jersey and Connecticut will partner with the federal government and let's get the testing up to scale quickly so we can start to build that bridge to reopening the economy.
Second, on opening, you need the federal stimulus bill. They're passed a couple already. But you need a fair federal stimulus bill. That's not a political pork-barrel bid. You know where the cases are and where the need is.
I understand the political dynamics of the U.S. Senate. But this is not a time to be passing bills that really are to make sure your home state gets enough funding. That's not what this is about. This is about helping the country coming back to need.
When I said the bills were unfair to New York, the past bills, it is not just that I am advocating for New York. Look at the needs and look at where the damages have been done. The federal government has been trying to address that damage.
You know where it's been done. Look at the chart on where the cases exist. Look at the number of deaths and number of cases and hospitalizations and help those places come back and come back. That's what the stimulus bill is supposed to be doing.
Also, let's make sure we're learning from what we just through and are going through, OK? Because there are lessons we all should be aware of over the past few months. Before we take a step forward, let's make sure we know what we are stepping into.
A question I had from day one, and when you look back at this, where were the horns that should have been were triggered back in February or January. Where were the warning signs? Who was supposed to blow the whistle?
The president asked this question and I think he's right. The president's answer is the world World's Health Organization should have been blowing the whistle. I don't know enough to know if that's right or wrong but I know the question is right. And sometimes the question in more important than the answer.
How did this happen? I want to know how this happened. The warning signs were there. If you don't know the answer, how do you know it is going to happen again, right? Food me once.
January, you go back and look at the headlines in January and you see questions and you see warnings. Now, they were all over the map. We saw what was happening in Asia and in Europe.
Where were the international experts saying, well, if this is happening there, this is what we should expect to happen in the United States or to prepare to happen in the United States?
January and February, you still have sources in this country saying basically there's nothing to worry about.
How did that happen? And did we really need to be in this situation where the United States winds up with a higher number of cases than the places that went before?
We sat here and we watched China. China had 4,000 cases. We wind up having 474,000 cases. How did it happen?
We saw South Korea. They wind up with 10,000 cases. Italy where we saw the collapse of the whole health system winds up with 143,000 cases.
I raise the question because the answer, again, is more important than the question. But before we move forward, let's make sure we are not repeating the same mistake that we made, right? Those who do not remember the past are condemned to repeat it. I don't want to repeat what we just went through this past month.
So what are the relevant questions? Is there going to be a second wave? Let's look at the countries that have gone through the reopening process and what can we learn from them. Right? Well, we have to start to reopen. Let's look at what the other countries have done before us, what they did and what worked and what did not work.
When you take just a cursory review, you see caution signs. Hong Kong appears to have the virus under control. They let their guards down, the virus came back. Hong Kong reported the biggest rises in cases in a new wave of infections. Is that true? Could it happen here? An article yesterday, Italy has seen a bump in the number of cases.
You know, before we take a step, make sure we are more informed and more aware than we were in the past.
They're talking about a second wave of Singapore. You go back and look at the 1918 flu epidemic, that was over 10 months. There was a first wave and the second wave. The second wave was worse than the first wave because the virus mutated. Third peaked. And the whole experience was 10 months.
Is there any extrapolation to where we are today? I don't know the answers. This is not what I do. It is not what a state does. But we know the question and we should have the questions answered before we take a step forward. Because, yes, no one have been here before. These are COVID uncharted
waters. But we do know that none of this is predetermined and it is all a function of our actions. We are in total control of our destiny now. What we do will affect literally life and death for hundreds of people.
Where we go from here? First, keep on doing what we are doing, stay home. That works. We are flattening the curve. We must continue to flatten the curve.
We have to get testing to scale. That's an entirely new exercise. It is something that we have not done well in this country. And we need both diagnostic testing and antibody testing. And we need millions and millions of them. We need them in a matter of weeks, not months.
We have to be more prepared as a nation. We should never go through this scramble with other states competing against other states to guy masks from China. I mean, we just should never have been here in the first place. But certainly we should never be here again.
Let's make sure we study the waters ahead and proceed with caution before we set off on the next journey. And when we talk about reopening, let's study the data and let's look at what's happening around the world and let's make sure the best health minds across the country are giving us their best advice.
How do we go forward? We stay New York tough. New York tough means more than just tough. It means discipline. It means unified. It means loving. It means smart. And now is the time to be smart.