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Interview with Economic Advisor Kevin Hassett; China Accuses U.S. of Barefaced Lies; New York and Arizona Set to Begin Contact Tracing. Aired 10:30-11a ET

Aired April 28, 2020 - 10:30   ET



POPPY HARLOW, CNN ANCHOR, NEWSROOM: -- or maybe in excess of 30 percent in the second quarter --


HARLOW: -- it --

HASSETT: The Wall Street firms are saying minus-20 to minus-30 at an annual rate.


HASSETT: And it could be as much as minus-40. I mean, I've seen a lot of different runs. In fact, I think that the number's so big that we should --

HARLOW: Wait, wait, wait. Minus -- an economic growth contraction of minus-40 percent in the second quarter?

HASSETT: That's -- you know, that's if you look at the CBO numbers, they're up about there. The thing is, though, that we should stop multiplying by four, right? So what's going to happen is, GDP's, say, going to go from 10 to nine. And then, you know, that drop of 10 percent gets multiplied by four when they put (ph) the number up. And so --

HARLOW: So how long, Kevin --

HASSETT: -- so it makes it look too big to go in annual rates, I think, if you look (ph) at (ph) it (ph) that way.

HARLOW: -- how long then, given that prediction, will it take for U.S. growth to return to pre-crisis levels?

HASSETT: Well, I think that if you look at the CBO forecast, they think that the third and fourth quarter go above the growth levels of recent quarters. And you know, again --

HARLOW: But what do you --

HASSETT: -- I hope that that's true --

HARLOW: -- what do you think? Because --

HASSETT: -- you know, I think if you can --

HARLOW: -- here's my concern --

HASSETT: -- let me finish, Poppy --

HARLOW: -- my concern is that if the restaurants are open but people aren't going to them because they're scared, and there's no vaccine?

HASSETT: Right. So I think that if we have a really prudent phase four stimulus bill that takes us -- pretty much, we've been, the last three phases have been the period where we're, like, building a bridge to the other shore, and now we've got to make sure that there's a lot of growth once we arrive on that shore.

If we have a very strong phase four bill, then I'm -- I'm really, you know, happy and pleased to come on the show and make the case for very, very high growth in the second half of the year.

But I think that that's where I as an economist am, is that I understand that, you know, Mitch McConnell and Nancy Pelosi and the president are all meeting with their teams and thinking about what the next phase is going to look like. And I think that if they hit a home run with that phase, like it looks to me they have with the previous three, then there's a really good shot that the CBO will be correct.

HARLOW: So, Kevin, Peter Navarro, your friend, White House trade advisor, yesterday --


HARLOW: -- on this network said, you're just all --

HASSETT: That's correct.

HARLOW: -- doom and gloom, those were his words. The president, Secretary Mnuchin say the economic rebound will be tremendous, that's the word the president used. Are you all doom and gloom, Kevin? Or are you just looking at actual economic numbers?

HASSETT: Well, no, I think that what I'm talking about, I do think that some of -- and you've never done this, but -- some of the things that I've been saying about the actual data that are going to be coming in have been twisted a little bit by some in the media to make it seem like I'm saying we're going to have a Great Depression, which is much different from saying we're going to have the highest unemployment rate since the Great Depression, right?

So we're talking about the factual data that we're about to read about in the newspaper between now and June and July, and those data items are going to be as bad as anything we've ever seen.

You know, Peter's right to focus on, well, what happens next? And I think that if, you know, the president's plan, if he works out a good one, another bipartisan bill for phase four, if it passes and becomes law, then there's cause for optimism and the CBO forecast --

HARLOW: Do you --

HASSETT: -- could be correct. And so I accept that.

And so I'm not saying that we're going to have a Great Depression. But what I am saying is prepare yourself because just about every number that comes out, we're starting -- we'll have GDP tomorrow, I don't know anything about the number.

But GDP tomorrow will probably be a negative number, and then that'll be just the very tip of the iceberg so a few months of negative news that's unlike anything you've ever seen.

And to not get out in front of it and explain it to folks and say, look, if you stop an economy, that's what you should expect to see? It would really be irresponsible, and that's why I won't do it.

HARLOW: We appreciate you being here with the straightforward numbers and analysis.

HASSETT: Thanks.

HARLOW: Here's my question. If the worst happens and it is a long time before we see a vaccine and people just don't feel comfortable going and eating in restaurants they did, so -- you know, consumerism is so much of our economy.

And I just wonder if the market is getting this wrong, if -- I can't see how people are going to go back and eat at restaurants the way they did before, go back and shop the way they did before, go back to malls the way they did before. And if that's the case, do you think that we need some form of a New Deal coming out of this?

HASSETT: I think that, again, a lot of it's going to depend on things that I have no expertise in, the path of the disease. I think that, yes, very much believe that Doctors Birx and Fauci and the rest of the team, the task force led by the vice president have given states the guidance they need to figure out how to open up safely.

When I look at the data, you know, there's some parts of the country where there are more workers going to work than others because there are more essential employees in those counties. And when I look at how they've been doing and what the disease path looks like in the counties where people already have been going to work, I found that there's really not a lot more spread of the disease lately.

There was a lot more spread of the disease earlier, which means that the education that's been, you know, I think really the achievement, the main achievement of the task force, is they've educated Americans about how to behave safely, has really had a big impact --

HARLOW: Yes, health (ph) --

HASSETT: -- so that all across the country, people are getting back. And so --

HARLOW: The thing is --

HASSETT: -- and so it's starting to get better, it's starting to get better --

HARLOW: Well --

HASSETT: -- but you're right, if you know, if there's another wave in September, then that's going to -- it's going to take another hit, the economy's going to take another hit for sure.

HARLOW: And perhaps a greater hit?


HASSETT: I mean, you know, I think that it depends on the progress of therapeutics and there are, what, 3,000 clinical trials right now, helping us understanding --

HARLOW: But I'm saying without that.

HASSETT: -- what's going to happen -- you know what, I have a lot of faith --

HARLOW: I'm saying without that, Kevin --

HASSETT: -- in the American system.

HARLOW: -- just the economics of it, the economic hit could be greater if states reopen too quickly. Look what we're seeing in Georgia right now, and this comes back, the economic hit could be more grave, correct?

HASSETT: I -- you know, I would have to study it, I would have to study it because the -- the fact is that it depends on so much that we don't know right now, like how many people have gotten it but haven't been tested because they were able to get rid of the virus relatively quickly --


HASSETT: -- there are some studies that are reasonably promising about that.

And so I would have to dig more into the data to let you know what I think --

HARLOW: Let me --

HASSETT: -- about that.

HARLOW: -- let me just ask you, you saw the CBO says the federal deficit is going to hit $3.7 trillion this year.

HASSETT: True. HARLOW: At what point will markets get concerned about unprecedented

U.S. borrowing and decide to demand a much higher rate, meaning isn't that a risk, that $4 trillion in deficits at this point?

HASSETT: Yes. You know, that is a risk but the amount of debt that we have relative to GDP is still a lot smaller than a lot of other countries like Japan --

HARLOW: OK, but it's in excess of 100 percent --

HASSETT: -- have been able to sustain -- yes. I -- you know what, it's a concern, it's definitely something that should be on everybody's radar. When you get debt this high, then it tends to slow growth. And so, going forward, if you're looking (ph) for a reason for medium- and long-term optimism, then it would have to be --


HASSETT: -- some kind of deficit reduction package --

HARLOW: All right.

HASSETT: -- but I don't think there's any economist who thinks that you should go after that precisely right now in the middle of a crisis.

HARLOW: Yes. The question is what's the long tail of this.

Quick, we have one minute, I want to do a lightning round with you --


HARLOW: -- something I haven't done before --


HARLOW: -- so please, yes or no --

HASSETT: Oh, jeez.

HARLOW: -- yes or no answers, Kevin.

HASSETT: Oh dear.

HARLOW: The PPP program, will it need in excess of $1 trillion?

HASSETT: You know what, I'm sorry, it depends but I hope not.

HARLOW: OK, maybe.

State aid, do you think --

HASSETT: Yes, sorry about the yes-no.

HARLOW: -- do you -- that's OK. Do you think that we could see a depression if there is not hundreds of billions of dollars in state and local aid?


HARLOW: OK. And oil, you saw oil falling to below $11 a barrel yesterday. Secretary Mnuchin said they're definitely considering financial assistance or loans to some of these oil companies, he said that just on Sunday. Some of these oil companies were already in a lot of financial stress before this crisis, borrowed heavily, some with junk bond credit ratings. Should they be bailed out?

HASSETT: You know, that's outside of my lane. That -- you know, I'm -- as a conservative economist, I'm very much opposed to bailouts usually. But this is an extraordinary circumstance, there's a lot of policy going on that is different from what happens in the textbooks, so --


HASSETT: -- I'd have to think about what's going on with that.

HARLOW: -- it is extraordinary. Kevin, thanks so much. We appreciate it.

HASSETT: Thanks, thanks a lot, Poppy, bye.

HARLOW: Yes -- Jim.

JIM SCIUTTO, CNN ANCHOR, NEWSROOM: Goodness, 20 percent unemployment? Remarkable to hear.

Well, JetBlue says that all passengers will now be required to wear face coverings on flights, beginning next month. CNN correspondent Pete Muntean Is live.

Pete, JetBlue, first major airline to take this step after already requiring its employees to do so on flights?

PETE MUNTEAN, CNN CORRESPONDENT: Yes, Jim. And JetBlue's COO says this is the new flying etiquette, requiring that passengers wear masks on board flights in passenger cabins, but also recommending that they do so as they travel through the airport.

It's a relatively big shift. Other airlines have been requiring that crew wear masks on the job -- pilots and flight attendants -- but this has been a relatively slow ramp-up. This is now being required by JetBlue starting May 4th, so next Monday. Although anecdotally, I can tell you that here at Reagan National Airport, of the very few passengers who are left remaining, traveling here, it is hard to spot someone not already wearing a mask.

A little context here, flight attendants have been calling for this for weeks. Not only do they want across-the-board requirement for passengers to wear masks on board flights, but they also want to the DOT to impose even further restrictions banning any travel that is not essential, banning all leisure travel. Interestingly, though, the TSA numbers of passenger counts passing

through their TSA checkpoints show that passengers are actually ticking up even slightly, the passenger load's ticking up even slightly after they cratered around May 3rd.

We're seeing that passenger levels are still very low, a 95 percent drop year to year, although maybe suggesting that as this scattershot approach of states reducing their restrictions on folks state to state, that now people are maybe getting a little bit more comfortable with wanting to travel now.

SCIUTTO: Yes, we're seeing a lot of data like that. Pete Muntean, thanks very much and welcome to CNN.

MUNTEAN: Thanks.

HARLOW: Thanks, Pete.


China, slamming American politicians, accusing them of, quote, "barefaced lies" over claims the country concealed its virus epidemic. We'll take you live to Shanghai for an update on that, next.


SCIUTTO: This morning, China is firing back at American politicians, accusing them of telling, quote, "barefaced lies" about the country's handling of the coronavirus.

HARLOW: CNN international correspondent David Culver is with us from Shanghai.

What specifically are these officials pointing to?

DAVID CULVER, CNN INTERNATIONAL CORRESPONDENT: Well, it goes to this back-and-forth, Poppy and Jim, that we have seen only intensify since this outbreak began. It's the blame game, essentially, and it's rooted in part with domestic politics in the U.S., and it certainly has its ties in domestic politics here.


Now, what we are seeing -- now to the U.S. -- is of course coming from the Trump administration, increased blame against China as a whole for its mishandling of the virus early on.

And it's something that we've reported on -- just go back three months, to our original trip to Wuhan -- and the allegations of cover- up, the underreporting and mishandling, the silencing of whistleblowers. All those things that can't be denied that we brought to light. And of course, continue to play a role in how this has played out over the past three months or so.

However, what's been now brought to this politicized level is the Chinese response from the foreign ministry, coming out against the U.S., and in particular against the State Department and Secretary Pompeo. And I want to read you some of what the foreign ministry had to say today, because to Jim, what you mentioned as those barefaced lies.

They say, quote, "American politicians have repeatedly ignored the truths and have been telling barefaced lies. They have only one objective: to try to shirk responsibility for their own epidemic and prevention and control measures and divert public attention."

Now, what they have been saying from the foreign ministry is essentially, sure, at the local level there may have been issues early on with this -- and they say the central government essentially stepped in to take control of the outbreak and to try to stop the spread. And despite the mishandlings early on, the central government, in their opinion, has done a strong job at preventing the spread from going beyond where it currently is.

However, what they also point is that the U.S. could have looked early on to see what was happening, and could have taken action at the domestic front. So within the U.S., whether that be ramping up production of face masks and PPE or even taking further steps to try to really prevent the spread within the U.S.

So it's this increased back-and-forth blame game that I really only see intensifying going forward, guys.

SCIUTTO: Listen, and you're right to note that there are domestic political audience that officials in the U.S. and China are both speaking to --


SCIUTTO: -- David Culver in Shanghai, thanks very much.

Well, New York City is now ramping up contact tracing. That is, tracing the contacts of people who have been infected with the virus. More on the pivotal role that could play in slowing the virus' spread, coming up.



SCIUTTO: New York City is rolling out a massive network to trace the coronavirus spread, the city, hiring 1,000 so-called contact tracers. They'll conduct interviews with people who have been exposed, try to determine who they've been in contact with. They will also follow up with those contacts to arrange testing and potential isolation.

I'm joined now by Kristen Pogreba-Brown, she's an assistant professor of epidemiology at the Zuckerman College of Public Health at the University of Arizona.

Doctor, good to have you on this morning. I mean, this, like testing, is one of those things that every health expert we've spoken to has said, you need this on a broad-based scale to safely reopen. It looks like New York is really the only one who's doing it right now. How much of a difference does that make?

KRISTEN POGREBA-BROWN, EPIDEMIOLOGY ASSISTANT PROFESSOR, ZUCKERMAN COLLEGE OF PUBLIC HEALTH AT THE UNIVERSITY OF ARIZONA: It makes a lot of difference. And I don't know that New York is the only one doing it; we're starting to ramp up to do this in Arizona as well. And the reason it makes such a difference is because it can really cut off the transmission cycle.

So for every person that you're able to get ahold of that might have had contact with somebody who is sick, and you can get that person to start monitoring their symptoms and keep themselves at home while there's a chance that they could be infectious, that's all the more people down the road that won't actually get infected as well.

SCIUTTO: Understood. And credit where credit's due. Arizona, as you know, doing this as well. How much more challenging does it make it to do this as economies' states are opening up? Because typically, you look at a lot of the countries that had success, stemming the spread of the virus, a place like South Korean, I mean, they were doing contact tracing -- Singapore -- from the very beginning.

POGREBA-BROWN: Right. It is more challenging. In some ways, you know, epidemiologists in public health departments have been doing case investigations this entire time, where we call people who are sick and talk to them and learn about household contacts who might also be sick, and get a sense of what their kind of movements are. But you're right, as the economy and other things start to open up, it does make it more challenging because you are going to have people who are starting to have more contacts.

But this is really kind of one of the bases of public health and epidemiology, and what we're trained to do. And so we understand how to make those connections and then really work with people to get that information.

SCIUTTO: Now, you make the good point that contact tracing is just one piece of the public health response. So in effect, you need that along with broad testing, do you not?

POGREBA-BROWN: Absolutely. Because the only way that contact tracing can be successful is, first, you need to be able to test cases rapidly to determine if somebody is sick. And once they are sick, once you determine who their contacts are, if their contacts start to actually become infectious -- and even ideally, even if they aren't because we know asymptomatic transmission is such an issue -- we really would like to have all of their contacts tested as soon as possible as well.

And so robust testing, both the PCR testing and then eventually the antibody testing, is just one other piece of this public health puzzle.


SCIUTTO: So New York City's doing this, you mentioned Arizona. Who else in the country is doing this? And is it anywhere near the scale that the country needs to reopen safely?

POGREBA-BROWN: I don't know off the top of my head, every single jurisdiction that's doing this. But I know that most health departments are at least trying to ramp up to be able to do this on a much broader scale than they have been doing. And it is an importance piece, but I think that it's -- we are not there yet, but we're working towards getting there.

SCIUTTO: And you mentioned, just before we go, you and your students, you're assisting the county health department there, to handle reported positive cases. So what do you do when you find someone who's been infected?

POGREBA-BROWN: So I work with a student team, I've been leading this team for about 15 years, called SAFER. And we already had students trained and in place to be able to respond to outbreaks and work with health departments to do routine surveillance.

And so we really work as surge capacity, underneath the health department. And when they have a case reported, my students are able to go and work with them to determine who the person is who's sick, make contacts, do an interview to determine what kind of risk factors they might have, what kind of symptoms they have.

I mean, you're starting to see new reports about symptoms that are more common that we didn't know about before, and all of that comes from those case investigations. And so students then make that -- make those connections, and then enter that data back into the health department's system, which is how we're making these decisions.

SCIUTTO: Well, appreciate the work you're doing. We wish you the best of luck, and we hope that other communities around the country follow that example. Kristen Pogreba-Brown, thanks very much.

POGREBA-BROWN: Thank you, have a nice day.

HARLOW: All right, thanks to all of you for joining us. We'll see you back here tomorrow morning. I'm Poppy Harlow.

SCIUTTO: And I'm Jim Sciutto. NEWSROOM with John King starts after a short break.