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Sharpest Quarterly GDP Drop in 12 Years; Gov. Jared Polis is Interviewed about Colorado Reopening; DOD to Provide Mental Health Programs. Aired 9:30-10a
Aired April 29, 2020 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JIM SCIUTTO, CNN ANCHOR: There is more proof that the pandemic is doing real damage to the U.S. economy. The economy contracted for the first time in nearly six years in the first quarter. In fact, Poppy, as you know better than me, second quarter expected to be much worse as the full effect of the pandemic hits the economy.
POPPY HARLOW, CNN ANCHOR: Yes. That's so true. Maybe ten times as worse if you ask White House top economists.
With us now is economist Douglas Holtz-Eakin, former director of the Congressional Budget Office.
It's nice to have you, Douglas.
DOUGLAS HOLTZ-EAKIN, PRESIDENT, AMERICAN ACTION FORUM: Thank you.
HARLOW: So, as Jim's referencing, Kevin Hassett, now back at the White House, senior adviser to the president, told us on the show yesterday that this GDP number that is down almost minus 5 percent for the first quarter is the tip of the iceberg, right, and that Q2 he could -- he thinks could see a contraction of 40 percent.
Can you put that into layman's terms for every American at home watching and thinking what's that mean for me long term?
HOLTZ-EAKIN: Yes, it is the tip of the iceberg. These numbers reflect essentially the impact in -- in the last two weeks of March. And in that short amount of time, it managed to cause a u-turn in the economy. Household spending, which is the anchor for everything --
HOLTZ-EAKIN: Fell by 7.6 percent. And the amazing thing is people pulled back on things you might not expect. Half of the decline can be explained by reduced use of health services. People stopped going to doctors. They stopped having elective surgeries. They stopped spending on any services at all and instead they just jacked up their savings. So that's -- that's the fear hitting the household sector. They're holding on to their money. They're afraid of what's coming. Well, what's coming in the second quarter? An annual decline at a 40
percent rate is the worst quarter in American history. That would be worse than the Great Depression. That is the steepest fall we will ever have experienced. And -- and I think that's something that we already seen the evidence of. We've got 26 million people who have filed for unemployment insurance in the past five week. The damage is out there. It's everywhere.
SCIUTTO: Douglas, the White House is talking about a v-shaped recovery, that this will come back very quickly in the fall. There's some politics in that, right? Expectation management.
SCIUTTO: As an economist, how much of this lost economic activity can quickly be turned back on?
HOLTZ-EAKIN: Some can be turned back on quite quickly. But I don't think we should expect a v-shaped recovery. If you think about your typical business, they're going to be spending the time thinking about how they can operate safely.
We might have to change the workplace, we might have to do some screening, we might have to bring back only half the employees and they're not going to be spending a lot of time thinking about adding employment and growing. They're going to be making sure that if they have to leave the premises again, they can operate remotely.
And so I expect for the economy to return to growth in the third quarter. I think most people do. But I don't expect it to look like a rocket. We're going to climb out at a slow and steady pace.
HARLOW: Very quickly, "The Washington Post" highlighting a program not getting a ton of attention, but the Fed is -- has initiated a $500 billion basically bond buying program from big, big companies, big publicly traded companies.
HARLOW: But with it do not come the constraints that come with PPP, et cetera, right? There's no constraint on, like you can't lay people off, there's no constraint on executive pay, there's no constraint on share buybacks. Should that worry people or not?
HOLTZ-EAKIN: I think if you look at the terms of those loans, there's a phrase in there saying that they should reasonably try to keep people on the payroll. And that's a word that I think is going to be important in the eye of the beholder.
But I think the primary objective, the primary objective in all these programs, the PPP, the Fed lending programs, should be to get the money out fast. And in doing so, you give up some other things. You give up finding out if people genuinely need it. We can't -- we don't have time to audit every firm. You give up some fraud controls and there's going to be some misspending.
HOLTZ-EAKIN: But I think the reality is, this economy is falling fast and it needs help fast. And that should be the primary objective.
SCIUTTO: Well, let's hope it gets to the people who actually need it the most.
SCIUTTO: The first couple rounds, wasn't clear that was happening.
Douglas Holtz-Eakin, thanks very much.
It is a critical balancing act, keeping people safe, but getting parts of the economy going again. Colorado's governor will be with us next on his plans.
SCIUTTO: The governor of Colorado, Jared Polis, is shifting his state's guidance to a safer at home order from a stay at home order. Not all of the state cities on board yet.
Joining us now is the governor, Jared Polis.
Governor, thanks so much for taking the time this morning.
GOV. JARED POLIS (D-CO): Good morning, Jim.
SCIUTTO: So, listen, I know that elected officials like yourself have difficult balancing acts to perform in these coming weeks. These are hard decisions to make. According to your data, the number of daily new cases in the state have only declined the last four days. As you know better than me, the White House guidance is to wait for a decline of 14 days.
Why relax these restrictions now rather than waiting?
POLIS: Yes, we have significantly less cases than we had two weeks ago, than we had three weeks ago. What you're seeing with the testing is, we're doing a better job testing. So we're catching a higher percentage of them.
But where we really see it is the decreased count in the hospital, decreased use of ventilators. So, you know, again, we're -- we're really facing a public health crisis here. But it's time to enter a more sustainable phase. Thirty-two days, Coloradans did an amazing job staying at home.
Now we're shifting to where most of our neighboring states were, Utah, Wyoming, Nebraska and others, which is just trying to encourage people to be safer. And it also gave us time to really put together comprehensive guidelines of how retail stores can be safer, how office workplaces can be safer. [09:40:01]
And those are going to be enforced once office workers go back on May 4th.
SCIUTTO: Is part of your decision -- is part of your decision-making acknowledge that as those restrictions are relaxed, and, trust me, I understand the economic costs of this as well. We talk about that on this broadcast often. But -- but that as you relax -- relax, the fact is there will be more infections. Is that something that as a leader of the state, in effect, you're willing to accept?
POLIS: Well, one thing that the modeling done by great scientists at CU here in Colorado did, and others have showed, is that really what matters a lot less is when you end the stay at home phase. It could end now. It could end in two weeks. It could end in three weeks.
What matters most about how well we can -- we can keep beating this virus down is that sustainable phase that you can keep up for a matter of months. In fact, if you went two or three weeks longer with stay at home and didn't follow it with social distancing and the way we live and the way we work, it would have all been for nothing. And the people in Colorado made a great sacrifice staying at home 32 days. I want to make sure it's not all for nothing.
SCIUTTO: You acknowledged to my colleague Jake Tapper this weekend that you, like others, are worried about a second spike, perhaps in the fall. I suppose the question is, what happens then? Do you go back to Coloradans and say, listen, we relaxed for a bit, but now we got to be stricter to help tamp down a second spike?
POLIS: We don't yet know if this virus follows the same pattern as the seasonal flu, which traditionally has a spike in the fall. What a number of folks nationally and here in Colorado are so concerned about is, what if we have a confluence of this flu high season along with a new high coronavirus season in the fall. So we need to do our best to continue this kind of social distancing over time.
We're encouraging mask wearing in Colorado. In fact, everybody who's doing business with the public, in a store, a storefront, a place of business, they actually have to wear a mask under -- under state law and under one of our orders.
So we're doing our best to be able to sustain this phase so that we can continue to move forward, rather than backwards.
SCIUTTO: You mentioned mask wearing. And we noticed -- there was a notable moment just a couple of weeks ago, when you met with the vice president. We'll show a picture, I believe. You were wearing a mask. He was not.
Again, yesterday, as the vice president visited the Mayo Clinic, of course, one of the most respected healthcare centers in the country that had a rule about wearing masks inside, again, and I believe we have pictures of this, this is you with the vice president. You wearing your mask, him not. And then the vice president yesterday again refusing to wear a mask.
What kind of message does that send to Americans at the same time that elected officials are saying, listen, this is your part, a part that you could do?
POLIS: Well, look, as elected officials, I think we have an additional responsibility with the soap box we have to practice what we preach. We're trying to be, and I'm trying to be an ambassador for wearing masks. So I walk to all my press conferences wearing masks. Take it off when I speak and I'm at the podium and nobody is near.
When in public, when Marla (ph) and I and the kids are walking our dog every day, we wear masks, because it's important. And I think that really elect officials should be role models and should demonstrate the importance of wearing masks, which could absolutely help save lives and help us return to economic normalcy sooner rather than later.
SCIUTTO: Governor Jared Polis, we appreciate the work you're doing and thanks very much for joining us this morning.
POLIS: Always a pleasure, Jim.
HARLOW: The Defense Department, no stranger to dealing with stress, of course, especially in and after combat situations. Now it's partnering with New York City to bring some of those stress management tactics and relief to first responders in the middle of this pandemic. That's next.
SCIUTTO: New York's first responders and medical teams are, of course, at the epicenter of this crisis, putting themselves at risk every day to save the lives of their patients. They're facing intense pressure with intense stress. Some even liken it to combat-like situations.
HARLOW: That's right. And that is where the Department of Defense comes in. It is now working with New York City it use combat stress management tactics, typically used to help military personnel, to try to support first responders to the Covid crisis.
With us now to talk about this brand-new initiative, Chirlane McCray, first lady of New York City, and Major General William Hall, commander of the New York and New Jersey Task Force.
Good morning to you both. Thank you for being here and for doing this for the people on the front lines.
If we could just take a moment, I'd like for you to listen to ER Doctor Arabia Mollette, who Jim and I had on the show just a few days ago talking about the pain of doing the work she does.
(BEGIN VIDEO CLIP) DR. ARABIA MOLLETTE, ER PHYSICIAN: Losing patients. And when they look into your eyes, and they give that last breath, what makes you think that I'm going to be OK after this or any healthcare workers that are on the front lines? Their eyes pierce your soul. You know, and it's different. It hits very different.
(END VIDEO CLIP)
HARLOW: First Lady McCray, it is workers like her that this is aimed at, is it not?
CHIRLANE MCCRAY, WIFE OF NEW YORK CITY MAYOR BILL DE BLASIO: That's right. That's absolutely right. And I want you to know that my heart goes out to all of these workers on the work they do. This is -- this is not actually a new problem.
We know that our nurse suicide rates are significantly higher than the general population. Our physicians are already the number one profession in deaths by suicide, 300 to 400 a year. First responders who answer EMS calls are nearly six times more likely than the general population to attempt suicide. This is really hard work.
And the pandemic has exacerbated everything that they go through.
I'm so grateful for the Department of Defense, for them coming in to do this work to help get our workers trained up to be able to help the healers.
SCIUTTO: General Hall, the military has an enormous amount of experience dealing with PTSD, stress, the results, the long lasting results of stressful situations like this. It may seem an unusual comparison to that faced by doctors, but tell us about the similarities there, because the similarities are remarkable.
MAJOR GENERAL WILLIAM HALL, COMMANDER, TASK FORCE NEW YORK/NEW JERSEY: Yes, sir. I think, at the end of the day, coming alongside of our partners here in New York City and the hospitals that we're working in, is there's a correlation to what they've been -- the fight that they've been in for the last two months and now us joining us -- them in the last month to what we see when we deploy soldiers, sailors, airmen, and marines to combat and the stress of that.
And then the Department of Defense has learned a lot of lessons in the last 18 years of how to combat that stress and also that it's acceptable to go for help, as we have developed initiatives to make sure that our service members, when they need the help, they can go and get that help.
HARLOW: And First Lady McCray, I know this program is really aimed at health care providers, like the ER doctor we just heard from. But, you know, it also makes us think about so many other people on the front lines, the people working with the MTA on the subways, driving the buses, doormen in apartments in cities, delivery, you know, people that bring us food and packages. I just wonder if you are considering an expansion of the program
toward them and what you think when it comes to mental health all around for a lot of those frontline workers as well.
MCCRAY: Well, I think that we will learn a lot from the training that we receive from the Department of Defense. We do have a mental health help line and many programs throughout the city to address this type of stress. But I think we're all learning how to best reach people, how to make sure that people are connected and able to talk about their experiences as we -- as we go into what I hope will be a recovery.
There's no one way to reach everyone. But programs like this one targeted to health care workers will go a long way. And we do have programs for our firefighters, for our police officers, and other essential workers. We will be looking at this to see if there are lessons that we can learn to expand to others.
SCIUTTO: General Hall, I know a challenge that the military faced early on was people raising their hand, right? Raising their hand asking for help. I wonder what advice you offer to health care workers who may be facing something to encourage them to reach out.
HALL: Yes, sir. As I said before, we have evolved in the last 18 years, and our ability and willingness for people to come forward and say that they need help. You know, coming alongside the city of New York and that exchange of information, I think one of the best things that we can do is, how do we get those professionals to take a knee and seek the help that they may need.
You know, the doctor that -- the clip that you played from the doctor, and she described what she's gone through daily in the last eight weeks speaks volumes for that need for people to just decompress and talk to others or simple things like, you know, the sleep that they do get off shift, that being a quality time away from work and to recharge and readjust.
HARLOW: First Lady McCray, before we go, I do want to offer you a chance to respond to some criticism that has been aimed at the mayor over a tweet that he sent last night. You, of course, co-chair the Task Force on Racial Inclusion and Equality.
And the mayor tweeted last night, after breaking up a big funeral that was not abiding by social distancing, he said, my message to the Jewish community and all communities is simple, this is the time for warnings that has passed. I've instructed the NYPD to proceed to immediately summons or arrest those in large groups. This is about stopping disease and saving lives. Period.
The Anti-Defamation League head said there are more than a million Jewish people in New York City. The few who didn't social distance should be called out but generalizing against the whole population is outrageous.
I just -- I wonder if you've spoken to the mayor and if -- if you have any comments for those who were offended. MCCRAY: Well, you know, I did speak with the mayor, and -- and that
response was directed at those who were not social distancing.
The last thing we want in this city is more death.
And for people to gather in that way, violating all the public health protocol that we've learned over these last days, last months, and have tried to share with people is being violated. The last thing we need are more funerals.
So I think that it is right for the mayor to take a strong stance. Of course, you know, most people are doing the right thing. And that's, you know, we don't mean to -- that to be extended to them. It's just those people who are not following the guidelines that have been laid down federally by the state and in the city to keep people safe.
SCIUTTO: Chirlane McCray, Major General William Hall, thanks to both of you and for the work you're doing.
HARLOW: Thank you. Good luck.
MCCRAY: Thank you.
SCIUTTO: One pharmaceutical giant says it has made progress on a coronavirus vaccine, which could be supplied to millions by the end of this year. Is that true? We're going to discuss.