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Protests in Minnesota over Death; Stocks Rise at Open amid Optimism; Trump Threatens to Close down Social Media Platforms. Aired 9:30-10a
Aired May 27, 2020 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOE BIDEN (D), PRESIDENTIAL CANDIDATE: Should be in a position where we're able to make sure that people are -- we -- if he cares about people reopening, start lending the money to small businesses, not one more penny to a major corporation. Put people in a position where they don't have to risk their lives to be able to make a living.
(END VIDEO CLIP)
DANA BASH, CNN CHIEF POLITICAL CORRESPONDENT: So that is generally the former vice president's prescription. The other, you know, hard reality that I asked him about is if he does win in November, he will very likely inherit a very, very severe economic challenge in this country.
And, you know, he says he understands that, but, he'll -- he, like everybody else, we don't know what the next day is going to bring in terms of the country's health, in terms of its economy, never mind the campaign trail.
JIM SCIUTTO, CNN ANCHOR: Yes. And he said, listen to the health experts. Of course, Dr. Fauci, just moments ago on our broadcast said masks are not just about your own health but other's health.
BASH: That's right.
SCIUTTO: Dana Bash, great interview. So good to have you on this morning.
BASH: Thanks, guys.
SCIUTTO: Well, the family of a black man who died while in police custody is now calling for the officers involved to be charged with murder. Overnight, hundreds protested the deadly encounter. We're going to have a live update from Minneapolis, next.
POPPY HARLOW, CNN ANCHOR: Well, outrage in Minneapolis overnight as police and protesters clashed in the streets over the death of 46- year-old George Floyd, a black man who died in police custody. Floyd was arrested Monday after officers responded to a call about an alleged forgery. A bystander's video shows Floyd handcuffed and pinned to the ground with one police officer's knee on his neck for more than seven minutes.
CNN has obtained that video, and a warning, it is very disturbing.
(BEGIN VIDEO CLIP)
GEORGE FLOYD: I can't breathe.
WITNESS: Boy, you got him down, man. Let him breathe at least, man.
FLOYD: I can't breathe.
UNIDENTIFIED MALE: I've been trying to help out.
WITNESS: He can't breathe (INAUDIBLE), man. (INAUDIBLE).
FLOYD: I'm about to die (INAUDIBLE).
FLOYD: I can't breathe my face (ph). Just get up.
(END VIDEO CLIP)
SCIUTTO: I can't breathe makes you remember those words of Eric Garner.
SCIUTTO: Floyd was declared dead just a short time later at a nearby hospital. The four officers involved have been fired, but they have not been charged. Now the family is demanding they be charged with murder.
CNN correspondent Omar Jimenez is in Minneapolis following these developments.
What more is the family saying here now following this? I mean, watching that, it's just heartbreaking to see it play out.
OMAR JIMENEZ, CNN CORRESPONDENT: It really is. It's tough to get through, even just those few minutes of video. Minutes that stretch even longer for the family that was watching in horror as this unfolded.
We know that the four police officers involved in this were fired less than 24 hours after this happened. But the family says it's going to take more than that. And that's a mentality that was playing out amongst the protesters that at first were demonstrating peacefully at the site where Floyd was pinned to the ground, and then later on things got a little more aggressive and at times violent outside of this police precinct here which at the very least is emblematic of the real anger that is in this community here over how this situation unfolded. And for the family, their lives changed in just a matter of minutes. This is how Floyd's sister describes what this moment has been like.
(BEGIN VIDEO CLIP)
BRIDGETT FLOYD, SISTER OF GEORGE FLOYD: There's definitely not enough justice for me or my family. I feel like those guys need to be put in jail. They murdered my brother.
(END VIDEO CLIP)
JIMENEZ: And we have seen the disciplinary actions again from the police department, but the family now wants charges to be filed.
HARLOW: Before you go, if you could just tell us a little bit more about him. I mean all I've been reading and watching the local news there, you know, gentle giant, his fiance just explaining the kind of person he was, who came to Minnesota for opportunity.
JIMENEZ: That's right. I mean this was someone who, as we understand, had moved to Minnesota in just recent years, lived a large part of his life in Houston as well. And a lot of people that met him describe him, as you mentioned, as that gentle giant, in some ways as a family man and at the very least was not someone who would have deserved to have been put in the situation that he was put in, again, that we saw unfold in that harrowing video that has been circulating, Poppy and Jim.
HARLOW: Omar Jimenez, we're so glad you're on the ground following this. Thank you very much.
HARLOW: And we'll be right back.
HARLOW: Taking a look at the market there. Stocks again sharply higher this morning at the open following a 500 point gain for the Dow yesterday, but are the markets betting on a rapid recovery that may not come to pass?
Neel Kashkari is the president of the Minneapolis Federal Reserve. He worked in the George W. Bush and Obama administration and previously oversaw the Treasury's TARP program during the Great Recession.
It is so good to have your perspective having helped lead through that crisis as well.
NEEL KASHKARI, PRESIDENT, MINNEAPOLIS FEDERAL RESERVE: Good morning. Thanks for having me, Poppy.
HARLOW: You look at the market today, you look at the S&P surging 34 percent since the March 23rd low. You've got the Nasdaq 5 percent away from record highs. And I just wonder, Neel, if you think this market is creating a false sense of stability that the true economy just doesn't reflect.
KASHKARI: Yes, I don't take any comfort from the stock market's recovery. I mean I'm happy that the Fed intervened massively in March, just to make sure markets were functioning and the financial system was stable. That was important. I'm glad we did it. It was effective. I think markets are recovering in part because of that. But the markets have no idea where the virus is going.
KASHKARI: My colleagues and I at the Federal Reserve are spending our time talking to the best epidemiologists in the world to understand where the virus may go. Ultimately, we have to solve the virus if we have -- if we're going to solve the economy. And there's great uncertainty about where the virus is going right now.
HARLOW: Well, you hear with such certainly from the administration, Larry Kudlow says we're going to see 20 percent\ economic growth in the second half. The administration's talking about all but promising a v-shaped recovery. I know you don't think a v-shaped, a dramatic spike in recovery is guaranteed at all.
But I wonder, Neel, if you think that we're -- we could be in store for a dreaded w-shaped recovery, meaning two downturns in a row.
KASHKARI: Well, that's something we are very concerned about. And when you look at prior pandemics, the 1918 pandemic that gets a lot of attention right now, it started in the spring and went dormant over the summer and then it came raging back in the fall. That's probably the worst case scenario that the epidemiologists are warning about. And right now we just don't have enough information to know, is that a likely scenario or how likely is that scenario? We certainly can't rule it out.
KASHKARI: We don't want that to happen, of course. That would be very damaging for the U.S. economy and for the American people.
HARLOW: You said just a few weeks ago that the worst is yet to come on the job front. How high do you think real unemployment, the U-6 number, is actually going to go?
KASHKARI: Well, right now I think, you know, the headline unemployment numbers are around 14.7 percent. I think the real or effective unemployment rate is probably around 25 percent when you actually account for how many people have been laid off.
You know, in those surveys, you have to declare that you're actively looking for work to be counted as unemployed.
KASHKARI: It would not surprise me if the real effective unemployment rate gets around 30 percent before we hit bottom, and hopefully not worse from there.
HARLOW: Wow. But that -- I mean that is -- that is well into Great Depression levels, 30 percent or above, and that's what Americans will be feeling.
What about permanent job loss? I'm sure you've read the study out of the University of Chicago and Stanford. Their analysis is that 42 percent of the jobs that are lost in this are never going to come back.
Is that possible?
KASHKARI: Well, it is possible. That's what's so, you know, difficult right now. A couple months ago, when this all flared up, I think many of us were optimistic that this would be a short shutdown and then a quick recovery and then Congress could bridge that with things like the PPP program.
If it turns out that many businesses are going to be shut, or running at sub capacity, 50 percent, 25 percent capacity, for the remainder of the year, or for longer until we get a vaccine, I think, unfortunately, then you're going to see probably many small businesses go out of business and those jobs that they were providing go away until new businesses form.
KASHKARI: And that's what will be a slow recovery.
HARLOW: So then the real, real question about the fact that the pain is not felt evenly comes into focus here, that I think is just so important. I mean you look at what Chairman Powell said, about 40 percent of the job losses have been in households, bringing in less than $40,000 annually. And then Eric Hearse (ph) from the University of Chicago just came out with this data that I think is so telling, 9 percent of the top income earners, the top fifth of income earners, lost their job during this.
But when you look at the bottom fifth, it's 35 percent, and they're more likely to be black or Latino. So what -- what is the administration going to do about that? What can the Federal Reserve do about that? And what happens if America doesn't do enough about that?
KASHKARI: Well, this is where -- you know, the Federal Reserve has very powerful tools to provide loans to the financial markets and to businesses, but they're loans, they're not grants. Congress has acted very boldly, both parties coming together.
I think they're going to need to do more and I think they will do more. I think the best thing they could do was continue to put money in the pockets of people who have lost their jobs so that they can pay rent, pay mortgage, buy food, cover their basic necessities.
KASHKARI: Congress can do that. We have the financial wherewithal as a country to do that for an extended period of time. And I think that's where their assistance is going to need to be focused.
HARLOW: Even more stimulus.
A quick yes or no on this. Janet Yellen is saying it's time for the banks to suspend their dividends.
Is it time for the banks to suspend their dividends and is the Fed going to recommend they do so?
KASHKARI: Well, I recommend they do so and I've called for this in a "Financial Times" op-ed, not only suspending their dividends, but raising capital. The losses will ultimately flow into banks. We need to make sure banks are strong. They should inoculate themselves now by stopping dividends and raising capital.
HARLOW: Let's not see another financial banking crisis.
Neel Kashkari, president of the Minneapolis Federal Reserve Bank, thank you.
KASHKARI: Thank you.
SCIUTTO: Well, President Trump is now threatening to regulate or even close down social media platforms. Not clear if he has the power to do that. This after Twitter fact checks his tweets about mail-in voting. False claims he made. We're going to have a live update, next.
HARLOW: Well, the president, this morning, is threatening to shut down or, quote, strongly regulate social media platforms. This is, of course, after Twitter fact checked two of his false tweets on mail-in ballots. The president claims they're trying to silence conservatives' voices.
SCIUTTO: CNN business reporter Donie O'Sullivan joins us now.
The president makes a lot of threats, as you know. Does he have any power to deliver on this threat?
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: Well, Jim, the president and Congress could certainly make social media platforms' lives a lot more difficult and a lot more expensive for them to do business. Here in the U.S., at the moment, basically social media platforms are not responsible for what their users post on their platforms.
So if the law were to change on that, FaceBook, Twitter, would have to hire probably a lot more moderators and -- but it would probably have the effect of stifling speech further. The president right now is saying that his speech is being (INAUDIBLE) in some way by Twitter. So I'm not sure it would have the intended effect.
HARLOW: So, Donie, Twitter is fact-checking the president's false claims on mail-in ballots, but are they doing the same when it comes to his false tweets trying to accuse Joe Scarborough of murder, completely unfounded? And also what is FaceBook doing on this?
O'SULLIVAN: Yes. So there's inconsistencies all over the place here. Twitter is fact checking Trump on voter misinformation, not fact checking Trump on false claims of murder against Joe Scarborough. So Twitter is saying false murder claims, OK, false voting information not OK.
FaceBook is not fact checking any of this. All these posts from the president have been posted verbatim, word for word, on FaceBook, and FaceBook is doing nothing about it. FaceBook and Twitter and Google have been going to Congress, have been appearing before lawmakers over the past few years saying they have a united view against voter misinformation. Here, clearly, they are not in sync.
SCIUTTO: No. Yes.
HARLOW: Yes. Wow.
Donie, we're so glad you're on top of this. I think it only develops from here.
Well, the nation's fight against coronavirus inches closer to a just very grim milestone. This as more cities start to reopen despite cases going up in areas.