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Quest Means Business
Fauci Warns Of Risks Reopening Economies Too Fast; Risks Of Reopening Versus Risks Of Staying Closed; Dr. Fauci: Reopening Early Could Have "Serious" Consequences; Trump Says U.S. Must Reopen Soon; WHO Envoy: We Need "COVID-Ready" Societies. Aired 3-4p ET
Aired May 12, 2020 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:26]
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Good evening from New York. I'm Richard Quest. Tonight, we have a special edition of QUEST MEANS BUSINESS.
There is one subject that we're looking at, and it is very much the subject of the day. It is the question and the timing and the true cost of
reopening the global economy.
It's one that's on the minds of policymakers in every country. When is it safe to reopen the economy at the same time without risking suddenly a
resurgence in coronavirus?
Dr. Anthony Fauci has appeared via video link before U.S. senators warning reopening economies too quickly will lead to more outbreak and more death.
And tonight, we not only ask the question, when to reopen, but how can we reopen?
It all boils down to one simple question that everyone has been asking, ever since Dr. Fauci posed it last week.
(BEGIN VIDEO CLIP)
DR. ANTHONY FAUCI, DIRECTOR, NATIONAL INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES: Well, you know, it's the balance of something that's a very
difficult choice, like how many deaths and how much suffering are you willing to accept, to get back to what you want to be some form of
normality sooner rather than later?
(END VIDEO CLIP)
QUEST: That is the golden thread that will run throughout our program tonight. How many deaths are you prepared to accept to reopen the global
economy, which is also accepted as being a necessity.
With us tonight, Mohamed El-Erian, Paul Krugman the Nobel Prize economist; Jim Yong Kim, former President of the World Bank; Gary Cohn, former White
House Economic Adviser and David Nabarro of the W.H.O. who is the Special Envoy for Coronavirus.
We start there with of course the fundamental issue. New warnings from top U.S. infections experts.
As Donald Trump is rushing to open up the U.S. economy and 48 states are now open in some shape or form, in a socially distanced testimony today, he
said the outbreak -- Dr. Fauci said the outbreak isn't under control. The risk of resurgence is real, and the risk is of uncontrollable outbreaks.
(BEGIN VIDEO CLIP)
TRUMP: Their attempt understandable to get back to some form of normality disregard to a greater or lesser degree the checkpoints that we've put in
our guidelines about when it is safe to proceed in pulling back on mitigation.
Because I feel if that occurs, there is a real risk that you will trigger an outbreak that you may not be able to control, which in fact,
paradoxically, will set you back not only leading to some suffering and death, that could be avoided, but could even set you back on the road to
try and get economic recovery.
It would almost the clock back rather than going forward.
(END VIDEO CLIP)
QUEST: The whole genesis for tonight's program, listening to what Dr. Fauci said, began with Mohamed El-Erian who's our guest -- one of our guests this
evening.
When I read, Mohamed El-Erian's article in which he speculated what is -- you have a health expert, a social expert and an economic expert, and they
all came together to convince the decision maker what he or she should do.
We'll hear Mohamed El-Erian's views in a moment, but this is the sort of debate that was probably taking place in many secret offices around the
world.
(BEGIN VIDEO CLIP)
QUEST: I think we need to hear first from the health experts. After all, this is first and foremost a health crisis.
JOHN DEFTERIOS, CNN BUSINESS EMERGING MARKETS EDITOR: The health experts are clear after weeks of lockdowns, the cases in hotspots is slowing down.
Lockdowns and social distancing appear to be effective.
QUEST: Very good news. Yes. We're not there yet. But, I think you're right. I think definitely.
And what do the social experts say?
ANNA STEWART, CNN REPORTER: From a social expert's perspective, that can only be good news.
It's been hard on all of us.
QUEST: Social and Health. The economy?
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Well, from the economist's perspective, that's good news, too. The cost of these lockdowns has been
staggering.
[15:05:03]
QUEST: Well, good. So, we all seem to like -- we all seem to be on the same page.
Now, let's think about opening up the economy and how we're going to do it.
DEFTERIOS: But we're not out of danger yet. Until we have this virus under control, we're still at risk of a new wave.
STEWART: So what are the social experts supposed to say? Do we trust our governments with indefinite lock downs?
SEBASTIAN: And what about our economic experts? Some sectors are on the brink here, unless we reopen soon, it's worth considering the cost of a
depression, too.
QUEST: Well, I think you've got it right economy. We can't let this virus overtake and completely bankrupt us all. So, I think I'm with you on
economy.
DEFTERIOS: The experts know all of this, but we need to buy ourselves some time and use it wisely. Whether it's treatments, testing, or contact
tracing.
STEWART: The problem is, we don't know if our societies will accept these new realities.
QUEST: Yes, yes, you too.
SEBASTIAN: And we don't know if our economies can survive without even a partial reopening. Right now, the big question is --
DEFTERIOS, STEWART, SEBASTIAN: How much risk are we prepared to take?
QUEST: That is the question.
(END VIDEO CLIP)
QUEST: Mohamed El-Erian is with me, Chief Economic Adviser at Allianz. Mohamed, you started the thinking of on this in terms of how one minute you
hear one thing and you agree with them.
The next minute, you hear the opposite argument, and you agree with them. So, I ask you the question I'm going to ask, what level of deaths are we
prepared to accept?
MOHAMED EL-ERIAN, CHIEF ECONOMIC ADVISER, ALLIANZ: So, this is really tough because it's life and this is livelihoods, or if you're living in a poor
developing country, it is the risk of dying from a virus or dying from hunger. So, it's a really tough one.
Look, the reality is we are reopening. The pressure to reopen is so intense, but let's focus on learning. There's lots we don't know, Richard.
But we've got one massive natural experiment. In the U.S. alone, we could have states ahead of the Federal guidelines, states behind the Federal
guidelines and stays in line.
We're going to get a ton of data. We need to judge not only the risk we take with respect to infection, but how people will behave? How businesses
will behave?
I don't know what the right answer is. But I do know that a political decision has been taken and we've got to learn and collect data and adapt
quickly if we're going to get that balance right over time, because there's going to be over time that we're going to get it right.
We're going to live with the virus for a while.
QUEST: You see, this is another thing we're going to be really coming to a conclusion on. This idea of we're going to have to live with the virus
until there's a vaccine which is a long way off.
And this is straining every sinew of economic thinking, societal thinking, health thinking. Can the three in your view act in harmony?
EL-ERIAN: So, they can if you have a vaccine, as you just pointed out, or if you have very sophisticated testing and tracing. We're not going to get
there quickly.
So, we are going to flip flop. Don't think of it as a smooth opening. We're going to reopen, we're going to learn and we may well have to shut bits of
the economy down.
It is going to be very difficult for a decision maker to shut the whole economy down again. You would need a major outbreak of infection. That's
why the health experts wanted us to go slowly.
QUEST: Right, but let's take the Seoul example in South Korea, where an outbreak, admittedly a cluster outbreak predicated around nightclubs.
If we started to see something like that, around say the subway in New York or use of the subway, you would -- the Governor, Andrew Cuomo would have no
choice regardless -- I mean, regardless of economic effect.
You see, you started it off again. Now, the pendulum is swinging backwards and forwards between the different protagonists.
EL-ERIAN: Yes, the question is how big are the swings? And the hope is over time, the swings become small.
Look, the really scary example is Singapore. Singapore thought it had this licked, and then it had to shut down completely.
So Korea at least could isolate it, could test, could trace and could keep going.
You know, I think of this as we used to live in this really sophisticated jigsaw puzzle that was put together. The infection has messed everything
up.
Now we're trying to put the puzzle back together, and we don't have all the pieces, so it's not going to fit even, I tell you look at China.
China has opened up 80 to 90 percent, and yet, economic activity came down in April. Why? Because the world is opening up in an unsynchronized manner.
This country, the United States is opening up in unsynchronized manner. So, it's going to be a lot of bumps along the way.
[15:10:10]
EL-ERIAN: And hopefully -- I say hopefully because there's nothing predestined about this, the pendulum will get smaller in its swings.
QUEST: You started the thinking of on this, didn't you? I mean, everybody was aware it had to be thought of, but to crystallized it.
You realized early on that this Faustian debate, as opposed to Fauci debate, this Faustian bargain that we are going to have to make is deeply,
deeply uncomfortable.
EL-ERIAN: Very much so. We make it in our own lives, but never to that extent. I came across it in the 80s, Richard when I worked on a fragile and
failed state.
And that's the reality there. We've never experienced it at the level of a global economy and we've never experienced it at the level of advanced
economies.
So there's going to be loss of judgment. It is really, really hard. You know, my own gut feeling is that people were way too naive about how easy
it would be to reopen this economy.
That is they thought we were going to flick a switch and everything will come back on. It turns out there are health issues. There are economic
issues and behavioral issues.
We don't know how people are going to react. I know of families, Richard, right now, some are willing to engage, some are not and they are the same
family, what are they going to do?
QUEST: Mohamed El-Erian, thank you very much for starting us off on this road and for giving us the points upon which we can now discuss with
others. Thank you very much, sir.
In just a moment, after we come back, there are warnings of a severe recession bordering on depression if businesses do not reopen.
But then, there are warnings of a second wave of the virus if businesses do reopen.
We have a former President of the World Bank on the health side, Paul Krugman on the economic side. Both are with us after the break.
(COMMERCIAL BREAK)
QUEST: Should we or shouldn't we? How far should we go? What is the price - - what is the price of risk and the number of deaths we are prepared to accept as we reopen the global economy. It is a hard choice and a simple
choice, just not an easy one.
Listen to how the Governor of New York views that choice.
[15:15:07]
(BEGIN VIDEO CLIP)
GOV. ANDREW CUOMO (D-NY): To say, well, we either have to have a strong economy or protect public health. No, that's a false choice.
It's not one or the other. It's both. We have to reopen, get the economy running, and we have to protect public health.
I mean, this is not a situation where you can go to the American people and say, okay, how many lives are you willing to lose to reopen the economy? We
don't want to lose any lives.
(END VIDEO CLIP)
QUEST: Can that be done? The Nobel winning economist Paul Krugman warns that the economic consequences of reopening too soon will be worse in the
long run.
He lays out a cycle which we can show you now. First, U.S. states abandon social distancing by acting irresponsibly and people emboldened by
President Trump begin acting irresponsibly.
Then people go back to work and employment falls for a while. That causes infections to rise. The pandemic begins to spiral out of control.
As that happens, people stop working and shut themselves at home, regardless of the message and that causes unemployment to spike again in
what could have been a short unemployment crunch becomes a major long term problem.
Paul Krugman is with me now joined by Jim Yong Kim, former President of the World Bank and co-founder of Partners in Health.
Let's start with you, Paul Krugman. The debate that everybody is having at the moment, everybody accepts there is this question of what price we're
prepared to pay.
Governor Cuomo says, it is not as simple as that. There's no choice. You do both. Is that possible realistically in your view?
PAUL KRUGMAN, NOBEL-PRIZE WINNING ECONOMIST: Yes. I think that the people who are thinking that there is a choice, that there's a tradeoff are the
ones who are being unrealistic.
Everything we know, I mean, you know, the epidemiologist could be wrong, but they know a whole lot more about this than the rest of us.
And as far as I can make out, epidemiologists are pretty much united in the view that certainly for the United States, reopening in any significant
degree, given where we are now would lead to a major increase in cases. We have not got this thing under control.
We have flattened the curve, but we haven't crushed it, as they say. And so, the cycle you just described, if we were to reopen now, then very
quickly, we would in a matter of weeks, or possibly not much more than a few weeks, the consequences would be everybody would see the concept that
this is leading to the pandemic worsening again, and the economy shuts back down.
The best chance of achieving a fast economic recovery is in fact to stay the course, to keep locked down until we've got the case load down, until
we've got the testing and tracing in place so that we can in fact reopen.
Where we are now, it's actually how do we make things worse?
QUEST: Okay, but, Jim, having taken that point from the economics point of view, there are those who would say, how do we know if the virus is going
to come back with a ferocity that it was before?
And in this balancing act of what price to pay, well, maybe we are just going to have to take a little bit more risk.
JIM YONG KIM, FORMER PRESIDENT OF THE WORLD BANK: Well, you know, Richard, I think the basic issue is, will the virus behave? Especially here in the
United States? Will it behave the same as it's been behaving all over the world, or will we be an exception?
I think you know, as cases go up and states here in the United States open up their economies and start, let businesses start moving again, I think
the assumption has to be that the virus will behave differently somehow here than anywhere else.
Because in the rest of the world, we know exactly how the virus is behaving, that once you allow gatherings, the super spreader events can
happen, the virus will continue to transmit.
And so, you know, what I have been saying all along is that, you know, we've got to get very, very aggressive about putting in place, the measures
that Professor Krugman just talked about. You know, testing, tracing, isolation and quarantine.
And for some reason, in the United States, and also in large parts of Europe, we still haven't done that. Spain and Italy are opening up, but
they don't have that kind of system in place that's aggressive enough.
And what we know is if you loosen the movement restrictions, if you loosen the lockdown, you have to replace it with something and unfortunately, they
haven't really done that, and so in Germany and Spain and Italy, you're starting to see the cases creep up again.
[15:20:08]
KIM: And so this is inevitable. This will happen if you do not replace the social distancing with the other thing that we have as a tool. It's a much
more accurate tool. It's much more sharp. It's a sharper knife than the blunt instrument that we have of having everyone stay at home.
We could have gotten -- made a lot of progress by putting those systems in place.
QUEST: Okay, but --
KIM: But it's only a few that have done it.
QUEST: Right.
KIM: Massachusetts is one place where we're doing it right now. We're learning a ton. We've been at it for a month. We've learned a ton.
We know you can do it. You can do it in Massachusetts, which is the third highest prevalence state in the United States.
We know we can do it, but --
QUEST: Okay, but Paul, so Jim, I want to take that -- I want to take that point, and I want to put it to Paul, but that would mean we are accepting
some form of a lower economic growth, a very difficult economic growth and elevated unemployment for the foreseeable future, because social
distancing, it's not going to work in the long run.
KIM: Richard, if you look at the countries that have had success doing this, what they've done is, you know, the lockdown and then they started
going after every single transmission event, which is where you have to get to.
And once you go after every single transmission event, that's in fact, when you crush the curve. You can't crush the curve, just with social
distancing. We've seen that again and again, and again.
Germany couldn't crush the curve with mostly just social distancing. Spain couldn't do it. Italy couldn't do it. We haven't seen any state in the
United States do it.
So, the testing and the tracing is not just to prepare for getting out of lockdown, it is the way you crush the curve.
And so, you know, let me make just this one point. We have a very important event that's going to happen over the next week or so.
A group of legislators have now presented a plan and it's going to be into tens -- many tens of billions of dollars to support testing, tracing,
treatment, isolation and quarantine in the 50 states.
Let's see where that goes because that's what we need. We need now to spend some portion of the vast amounts we've been spending on fiscal stimulus for
setting up these public health programs.
Now, we need to pay for it, we need to incentivize.
QUEST: Paul?
KRUGMAN: Yes. Again, this is a false choice. Yes, the idea that, yes --
QUEST: Bear with me. Bear with me, Jim. Bear with me, Jim, because I just wanted to Paul. On that point. It's everybody says, Paul, it's a false
choice, Paul Krugman, but the reality is, it's a choice that we're having to make and countries appear to be getting wrong.
KRUGMAN: Yes, there's a lot of -- look, there's a lot of wishful thinking out there, and particularly there's a lot of wishful thinking from people
who are -- you know from wealthy donors, businesses, people who are not themselves especially at risk, who say, why can't we get back to stuff? You
know that the --
But everyone who has really, you know, the epidemiologists are unanimous here. I would say that there's overwhelming consensus among economists that
this is a false choice.
So, this is one of those, you know, I like to talk about zombie ideas. This is something that has -- the view that we can do this, that we can just
reopen without having these preconditions in place is something that everything we know points to it being wrong, but it just keeps on shambling
along eating people's brains.
And yes, we have a lot of -- we have massive unemployment, but you know, we're a rich country. We're able, if we choose to provide a lot of relief,
so that the unemployed don't suffer that much economic hardship. They suffer some, but -- and the rest of us will at some point have to, to some
degree deal with the bills.
But we can do this, you know, this is not an impossible task and the alternative is far worse.
The alternative is -- the only way you turn this into a depression, of years of depressed economic activity is precisely by failing to take the
necessary action now.
QUEST: So, if this is the case, and I'll address this first of all to you, Paul Krugman and then to you, Jim. If this is the case, Paul Krugman and
everybody -- every expert says testing and tracing allows us to reopen our economies.
And both of you seem to be in agreement that really we're nowhere near the level necessary. So, first, Paul Krugman, why not? Why are we not -- if
you've been given the golden key to the door of reopening your economy, why aren't you turning it?
[15:25:06]
KRUGMAN: But we haven't invested -- I mean, look, we were -- our Federal government, our head of state was in complete denial until March. This was
mid-March that the White House finally acknowledged that we had a real emergency.
As late February, when we still had them saying, oh, this is contained. There's no problem. So, we are very late in getting started.
We allowed this epidemic/pandemic to sink deep roots into the United States before we acted. That meant that we really needed -- we need a much higher
level. We need much more investment of resources in testing and tracing than we would have had to do if we had acted sooner.
We need the social distancing to go on longer than if we had acted sooner. It's all about having refused, you know, refusing to make choices is a
choice.
We just didn't face up to reality until we reached the point where only extreme measures work.
QUEST: Jim, I'm going to finish actually by asking you this question instead. Same question to each of you. Start with you, Jim, if we may.
Jim, simplistic question, but you'll know what I'm getting at. If we accept we can't do this perfectly, how much risk are you prepared to accept? To
ask -- I know the words, I'm getting everybody to answer Fauci's cheese question that he did last week.
How much risk and death are you prepared to accept of an increase over what we've seen so that we can get some form of economic growth back to normal?
KIM: Let me address it from exactly where I am right now in terms of what I'm doing around the pandemic.
Look Richard, every single state, every single country has to have the testing, tracing, isolation, quarantine system in place. This is now what
we've learned about this virus.
A virus is capable of bringing down the entire global economy for lots of very specific reasons. The fact that the transmission period is four days
before symptoms and four days after, according to the Taiwan study.
We've learned so much about this that we've got to get those systems in place.
And so, you know, I don't understand why we're not more focused on just putting those systems in place.
And so from my perspective, if you open up these economies now, it makes that job of building the testing, tracing, isolation a system. It makes it
that much harder.
Each new case, every new outbreak makes it harder, because for each new case, you have to trace the contacts of all those other cases.
And so for me, you know, I'm not looking at this from just my health. You know, I run to Paul back, I'm looking at it from an economic perspective as
well.
And so from an economic perspective, the smartest thing to do is to continue the lockdown, but then get really aggressive, put the testing,
tracing system together in every state, and then start gradually unwinding it.
You know, people ask me, how long would it take? I can tell you once you have those systems in place, about two months afterwards, I think we really
then ready to open up the economy.
KRUGMAN: Richard --
QUEST: Stay with me. Yes, go ahead.
KRUGMAN: Oh, you are -- I am dumping a little harsh on you here, but you are in a way, illustrating that. Both of us are telling you there is no
tradeoff. There is no that -- that crushing this thing is what we have to do.
And that if you think you can cheat that a bit and get the economy going before you've got everything in place that you'll end up actually doing
harm.
And so we've just spent the last 10 minutes telling you there is no tradeoff. And you ask, so where on this tradeoff will you make the choice,
right? You're not willing to accept what we are saying which is that that there is no tradeoff and that's to describe the state of our body politic
right now.
People -- too many influential people are just not willing to accept the reality that we have to have a lower infection rate achieved through social
distancing, testing and tracing before we can do any economic reopening.
And you know, as long as people are in denial about that, then we're going to keep on getting this pressure to reopen too soon and disaster will
result.
KIM: We'll see soon enough and let's talk again in two weeks. In two weeks, you'll see the case will start to jump up again.
QUEST: Well, I'll tell you what, gentlemen, assuming we're not traveling, and it is a good assumption, and assuming our diaries can meet up, let's
revisit in a month or two and see exactly where we are.
Thank you. I think Paul, you make a very valid point that is people perhaps like myself, who are unwilling to or at least yet still in denial, and Jim
you make a valid point that there really is no choice between the two.
Gentlemen, I thank you both for joining us tonight.
Now, in just a moment, we will turn to the more economic point -- from a political point of view. Gary Cohn of course with us, President Trump's
economic adviser.
Testing and tracing is still the message from him. But remember what Paul Krugman was saying and what Jim Yong Kim was saying. We'll talk about that
after the break.
[15:30:23]
(COMMERCIAL BREAK)
QUEST: Welcome back. Special coverage tonight on the price we are prepared to pay to reopen economies. And the pandemic is permanently changing the
way some companies are doing business. For example, Twitter has announced it is to extend working from home and basically is now saying some
employees can do it forever if they want. Not, excuse me, not expecting to reopen most offices before September.
And many employees of other companies already back on the job, some 50 -- nearly all the 50 states in the U.S. are reopening in some shape or form or
are about to. CNN's Nick Watt reports.
(BEGIN VIDEOTAPE)
NICK WATT, CNN NATIONAL CORRESPONDENT: Stores in Ohio today opening doors to a brave new world.
UNIDENTIFIED MALE: We have cleaned everything. Everything is marked off and everybody's safe.
WATT: Nearly 90 percent of Ohio's economy can now reopen through this weekend. Forty-eight states will have begun reopening. The logic, lockdown
can't last indefinitely. Thirty-three million Americans have lost jobs already.
MICHAEL OSTERHOLM, DIRECTOR, CENTER FOR INFECTIOUS DISEASE RESEARCH: What we have to do is find that middle ground. I call it threading the needle
with the rope.
WATT: New York State starts reopening Friday, as we hear New York City's terrible toll of nearly 19,000 dead through early May, might be even
higher. The CDC now says another 5,000 deaths are potentially related to the pandemic.
BILL DE BLASIO, MAYOR OF NEW YORK: Testing, testing, testing. From day one, it's what we needed most. Didn't get what we needed from the federal
government.
UNIDENTIFIED FEMALE: Temperature check.
[15:35:07]
WATT: Over in Hawaii, every single new arrival might now be photographed as official scramble to enforce a 14-day quarantine for visitors.
UNIDENTIFIED MALE: Certainly, having photos would be helpful.
WATT: New case counts in South Dakota climbing dramatically and after clashing with the governor over COVID checkpoints on tribal land, the
Oglala Sioux, now, in a three-day lockdown.
UNIDENTIFIED MALE: There will be absolutely no movement of anybody or anything throughout the reservation.
WATT: Meanwhile, Doctors Without Borders and international organization has teams helping the Navajo nation, as a new CNN poll finds 54 percent of
Americans think their government is doing a poor job preventing the spread. A majority also think the worst is yet to come. Still, some signs of near
normality on our horizon.
Major League Baseball might start spring training in June, according to the New York Times, and an 82-game fanless season, first pitch, July 4th. But
some researchers fear a rerun of the 1918 Spanish flu pandemic a spring, summer low, and then --
OSTERHOLM: A very large wave this late summer or fall, that could be much, much larger than anything New York has seen or many other places around the
world. That's a concern to us if 1918 holds as a model as it has so far.
WATT: Nick Watt, CNN, Los Angeles.
(END VIDEOTAPE)
QUEST: Gary Cohn is with me, President Trump's former chief economic adviser, of course, senior executive (INAUDIBLE) Gary, good to see you,
sir. You're looking well, and that's good news.
GARY COHN, FORMER CHIEF ECONOMIC ADVISER OF PRESIDENT TRUMP (via Skype): Thank you, Richard. Great to be with you.
QUEST: Thank you. OK. So, we know it's a false choice. We've been told it often enough. But it seems at the moment that not enough is being done to
ensure safely reopening of the U.S. So, I'm left with the conclusion that many politicians and many states are willing to accept higher numbers of
cases and levels of death to accomplish this.
COHN: Richard, it's -- this is a very difficult decision. You know, it's not just an economic versus COVID decision. This is almost a healthcare
versus healthcare versus economic decision. You know, telling people to stay home 24 hours a day, seven days a week and only leave your house to go
out and purchase groceries or other necessities has other healthcare implications.
There are a lot of things that people need in the general economy, whether it be other healthcare, other medical needs that are not getting taken care
of. So, we are seeing huge instances now of other diseases and other bad healthcare outcomes starting to spring up in the economy, in the society.
So, this is not a simple decision.
You know, our governors, our mayors, our elected officials, they're in a very difficult position. They are trying to thread this needle very
delicately, to allow people to resume some normalcy, where they can go get their preventive healthcare, they can go get the medical treatment they
need that's not COVID related. And yes, may include returning to some type of normal economic activity as well.
QUEST: So, listen to what President Trump said, the way in which that debate has been put forward, at least from the top. Have a listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think we had 144 days of wreckage stock markets. And then one day, they said, we have to close the
country. But now, it's time to open it up. And you know what? The people of our country are warriors, and I'm looking at it. I'm not saying anything is
perfect. And yes, will some people be affected? Yes. Will some people be affected badly? Yes. But we have to get our country open and we have to get
it open soon.
(END VIDEO CLIP)
QUEST: So, wait, Gary, when you look at that, those sort of statements, and you see the actions that are being taken, and you've been a great proponent
of tracing and testing, and that's simply not in place yet, which does then suggest that on this complex question, most states have decided it's more
important at the moment to change the balance of risk.
COHN: Well, we did not start with a riskless environment. And I like to remind people that. You know, if you go back pre-crisis, we had risks to
our economy, risk to our healthcare, risk to our culture, every day. When we got off and left our house, we had a risk. So, we need to balance what
risks are acceptable to return to. We're never going to get to a risk-free, riskless environment to reenter.
[15:40:11]
And balancing those risks are important. And I -- yes, you're right. I have been an advocate of testing. And I think the ability to test is very
important. So, if we see an early outbreak in an area, we can shut down that area and can find the disease to more isolated areas and not have to
shut down the entire country. I think that's very important. But we are now in a position, we're evaluating different risks, we're saying, look, risk
versus reward.
If we allow economies open, and when we need to open them slowly, we cannot open them with the big bang. We've got to allow certain businesses, smaller
businesses, smaller footprints, smaller stores, which naturally have less clientele in them. Even stop a lot of people from coming in.
Maybe we say look, this store can only have five people at a time, and people have gotten accustomed to waiting outside. This store can have 10
people in because this is a bigger store. There are ways to manage this in a very proactive fashion, but allow some sense of normalcy to come back.
QUEST: Gary, you're with us after the break when we can talk about the longer-term economic damage if such there'd be. Thank you for being with
us. We'll be with you again after the short break.
(COMMERCIAL BREAK)
QUEST: Gary Cohn is with me. Gary, thank you for giving us the extra time. It's good to have you. Listen, Gary, this is a footnote to the last
unemployment numbers. It basically said they're understated because they can't read the methodology.
So, in reality, we are looking at depression era levels of unemployment. How much of this do you think those jobs are not going to come back? It's
going to be basically maybe half, three quarters will come back, but what won't?
COHN: So, first of all, remember, the depression era of unemployment numbers, we got there in a completely different fashion. You can look at
the years leading up to those unemployment numbers in the years coming out. They were completely different.
This was a binary event, where the federal government basically told 90 plus percent of people in United States to please, for the greater good of
the country, stay home. Do not go to work. And so, we got to this unemployment number in a very unique way.
[15:45:09]
And 80 percent of those people in that survey said that they thought that this -- that their unemployment was temporary, that they would be going to
back to work relatively shortly within six months or less. But I hope that that's right. So, we know that many of these jobs will come back. The
problem is, if you look in the restaurant, entertainment, beverage industry, we just don't know how fast that industry can come back.
And at what density or what utilization that industry can come back. Even when a restaurant opens tomorrow or a bar opens tomorrow, there's no way it
can or it will come back at 100 percent of capacity. So, this is going to have a long tail on getting all those people back into the workforce.
QUEST: At what point -- and no, I agree. It's not now, but at what point do we need to worry about the trillions being spent and the amount of money
being loaded on to the deficit, bearing in mind that debt to GDP is now over, a hundred percent? Again, you know, I'll preface it, perfectly
understandable, you don't stop spending yet. But at some point, we will have to worry about it. When is that point?
COHN: I couldn't agree with you more. We don't stop spending now. We need to defend our economy. We need to take care of our citizens. We need to
make sure people have the ability to feed themselves, house themselves and buy the necessities they have. But you're absolutely right. We are creating
a huge deficit in the United States with now the knowledge that at any given moment in time, the federal government may need to step in and do it
again.
We don't know if that's next year or we don't know if that's 100 years from now. So, we as a country, and hopefully Congress understands that they need
to really sit down once and for all and look at both sides of the equation. They need to look at the expenditure side of the equation, and really
justify how we spend money in this country. And number two, we need to look at our tax system. How do we collect taxes? Who do we collect taxes from?
And both sides have to be looked at and everything needs to be on the table. Remember, last time we went through a crisis like this or a
depression era in the United States, we came out with brand new taxes, Social Security tax was invented, and there were other taxes, it may be
time to have a pay down the deficit new surtax in the United States, which was great, we'd be supportive of that.
But only to the extent that we put a hard debt ceiling in place. There's no point to pay down on one hand and then increase on the other hand.
QUEST: This is an election year. I can't see anybody suggesting a deficit tax yet, but I accept your point, Gary, that this is something that has to
be done. Do you think any politician has the whatever to do it?
COHN: Richard, this is -- this is not going to be done in 2020. This is a challenge to the new Congress that will be set in 2021. We'll have -- we'll
have just gone through a presidential election. We'll have new members of the House, we have new members of the Senate, and they will have a huge
daunting, both task and or opportunity.
And I think it's an opportunity that once and for all, look at the budget, look at the tax system in the United States and say, hey, based on what we
know now, we have to take a radically different approach to this.
QUEST: Gary, it's always good to have you, sir. Thank you. I appreciate you giving us time this afternoon. Keep well and keep healthy. Good to see you,
sir.
COHN: Thanks. I will. You do the same.
QUEST: Thank you. Now, in a moment after the break, we will end our program where it all begins, which is the health issue. The special envoy from the
WHO on coronavirus. David Nabarro is with us to wrap up the thoughts of -- and I really do want to know, is this virus going to come back if we reopen
too much? Is the evidence there (INAUDIBLE) in a moment.
(COMMERCIAL BREAK)
[15:50:00]
(COMMERCIAL BREAK)
QUEST: Around the world, of course, the reopening is well underway and it's got pacifically mixed effects. So, for example, Wuhan, next stop, where it
all began. Wuhan is to test the entire population after six new cases reported this weekend. In Russia, Vladimir Putin is easing the six-week
lockdown despite a record number of jumping daily cases. And in Germany, 933 new cases after further lifting restrictions six days ago.
David Nabarro -- Dr. David Nabarro is a special envoy for COVID-19 World Health Organization. He joins me from Geneva in Switzerland via Skype. Dr.
Navarro, I -- this is going to be such a simple question, a simplistic question arguably, but, you know, do we know for certain that if we reopen,
this thing will escape again, like a horse out of a stable?
I think you might be muted, David. If you just -- if you could just check, I think you might be muted at the moment on whatever it is you're looking
at, while we just try and sort that out. He is back. I think we're all familiar with it. David, you're back with us. We can hear you now. Let's
start. Let me start that question again. Is it a certainty that the virus will escape again?
DR. DAVID NABARRO, SPECIAL ENVOY FOR COVID-19, WORLD HEALTH ORGANIZATION (via Skype): Yes, the virus hasn't gone away. It's still here. And
lockdowns actually freeze the virus where it is. And as soon as movement starts again, the virus starts to move as well, because the virus exists in
people. But what we're saying is, that you can actually go on with life, both socially and economically, whilst at the same time holding the virus
at bay.
And it's that ability to be able to keep the defenses going, that will be key to the future life that we're going to have over the next few years
until there's a vaccine.
QUEST: Are you concerned that societies, governments have decided, either through ignorance or deliberate, to accept a higher level of deaths, as a
price, for regaining some form of economic normality?
NABARRO: I hope not. I really do hope not. Because I actually don't think that societies are going to be able to cope with the reality of really
potentially very high levels of death. Instead, let's imagine I'm a business leader.
What I'm going to ask my government to do is to make certain that the basics of public health are in place right throughout the country, the
ability to test people who might have the disease, to trace their contacts, to isolate those who've got the disease, and to protect those who are
vulnerable wherever the outbreaks are building up.
That's what I want as a business leader. And that's what I believe that all countries everywhere are going to have to put in place, really, quite fast.
It'd be a struggle, but that's going to be the new normal, what I call the COVID-ready state.
[15:55:13]
QUEST: You're not satisfied, judging from what I've heard and what you've said, you're not satisfied that we have put in place sufficient testing,
tracing building blocks to allow the reopening to continue.
NABARRO: Well, I think every country has been trying to do it. But sometimes, when I read the arguments from countries when they're deciding
whether or not to release bits of the lockdown, I asked myself, have they actually prioritized these basic functions that we believe to be necessary
for people to live with this virus still as a threat? I think some countries have done really well.
Austria has done well, Czech Republic has done well, Greece has done well. Many East Asian countries are doing well. And remember, you may still have
the odd flare up, but then what you've got to be able to do is to cope with it super quickly without disturbing everybody, just going to the areas
where the disease is. And there, I believe, Singapore's done well, and Germany is doing well. They've got some problems at the moment, which I'm
sure they'll get on top of. But not every country has done this.
And I suppose what really amazes me is there's not more international cooperation on the standards for the basic level of public health that need
to be in place, for life to return. It's as though every country is almost going it alone. And from our position in the World Health Organization,
we're not sure that that's necessarily the best way to do it.
QUEST: David, thank you. I think you're being charitable when you say you're surprised there's not more cooperation. I -- you didn't say I will.
I'm surprised there's not much cooperation. Anyway, we will talk more about this. I appreciate you giving time to us this evening. Thank you very much.
Now --
NABARRO: Thank you very much, Richard.
QUEST: Back in program tonight. And we're delighted to have you with us and we'll take a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: This is well and truly underway. But the reality is, it's being done in a haphazard fashion, and one that seems prepared to take risks with the
health crisis. We know the virus is still out there. Which begs the question, why isn't the more tracing and testing being done, so that when
the flare ups take place? Again, the question we started right at the beginning of this program, how many deaths and what risk are you prepared
to take?
Of course, we realize that this was a false question. You can do both. You can have testing, you can have tracing, you can have economies, and you can
manage to keep COVID under control. Now, the next question of course, is will we? And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest.
Good night from New York.
END
