Make the world you want.
>>> MARKETS OPENING. Make the world you want.
>>> MARKETS OPENING. THE DOW UP 404 ALREADY.
JUST 35 SECONDS INTO TRADING.
WE ARE GOING FOR A BOUNCEBACK
AFTER WALL STREET SUFFERED ITS
SINGLE WORST DAY SINCE THE 1987
MARKET CRASH.
MARKET CRASH. EFFORTS TO COMBAT THE
CORONAVIRUS CONTINUING TO
CRIPPLE GLOBAL MARKETS.
JOINING ME NOW TO DISCUSS,
AUSTIN GOOLSBY, FORMER CHAIRMAN
OF THE COUNSEL OF ECONOMIC
ADVISERS DURING THE OBAMA
ADMINISTRATION.
ADMINISTRATION. ALSO A PROFESSOR AT THE
UNIVERSITY OF CHICAGO BOOTHE
SCHOOL OF BUSINESS AND CHRIS
LIU, FORMER DEPUTY LABOR
SECRETARY.
SECRETARY. AUSTIN, WHERE DO YOU THINK
THINGS ARE?
THINGS ARE? YESTERDAY THE PRESIDENT CHANGED
HIS TONE FOR THE FIRST TIME AND
REALLY ACKNOWLEDGING THAT THE
CAUSE OF THE ECONOMIC IMPACT OF
COROEN AWE COULD BE HEADED
TOWARD A RECESSION.
YOU SAID WE SHOULD LOOK AT THIS
AS VIRUS ECONOMICS.
EXPLAIN.
EXPLAIN. >> YEAH, LOOK, TWO THINGS.
I THINK THE PRESIDENT HAD TO
COME TO THE VIEW THAT THIS IS A
SERIOUS PROBLEM BOTH FOR THE
ECONOMY AND FOR THE HEALTH OF
THE AMERICAN PEOPLE.
YOU CAN’T LOOK AT EUROPE WHERE
THEY’VE SHUT DOWN MULTIPLE
MASSIVE ECONOMIES OR IN CHINA,
KOREA AND OTHER PLACES IN ASIA
WHERE THEY SHUT DOWN MAJOR PARTS
OF THEIR CITIES AND ECONOMIES
AND NOT THINK THAT THAT’S GOING
TO CAUSE A RECESSION IN THE
UNITED STATES.
UNITED STATES. SO I THINK HE HAD TO CHANGE HIS
TONE.
TONE. MY ARGUMENT ABOUT VIRUS
ECONOMICS IS AS WE STEP INTO
DOING STIMULUS AND TRYING TO GET
THINGS TO COME BACK, THE THING
TO REMEMBER ABOUT VIRUS
ECONOMICS IS THAT IT’S NOT LIKE
NORMAL ECONOMICS.
NORMAL ECONOMICS. THE MOST IMPORTANT THING FOR THE
ECONOMY, BY FAR, IS ANYTHING
THAT WILL SLOW THE RATE OF
SPREAD OF THE VIRUS.
AND JUST LIKE IN A FINANCIAL
CRISIS, YOU CAN’T REALLY DO
ANYTHING WHILE PEOPLE ARE HAVING
BANK RUNS.
BANK RUNS. YOU HAVE TO STOP THAT BEFORE YOU
CAN DO STIMULUS OR ANY OF THE
OTHERS.
OTHERS. SO, TOO, HERE, YOU HAVE TO
ADDRESS THE FEAR, THE THING
THAT’S BRINGING DOWN THE
ECONOMY, IS THE FEAR.
AND UNTIL YOU GET A HANDLE ON
THAT FEAR, I DON’T THINK
STIMULUS CAN WORK.
>> HOLD ON A SECOND.
>> IF YOU SEND PEOPLE CHECKS
RIGHT NOW, THEY WON’T SPEND THE
MONEY.
MONEY. >> IT’S NOT JUST FEAR.
IF YOU RUN ANY CONSUMER-FACING
BUSINESS RIGHT NOW, YOUR REVENUE
IS ABOUT TO GO -- UNLESS YOU
HAVE A GROCERY STORE, YOUR
REVENUE IS ABOUT TO GO TO ZERO
WHILE YOUR OPERATIONAL COSTS
DON’T CHANGE.
DON’T CHANGE. SO THE PRESIDENT IS PLANNING TO
ASK CONGRESS TO APPROVE AN $850
BILLION STIMULUS PACKAGE THAT’S
REALLY DEVOTED TO FLOODING CASH
INTO THE ECONOMY.
WHY WOULDN’T THAT BE A GOOD
MOVE?
MOVE? IT’S NOT ABOUT FEAR.
BARS ARE NOT -- IT’S NOT ABOUT
FEAR.
FEAR. THEY’RE NOT MAKING MONEY.
>> EVERYTHING YOU JUST SAID IS
100% ABOUT FEAR.
THE REASON WHY PEOPLE ARE NOT
GOING TO STORES IS BECAUSE
THEY’RE AFRAID THAT IF THEY BUMP
INTO OTHER PEOPLE THEY’RE GOING
TO CATCH THE DISEASE.
WE NEED TO DO -- WE NEED TO DO
IT IN ORDER.
NUMBER ONE, EVERYTHING THAT YOU
CAN DO TO SLOW THE VIRUS.
SO PAYING PEOPLE NOT TO COME TO
WORK IF THEY’RE SICK, A PAID
LEAVE PROGRAM, IS DESTIMULUS.
PAYING PEOPLE NOT TO GO TO WORK
DOESN’T INCREASE THE GDP, BUT IT
IS STIMULUS IN A TIME OF A VIRUS
BECAUSE IT SLOWS THE RATE OF
SPREAD OF THE DISEASE AND
HASTENS WHEN WE CAN GO BACK.
NUMBER TWO, YOU THEN NEED
FORBEARANCE.
FORBEARANCE. SO IF WE’RE EXTENDING CREDIT AND
MONEY TO PEOPLE AND TO COMPANIES
SO THAT THEY DON’T MAKE A
PERMANENT DEATH OR PERMANENT
PROBLEMS OUT OF A SHORT-TERM
DROP IN DEMAND, WHICH IS WHAT
WE’RE FACING, THAT’S IMPORTANT.
BUT ONLY ONCE YOU’VE DONE THAT
WILL GIVING PEOPLE CHECKS AND
TRYING TO ENCOURAGE THEM TO GO
OUT AND SPEND MONEY.
THAT’S THE ONLY TIME THAT WILL
WORK.
WORK. IF YOU START WITH A PAYROLL TAX
CUT OF $500 BILLION AND YOU GIVE
A BUNCH OF HIGH-INCOME PEOPLE
LARGE TAX CUTS, THEY’RE NOT
GOING TO GO SPEND THE MONEY.
SO IT’S NOT GOING TO BE
STIMULUS.
STIMULUS. AND THAT’S THE KEY POINT.
YOU’VE GOT TO GET A HANDLE ON
BUYING VENTILATORS, FOCUSING ON
TESTING AND SOCIAL ISOLATION.
GIVE PEOPLE A SENSE THAT IT’S
NOT A CATASTROPHE THAT’S
PERMANENT, THAT THIS IS A THING