Worst jobs report since the 1930s and the great depression, how do we dig ourselves out of this hole . Michael it will take a variety of things. We have a government ordered supply side shutdown of the economy, so we could not produce a lot of services because people could not go to work. At least substantially for good health reasons. And that morphed into an added demand side problem as people were not getting incomes, etc. The congress and the president have taken action to try to cushion on the income side. The fed and to some extent the congress with various Small Business loans have tried to enable firms to bridge to the other side. Many of whom have retained workers even though demand for their products is way down. But this unprecedented shutdown of the economy has caused a substantial amount of harm. We have got lots of people unemployed. The data that came out today of course is a snapshot of what was going on in the middle of april. Since then, additional people have filed claims for unemployment insurance. Millions more. We are in the early stages of in some places of barely beginning to reopen with some social distancing and partial work and some restaurants can have separation, a quarter of their normal people. Etc. Etc. What we need to be able to do is get firms back in operation, prepare to have employees return and people willing and able to go back to work. And that latter will require people feeling workers feeling , that they have very low risk if they go back to work of a Serious Health problem and a firm feeling there will be some demand there, and they will not face very difficult litigation issues they dont know how to deal with at this stage until there is more clarity. If that starts to resolve, we will open up more, the good news is that the numbers are not as bad as the great depression, 10 years after the great depression, the Unemployment Rate was still at 18 . People are expecting the Unemployment Rate to peak this quarter and improve later this year and improve next year. I think it will be a couple of years before we are back to what we consider much lower unemployment. Most forecasters are looking at still having 7 unemployment late next year. Hopefully, they can do better but it is health driven. What will make people feel safe going back to work . It is a combination of things. It can be more widespread testing so you are confident the people you are working with are not infected. That can be Antibody Testing if we demonstrate antibodies work. It can be testing for the virus frequently. It can be if some of the , therapeutics, before we get to a vaccine, if some of these additional therapeutics being tested have really good results, if indeed you do get sick and you have symptoms, if it is pretty clear you have a much lower risk of a really bad outcome than what is going on now, that is another way that will happen. The medical clock is racing alongside the economic clock, and it is also important to appreciate that the shutdown of the economy has caused a lot of Health Problems as well. There have been discussions of mental health, but with hospitals shutdown and only gradually starting to reopen now, shut down for anything other than covid more or less, we have seen people delay chemotherapy, not get brain surgeries, children not getting vaccinated. These are complex calculations that i think are wisely being made on a localized level with some guidance from what they are seeing in other places. Host if you remember in 1992 when you were in the bush white house, the Campaign Slogan for the Clinton Campaign was it is the economy, stupid. My question as we look at this, how significant was the economic downturn to george h. W. Bushs defeat in 1992, and are there lessons to this white house . Michael the economy had been in recession for a variety of reasons but especially the first gulf war and the oil shock and so on contributed. There were other reasons as well. We slowly started to come out of it by the Second Quarter of 1991. So it had been growing for well over a year by the time we got to the 1992 election, but people had not yet felt that things had improved a lot. In a technical sense, when the economists said the recession is over, the economy had stopped shrinking. You could be at the bottom of the well, and it would be a long time until you got to the top. Once you start climbing back up for a while, the economy is still technically out of the recession. So i think it is more when people feel things are decent and their incomes are pretty secure, their families are secure, and that will be a while. I dont think we are going to be in anything but not very good shape come november. But importantly it will be very important to see whether people believe President Trump has done a good job or not in handling the situation. I think the early polling seems to suggest people are not blaming him for what happened. They realize this was an unprecedented situation and the like, despite the political backandforth. It will depend heavily on a combination of how people feel, number one, and number two, who they blame if anybody, and number three who they think offers a better vision and a more rapid path to getting back into decent shape. That is a different question than just who is responsible for the current situation. And there and i have my own opinions about what the proposals are and what good they do for the economy. I offer two perspectives. One of the things that caused george h. W. Bush not to win his reelection was that ross perot ran and got 19 of the vote. If he had not run, i think it would have been a much closer election. That is water over the bridge. In this case, what will be very important i believe is that if there are some signs that the economy is improving, and there are some signs that some of the actions that have been taken are contributing to that improvement. And that will be a better Case Scenario for President Trumps reelection than if it is not improving, if the forecast of things starting to pick up from a very deep hole. Starting to pick up and there is some evidence picking up by the election, that would augur well for him. If not it will be much tougher. Host to remind our radio listeners we are speaking with , michael boston, joining us from palo alto, california. Serving as a senior fellow at the Hoover Institution. He also served as a chair of the White House Council of economic advisers during the George Hw Bush administration. Let us get your phone calls. John from louisiana. You are on the air. Good evening. Caller good evening. A question just kind of crept into my mind this morning about all of these people that are unemployed, and they have one thing in common. They are all businesses that were open. We have a leviathan of the federal government and then we have the state governments, and then we have, like in louisiana, our parish governments. Im curious as to how many, and i called my congressman, mike johnsons, office and asked specifically, how many federal, Civil Service employees have been furloughed . Because obviously, if things are shutdown, and i use the example of the park service, all the National Parks are closed. So what are those park rangers doing right now . They cannot work from home because that is not the kind of work you do from your desk. Are they still on the payroll . Are we still paying federal, state, and municipal employees to do nothing . Host michael bostic, any expertise in these areas . Michael there are three or four things i can say about that. Park rangers i cannot attest specifically to, park rangers who we all love because we love the outdoors and the National Parks and so on. They are a tiny fraction of Government Employees. In the latest unemployment report, there was a substantial number of Government Employees that were unemployed. These tended to be heavily at the state and local level for example teachers because many schools were closed. The federal workforce, many have been kept on. Some have been furloughed. Some are working from home. Many are working from home for various reasons depending on where they are and with the washington, dc metro area having been something of a hotspot, not as bad as new york, but something of a hotspot, there is a mixture. I think it is fair, and john, your question implied you were a little concerned that the private sector workforce was bearing a bigger brunt of this than government workforce. That is, with some exceptions, that is probably not a bad generalization. However while there was a shrinking in almost every aspect of the economy, every sector that employs workers including the government, it was heavily concentrated in a couple of very obvious places. Leisure, hospitality, travel, etc. , there were massive layoffs. That is an area that sadly will probably be among the slowest to rebound because cruise lines, air travel, hotels and things of that sort will probably reopen more gradually as people are concerned to be careful and probably will not travel immediately when they can start getting out locally. But so there is a very large layoff there. Other places where you think people would have unemployment issues that all of a sudden this highly unusual circumstances covid19 recession, there were half a million jobs lost in dentistry. Ofe dentists, but a lot dental hygienists. It has affected virtually everybody in many communities. All major demographic groups saw unemployment increase. From historically low levels. 3. 5 Unemployment Rate in january. That is the best in 50 years. And there were historic lows for minorities and others that were typically have had higher Unemployment Rates. We were in a very good position dealt not, and we got only a deep blow but the unprecedented steepness of it all because we shut the economy down by government decree which is something that is quite different from anything else we have experienced. It also want to make us a bit humble about comparing this to other periods, to other recessions, etc. We have had other bad recessions before, but they unfolded over a span of time including the socalled Great Recession of 2008, went over a span of many months. We had been in a very, very slight recession heading into it. I think the key thing here is there is a lot of suffering. Remember, while the Unemployment Rate is really, really high, and there is some other people that did not counted for various reasons, not looking for jobs in the last few weeks, a very large number of them who are also on temporary furlough which means they are much more likely to come back relatively soon, and more likely hopefully to come back to something approximating their previous job they had even as part time to start or whatever. We are all very cautiously optimistic in this very difficult time that over the two to threehs, quarters, a lot of those people will start to get back to work. The worst is behind us. Host you write about this for the website project syndicate. The headline is the covid19 balancing act, the risk of returning to work and school will not fall to zero until an effective vaccine is widely available or until the population has achieved herd immunity. Actions taken or not taken now will produce different results at different times, and the longterm consequences of any given response will not be easy to predict. Let us go to alan joining us in little rock, arkansas. Good evening, you are on the air with Michael Boskin. Caller thank you. Im just sitting here watching and listening and thinking and hoping there is more than 85 people watching right now. Considering an economist is the topic of the evening. But i was hoping that Speaker Pelosi wouldve been available for a question or two. I was trying to get in on a question for that, but in any case, i wanted to convey that in arkansas, the capital city, driving around all afternoon, our state is ones that has not been in an enforced shut but a voluntary, prudent. The traffic and the folks out and the Economic Activity was as strong as it is on a typical friday afternoon. I was really amazed. And people are doing their due diligence, not to discount that. They are certainly respectful. I noticed the pizza place was restructuring their styling for spacing their restaurant area. Such as bad. That. H as but i just wanted to put in a really positive word for the recovery, and when i see references that the democrats rooseveltization, lets do a big the way program, i hope as an economist you would convey to the listeners that it is the jobs and the taxes that are paying for these programs that the democrats want to spend on. Just spending money is a fools errand. I wish you would speak to the subject of how important it is to be enthusiastic about the positive of what the president is doing and convey that to the folks. Host thank you for your call. And for your points. We will get a response. Michael first of all, i could not agree more that it is important to be optimistic so long as you are realistic. And i think that some of our elected officials are trying to tread a fine line in doing that. Not to be so optimistic they look like they are not paying enough attention to the hardship but not to get everyone down in the dumps. There is a lot of evidence that the original projections of 2 Million Deaths which were off in the order of magnitude, what is likely to happen now, wound up scaring a lot of people into overdoing it and hunkering down. That made the downturn even worse. It would be good if we are emphasizing the ways we can responsibly in various places, apparently little rock is one of them. We can reopen. I think it is remarkable that you are back to where things were before all of this happened. I hope that is accurate and that it proceeds safely. And i think things will proceed in fits and starts. Some places will go faster than others, and we will try different types of lockdowns for different sectors. The original list of what was essential very a lot from state varied a lot from state to state. Nd we will learn from that there did not seem to be a need for every state and every area in every state that had very little infection and very little bad outcomes if at all to be on the same regimen that new york city was at the height of all of this. So i am cautiously optimistic in the midst all of this. I dont think it will happen quickly in most places. I think it will have to go on for a kind of a race between getting enough testing and therapeutics and i think we are finally back to a place where hospitals are very more or less have lots of capacity in different places if there is , another upsurge or hotspot. On the spending side, i have never been a big fan of a massive government program, and i worry about the longterm effects of the deficits and debt and what that does to our future growth and our future taxes, and the general inequity of sticking our students with higher taxes to pay for this. However i do think this was quite an unprecedented emergency, and i do think that providing the liquidity as the fed has done and some of the Small Business loans have done in providing a cushion for people is important. I think the big risk is that as we have seen in the past, when a crisis, a war, a deep recession, other things of that sort, government has expanded because the needs are exigent and severe, and often, once the problem is over, government does not come back to more or less its previous size after the needed adjustments abated. It is often kept powers and responsibilities and more of those have been centralized over history after the crises. I worry that will be a problem as we go forward. But in the short term i think we had to have a substantial cushioning and get the money out rapidly. Im a big believer in going after government waste. I dont think we do enough of that at all levels of government but especially perhaps federal level. And so there are a couple of highprofile examples of this. Stimulus checks going out to people that are deceased. But they had to get the stuff out so rapidly given the unprecedented scale and rapidity of all this that i think on balance, they have done a pretty good job on that and will catch up with some of the people that should not have gotten the loans. Holding it up to try to be careful about that wouldve created so much more hardship for longer that the proper choice was made to be quick and worry about some of these things and catching up with them over the next few months. Host jimmy in paducah kentucky, thank you for waiting. Caller yes. Host jimmy, go ahead, please. Caller [indiscernible] the economy would be back before christmas comes. Because kids all over the world and the country, the united states, and i am just, should we not worry about that . You know, most of us probably need to be worried about the health of people and not try to rush into things. Host thank you, jimmy. What do you think christmas time will look like, Michael Boskin . Michael i think it will be considerably better than april, may, june, but it will still not be very good. I think we will still have high unemployment. Partially reopened in some places most everywhere a , different pace and a different degree of reopening. But i think we will still be worried about a second wave of the virus as we get into winter. I think we will that will alleviate a lot if we get the advanced therapeutics that are in stage 2 and 3 Clinical Trials now. Are even more healthful than the remdesivir the drug recently fda recently. The shortening the hospital stay somewhat. If we get some that are more powerful and helpful than that, that will help a lot and if we get our Testing Capacity up substantially, that will help a lot as well. Host we will go to john in i am sorry. Michael i would say it is likely christmas will be better than today but not very good. Host we go to john in ohio. Good evening, john. Hi, michael. My question is this. Is moving forward what is going to be the beast that we have to deal with, inflation or deflation . Do you have an opinion on that . Michael yes, i do. I think there is a small risk of deflation given what is going on in the world. I dont think it is large. I dont think it would be severe. We do have an example of four years into the great depression, prices had fallen by one third. So i think there will be, in some things, in some areas i think this will occur. Very is some things in short supply so some people will beef orether that is eggs, toilet paper and hand sanitizer, that is likely to be more sporadic. But the main big price that has collapsed for a large sector of the economy is energy, and that has fallen. It was already very low because of im talking about oil and natural gas as opposed to electric bill which has other things in a including taxes and Subsidized Green Energy in most states it but for oil and natural gas, the price of gas and so on, that has collapsed. First, there was a dispute between the russians and the saudis and they all started pumping extra oil like mad in addition to our shale oil from the permian basin. Oil prices were down and then it collapsed. People were not driving. Airplanes were not flying. There was kind of a dual whammy. And the futures price temporarily very briefly went negative. We had so much oil that people were paying you to offload it so they did not have to store it. It has rebounded some since then. As economists often do, we strip out energy and food. Not that those are not important but they tend to vary a lot. Things of that sort. The prices of other goods and services do not show any big sign of an increase or decrease yet. So we will have to keep an eye on that. Deflation causes different issues than inflation, but there is so much excess capacity, once people are allowed to go back to work, it is hard to see a lot of inflation in the short run. Many of the things we are doing, if they continue once the economy recovers, remember, this is not just a u. S. Phenomenon. Many other natural disasters, 9 11, horrible hurricanes hit a localized area. This is happening to the hold country, the whole world, and we need all the get back up and all of that to get back up and running. Once that happens, if we do not move off the kinds of policies we are on now, where there is a massive amount of spending and massive amount of debt, and we keep piling that up year after year, i think that will wind up causing risks to inflation. Host Michael Boskin served as a senior fellow at the Hoover Institution and served as the chair of the White House Council of economic advisers in the first bush administration. Mr. Boskin thank you for being , with us on cspan. We appreciate your time. Michael my pleasure and thanks to your listeners and viewers for their very good questions. Host we hope you will come back again. This is the headline from the desert news in salt lake city, the sickest i have ever been in my life. That quote from congressman ben mcadams. We talked to him yesterday at his home in salt lake city. Evening, march 14, we had just come back from washington. We had voted through the second the legislation that was