Plan that would help struggling businesses and those put out of work because of the virus and make direct cash payments. The deal was in the work on tuesday ands caused a celebration with the dow having its biggest oneday point gain in history. It appears investors have become a little more optimistic after stocks took a tremendous battery. On tuesday President Trump toogave the first indication of when he wants to see the pullback in the nationwide restrictions we are seeing. He told a town hall that he liked to have the country up by easter, april 12 but thats a much earlier timeline than many experts believe will be required to keep the virus under control. The first shockwaves we saw on thursday when they reported weekly unemployment claims that soared to over 3 million. The most since records have been capped and almost five times higher during the financial crisis. How much has the coronavirus already hurt the economy . How much more damage might be done . And more importantly how long can the country remain at a standstill before the impact might become, as the president has said, worse than the effects of the disease . Here to discuss all of that and more is director of Political Studies and author of the released book the American Dream is not dead but populism could kill it. He joins me from skype via washington. Thanks for having me on. Lets start with the immediate crisis. We are in completely uncharted territory. Weve never been in this situation before. Were close to a global lockdown and we dont know how long it will last. Whats your sense given the uncertainty. Weve seen a forecast of massive drops in gdp and as much as 30 or 40 . What is your sense without putting a number on it. Is this going to be something that will be done, check terrible shock to the economy and will get over it quickly . A lot of it depends on the public response and how quickly we can get the economy up and running, that will help design more targeted estimates on when to reopen the economy. A lot of it also depends on the virus. Will the hospital be over whelmed, will we see Rapid Transmission two weeks from now, four weeks or six weeks from now, those are all very serious unknowns. Then of course a lot of it depends on the response of the economic policy, how active can we be at keeping business is open, keeping workers attached to their employers, those sorts of things. Lets take the measures congress has come up with this week, a massive 2 trilliondollar stimulus as its called or some people say its more like life support for the economy right now. Lets go through some of those measures. First of all the 1200dollar payments, more if you have children that are being paid to people. Does that look like sensible policy to you . Is that the way to sustain people through what may be as we been talking about, and unknown, a crisis of unknown duration. I think that was a sensible solution to the problem two weeks ago, that was a reasonable measure before we knew that mayors and governors were going to beast shutting down there cities and businesses, if we were shopping a little less, dining a little lesson working from home but where life would be looking reasonably normal been i think, given household some direct Financial Support is a completely sensible measure, i think its fine to do now as well, now that were living in a very different world where half the countrys population is moving under shelter in place orders and millions and millions of businesses are shut, its still a fine thing to do, but its not going to get us through this. The relief that the senate provided to Small Businesses i think is the most important part of the package, basically giving Small Businesses forgivable loans if the businesses spend that money on payroll and keep their workers on the payroll, thats the kind of thing that can preserve our business infrastructure and art ecosystem of Small Business. The question is just, is it big enough, doesnt need to be reauthorized in eight weeks and we just dont know. What about the Unemployment Insurance element of this, guaranteeing Unemployment Insurance. [inaudible] some people worry theres a lot of debate in the senate this week, but this is basically an incentive, some people will be getting more money from unemployment than they would be from their jobs in its an incentive for people to be laid off and actually, even if they were available to work for them not to do it. You worry about that. Yeah, so my preference would be that the first line of defense is the 350 billion program the Senate Passed for Small Business. Keep workers on their payroll, keep workers attached to their employers, give businesses the resources they need not to lay workers off. I think we need a second line of defense as well because we saw last week, three and a half million workers were laid off or thereabouts. We do need to do something about the layoffs that will happen and they could occur in staggering numbers. I think we need both, i think the first line of defense should be to keep workers attached to their employers and the second should be, there probably is less generous than what the senate put together. Some areas like the uk, denmark are considering it to and have done something rather different. In the uk the government is guaranteed workers 80 of their pay. So Companies Keep employees on the payroll, the government will basically take over the vast bulk of their pay. Does that seem to you like a better way of keeping people employed through this. Where theres going to be no work to do for two or three months and then getting back to work when its over. I think that is a better way, and i think thats a lot of what the Senate Package is designed to do, the question is just how much does that cost and how sustainable is that over the longer term. Thats going to be a question that the uk will have to confront, and if we need to reauthorize or make more generous the Senate Small Business plan we will face that exact same question as well. The two plans are actually pretty similar, the senates plan for Small Business and countries like what the uk is doing in terms of their goals. The u. S. Partners with commercial banks. Im sorry, we have to take a quick commercial break but coming up next, we look at more of the things that are being done in some of the things that may be can be done to help us keep the coronavirus from turning into a deep, deep economic crisis. You cant predict the market, but through good times and bad at t. Rowe price weve helped our investors stay confident for over 80 years. Call us or your advisor. T. Rowe price. Invest with confidence. Yoall this grass. All this mulch. All these projects to do. You need a tractor that can do it all right. Mowing. Hauling. Mulching. Trenching. If its on the todo list, the 1 selling subcompact tractor in the u. S. Can do it. Versatile performancematched attachments. Legendary durability. Affordably priced. The kubota bx series. Can we go get some ice cream . Alright, we gotta stop here first. From smarter atms, to after hours video tellers comcast business is connecting thousands of banks to technology that turns everyday transactions into extraordinary experiences. Hi there. How are you . Do you have any lollipops in there . laughing no, sorry. Were helping all kinds of businesses go beyond customer expectations. How can we help you . That Liberty Mutual customizes your insurance, i just love hitting the open road and telling people so you only pay for what you need [squawks] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Im back with michael straight. Were talking about a 2 trillion support package for the economy. Thats about 10 of u. S. Gross domestic product. On top of a deficit thats already about 5 , is this just no limit to the debt the u. S. Government can take on, do you think this will have no consequences . I think this underscores the need to get our financial situation under control. We should be going in a downward trajectory and reforming our programs, now is not the time to do those things. We need to borrow money to support the economy right now, but this underscores the need to have a Balance Sheet in healthy times so when the prices arise that we can act. We shouldnt go into this with the trillion dollar deficit but we did i hope we learn from that moving forward. Where you stand, the president said we cant have a situation where the cure is worse than the sickness, we cant keep the economy shut down indefinitely because that will simply not generate the resources necessary to function as an economy including the healthcare resources. But those that say no we gotta keep the shutdown as long as it taken it doesnt matter what the economic damage. Is there actually a tradeoff there . There is not a tradeoff right now, right now we dont know how far the virus has spread, we dont know the mentality rate or what were up against. So what we really need to do right now is more and better testing so we can understand the situation. At some point in the near future we will probably arrive at that tradeoff. We will have to figure out how do we reopen the economy knowing that the aggressiveness will allow transmission to spread faster and result in a Greater Public health challenge. Thats a real tradeoff and were going to face it but right now the problem is we dont know how to make that tradeoff because we just dont know enough about how this virus will behave. Again because the economy locked down like this, there is a view that look and get over this thank you. In the deep freeze for a few months and come back but of course real damage is done in the course and its not that easy once businesses have stopped to simply pick up where they were. Thats right, and thats why think its so important that we have policy measures that keep workers attached to their companies, that keep workers getting paid by their company and that allow the ecosystem of Small Businesses, shops, restaurants, et cetera to stay open, and to stay alive while the shutdown happens. The worst Case Scenario is that we end up with 20 Million People were unemployed and 10 million Small Businesses that have gone bankrupt because of a pandemic. We need to keep all of that going so that when the pandemic subsides we are able to return to a functioning economy. Is very early days, theres still a huge amount of uncertainty, but at this stage can you already start to see the way things may start to change in our economy and our global economy, one thing people said his work and become much more focused on the local and the national, much less, this will make people much more cautious about Global Supply chains and global integration weve seen over the past 50 years. Do you think thats likely to change . I hope its not what happens. The problem or facing is not a problem of globalization or Global Supply chains, its a problem of a pandemic and it would be unwise to try to optimize our systems around that threat. We need to deal with the consequences of the threat. Of Course Company that you are adversely relating with, a country we had hostile relationships with is not where we want to put a lot of critical infrastructure. There are perhaps some lessons to be learned. Im talking about china. But overall the idea that walking back from civilization would be extreme overreaction that would end up hurting the American Workers and american households over the longer term. Thank you michael we will take another quick break. That leaves us very neatly into a discussion about your book about why you think populism actually is a threat to the American Dream, which otherwise perhaps is not in quite as bad a shape as people its a challenging market. Edward jones is well aware of that. Which is why were ready to listen. And ready to help you find opportunity. So. Lets talk. Edward jones. Its time for investing to feel individual. But allstate helps you. With drivewise. Feedback that helps you drive safer. And that can lower your cost now that you know the truth. Are you in good hands . To be most successful, connectivity is vital. Verizon, really for us, has been a partner for years. Allows us to stay connected to our 80 plus locations across the country. 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These expect and way more. Internthats xfinity xfi. U get powerful wifi coverage that leaves no room behind with xfi pods. And now xfi advanced security is free with the xfi gateway, giving you an added layer of network protection, so every device thats connected is protected. Thats a 72 a year value. No one else offers this. Faster speed, coverage, and free advanced security at an unbeatable value with xfinity xfi. Can your internet do that . Michael, youve got a new book out called the American Dream is not dead. That will come as a challenge to a lot of people, perhaps on the left and the right there has been a view over the last decade or so that stagnant wages, declining social mobility, all these opinion polls that show their children will not have a better life than they have and secondly that things have been on the wrong track for a long time, it does look like the American Dream is not dead but on life support. Why do you take a different view. Right now we are in a period of extreme challenge. This is a challenging time and people are right to experience some exam anxiety about this and some peoples economic outcome will suffer over the next few months for sir. What i do in the book is look at a longer suite. I look at over the last 30 years. What is the story of American Workers. What is the story of typical households not just the top 1 . What i see is a slow but steady upward mark of economic progress. I see wages for typical workers grown by a third over the past three decades, i see Household Income up by even more than that, i see three quarters of people grow up to have higher incomes than their parents did, i see the solid majority of sons grow up to earn more money than their fathers did. Its not to say that over the past 30 years there were periods of challenge, there were, just like what were living in now, the Great Recession being the most recent. This is not a story of uninterrupted progress, but if you look over the last three decades, the long sweep of the economic story for typical workers in typical households is a success story. The American Dream is not dead and my strong prediction is that even though we are in for a rough few months, the coronavirus isnt going to knock the American Dream out either. You say for example some sons go on to earn more than their father. Is that generally true . Theres a lot of research out there which suggests upward social mobility in the u. S. May still be able browned but its decline from where it used to be backed when we used to think of the golden age of the 1950s. Are we at as opportunity driven society as we were before . So, i think i would look at it in two ways. The first question is are we still upwardly mobile. I think the answer is resoundingly yes. If you look at people in their 40s today and look at their Household Income, about three quarters have a higher Household Income than their parents did when their parents were the same age. If you look at people today who were raised in the bottom 20 , 86 of those households have a higher income today than their parents did when their parents were of similar age. So just in the absolute sense, i think its incorrect to say were not upwardly mobile. I think we have quite a bit of upward mobility. I think you can look at the trend in mobility rates and yes, we are less mobile than we used to be, but remember, a lot of that trend is being driven by this experience that people had decades ago relative to their parents who lived through the great depression. Michael,. [inaudible] it used to be like 90 . I want to quickly get, you argue that populism is a threat to that so the thing that President Trump stands for, maybe tougher restrictions on trade, on immigration, you think thats a threat to the American Dream, very brief explain why you think that. I think populist policies hurt workers and i think the message that it sends that the economy is against you, you cant make economic progress, that message is extremely destructive precisely because its wrong. Again the book is the American Dream is not dead but populism could kill it. Just ahead, there is a way we can save lives and the economy atatatatat life isnt a straight line. And sometimes, you can find yourself heading in a new direction. But when youre with fidelity, a partner wh