On Sunday, Treasure Secretary Steven Mnuchin appeared on “Fox News Sunday” with host Chris Wallace to discuss the continuing economic fallout from the COVID-19 pandemic, as well ways to “safely reopen the economy.”
Wallace first drilled into the reported unemployment numbers and the “real unemployment rate.”
“The official unemployment rate, as we just reported, for April is 14.7%, but that does not include the 7 million jobs lost since April 18th or the millions of workers not looking for jobs, or what are called the underemployed,” Wallace stated. “So, Mr. Secretary, what is the real unemployment rate in the United States as we talk today?”
Mnuchin responded by briefly speaking about the need to reopen the economy carefully, and mentioning that the reason for the high unemployment isn’t for lack of a strong economy, but “because we’ve shut down the economy.”
But Wallace wanted to get into the numbers.
“The Bureau of Labor Statistics says, what they call the real unemployment number, for April, which again includes people who are not looking for work or underemployed, is 22.8%,” Wallace said, adding that those numbers don’t include those who have lost their jobs since mid-April.
“So, aren’t we talking close to 25% at this point, which is [in the] Great Depression neighborhood?” the host asked.
Mnuchin again emphasized that this economic downturn is unlike the Great Depression because the 2020 shutdown was a forced closure. “This is no fault of American business. This is no fault of American workers. This is a result of a virus,” the treasury secretary stated.
And that’s why the president and I were determined to put together the largest economic program ever to help American workers get through this. So, you are correct. The reported numbers are probably gonna get worse before they get better, but that’s why we’re focused on rebuilding this economy. We’ll have a better third quarter. We’ll have a better fourth quarter. And next year is gonna be a great year.
Wallace challenged Mnuchin’s outlook, saying that the job losses are “more widespread,” and that there are indicators that the economic recovery will not be as swift as predicted by President Trump and Mnuchin.
“The white collar and government sector, three million jobs lost, major retailers like Neiman Marcus and J.Crew declaring bankruptcy, and the nonpartisan Congressional Budget Office says unemployment at the end, not of this year, but of 2021, will still be 9.5%,” Wallace noted.
“Question: are your rosy predictions based on economic reality or the November election?” the host asked.
The treasury secretary responded first by saying that these aren’t “just numbers,” but “real people.”
Mnuchin continued, and pushed back on the question, saying that the models “haven’t worked in predicting what happens” in this very specific kind of situation:
My numbers aren’t rosy. What I’ve said is you’re gonna have a very, very bad second quarter, and then I think you’re going to see a bounce back from a low standpoint. None of the economic models have ever worked in predicting what happens when you close down due to medical reasons.
So, my predictions are based upon what I see is the rate of reopening in a careful way. It’s also based upon my views – and I’ve personally heard from many of the doctors that have vaccines and virals in trials and their expectations of being able to get a vaccine by the end of this year and having real viral treatments, the advent of testing.
All these things are going to help give American business and American workers the confidence to reopen in a careful and a deliberate way.
Wallace and Mnuchin then engaged in a discussion about the “food supply chain,” and the potential health consequences of reopening the economy. Wallace quoted Philadelphia Federal Reserve President Patrick Harker, who said that if the economy opens “too quickly,” and there’s a rebound in COVID-19 cases, “not only would this be a health catastrophe, but it would reverse the recovery as well.”
“Do you agree that there is a considerable risk – not to say you shouldn’t do it – but there is a considerable risk to reopening both from a public health and an economic standpoint?” Wallace asked.
Mnuchin countered by claiming that “there’s a considerable risk of not reopening” as it pertains to “permanent economic damage.” He added that the plan is to reopen with caution.
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