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Economist Paul Romer: To save American jobs, we must bring virus to ‘screeching halt’

The Labor Department’s June jobs report seems to reflect a strengthening economy. After all, businesses across the country reopened during that month. But now coronavirus cases are soaring, raising questions about how we can have a functioning U.S. economy without adding fuel to the raging pandemic. Nobel Prize-winning economist Paul Romer joins Judy Woodruff to discuss the dilemma.

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  • Judy Woodruff:

    Today's positive jobs suggest a strengthening economy, as businesses across the country reopened in June.

    But coronavirus cases are soaring in the past two weeks, as restrictions on social distancing and other safety measures are relaxed. So, how do we restart the economy without reinvigorating the pandemic?

    We explore that now with Paul Romer. He's a Nobel Prize-winning economist who has focused on these very questions since the outbreak began.

    Paul Romer, welcome back to the "NewsHour."

    So, let's talk about today's jobs report. Some people are focusing on the positives, saying, yes, 4.8 million new jobs in the month of June. Others are pointing out, but, hey, we are still many millions behind where we were before this all started.

    How do you read these new numbers?

  • Paul Romer:

    Well, you got it right in the earlier introduction of this issue.

    We're — employment is still down by about 15 million people. Last month, it was down by about 21 million. So it is better to be down by 15 million than by 21 million, but it is still pretty terrible. It is the worst labor market in my life.

  • Judy Woodruff:

    And, of course, all this, as we know, Paul Romer, taking place as the COVID cases are starting to spike, to surge back up again.

    What does that portend for the economy overall? You have businesses that were getting started opening up, people who were thinking of going back to work, and now this has happened. What does this mean — what could this mean for the economy?

  • Paul Romer:

    Well, it is clearly shows that we are not on a sustainable path.

    And to try and describe what we're doing, it's as if — imagine some gremlins turned all of our cars into — not all of them, but a lot of our cars into time bombs. So, we go drive our cars, and then they blow up and kill us.

    So, we have a lockdown. Nobody drives. And then everybody says, well, you know, we have to drive. We have got to get back out there. So then you start driving. Well, we will only drive to the grocery store and we will only drive on Tuesday, but the cars blow up and people keep dying.

    The thing you have got to do is figure out, well, which are the cars that are time bombs? It is only a small portion of them. And then somehow fix them, so they don't keep blowing us up.

    So we just keep thinking, if we are driving on Tuesday or driving to the grocery store, we are not going to get blown up. But we are not addressing the fundamental problem. We should be using tests to figure out who is infectious and then isolate them. Then everybody else would be safe.

  • Judy Woodruff:

    And I know you have been a big advocate of testing. You have been talking about that, writing about that.

    But, in the meantime — while we are, what, at a half-a-million tests a day, roughly, in this country, trying to get more, but we are not there yet. In the meantime, what are businesses to do? What are people to do who are thinking, OK, am I going to be open? Am I going to be closed? Am I going to have a job or am I not?

    I mean, what effect does this uncertainty have on what we face?

  • Paul Romer:

    I mean, the first thing is, there is a way to get much more — get many more people tested with the capacity we have. It is this idea of pooling tests.

    And Dr. Fauci and others have been announcing — talking about this in the last week. We need to move ahead with this just full steam ahead. And then we also need to recognize that some of the sophisticated players here, like the Stanford Medical School and Cornell University, what are they doing? They are saying, we are going to test everybody when we reopen, because that's the way to keep ourselves safe.

    And in their case, they can just ignore what the CDC says, which is really, you know, bizarrely unhelpful. They just ignore it. But, unfortunately, far too many people are listening to the CDC on this, and the CDC says, don't test.

  • Judy Woodruff:

    So, you put yourselves, Paul Romer, in the shoes of someone, say, who owns a small business or someone who is hoping they can go to work or stay at work, and they are trying to make a calculated decision: I want to go back to work. I want to open my business, but I have got to be worried about health.

    How are they able to make these decisions with any sense of certainty right now?

  • Paul Romer:

    Well, it is really tough when the sophisticated players are saying, you can't rely on the CDC. So it is very hard, I think, for anybody to know what to do.

    I will tell you what I do. I mean, one, fresh air is very good, enclosed spaces with people who might be infectious, very bad.

  • Judy Woodruff:

    So, you are speaking for — of restaurants and any kind of work that can — that could be done outside. And, of course, not all work can be done that way.

    Another thing I want to ask you about, Paul Romer, is the fact that we do see in these numbers that, once again, individuals, people of color, people with less than a college education are facing a much tougher job picture than everybody else.

    Is this just something we are destined to have with us for a long time to come?

  • Paul Romer:

    On the current course, the CBO is predicting that we will get back to where we were before the — where we would have been if the pandemic hadn't hit, we will get back there by 2028.

    So, if we keep doing what we are doing, it is going to be a very long, slow recovery, and the people who are in — the most disadvantaged will be the ones who suffer the most, and their kids, because their kids are not going to be able to get an education this fall.

  • Judy Woodruff:

    You mean in terms of getting back to where we would have otherwise been if it hadn't been for this pandemic. That's a long time to wait.

  • Paul Romer:

    It is. It is a terribly long time.

    But the sad thing is, is that, if we could just do enough testing to find out the roughly two million people who are infected right now, quarantine them for two or three weeks, the pandemic would come to a screeching halt.

    This is all we need to do, is figure out who is infected, get them into isolation. The pandemic comes to a screeching halt. And we just need to have the commitment to just start doing it.

  • Judy Woodruff:

    Very tight connection between business, between jobs and the economy, and finding out who has this COVID infection, and then dealing with it.

  • Paul Romer:

    Absolutely.

  • Judy Woodruff:

    Paul Romer, thank you very much.

  • Paul Romer:

    Thank you.

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