Harry Litman: Welcome to Talking Feds, a round table that brings together prominent former federal officials and special guests for a dynamic discussion of the most important legal topics of the day. I'm Harry Littmann. We've had a week with dramatic action on multiple fronts to hearings in Congress. Brought home the divide between what the president and administration have been telling the American people in daily briefings and what the country's best scientists and doctors believe.
Predictably, the President and congressional Republicans largely blamed the messengers and questioned the motives and bonafides of both experts. We had continued terrible economic news, 3 million new claims for unemployment last week alone, and began for the first time to hear dire predictions from some experts that the economy is in such a structural free fall that it may never fully recover. On the political front, Trump continued to treat the Michael Flynn case as a cost of lab of deep state corruption. But that portrait seemed to put the federal judge, in Flynn's case out of joint, and the showdown looks likely when the judge looks at the Department of Justice’s motion to dismiss charges and the President coined a new line of attack, which so far seems to be more of a bear slogan Obamagate, but suggested somehow Flynn's having been unmasked inappropriately at the end of the Obama presidency. Finally, at the end of the week, North Carolina Senator Richard Burr found himself ensnared in a federal investigation for trading on confidential information about the virus. That threatened to quickly end his political career.
He's resigned the chair of the intelligence committee, but in leaving, he has declassified the Senate intelligence report substantiating Russia's interference in the 2016 election. To discuss as many of these major developments as a fast moving a Talking Fed's episode world will allow. We have a Cracker Jack panel of prominent experts and commentators.
First. Asha Ranapa, who I'm happy that to say we can almost call a regular on Talking Feds. Asha is a senior lecturer at the Yale University, Jackson Institute for Global Affairs and a CNN contributor. She was an FBI agent in New York City, specializing in counterintelligence investigations. Thanks for being here, Asha.
Asha: Thanks Harry. Glad to be here
Harry: And to great newcomers to Talking Feds. First. Aaron Blake, one of the country's foremost political reporters. He's covered politics for 20 years currently as a senior political reporter who writes for the Fix at the Washington Post where he and I were colleagues, and it's one of the downsides for me of no longer being at the Post. Aaron, thanks for coming.
Aaron: I have to say your column is very much missed, but it's good to be here..
Harry: Thank you. And finally, David Gura, a correspondent for NBC News and an anchor himself on MSNBC. Now visiting the other side of the table., Before that Bloomberg TV. And he previously hosted Up with David Guerra, and now he hosts MSNBC Live.David, welcome.
David Gura: It's a pleasure. Thank you, Harry.
Harry: All right. Enough pleasantries. Let's dive in, beginning with maybe with the testimony from Dr. Fauci and Dr. Bright, let's focus on Fauci first. What do you take to be the sort of biggest takeaway of his testimony.
Aaron: I think what, what really stood out to me was maybe not so much what he said in the testimony, but what he set it up to be, which is he basically sent an email to a New York Times reporter in which he said that his chief goal in his testimony was to raise some red flags about reopening the country too fast, about skipping over the guidelines for those reopenings. And then when he actually testified one point that he returned to on a few occasions was this idea that if we reopen too quickly, this could actually set us back when it comes to reopening the economy because we might see further outbreaks propping up because of this. Left unsaid there is, is the audience for this, which of course is Congress technically, but I would argue is probably more the {resident who has previewed this being kind of the next stage in the reopening of the economy. Has kind of shoved aside those guidelines to some degree and argued that states can make their own decisions. So, it's been a tense relationship between the two of them. And I think that he was very diplomatically trying to send a signal that states should be, should be very cautious about what they're doing right now.
David: Now, we see this public side of Anthony Fauci him at the podium with the President. We see him giving these interviews as well, and one wonders what these conversations are like between him and the President of the United States. And I go back to this great piece that Michael Specter wrote for the New Yorker just a few weeks ago.
Michael Specter, who has covered public health for a long time, and in the course of writing this piece says he's known Anthony faculty for a very long time, and there's this really revealing anecdote, that fact she shares through the course of that, it's sort of how he has over his long career, worked with different Presidents.
And that is, he doesn't play the politics. And you know, to Aaron's point, what I find so fascinating about his testimony is that they're on that public platform. He was opposed to what the President was saying and strikes me the sort of most defining moment of that was when he was talking about children and this disease.
And this, of course, is this huge issue we can talk about in the context of the economy in a little while. But, uh, you have the President who was so adamant that things get back to normal so quickly, and a huge component of that is schools is being open so people can go back to work. And there was caution from Anthony Fauci on two points:
One, let's not do this too quickly. As Aaron was saying, you know, there, there could be a second wave to this. There's a lot we don't know. And then there's just the spectre of what this means for children yet. And where I sit here in New York, there is so much fear and concern about this sort of side syndrome that could be related to Covid-19. And I was just struck there again,by his willingness to do this. He said in interviews before, he didn't testimony on Capitol Hill this week as well.
Harry: Yeah. Well, what about that? I mean, look, we he does have this uneasy relationship, but he certainly portrayed as a basic good soldier, but New York Times? Red flags?
I mean, that's the stuff of going around the President and sounding an alarm bell because the President won't take his sort of private cautions. Is he going rogue?
Aaron: I, I think that there is some sense that that's happening. Certainly the president seems to believe that if you look at the way he talked about Fauci this week, there have been myriad examples of Fauci saying something that contradicted the President. Of the president saying things like, we don't need a vaccine that are different than what Anthony Fauci has said.
But the two men have tried to make the best of it. They've downplayed any tensions between the two of them. But then shortly after Fauci's testimony this week, we saw the President come out and say, “Look, Anthony Fauci was against me doing the China travel restrictions. Anthony Fauci, I didn't agree with what he said about schools reopening.”
Those seem to be the most direct, I think, instances of the President saying that what Fauci is advising is not right and is not what he intends to do. And I think that it's probably no coincidence that those comments came shortly after Fauci’s testimony on Tuesday.
David: There is this certain breed of the conservative chattering class who is now kind of coming out against Anthony Fauc.
And so talk about a second, a second wave. There's the potential second wave with the virus. There's the second wave of this criticism, as well. We remember the hashtag Fire Fauci from a few weeks ago, and now you've got basically every member of Fox News' prime time lineup casting doubt on Anthony Fauci’s motives. As this career civil servant, somebody who's been in government for decades, what he's up to, and now you've got Tom Fitton coming out crying foul. Saying he's going to file yet another lawsuit trying to expose, I guess the emails that might've been between Anthony Fauci and the head of the WHO and Steve Bannon, who's now podcasting, making similar comments, just questioning the motives of Anthony Fauci. So, I will continue to watch [ his perseverance, the degree to which he can deal with all of this. But it does seem like there has been an uptick in terms of the criticism or the heat that he's been feeling here in recent weeks.
Harry: Yeah. I would say more than an uptick. I, you know, it's remarkable. You see it a guy ;ike that, make these kinds of proclamations on Tuesday. You think, you know, it's one of a dozen times where we've seen the truth told to power. Yet power seems to triumph at least among a big sector. It's not just the chattering class or Fox News. After his testimony, in a CNN poll 84% of Republicans say they trusted the information they received from President Trump. so it didn't seem to erode that, and just 61% said the same about Fauci. Now there's already a sort of tension there, but it's,, as if even the most credible spokesperson can't break through the din of a Trump slogan that goes in the other direction.
Asha: What I find fascinating about power triumphs in this case is that they can't control the reality. And so I'm wondering what is, what is their end game. Because if they reopen, as you mentioned before, Fauci said that it could set back the economy even more if there's more outbreaks, I mean, are they not accounting for that possibility? They can't control that. This isn't like the other narratives where it is simply about what people believe or don't believe. Because there is actually objective things that happen in the world. Like people get sick or, or kids develop the syndrome that they're not going to be able to deny. Or is that going to become another, they're lying about that or something.
I mean, I'm just, I found that this thing to be the most fascinating part of how this has been handled by this administration from the get go. Like, why did they think they can use a verbal narrative to shape this when it is completely beyond their power to actually control what happens objectively.
Aaron: I think Asha is exactly right.
And I think when this began, the earliest indication of that was the President in his early comments, which were in many cases downplaying of course, this for the better part of two months. He seemed in many ways to be much more concerned about the momentary impact on the stock market. He saw those gains that had taken place over the course of his presidency going away, and he reacted accordingly.
I wrote around the time that the danger in this was never in a momentary decline in the stock market for the President. The danger in this was in a botched response. Things, uh, you know, something that leads to loss of life. And if you look at the continued polls of this, people don't hold the president responsible for the economy at this point.
They're chalking it up to the virus. His approval on the economy is where it has always been, and it's his strongest issue at this point. So there seems to be a calculation here where the President thinks that an economy being bad in his reelection year is automatically going to hurt him in his reelection.
Or he's much more concerned about that when in fact, I think there's a growing volume of evidence to suggest that simply a competent government response that includes an economic downturn as a necessary consequence would be something that people would understand and wouldn't necessarily reflect poorly on the President. But that's never really been his apparent calculus on all of this.
David Gura: You know, what’s so fascinating and maddening about the way that he is approached this is the way that he sets deadlines by which things are going to be accomplished and they aren't. So we had that with testing, for example, we had it with ventilators and now it's vaccines.
And you kind of see vaccines as the bridge between the testimony that we heard from Anthony Fauci and Rick Bright later in the week. And there is this incredible magical thinking that was approx there on the part of this President. You know, expert after expert after expert has said There is very little likelihood that there's going to be a vaccine developed in 18 months, nevermind by the end of this year.
And the President continues to come out as he did in Pennsylvania this week, as he's done numerous times at the White House to say he has a feel--he has a sense that vaccine development progression is going to such a level that is going to be ready by the end of this year. And. I just feel so stymied and surprised that he keeps doing this to really no effect.
I mean, there is going to be a point at which the calendar clicks over to January the first, and I'm not a huge betting man, but I will bet that a vaccine won't be available or widely available by the end of this year, and yet I wonder sort of what the result of that will be for him or for the next President, whoever that may be.f…
Harry: It’s true. It’s kind of maddening to pick up on Asha’s point. It's one of many times where, ‘Hey, okay, the lines are drawn. He either has or he hasn't. And there'll be a day of reckoning.’ And I don't know whether he thinks in these terms, it's just his playbook or he's just always in the moment, but presumably, if Fauci proves correct Trump will stand up there and say, “I never said that, and it's not my fault anyway.” And at least the majority of his base won't somehow question it. There won't be a cost to having been as, Asha said, in the sort of objective yes or no death or life situation, having been dead wrong.
Aaron: So. I think the best example of the kind of short term nature of the President's reaction here. And of course, the vaccine stuff is something that might ultimately look like a pretty poor prediction, but, that will come after the election at least, and he'll either be reelected or he won't. It was less than a month ago that the president was talking about how we were headed towards 50 or 60,000 deaths. We are now at more than we are now at 85,000. Even when he said that, it was pretty evident that that was not going to be where we were going to ultimately be, whether it was going to be at the a hundred thousand or 200,000 marker, we didn't know. But it was maybe the best example of the President apparently trying to handle this on a day by day basis. Try to kind of make this seem like it's going well. Even if what happens in the future might completely undermine the things that he's saying today.
Harry: All right, let's switch just a little bit. We've already prefigured it with the talk of the vaccine, but Bright is a somewhat different figure. He's a whistleblower who comes forward. He gets the whistleblower treatment that Trump has patented, basically shoved to the side for not following the political orders. And now he shows up, you know, and in this somewhat dramatic fashion, here's a guy we hadn't seen and he comes to tell his tale.How do you think he presented?
Aaron: Well as, as somebody who watched the hearing for the most part, um, the person I kept coming back to as I watched him was another figure who has been a key figure in during this administration, which is Peter Struck. I think regardless of what the two men were saying, I'm not sure they were terribly sympathetic witnesses. Their presentation was a little bit stilted. Bright was very kind of soft spoken and, and cautious, which I guess you can understand from a witness. It was more, I think, in the content of what he was saying that his testimony mattered. And basically what that was, was there have been a lot of newspaper reports about the behind the scenes machinations early in the outbreak.
About people in the administration, even the White House who were raising red flags and saying, this needs to be addressed. But we haven't seen really many people come forward and do it on the record and attach their name to this. It's been kind of background sourcing. You know, Matthew Pottenger and the White House said this, and Robert Cadillac said this was maybe the first and most prominent example of somebody putting their name behind this and saying, “Look, I told HHS--where I was an employee--that we needed masks, that this was going to be a very serious situation. And they didn't respond.” And, and he said on numerous occasions that he believes that lives were lost and that to this day, the response is hurting because of that. Because of the lack of PPE. And so I think it moved the ball forward, even as it may only confirm the broader picture of what we've seen in a lot of reporting on this.
Harry: I mean, he did seem a little stiff, on the other hand his content seemed quite credible to me, just in terms of the kinds of interference with good medical practices and the demands for cronyism and certain contracting by the administration. So in that sense, he seemed pretty solid. And you know, I'm a whistleblower lawyer that sometimes when your client takes a stand, it can be a little tricky.
But even though the knives were already out for him clearly and they wanted to try to bring him down and they continue to try it. You know, I thought he came through. Okay. Just a quick question on the vaccine. What kind of struggle could we be having? Is it not a hundred percent clear that everybody's doing everything that can be done. When Trump says December and Faucisays, get real: maybe December 2021 or whatever.
You know, it doesn't seem a matter of policy choices. It just seems a matter of when we're going to get kind of lucky and as I understand it, we need just not just one, but a kind of a multiplicity of vaccines. But surely there's no doubt that everyone's doing everything that can be done. No?
David Gura: This is David. Yeah, I think that's true. And there is a global effort and we can debate the degree to which different countries and institutions are working with each other toward the advancement of this goal. But I think the real big question remains how, once the vaccine is developed if we get there and what we all hope that we do get there, uh, it's going to be produced at scale. I think that the record of the amount of time it has taken for a vaccine to go from, from its inception to development is, is four years. So we're working with a pretty accelerated timetable here. Just the way that she's talking about it, the bit that Trump is talking about it, certainly. But yeah, it raises a whole host of questions. I think once we get there, how it's distributed and to whom it's distributed, who's going to make this thing so depressed and coming out of the White House today. And he's picked this former pharma executive to oversee this program now going forward, You know, that's kind of the story of this crisis as well. I mean, it's gone on now for, for many weeks, many months. There are these moments we're like, “Oh great, there is now a point person for this!” But one can't help but be surprised how long it's taken for, for that to happen. So I guess we can breathe somewhat of a sigh of relief now of somebody who's overseeing this particular enterprise--this part of the enterprise. But what I'm wondering is, how much farther along would be if that were the case four or five weeks ago?
Harry: Right. And of course, if it's a problem that all the point people, you know, where the DT, on their uniforms. Maybe we'll get to this when we talk about the economy, but you were on Nicole Wallace the other day, David, talking in the economic terms about the whole sort of Tale of Two Cities and inequality.
I've come to understand from Juliette Kim and others. Even getting the vaccine, we then move into the huge logistical problem of distribution and the worry that that will be done politically, and that the rich will get richer as it were, and that's a whole host of headaches.
All right, let's leave that to the side for now and turn to this new broadside or what? I'm, I'm stammering cause it's hard to know even what to call it, but a new slogan that, that, that Trump has, uh, concocted: Obamagate, which seems not even a concept, but kind of a Pavlovian word, just designed to bypass the higher brain and go straight to the limbic system. Obamagate, that no one seems to know what he's talking about though. Maybe that doesn't matter if it's just to whip up the base. There is one concrete charge here, which we've been hearing fly in, which, um, depends on a concept that I think is novel for many of us.And that is this idea of unmasking. So let's just start there. You know, this idea of unmasking, you know, what are they suggesting it is and what is it really?
Asha: Yeah. So the entire process of unmasking really precludes the possibility of actually targeting any individual. So when intelligence is disseminated within the intelligence community and to government officials outside of the agency where that intelligence was collected they will mask the identities of any persons or companies that are not the target of the electronic surveillance. So in the case of the NSA, which monitorsforeign intelligence targets foreign terrorists, when they intercept those calls or communications, and there is a US person on the other end, if they disseminate an intelligence report about that, they will mask that identity and it will show up as something like, US person one or American citizen one.
Harry: So there’s a transcript of the phone call US person One, colon.
Asha: Yeah, it is probably not even a transcript. It’s an intelligence product. Like they'll, you know, summarize the call. It'll be a summary or maybe there are, there will be some additional analysis put in there if that agency knows of it.
But it basically, it's, you know, here's something of interest. Um, and this is something that we expect these agencies to do because since 9/11, the whole idea is to connect the dots, right? And so you want to share intelligence so that people have all of the bits of information that they might need to do their job or investigations or whatever it might be.
When the consumer of that intelligence report views that communication, if they need to know the identity of the person in the communication that is masked in order to understand the significance of that communication, they can request the original collecting agency to unmask the identity of the non target in that communication.
And that apparently happened several times. And when that identity was unmasked, it turned out to be Flynn.
Harry: Gosh, are you stating like legal regime or, or basic practice where, where do all these rules even come from?
Asha: They're internal, and I think in this case, this would be-- the request was going to the NSA. That request goes to whomever looks at the reason that this person, this consumer is asking for the information. I mean, it can't just be, ‘Hey, I'm just curious who this person is.’ There has to be a legitimate purpose that is related to their job. Or, they have to explain why it's important to know,the identity.
And then if they approve it, they will provide that information for that communication only. It doesn't mean that then they go through and give that requester any and all communications relating to that individual.
Harry: So hypothetically there's a report that American person, one is speaking with the Russian ambassador, talking about what the ambassador should or shouldn't do about sanctions. And then somebody says, “Hmm, you know what? I think it might be important to know who this person is.”
Asha: Something like that. But I think it's important to not use that specific example, Harry, because I think that is exactly what the Trump administration wants us to do. Is to look at these requests for unmasking to the NSA and somehow believe that it was connected to the FBI investigation into Flynn's call with Kislyak. His call with Kislyak was intercepted by the FBI. That is a kind of a straightforward CGI counter-intelligence intercept. Um, Ben Widowswrote a thread about this. Ryan Goodman also wrote a piece for Just Security explaining why this was internal to the FBI. (~23)
So, it actually has nothing to do with the Kislyak call. In fact, my initial reaction when I saw the list of requests, which by the way, the dates predate the Kislyak call on that list most of them anyway is: Oh my God, there were so many people in the government who were viewing some number of intelligence reports where they didn't know who the person was, but apparently were so freaked out about what this report said, that they all independently requested an unmasking.
Harry: So the unmasking here was in the context of some other activity, like his lobbying of Turkey but it wasn't, it wasn't the FBI and part of the investigation that landed him in the soup.
Asha: That's right. Not the Russia Kislyak call.
David Gura: Asha, I just wanted to ask you about, you know, when you look at that list and you see the person's on there, Nathan Sheets, former Undersecretary of Treasury for International Affairs. One assumes he's on there, maybe because it has something to do with sanctions.
Jack Lou, the Treasury Secretary. You, got the whole list there, but I think my broader question is: What is the danger of releasing this without context? And you've, you've added some here, but Rick Grenelle, the acting DNI pushes for the release of this thing. It comes out, people are gonna see this, and there's a lot of sort of creative connecting of the dots that can happen as a result of that. We've seen that. But it lays bare the dangerous of, of having something like this without context if you could speak to that.
Asha: Sure. I mean, the analogy I made in another discussion was, this is like being on Wheel of Fortune and revealing two vowels, but not telling you how long the word or phrase is, or any of the other letters.
I mean, it's like you don't have critical pieces of information to actually come to any kind of meaningful conclusion. What we do know is that these were all legitimate requests, the NSA memo says that. But I think if you really want to, you know, make your case that these were fishing expeditions, if you will, then they need to show what the underlying intelligence was.
On which they were asking for this information. What was it? I mean, was he just, you know, like calling his favorite restaurant in Turkey and asking them about the menu? I mean, if that's it, then let's see it. But it seems like whatever was in this report or reports, um, were alarming.
Alternatively, you could also release the actual justifications for the requests and find out why were these people asking to see this? I mean, they had, like I said, they had to give a reason. That could also tell you, um, what was concerning to them. But I think that releasing only the names of the people who made the requests doesn't tell you much of anything.
And in fact, it can actually compromise ongoing intelligence collection because the NSA is monitoring targets all the time. If they're still on any of the channels where the people who were speaking with Flynn on or around these dates, they can view it and say, ‘Oh, I guess that one is burned and let's, you know, uh, let's get, give it up.’ And that can dry up our intelligence collection as well.
David: How much do you worry about this becoming the thing that Rick Grinnell or others, are going to do? So he, like many folks in this administration are working three jobs at once. It seems like he's still ambassador to Germany. He's a special Envoy and now he's acting DNI.
But how much do you worry that this portends more releases like this? I think, I'm not saying, I think radical here when I think that he’s really fanning these flames. He's providing a lot of fire for this #Obamagate thing that we've seen erupt here over the last week.
Asha: Yeah., I think there's going to be more of this. You know, the Ryan Goodman piece that was in Just Security today, I think makes an important point. Which is I think there's going to be an attempt to connect this list with the Flynn investigation, which, as I said, I think already does not seem related at all. But I think what they wanted was a list that included Joe Biden and this NSA list provides that. And I think you might see some kind of investigation into the leak of the contents of the Kislyak phone call. Now, even if that originated in the FBI leaking that information would be a crime. But I think there's kind of going to be a bait and switch, you know, like they did with collusion and conspiracy.
I mean, that's where I see this going. And this is just kind of a precursor to prime people for imagining that the people on this list are somehow connected to anything that comes later, even if it's not in fact connected.
Harry: You asked what it tells you. Look, I think one thing it tells you is, is that the director of national intelligence, who by law is supposed to be experienced and learn, you know, know know his stuff stuff here. And Grinnell isn't, you know, totally in the tank for Trump.
So his conduct will be influenced by that. The biggest point to me that I think was a revelation. This made it seem so sinister, but this is a very common undertaking. And in fact, one that the Trump administration has really proliferated. So in 2018 there were 17,000, quote unquote unmaskings.
I mean we almost need another word cause cause it's got this sort of sinister turn that makes it look like some, some poor, innocent is suddenly being revealed to the world. So much happening with Flynn. The other big part of the drama that's ongoing is at the level of continued fallout from the dismissal of charges.
And we now know that there's going to be some kind of showdown Yay, there's finally a federal judge who will look at this and have the advantage of an actual presentation of the view that the Department of Justice, the law enforcement agency won't make here. And that's going to be pretty dramatic, I think, when no lessa personage than John Gleason, former judge, but also, you know, Gotti, prosecutor and just overall an awesome advocate, comes to the fore.
I think probably just cause there's so much to talk about. We should leave that and what Sullivan will do for a future Talking Feds, so we can get to a couple other topics. Before we do, it's time to take a moment for our sidebar feature, which explains some of the terms and relationships that are foundational to events that are typically in the news, but they're never really explained.
And today we have one of the best known podcasts hosts out there, Tom Merritt who hosts, as many of you know, the Daily Tech news Show among others, and who previously hosted Buzz Out Loud. Tom's going to explain about a concept that's become newly relevant with the focus on Flynn and the beginning of the administration and even the replay of Carter Page. And that is wiretap warrants ,FISA warrants and the differences between them.
[TOM MERRIT SIDEBAR]
Thanks very much to Tom Merritt. You can catch him daily on the Tech News Show. All right. A couple sort of broad trends that I'dlike to get to, which are, we don't always have time to cover here, but we have the benefit particularly of David's expertise in economic issues. So I want to start with this idea that you just mentioned with Nicole Wallace, but seems so important to me.
Which is: economic suffering abounds and is everywhere, but we're increasingly aware that it's very disproportionately visited on vulnerable communities. People have to be out front, communities of color and the like. What's your sense to the extent you're able to kind of quantify that and the possible policy responses that you would hope somebody in Washington is thinking about?
[35:00]
David Gura: Yeah, the Fed chair, Jay Powell, has been speaking a lot lately, uh, about the actions that the Fed has taken. He's kind of been indirectly offering,advice, or directives to the Congress for them to do more, more fiscal policy. But during a Q&A this is where he talked about who's born the brunt of this so far. And there was a Fed survey that came out showing that most of the people were borne the brunt of this are people who make less than $40,000 a year. You know, I, I've been thinking a lot just about numbers in the context of this public health crisis and economic crisis as well. And we were talking a bit about the President’s willingness to sort of futz with that as all of this goes along.
We see what with the reaction so much as he has a genuine reaction to the amount of deaths and the cases that we've seen in this country as well. And that's a real moving target for him. Someone will bring up the fact that 80,000 plus people have died here in the US and his inclination, his reaction to that is to say well, the models particular, it could've been much worse than that.
So there's kind of an absence of humanity there. And I think that the same is true with the economic figures we've seen as well. So we've been paying particularly close attention to these weekly jobless claims. Seven, eight weeks ago, we had record numbers for the first time that were magnitudes higher than what we saw during the financial crisis of 2008 and 2009 and that's begun to diminish a little bit, but still this week, 2.9 million first time claims were filed. And 36 million people have applied for unemployment benefits for the first time in the last two months, which is just extraordinary. And that gets to my point Harry, which is it's hard when you see numbers that big not to humanize them. You're just left so stupefied looking at numbers like that, you don't think of the individuals here I think kind of plays into what I'm describing. The President, being able to sort of obfuscate or, or make us not see the human side of the reality of that and certainly plays into the inequality you're talking about.
But we were just in a really deep trough there. There are some indications that perhaps we've seen the low, the nadir of how many jobless benefit claims we're going to have, but still, for all the President’s fantasy talk about a V shaped recession and this happening really quickly. Economist after economist I talked to just says how uncertain these times are, how impressive these times are and how long it's going to take for us to see any kind of rebound from this.
And a paradox in all of that is: the longer somebody is out of work, the harder it is for him or her to get a job and get back into the workforce. And you look at the policy decisions that the fed has made and what's been done on Capitol Hill. A lot of that has been tailored to keeping those tendons alive, but between a worker who's been laid off or [00:43:00] furloughed and his employer, past employer. But the longer this drags on, I think that the more difficult it's going to be to, to sort of regain any foothold that we've lost over the last month or two.
Harry: You know, and it's not only the, the frontline workers, they seem most poignant, they don't have a choice. But small businesses or are going out of business in droves. The “V” is--hoping we're at the bottom of it--is the rosy scenario. But I'm hearing a lot about a “W” which seems, you know, certain some more reversals that you know, thereafter or, or even, God forbid an L. But what about this notion,that things could be such, so much in the trough, as David says, that it's a permanent game changer for the US economy in a way that the Great Depression even wasn't. You know, we're in a competitive world, and by the time we even get back to the starting gate, you know, we're gonna have been left in the dust by China and others, and this is almost an epitaph for the 200 year booming economy. Is that, is that seem overly grave and pessimistic?
Aaron: The best way that I've seen this described is that, and you mentioned the Great Depression, obviously, comparisons have been made to the Great Recession a decade ago. It’s tempting to compare the numbers because we are now at the highest unemployment rates since the Great Depression. We're seeing numbers that are in line with what we saw during the recession a decade ago as far as the GDP decline goes. But what those were were different than what we see today in that they were demand shocks.
What we're seeing today is much more of a supply shock. It's a different situation in which it’s not The Market itself that caused this problem, it was an external factor. And the thing is that we have so little experience with recovering from something like that because it just hasn't come along very often. I think the best comparison to what we're going through right now, would be something like the oil shock in the 1970s and early 1980s where, it was something external that was impacting the economy and causing this great hardship that needed to be addressed. And then the economy recovered from that in other ways. Rather than something where you can kind of handle this with, uh, a top down macro economic policy. And so I think that because of that, we have just such a great degree of uncertainty. And when it comes to projections of what the recovery might look like, they're all over the place.
They're far different when it comes to long term GDP impact. And I don't think there's a whole lot of agreement about exactly what that's going to look like, which I think, if you look at, if you compare it to the Recession, the Depression, you know, you're saying that was a decades long project.
In this case, we're dealing with something that hopefully is more of a temporary thing and maybe things can back bounce back quicker once we get past all of this. But we just don't know because we really haven't been through a situation that's even remotely similar to what we're doing right now. (38:45_
Asha: I'm not an economist, but I mean, just in terms of looking at our lives right now, it's really hard to imagine that we would go back in any meaningful way what it was like before. And we're all experiencing this in different ways. I'm at Yale and you know, there is apparently an aspiration to start classes on time in the fall.
And, you know, I can't imagine, like, how does that work with students being in dorms and, you know, being in the same classrooms and teaching seminars and things like that. And I think this kind of gets at what David just said in a different way, which is, this seems like we are going to fundamentally alter our way of living to some degree. And even if there's a vaccine down the line, and we don't even have, we can't even get into the politicization of the vaccine and the fact that there's some huge percentage of people who are going to refuse to take it or whatever.
I think there's always a fear that this is a biological phenomenon. There is no way to prevent it from actually surfacing again as well. So there's almost a need to structurally change how we approach all of the things that we do in this economy, to be prepared for the unexpected shock the next time if it comes again. It's not something you can, like, create regulations for, for example after the housing bust. You can't regulate your way out of this. This is kind of at the mercy of nature. (40:00)
David Gura: It's totally true. This is David, and I think as you talk to labor economists there, they like all of us are trying to become experts on public health and epidemiology. I mean, they're studying this because it is a medical, a scientific phenomenon, and they're having to figure this out and try to gain things out as a result of that, and that's left them kind of blindsided. I think one last thing I'll say here Harry is I'm struck by how quickly and readily the administration is saying that any sort of bill that provides more fiscal stimulus at this point is dead on arrival. It highlights yet another disconnect between experts, academic economists, labor economists who say that the need is so acute and real, they can't imagine that that would be the case, that the White House would foreclose that entirely.
And I mentioned the indirect advice that the Fed chair has been giving. I listened to a lot of these speeches that he gives, and in each one, he's pretty candid about the fact that he thinks that the Congress is going to have to do more. And here we are in this kind of strange circumstance where some states are opening up and we don't know how that's going to play out. Getting back o the earlier conversation about the epidemiological side of things, I’ve heard from these experts on Capitol Hill is, this is likely about to be a real problem. That you open the doors to businesses without a vaccine, any therapeutic or this being really mitigated and we can go from a really bad situation for a public health perspective and an economic perspective as well.
Harry: Right. You know, I always think that the second wave in 1918 was worse than the first, and there'll be some kind of second wave. So what that will look like, especially when people will have taken a deep breath and think it's all over, is a pretty alarming to contemplate.
But it is, it is true, it seems like there has to be more stimulus. On the other hand, that seems to be the only thing on the table for the kind of gargantuan help that the economy needs. And, you think about the story of the Depression, I guess there's some dispute about this, but, you know, the triumph of Keynesian economics and after several years, maybe it took the war effort, we get back on our feet. This was a striking datum that I just read.
We've already, even in 2020 dollars, had as much stimulus poured into the economy in the last three months as there was in all of the Great Depression. On the other hand, you know, nobody seems to have a sense of what to do, but keep on keeping on with the same idea.
David Gura: I think a lot of policymakers who have been advocating for stimulus would hold that up as an exemplar of things done right. I think that the Fed chair would say, “Look, we learned our lessons from 2008, 2009. The economy was righted, we implemented new policies. That took months. The Great Depression took even longer than that, and now they are moving really quickly. I do think that from an economic vantage the response to this has been pretty fast. In a way that I think that the public health committee is probably envious of how quickly we've seen movement on the monetary and fiscal side.
Harry: I was thinking of that too, but for 2008 remember the incredible resistance. We're going to do what? We're going to spend how much? But now, you know the idea, well, here's what we gotta do. Just like start throwing out money. Everyone understood, at least for the first few trillion dollars say, it was a forced move.
Aaron: Just, just to the point you were making about how there was considerably less resistance to a massive economic stimulus package. As far as an argument for having Donald Trump as president, the fact that that got done so quickly, I don't think we should diminish in any way the role of having a Republican president in office during that and being able to bring Republicans in line. When in other situations, as we've seen, there was obviously a very much different emphasis when it came to the impact on the debt. And I do think though, that as we move forward, given the amount of money that Jay Powell was talking about here, we may start to see resistance crop up in a way that we didn't with these last two packages because of how quickly the debt is ballooning. In the event that this were to be a debate that we're having next year, if in fact there is a Democratic administration.
Harry: Excellent point. All right. We have a few minutes left to at least touch on Richard Burr. I'll kind of lay out the, the, the basics here. They go to his house, serve a search warrant, and want his phone having already, I think, even subpoenaed Apple for iCloud information.
Almost surely talk to the broker, the brother-in-law, and you remember the basic facts here. He gets a gloomy picture, even though he's talking in a sunny way. But he gets a gloomy picture, in the 12th as an official briefing and the 13th, you, he does 33 different transactions.
His brother-in-law the same of a substantial part of his portfolio. So it sure seems like a prima facie case of insider trading. It seems to me that he is looking very likely at criminal charges. And I've said before, he's so quickly stepped down from the chairmanship, and obviously McConnell wasn't giving him any support, wasn't throwing his body in front of him.
And I think he's in very deep trouble, and we'll probably be out of the Senatebefore the election. But just today on his way out, he declassified the intelligence report that we've been hearing about that is somewhat at cross purposes from what the president has been trying to propound. So, can someone just kind of give us that late breaking news and, and what's our thoughts about its significance?
Asha: I'll jump in here. I mean, I think that Senate intelligence committee report is probably the biggest thorn in Bill Barr’s side. Right? In terms of going and trying to discredit the Mueller investigation, which it does seem like he is trying to do systematically. Because that is going to be a counter narrative that is coming from a bipartisan body that is basically supporting the IC’s assessment from January of 2017. Just, you know, I do think that it's really sad for the Department of Justice, Harry, that, you know, when Burr had the search warrant sort of on his cell phone and, as you said, it looks like he's in big trouble.
There were a lot of cynical takes. I saw on Twitter that this is politically motivated against him because he was helping to put together that report. And there was a lot of questioning on why isn't Loffler being investigated. We don't know if she is, I think, I think she did have a visit from the FBI. But I think the sad part is, you know, people are asking these questions and I don't blame them. You know, we've had so many different parts of our government weaponized, and we've always been able to count on the Department of Justice to dispense justice impartially. And I think having Barr at the helm raises these kinds of questions and the fact that people are asking them and thinking that this is a way for Barr to help Trump bury the report. Which is, I think, what the suggestion was that by making him step down, then he wouldn't be able to release it. You know, this is, this is where we are now, and I think it's just really sad that, that this is what people think of when they think of the Justice Department.
Aaron: The other element of that was that Burr as Intelligence Committee chairman at one point was talking about having Donald Trump Jr. come up and testify to his committee, which really rubbed the Trump world the wrong way. And you can imagine, would have created some hard feelings there. Having said that, we have no idea if this is in fact a politicized effort. And I'll also say that to the extent that it is, if it is,it's probably a very suspect decision in that if Burr were to resign his seat before. September 4th, there would be a snap election, a special election in a state that the President won by less than four points in 2016. There would be a temporary appointee who would be a Republican, but they would be selected by the state party. And then the Democratic governor choosing from those people. The Senate is very much in play right now and the ramifications of throwing another seat into playI think would be a very suspect political goal here.
Harry: Yeah, I mean, even the political analysis, it doesn't seem to hold up, but I can't second loudly enough the point Asha made and the sense of sorrow or outrage from DOJ alu, that this is the kind of inference, automatic inference now that you have to beat back.
All of us who were there, Asha and I, are used to pairing these charges and being able to reassure people, no things are on the up and up. And now, it doesn't seem like things are on the up and up and important cases, and that bleeds over into everything. All right, so on that cheery note, it’s time for our final segment of five words or fewer, where we take a question from a listener and, each of the feds has to answer in five words or fewer. Our question today comes from listener Merrill Sherman, who asks Will Burr be in the Senate on labor day?
David Gura: This is David and I'm a native North Carolinian so I'll jump out first and say I'm taking a page out of what Aaron was saying, that this is going to be up to the governor of North Carolina. I'll say, no, they don't want Cooper's pick.
Asha: I'll take the other side based on the political analysis as well and say: He'll stick it to Trump.
Harry: Aaron?
Aaron: Mine is almost completely 50 50 between the two of those. It was: No, unless he wants revenge.
Harry: You guys are forgetting the whole law enforcement angle here: No, feds, force him out.
Thank you very much to Aaron, David and Asha, and thank you very much listeners for tuning in to Talking Feds. If you like what you've heard, please tell a friend to subscribe to us on Apple podcasts or wherever they get their podcasts, and please take a moment to rate and review this podcast.
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Submit your questions to questions@talkingfeds.com whether it's for five words or fewer or general questions about the inner workings of the legal system for our sidebar segments. Thanks for tuning in and don't worry as long as you need answers, the Feds will keep talking. Talking Feds is produced by Jennifer Bassett and Rebecca Lowe Patton. Our editor is Justin, Wright. David Lieberman and Rosie Don Griffin are contributing writers, production assistance by Sam Trachtenberg and Sarah Phillipwhom. Andrea Carla Michaels is our consulting producer. Thanks very much to Tom Merritt for explaining the tricky area of wiretap warrants and FISA warrants.
Our gratitude as always to the amazing Phillip Glass who graciously lets us use his music. Talking Feds is a production of delete LLC. I'm Harry Litman. See you next time.
