PBS NewsHour


Which economic policies will get Americans back on track?

The economic toll of the pandemic and the ensuing shutdowns continues to grow, with more than 40 million people losing jobs so far. Although economic activity will pick up as businesses reopen, there is growing debate about how government policy can support struggling Americans and a fragile economy. Judy Woodruff talks to Mary Daly, president of the Federal Reserve Bank of San Francisco.

AIRED: May 28, 2020 | 0:08:35

JUDY WOODRUFF: The economic toll of the pandemic and the shutdowns is growing. More than 40

million people have lost a job so far. The economy is expected to pick up momentum as

businesses reopen, but there's a growing debate about what more needs to be done.

Mary Daly is the president of the Federal Reserve Bank of San Francisco, one of a dozen

regional Fed banks around the country that help support the economy.

Mary Daly, welcome back to the "NewsHour."

So, looking at today's report on the number of unemployment claims filed, some are looking

at that and saying, well, we see a slight decline in the number of people filing; maybe

that's good news.

How do you see it?

MARY DALY, President and CEO, Federal Reserve Bank of San Francisco: Well, first, thank

you so much of having me.

The numbers of the over 40 million really filing for unemployment insurance so far is

really the number to pay attention to. It's an astoundingly large number.

And then, of course, as we have gotten more people who have been dislocate, displaced

onto the unemployment insurance program, you see a smaller and smaller number filing each


But it's really important we stay focused on that top-line number and not get too, too

excited about the declining number of unemployment insurance claims.

If you even look beyond unemployment insurance, there are countless people, thousands of people,

hundreds of thousands of people who have left the labor force altogether because they're

not eligible for unemployment insurance.

And so this is the single biggest dislocation we have had in our economy in our recorded


JUDY WOODRUFF: You have made this comment that people at the lower end of the income

scale -- and this came out in a Federal Reserve report -- are -- have been at least twice

as likely to be thrown off the rolls, off the worker rolls, as anybody else, and -- in

other words, to be suffering in this pandemic.

Why is that? What does that mean in terms of our ability to get back to where we want

to be?

MARY DALY: Well, think about the -- let's put some faces to the people.

This is one of those crises that is being borne most heavily by the people least prepared

to really get through it. And if you put face to those people, those are people with disabilities,

people with a high school education, people of color, women, people who only just came

into the economy and really got their legs under them at the end of the expansion. And

now they're out again.

These are individuals that often occupy high-touch jobs, the jobs that are in service of us in

our economy. And so, as we sheltered in place, of course, those are the very jobs that are


Now, what's rally important as we open up and we see that some of those people are still

left behind is, we have to go back and make sure that all of them are reintegrated into

the economy, because we really can't afford, as a country, to leave any of those people

on the sidelines.

We need everyone if we're going to get back to the growth rate that we need to move forward.

JUDY WOODRUFF: And what are some of the best ways to do that? As you know, Congress right

now is debating how much aid, if -- and where the aid should go, whether it should go to

the unemployed, whether it should go to small businesses.

The chairman of the Federal Reserve, Jerome Powell, has said there is a role for the federal

government, for Congress, particularly among - - well, among other things, in supporting

state and local governments, who employ these front-line workers.

How do you see that?

MARY DALY: I really want to expand our conversation away from trade-offs. I don't think it's state

and local or small businesses or the unemployed.

It really has to be everyone. I feel really good about what we have done as a nation to

get money into the hands of the unemployed really quickly. The PPP program is getting

money into the hands of small businesses. States and localities, they're the first line

for the communities that we all serve, and they're going to need resources.

So, as Congress looks at this, they're debating, where do we -- where are the pockets where

there is still pain, still suffering, where we still need to treat,?

And the important thing is that we're still having those conversations, and that we're

all recognizing that we need a bridge, because it's over the coronavirus, past the pandemic,

and the bridge is likely to need to be longer than we thought just two months ago.

JUDY WOODRUFF: And what does that mean exactly in terms of support from Washington? Because,

as we know, states are running out of money. Local governments are running out of money.

MARY DALY: Well, what I hear being discussed - - and I think we're all listening to the

same news on this -- what we hear being discussed is, how do we take care of states and localities,

so they can support health care professionals and health care facilities, that they can

support educational facilities as they figure out, how do you deal with educating people

from kindergarten all the way through college in a way where you have to social distance?

And so I think these are really important conversations, because, ultimately, you know,

when we get through this, we want to be on the best footing.

There are two essential ingredients to doing that well, maintaining the health and safety

of our population, and ensuring that education and skill training continue, so that, when

we get past the pandemic, we can really grow and expand and include everyone in the economy

with the skills necessary to take the jobs that are created.

JUDY WOODRUFF: In fact, I have read where you have used the term -- you said, this pandemic

has put a giant magnifying glass on this country's inequities in education.

Is this a time when the country can afford to redress that, to do something about that?

MARY DALY: Yes, I think the way I think of it is, we can't afford not to.

This was something that was not simply about fairness before the coronavirus. It was essential

to increasing our potential growth rate going forward, ensuring that the pie grows for our

entire economy. We have to include everyone.

That's important. It has become more important now, when we see that social distancing and

other kinds of things are going to be important. If you have a college education, you're much

more likely to be working from home. There are jobs that are going to be created that

allow all of our citizens to do that, all Americans.

But we need to ensure they have the education that's required. And my view of this is, an

investment in human capital is one of the greatest investments we can make. It's the

most durable. And that kind of investment is one we can definitely afford to make, and

it's definitely one that will help all of us.

JUDY WOODRUFF: There are also questions, Mary Daly, about what the Fed itself can do.

Of course, it's already done a lot. A lot of money has been made available to businesses

for lending. But I think there are still questions out there about the Main Street Lending Program,

whether it's going to reach enough businesses to make a difference.

What's your view?

MARY DALY: So, again, we're one of many players, right?

So, the Paycheck Protection Program, that's really meant to treat those small businesses.

Larger businesses, you know, very large businesses, have access to capital markets, which the

other facilities we opened helped settle.

And then the Main Street facility is really targeting those businesses that are bigger

than the small businesses and not in the Paycheck Protection Program, and smaller than the very

large businesses, by giving them access to lending facilities that allow them to bridge

themselves over it.

So, we will keep doing what we have been doing, which is, put this facility out there, see

if the -- if there's still pockets of need, pockets of concern, and then do our best within

the limits of our power, in combination with the Treasury, to really figure out how to

reach those (AUDIO GAP) in need.

The main thing that I want to emphasize, though, is, the Federal Reserve is not just opening

facilities. We're also supporting the economy through, you know, lowering the interest rate

through monetary policy, and giving forward guidance that says, we're committed to doing

that until we have weathered the coronavirus and we're back on track to achieve our dual

mandates, price stability and, importantly, full employment.

JUDY WOODRUFF: Mary Daly, president of the San Francisco Federal Reserve Bank, thank

you very much. We appreciate it.

MARY DALY: Thank you.