Senior Trump advisor: Red State economies opening much faster than Blue States after coronavirus
'I think it's noteworthy and something to think about, what the impact of it will be going forward'
May 26, 2020 - 1:34pm
Red State economies are opening much faster than Blue States in the wake of economic devastation due to coronavirus, a trend that could have large future impacts, a senior economic advisor to President Trump told Just the News.
"You're seeing very large variation across Blue and Red states right now, and the extent to which economies are turning back on, and I think that that's probably the story of the data that's probably most under-told right now," said Kevin Hassett, senior White House economist.
Hassett, a former chairman of Trump's Council of Economic Advisors, said the impact of these faster re-opening trends in conservative-leaning states could have an important impact on the future.
"I think the variation is striking, that you're looking at, you know, much, much higher share of businesses open and so on in Red States," Hassett said. "And so, I think it's noteworthy and something to think about, what the impact of it will be going forward."
Hassett said he was uncertain what was driving the re-opening differentials among the various states.
"I really don't know, that's something that's the subject of, you know, will be the subject of a lot of study," Hassett said. "But it's definitely the case that the economies are picking up quicker right now, in places that are opening up. And you know, our hope is that every state opens up and gets back to normal as quickly as possible and as safely as possible."
Left-leaning states have seen higher numbers of coronavirus infections, experts say, in part due to urban density.
"I think, North Dakota, we've got 91% of businesses open," Hassett said. "And then other states, I think Massachusetts is one of the lower ones, that about 50% are open. But I think that we're ramping up and hopefully we'll get to fully open everywhere in the country relatively soon."
Hassett said there was a "100%" chance of some additional form of coronavirus-related legislation, though the shape of any possible additional coronavirus stimulus package is uncertain.
"It's 100%, there's going to be more legislation of some form," he said. "They're going to be technical fixes for the small business loan program, the PPP. And I think [Treasury] Secretary Mnuchin and the president probably expect that there'll be a phase-four deal as well. But exactly what form it takes is still an open question."
Hassett said the size of any possible additional coronavirus stimulus package is currently up for debate.
"Mitch McConnell said he doesn't want more than a trillion," Hassett said about the Senate Republican leader. "The president hasn't staked out a number yet. But that's, you know, how legislative negotiation works: As people start to state their needs, and then people respond to the statements."
Hassett told Just the News that the United States was more at risk of an deflationary spiral rather than an inflationary one right now. Critics of the Federal Reserve are wary of that body rapidly growing its balance sheet in the wake of the coronavirus could spark inflation, which would make the dollar's buying power less potent.
"The latest consumer price index number was negative, suggesting that there are some deflationary risks," Hassett said. "In this downturn, given the latest numbers, the deflation risk is higher than the inflation risk."
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