On this “Face the Nation” broadcast moderated by Margaret Brennan:
- Janet Yellen, secretary of the treasury
- Dr. Scott Gottlieb, former FDA commissioner
- Governor Jared Polis, Democrat of Colorado
- Neel Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis
- David Malpass, president of the World Bank Group
Click here to browse full transcripts of “Face the Nation.”
MARGARET BRENNAN, HOST: I’m Margaret Brennan in Washington.
And this week on Face the Nation, 20 months into the pandemic, we will sort out the conflicting signals on our recovery from COVID and the COVID economy. More and more Americans are heading back to in- office work, and the jobless rate is inching closer to pre-pandemic levels.
But the broader economy is still struggling to shake off the impact of COVID-19. Prices are surging in sector after sector. Businesses are struggling to find workers. And supply chains are tied in knots.
JANET YELLEN, U.S. TREASURY SECRETARY: The pandemic has been calling the shots for the economy and for inflation.
MARGARET BRENNAN: So, what can we do about it? We will ask Treasury Secretary Janet Yellen.
Then, we will ask the head of the Minneapolis Federal Reserve Bank, Neel Kashkari, for his perspective.
Plus, we’re starting to see the seasonal impact on COVID cases, leading some states to encourage booster shots for all adults.
We will check in with former FDA Commissioner Dr. Scott Gottlieb. And we will talk with Colorado Governor Jared Polis, whose state is wrestling with a new surge of infections.
GOV. JARED POLIS (D-CO): One in every 48 Coloradans are infected and contagious with COVID-19.
MARGARET BRENNAN: Finally, we will ask World Bank President David Malpass about the international commitment to fight climate change in the wake of the United Nations’ Glasgow conference. Will wealthy countries fulfill their broken promise to help impoverished nations cope with the cost of a hotter planet?
It’s all just ahead on Face the Nation.
Good morning, and welcome to Face the Nation.
Progress in our slow march back to normal seems to be a continuing series of starts and stops. And there’s a lot of confusion about where we are headed.
Most Sundays, we start the broadcast with a look at what’s going on that you need to know. And today’s no exception.
But one thing that’s different is, our Mark Strassmann is actually here in person.
Good morning to you.
MARK STRASSMANN: Good morning. Great to see you in person.
MARGARET BRENNAN: So, there are a lot of conflicting signals on the economy. What can you tell us?
MARK STRASSMANN: There’s some fundamental disconnects going on with the economy, right, between what it is we’re all looking to buy vs. what’s available in store shelves. That’s number one.
Number two, people have money in the bank, but they still feel financially vulnerable. And then there’s this constant battle with sticker shock.
MARK STRASSMANN (voice-over): Econ 101 in late 2021. When demand dwarfs supply and supply chains are bottlenecked, prices explode, inflation’s peak surge in three decades.
WOMAN: There aren’t enough truck drivers. There aren’t enough trucks. All the way along, it’s just kind of a hot mess this year.
MARK STRASSMANN (voice-over): The Consumer Price Index, what we pay for goods and services year to year, jumped 6.2 percent in October, broad-based and eye-popping, the biggest surge since 1991, new car prices up 9 percent, used cars and trucks astonishingly up 26 percent, gas 50 percent. Heating oil has climbed almost 60 percent with temperatures dropping, and food basics, eggs up 12, bacon up 20 percent.
You quickly see why inflation is now chewing into the president’s popularity.
JOE BIDEN, PRESIDENT OF THE UNITED STATES: Many people remain unsettled about the economy. And we all know why.
MARK STRASSMANN (voice-over): With pandemic restrictions loosened, consumer demand has roared back. Millions of families with stockpiled savings want to spend.
WOMAN: Two pallets’ worth Arctic Animals by Magna-Tiles, love it.
MARK STRASSMANN (voice-over): And merchants want to sell. But supply chains from the ports to the highways remain knotted, among the worried, U.S. turkey farmers. It’s less than two weeks before their Super Bowl.
MAN: Everything in the last couple years has been a little more challenging, even down to boxes.
MARK STRASSMANN (voice-over): Help wanted, another sign fueling inflation. We have become a nation of quitters. More than four million more workers resigned in September. The U.S. Labor Department reports 10.4 million job openings.
Economists disagree whether this inflation will worsen and about the potential impact of trillions in government spending, the infrastructure bill, the social spending bill, on top of all that pandemic relief.
Inflation pressures the Fed, with rates now triple the average 2 percent gains it aims for annually. And with last month’s Gallup poll, nearly 70 percent of Americans believe the economy’s getting worse. There’s also pressure on a president pushing for Washington to spend more.
MARK STRASSMANN: So, again, the irony is, with more money in the bank, millions of Americans are better off, but they don’t feel it, and nor do they believe, Margaret, that anyone has a plan for getting inflation under control.
And many, if not most people believe the economy is going to get worse before it gets better.
MARGARET BRENNAN: All-important consumer psychology.
Mark Strassmann, thank you so much for being here.
MARK STRASSMANN: You bet.
MARGARET BRENNAN: On Friday, we went to the Treasury Department here in Washington and sat down with Secretary Janet Yellen.
She told us, unsurprisingly, that our economic stability depends on the pandemic.
MARGARET BRENNAN: You have said that inflation is likely to be with us until the second half of next year. Are you confident that prices for the average American will be down by the time we head into next November and Election Day?
JANET YELLEN: The pandemic has been calling the shots for the economy and for inflation.
And if we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do. I think it’s important to realize that the cause of this inflation is the pandemic.
It led to a dramatic increase in demand for products. Households were unable to spend on services, going out to eat and traveling. They shifted as they stayed at home, worked more from home. They shifted their spending on to goods. That led to a surge in the demand for products.
And although the supply of products has increased in the United States and globally, not as much as demand. Americans feel confident about the job market. Quits have increased to record numbers, which is a sign that people are getting outside offers. They’re seeing wage increases.
That is something that didn’t have to happen, and it really reflects the support that we gave to Americans to keep up their spending and make it through the pandemic.
But with supply disruptions and this huge shift in demand toward products, we are seeing some broad-based price increases. We have shortages of semiconductors. That’s really caused new and used car prices to rise, car production to decline.
MARGARET BRENNAN: Twenty-six percent year over year for used cars.
JANET YELLEN: Yes.
MARGARET BRENNAN: Gasoline up 50 percent, eggs 12 percent, milk 6 percent, coffee 6 percent. So when…
JANET YELLEN: We are seeing some big increases in prices.
MARGARET BRENNAN: When does it get better? When do those spikes abate?
JANET YELLEN: You know, when the economy recovers enough from COVID, the demand patterns, people go back to eating out, traveling more, spending more on services, and the demand for products, for goods begins to go back to normal.
And, also, labor supply has been impacted by the pandemic. Labor force participation is down. It hasn’t recovered.
And I would expect that, if we’re successful with the pandemic, to be sometime in the second half of next year. I would expect prices to go back to normal.
MARGARET BRENNAN: Because there could be a political cost to this.
JANET YELLEN: Yes.
Well, there’s an economic cost. And Americans feel it. And when gas rises – – average is now over $3 a gallon, in some places, quite a bit higher. Americans notice it. And it makes — it makes a difference.
But I just think it’s important to put inflation in context of an economy that is improving a lot from what we had right after the pandemic and is making progress.
MARGARET BRENNAN: China’s leaders have repeatedly asked for the Trump era tariffs to be lifted. If the Biden administration did that, would it make things cheaper?
JANET YELLEN: It would make some difference.
Tariffs do tend to raise domestic prices. We put those tariffs in place, President Trump and his administration did, as retaliation for unfair trade practices. And…
MARGARET BRENNAN: Should they stay in place?
JANET YELLEN: You know, we have said — the U.S. trade representative, Katherine Tai, has said that we are revisiting the phase one trade deal and recognizing requests to reduce tariffs in some areas.
So that’s certainly something that’s under consideration.
MARGARET BRENNAN: When we talk about the supply part of the challenge you’re dealing with here in the United States, is it the private sector’s job to unclog the supply chain? Or is there more that you can be doing within the administration right now?
JANET YELLEN: The supply chains are, by — are, by and large, private.
But, nevertheless, sometimes helping coordinating actions is useful and necessary to unclog supply chains. We have been talking with the operators of ports in Los Angeles, in Long Beach, in Savannah, trying to understand why there is such backlogs of ships waiting to off-load their goods.
Those ports have agreed to stay open 24/7. And we’ve talked to the retailers about trying to move their containers out to create more room. We’re leaving no stone unturned, even though this — this is mainly private.
MARGARET BRENNAN: There are record level of job openings right now.
JANET YELLEN: That’s right.
MARGARET BRENNAN: And yet there’s a worker shortage at the same time. What is going on with the supply and demand mismatch here?
JANET YELLEN: The programs that were put in place, the American Rescue Plan and the CARES Act and other programs, really were intended to support households and families to get through this, so that they didn’t take a huge hit to their income.
So, financially, Americans say they feel good about their finances, and that’s not an accident.
Unemployment is low. Labor force participation is quite depressed, relative to pre-pandemic levels. I think part of it reflects concerns about COVID and exposure to COVID, especially in jobs that involve public- facing activities. And I — partly, the fact that child care workers, educators are in short supply creates child care problems. That also tends to suppress labor supply.
So, as I say, when we really get control of the pandemic, I think labor supply will go back to normal.
MARGARET BRENNAN: Are we at a place where we need to increase immigration in order to meet this challenge?
JANET YELLEN: Well, there are a lot of issues involved in immigration, but that — I believe that is one reason that we do face supply shortages — shortages of certain kinds of workers.
MARGARET BRENNAN: What does the economic recovery look like without paid leave?
JANET YELLEN: I think we will still have an economic recovery that will be strong and support ongoing growth.
But labor force participation for — particularly for women, has been a problem in the United States now for some time. Once upon a time, female labor force participation in the United States was higher than almost any developed country.
And now that is absolutely not the case. And when you compare the United States with other developed countries, a big difference that stands out is a lack of support for people working…
MARGARET BRENNAN: Right.
JANET YELLEN: … and particularly for women.
Now, I’m very hopeful and fully expect the Build Back Better package to become law.
MARGARET BRENNAN: But it was taken out of the framework.
JANET YELLEN: Yes, so paid…
MARGARET BRENNAN: And it’s unlikely to have full support in the Senate.
JANET YELLEN: Paid leave is important. It’s an important support for people to be able to work.
But there’s a great deal of support in that package for child care. It does a lot to make child care more affordable, so that, for most families, child care expense would be reduced from, I think, about 13 percent now down to no more than 7 percent of their income.
MARGARET BRENNAN: But — so I…
JANET YELLEN: There would be two additional years of early childhood education that would be universal, and a child tax credit that would help families be able to afford to take good care of their children and also participate in the work force.
So, I think that package will help boost labor force participation, particularly that of women.
MARGARET BRENNAN: So you think what’s in there is sufficient?
Because, back in February, you told me women’s participation is down because they don’t have access universally to paid family and medical leave and child care.
Is it essential to full economic recovery?
JANET YELLEN: It’s something that we will try to legislate in the future.
It looks like it won’t be a component of this package.
MARGARET BRENNAN: The president’s expected to make his selection for the Fed chair. Do you believe Jerome Powell should be renominated? How important is continuity?
JANET YELLEN: I am going to leave it to the president to make a decision.
I have said that I think Chair Powell has done a very good job of running the Fed, of addressing the issues, particularly that arose when the pandemic struck. But what’s important is that President Biden choose someone who’s experienced and credible. And there are a range of candidates.
MARGARET BRENNAN: You can see our full interview with Treasury Secretary Janet Yellen on our Web site and our YouTube channel.
We will be back in one minute with Dr. Scott Gottlieb. Stay with us.
MARGARET BRENNAN: Joining us now is former FDA Commissioner and Pfizer board member Dr. Scott Gottlieb.
Good morning to you.
DR. SCOTT GOTTLIEB, FORMER FDA COMMISSIONER: Good morning.
MARGARET BRENNAN: You told us last Sunday that we are entering the final end of this pandemic phase, but we could see an uptick in cases as we transition to the next phase.
Twenty different states in this country are seeing an uptick. Should we prepare for a post-Thanksgiving spike?
SCOTT GOTTLIEB: Well, look, we’re going to see a post-holiday spike. There’s no question about that.
People are exhausted right now, but we need to remain vigilant just for a little bit longer. I think we can finally see the light at the end of the tunnel in terms of declining prevalence on the back end of this Delta wave and also with the deployment of new technology that we have.
We now have orally available drugs that should be available in the first quarter. We have vaccines available to children. So, we see a point in time when this is going to still be a pervasive risk, COVID, but it’s not going to be the prevalent risk it is right now, where it’s — where it dominates our lives.
Now, when you look across the country, though, you really have to look at the country in terms of about 10 different regions and how this coronavirus has been experienced all through this pandemic.
So, if you’re in parts of the South right now or the Southeast, even if you’re in the Pacific Northwest, where cases are coming down quite dramatically, or the Plains states or certain Mountain states, things are looking pretty good. And South — in the South, the prevalence is very low and unlikely to bump up substantially.
But if you’re in the Southwest right now, you’re in the Great Lakes region, Wisconsin, Minnesota, Michigan, you’re in parts of New England or Western Pennsylvania or Northern New York, or certain Mountain states like Colorado, things don’t look good. You haven’t experienced the Delta wave yet, and things are going to get worse before they get better.
MARGARET BRENNAN: But you heard the Treasury secretary say basically everything is determined by the path of this virus when it comes to the economic recovery.
When do we say COVID’s under control?
SCOTT GOTTLIEB: I think COVID is going to be under control in the back end of this Delta wave through a combination of population-wide immunity.
We’re going to have a lot of people with immunity, either through vaccination or through infection — people who choose not to get vaccinated are probably going to get infected by this Delta variant — as well as the more rapid and widespread deployment of the tools that we’re now getting available, the orally available antiviral drugs that people should have available in the first quarter, if things go well, including one drug from the company I’m on the board of, Pfizer, as well as the widespread availability of vaccines, including for children.
We now have the tools to really get this under control. Look, COVID is not going away. This is going to be an endemic virus that stays with us. A lot like the flu, we may have to get revaccinated for this on an annual basis. But this is not going to be sort of the pervasive risk that it is right now, where it dominates our lives and dominates the economy.
But there are some parts of the country that still haven’t had their — had their Delta wave that, unfortunately, are going to be hit pretty hard, especially the unvaccinated or undervaccinated parts of the country, like the Southwest right now, or certain states around the Great Lakes.
There’s a question of what happens in the tri-state region or the Mid- Atlantic. We have higher vaccination rates and higher rates of prior infection. So far, they’re not seeing the big upticks. I think there’s still some risk in those parts of the country as well.
MARGARET BRENNAN: So, preparing us for that — the NBA is telling its players to get a booster shot as soon as possible.
Dr. Fauci is saying publicly, he’s leaning in pretty hard to the idea that it is absolutely essential. Why isn’t the CDC telling us to go get booster shots now?
SCOTT GOTTLIEB: Well, look, I think the confusing message around the boosters may — may end up being one of the biggest missed opportunities in this pandemic.
We now see very clear evidence of declining vaccine effectiveness over time. There’s different reasons why that may be the case, but the trend is unmistakable. And this has been apparent since the end of the summer. Now it’s very clear. Anyone who’s eligible for a booster — and most Americans probably are eligible for a booster at this point — should be going out and seeking it.
And this is the fastest way that we can increase the total immunity in the population, because someone who has an old vaccine that may only have 50 percent of its effectiveness left, they go out and get a booster, they restore 95 percent effectiveness, based on the data that we’ve seen, within a matter of days.
So the fastest way that we can get increased immunity in the population, increase the total immunity in the population, may be through boosting people who’ve already been vaccinated with two doses. Plus, it’s going to be easier to convert that person. It’s going to be much easier to convince someone who’s had two doses of vaccine to go out and get a third than to convince one of the 18 percent of Americans who’s chosen to remain unvaccinated this long to get vaccinated for the first time.
MARGARET BRENNAN: You just said that was one of the biggest missteps in this pandemic. This pandemic has been full of mistakes. Why is this the biggest one?
SCOTT GOTTLIEB: Yes, look, I think, when we look back, this may be a very big missed opportunity to try to get ahead of this Delta wave, again, because this is going to be the fastest way that we can increase the total immunity in the population.
We have to look at the immunity in terms of not just how many people have been vaccinated, but also the depth of immunity. How many people have a lot of residual immune protection against this virus and are going to be what we call a dead-end host, are not going to be someone who can catch and spread this virus?
And the fastest way to turn someone into a dead-end host is to get them fully vaccinated. There’s a lot of people with declining vaccine effectiveness right now who can both catch and spread this virus. If we give them a booster, we restore the full effectiveness of that vaccine.
The other way, unfortunately, is to — to get immunity to the population quickly is to get people infected. And, unfortunately, that’s the way a lot of people are choosing to do this. If you go out and start vaccinating someone right now for the first time, it might take five or six weeks for them to get full immunity.
In many parts of the country, this Delta wave will be over in five or six weeks, so we need to do what we can right now.
MARGARET BRENNAN: Understood.
We’re 10 months into the administration. The president has nominated someone now to run the FDA. What do you think of this candidate?
SCOTT GOTTLIEB: Well, look, I think experience is important in these roles. That’s why Janet — Dr. Janet Woodcock has been very exceptional in this role. She has a lot of experience in the agency.
Robert Califf also has a lot of experience running the FDA. He is a previous FDA commissioner. I inherited his FDA, so I inherited his team. When I came in, he had left at the end of the Obama administration, in the beginning of the Trump administration. I took over at the beginning of the Trump administration. I inherited his team. It was an outstanding team.
I worked to keep them in place. Most of them stayed. I also inherited his policies that he has set in motion, including around opioids, where he had set in motion an aggressive set of measures, increasing regulation on immediate release formulation of opioids, education for providers.
He also started the discussion around looking at the broader public health impact of the availability of opioids, which ultimately resulted in bipartisan legislation in the SUPPORT Act.
So, Rob did a lot. I was the beneficiary of a lot of things that he set in motion.
MARGARET BRENNAN: Well, and opioids, of course, something that may come up in any hearing, and he’s already taking fire for.
SCOTT GOTTLIEB: Right.
MARGARET BRENNAN: Thank you for your perspective, the former FDA commissioner, Dr. Scott Gottlieb.
We’ll be right back.
MARGARET BRENNAN: You have heard and seen pictures of those fully loaded ships sitting in Southern California’s ports.
Tonight, on “60 Minutes,” Bill Whitaker takes a closer look at the deep flaws in America’s supply chain.
We will be right back.
MARGARET BRENNAN: We have a lot more ahead on Face the Nation, including Colorado Governor Jared Polis, the head of the Minneapolis Federal, Neel Kashkari, and David Malpass, the head of the World Bank.
Stay with us.
MARGARET BRENNAN: Welcome back to FACE THE NATION.
Colorado is one of several states dealing with a new spike in COVID cases. Their governor, Democrat Jared Polis, joins us this morning from Boulder.
Good morning to you, Governor.
GOV. JARED POLIS (D-CO): Good morning, Margaret.
MARGARET BRENNAN: Your state’s health agency says 72 percent of the eligible population has been fully vaccinated. So why is COVID still ravaging your state?
JARED POLIS: You know, right now what we’re seeing across the Rocky Mountain west, the upper Midwest, sort of this swath of the country, we were largely spared the delta spike in summer and late summer, but we’re getting it now.
Now, we’re hopeful, and so far what we’re seeing is it’s not going to hit the same levels that it did in southeastern states that had 40, 50, 55 percent vaccination rates. But one think we know about the delta variant, Margaret, it is incredibly effective, like a heat-seeking missile, at seeking out the unvaccinated, infecting them, hospitalizing them in large numbers, and killing them in certain — all — far too often.
MARGARET BRENNAN: Ninety-five percent of your ICU beds are occupied. I mean people are getting very ill with this.
You, this week, declared the entire state to be at high risk of exposure. And you told adults to go get a booster shot. Do you think other states should follow suit? And are you disappointed that the CDC has not been clear on this?”
JARED POLIS: Yes. So we have about 1,500 people hospitalized and 81 percent of them, Margaret, are unvaccinated. Now, of the 19 percent that are vaccinated, we can reduce that, come close to eliminating it with the booster.
And, yes, I’ve been very frustrated with the convoluted messaging out of the CDC and the FDA. Everybody should get the booster after six months. The data is incredibly clear that it increases your personal protection level. That’s why my parents got it. I got it. My family members got it. But it also can also — help improve the epidemiological state of a particular state or of the entire country because you have folks that are ready to roll up their sleeves and add that extra protection, to go from 70 or 80 percent protection, back to that 90 to 95 percent level of protection, which can really have an impact in preventing the spread of the virus.
MARGARET BRENNAN: Noted.
Well, your state draws a lot of tourists, particularly as we head into ski season. I’m wondering why you aren’t mandating more health restriction. I know you’re advising people to wear a mask. Why not issue a mandate? Why not roll out more restrictions, distancing and things like that, in places people gather?
JARED POLIS: Well, there’s many examples of folks that are doing what works in Colorado. In fact, I’m coming to you live from the University of Colorado at Boulder, where last year, before the vaccine, they had 1,000 cases in the course of a month. This year, just a handful. Why? Everybody’s vaccinated. The students are wearing masks.
Likewise, with our outdoor recreation opportunities in winter, our world- class ski resorts, many of them, of course, are — anybody can ski. But to go to a lot of those indoor places run by many of the ski resorts, they’re also making sure that folks are vaccinated to help make sure that we don’t have additional unvaccinated tourists filling up Colorado hospitals.
So I think we have a good model to do it. We had a good ski season last year. The thing that we need most right now is some more snow to make sure that we can give visitors from across the world that experience that they expect.
MARGARET BRENNAN: But why not institute more capacity restrictions, do things to try to help contain the spread?
JARED POLIS: Well, these are happening in our state. There’s areas of our state where people are — have to wear masks indoors. There’s other areas of our state, like the university, where — have vaccination requirements. Most of the ski resorts, which are the source of the most —
MARGARET BRENNAN: But you as a governor.
JARED POLIS: Yes.
Well, as I said, there — I’m very proud of the steps that the ski industry has taken. I think they’re doing very well. It’s going to be a very safe experience, just like it was last year, even during the national spikes. It’s fundamentally an outdoor recreation activity. And if there’s one thing we learned about the virus, including the delta variant, it’s relatively safe to be outdoors. Nothing is zero risk in this day and age, but it’s relatively safe to be enjoying yourself outdoors.
MARGARET BRENNAN: I hear you saying you prefer businesses to do it versus the government putting in some of those restrictions, is that right?
JARED POLIS: Well, right now, if you’re vaccinated, your risk is one-tenth or one-twelfth what it was during the highest peak before. And for folks who are vaccinated, you know, this is still a higher risk than usual in the background, but this is like the endemic state of what this virus will always be. It’s no longer a pandemic for you.
If you’re unvaccinated, this is the most dangerous time for you no matter where you live in the country or in the world because of the highly contagious nature of the delta variant. The most important thing you can do is get vaccinated.
But if you continue to be unvaccinated, please, be careful, wear a mask and don’t gather in large indoor areas around others.
MARGARET BRENNAN: You’re coming to the White House tomorrow for the signing of the infrastructure bill I understand. Will you have shovel-ready projects by the spring? Because large parts of this bill don’t actually take effect until 2023, 2024. How many jobs do you actually benefit from?
JARED POLIS: Yes, we’re — we’re ready to go. We were ready to go several months ago. We’re ready to go now. I’ll be excited to join President Biden and bipartisan members of Congress to sign the bill.
We, in Colorado, passed a bipartisan infrastructure package through our own legislature to complement what we were expecting out of the federal government, but also to get moving. So we have projects underway, including expansion of Highway 70, an additional lane each way around Floyd Hill to better access our high country and ski resorts throughout the year.
MARGARET BRENNAN: Do you have an estimate on job creation from the federal bill and when those jobs will result?
JARED POLIS: Well, it will be, as you know, it’s a 10-year investment package. So there will be jobs on the — you know, again, the fundamental, it’s a benefit to people, right? So are there jobs adding broadband to more families and houses. Yes, there are. But the real benefit is this connects our rural communities and helps empower and grow our local economies. Of course we support the jobs in road expansion and electric vehicle infrastructure. But, again, fundamentally, this will fund the transition to electric vehicles, cleaner air, taking action on climate, and les traffic.
MARGARET BRENNAN: OK.
All right, Governor Polis, good luck to you. Thank you for your time today.
And we’ll be right back.
MARGARET BRENNAN: We turn now to Neel Kashkari. He’s the president of the Federal Reserve Bank in Minneapolis and joins us from that city this morning.
Good morning to you.
NEEL KASHKARI, PRESIDENT AND CEO, FEDERAL RESERVE BANK OF MINNEAPOLIS: Good morning, Margaret.
MARGARET BRENNAN: Neel, core inflation is at a 30-year high. Do you think we are at the peak or is it going to get worse?
NEEL KASHKARI: The math suggests we’re probably going to see somewhat higher readings over the next few months before they likely start to taper off. We’re seeing both a surge of demand, because Congress has given a lot of money to families and to businesses to get through the pandemic, but we’re also seeing supply disruption at the same time because of the COVID virus.
The good news is, both of those should be temporary. The challenge is, these high prices that families are paying, those are real, and people are experiencing that pain right now. And so we take that very seriously. But I’m optimistic that it should be temporary, even though it is causing pain right now.
MARGARET BRENNAN: It is causing pain, but many Americans feel like they’re being told what they’re experiencing isn’t real when they’re told it’s transitory. That world the White House keeps using and the Fed keeps using.
You said, we won’t get back to 2 percent inflation until 2024. Why do you think it’s going to take us that long?
NEEL KASHKARI: Well, I think both of these things, the demand side and the supply side, are going to take some time to work out. But it’s important from the Fed’s perspective that we don’t set long-term monetary policy and adjust too much based on temporary factors, even if those temporary factors take a little bit longer than we expect.
You know, if you look at the supply chains, some supply chains have already sorted themselves out. Some are taking longer. We know the auto sectors and semiconductors, it takes a long time to put more capacity online.
So, there are going to be sectors that are going to be struggling for a while, while other sectors right the ship, so to speak, more quickly. And so we need to pay very close attention to this. We need to take it very seriously. But my view is we also need to not over-react to some of these temporary factors, even though the pain is real.
You know, the Federal Reserve, when we adjust monetary policy, it acts with a lag. And so if we overreact to a short-term price increase, that can set the economy back over the long term.
MARGARET BRENNAN: So you don’t think the Fed should be taking steps faster than they currently are?
NEEL KASHKARI: Right. I think we’ve taken the appropriate steps. We’ve — as you know, we’ve begun normalizing our balance sheet, quantitative easing. We’ve now began to taper process, which will probably take six months. That’s the first step in reducing monetary policy boost that we’re providing the economy.
And over the next three, six, nine months, I think we’re going to get a lot more data on both the demand side and the supply side to get a better reading of where the economy is headed.
MARGARET BRENNAN: You’re talking about the emergency bond purchases that had been done throughout the course of the pandemic there, and some of the emergency measures.
I want to ask you about what the administration is saying it’s doing, and that is pumping in trillions of dollars in these rescue packages. Is the risk worth it? Because most economists do expect some inflation from it.
NEEL KASHKARI: Well, I thinking Congress and the executive branch, both President Trump and under President Biden, were very aggressive in supporting families and businesses through the pandemic. And that was the right thing to do.
You know, the recovery is much stronger than it was, say, after the 2008 financial crisis. That’s in part because the fiscal authorities and the monetary authorities were so aggressive.
I think the question is, what does Congress and the executive branch do going forward? What they’ve done so far is temporary in nature. The question is, are there long-term new spending programs and are they paid for or not?
MARGARET BRENNAN: Right.
NEEL KASHKARI: Whether or not they are paid for is going to have an impact on inflation.
MARGARET BRENNAN: Right. So it’s actually too soon to say it won’t add or have an impact.
COVID. We heard your state and your region highlighted by Dr. Gottlieb as an area where infections are climbing right now. Does this latest wave have a big impact in the recovery that you see right now under way?
NEEL KASHKARI: It absolutely will. Right now we are about four or five million jobs and workers short of where we should be had there been no pandemic. You know, six months ago, when I was on your show with you, I focused on schools that were shut and (INAUDIBLE) unemployment benefits and fear of the virus. Well, schools are largely reopened. The unemployment benefits have expired. So, what we’re left with, what’s keeping people on the sidelines, we think it’s fear of the virus, the delta wave and the continued spread.
So the sooner we can get this pandemic really under control, the more quickly people will have confidence to go back to work. That will help the economic recovery, and that will certainly help bring down inflation.
MARGARET BRENNAN: And what about the childcare and other packages that are built into what the president is trying to push through? I know you’ve been looking at the impact on women dropping out of the workforce.
NEEL KASHKARI: Well, this is a long-term issue facing our country. You know, we have been a laggard relative to other advanced economies in providing childcare for families. You and I both have young children. We know the huge challenges associated with childcare, yet we’re both very privileged to be able to afford it. Many families are not as lucky and so it does have a factor– it does have an effect on women’s participation in the labor force and how high our labor force participation is as a whole.
These challenges have been exacerbated in the pandemic, and so I think long term it is an important economic growth issue and competitive issue for the country.
MARGARET BRENNAN: I want to ask you I guess it’s kind of an awkward question, but you heard the Treasury secretary seem to indicate that Jerome Powell, the current chair of the Federal Reserve, might not have a lock on the job. Would nominating another top contender, like Lael Brainard, actually affect policy much?
NEEL KASHKARI: Well, I think both Chair Powell and Governor Brainard are outstanding, very seasoned, experienced monetary policy makers. And I think if either of them got the nod from President Biden, I think we would be in very good, capable hands. I have worked with both of them. I think they’re both outstanding. And so I think the president has very good choices ahead of him.
MARGARET BRENNAN: So not much of an impact on policy?
NEEL KASHKARI: I think both of them have been instrumental in the new framework that we’ve adopted in terms of not short-cutting the economy, and I’m confident that either of them as chair would continue to see that through, and that’s very important in my view.
MARGARET BRENNAN: Understood.
Neel Kashkari, thank you for your insight.
We’ll be right back with a lot more FACE THE NATION.
Stay with us.
MARGARET BRENNAN: We turn now to COVID and the COVID economy around the world. The head of the World Health Organization said last week the world is at another critical point of pandemic resurgence. CBS News senior foreign correspondent Elizabeth Palmer reports from London.
ELIZABETH PALMER: Good morning.
Twenty months in, this pandemic, which has now killed more than five million people worldwide, is once again surging in Europe.
ELIZABETH PALMER (voice over): Winter arrived in central Siberia, along with a deadly wave of coronavirus infection. One that swept clear across Russia. The vast majority of its victims were unvaccinated. Most Russians don’t trust the state or the locally developed Sputnik v. vaccine. So even after a month of record deaths, only roughly 35 percent of Russians have been immunized.
Western Europe, especially Germany, is also seeing a huge spike in COVID cases. Hospitals are filling up and once again most of those seriously ill haven’t had a shot.
The Austrian government has said enough is enough. In hard-hit areas, people who get themselves fully vaccinated, it said, can live normal lives. And those who refuse will go back into lockdown.
In the Netherlands, public patience with restrictions is wearing thin. Police brought out water cannons in The Hague as they faced off with protesters furious about new rules to tackle a COVID surge, including early closing times for cafes and restaurants.
And, increasingly, across the continent, anyone looking to enter an indoor public space has to show a vaccine pass.
The exception is Britain, where Remembrance Day ceremonies went ahead pretty much as normal today. Everyone is breathing a little easier after a big spike in October, U.K. COVID infections are finally on the way down.
ELIZABETH PALMER: But even with high vaccination rates here and a smooth roll out of the booster program, the experts are saying with winter looming, the U.K. is not out of the woods yet.
MARGARET BRENNAN: Liz Palmer, thank you.
Poor countries continue to wait on COVID shots. The head of the WHO said it is a scandal, in his view, that six times more booster shots are administered globally than first doses are in low-income countries. An organization heavily involved in financing global vaccines and climate change commitments for developing country is the World Bank, and its president, David Malpass, is with us this morning.
Good morning to you.
DAVIS MALPASS, PRESIDENT WORLD BANK GROUP: Good morning, Margaret.
MARGARET BRENNAN: Well, you have no shortage of issues. The vaccine crisis. You have, right now, inflation at a 30-year high in the United States, debt crisis, potentially, in China, potential energy issues in Europe. How shaky is this global recovery?
DAVID MALPASS: You know, it’s very difficult. And for people at the bottom, for the poor, it’s really an unequal situation. They’re not getting vaccines. The debt burden is super high. And so this is a challenge for everybody.
Their growth rates are well under the growth rates in the advanced economies. And that’s the opposite of what we really want. To get development, we need them to be growing faster, creating even more jobs, but the unemployment rates there are very high.
MARGARET BRENNAN: So, what is the first step in solving that?
DAVID MALPASS: The first step is vaccines. So we can talk about that. But then I think there has to be really a range of policies for the countries themselves. They can do more to help. And then in the advanced economies, there’s just not a — there’s not resources that are going worldwide. They’re mostly staying in unequal situations in the advanced economies themselves. The people doing the best right now are the people at the top.
MARGARET BRENNAN: Well, the top two biggest economies, the United States and China, also have their issues. China has this debt crisis potentially that you heard the Treasury secretary say they’re monitoring very closely. How concerned are you?
DAVID MALPASS: We work closely with China. You know, its system is different from the market-based system of the world. It’s a communist party system. And so there are frictions. There are — there are challenges. But from the standpoint of the World Bank, we’re working well with them on marine plastics, reducing that from the — from the river systems. Also the — also from a greenhouse gas emission standpoint, we’re working with them.
So, you know, China’s engaged in the world. It’s making vaccines for its own population. And, so, we can look at that as well.
I think we have to recognize there are these frictions on debt transparency, for example. As they — as they enter into contracts in the developing world, there’s often a nondisclosure clause, which makes it very hard for people to know whether they’re getting a fair deal.
MARGARET BRENNAN: China’s being a predatory lender to poor people is what you’re saying.
DAVID MALPASS: You — you said that. And so we’re working with them hard to try to get more transparency in the contracts. And that actually helps them and the developing countries.
MARGARET BRENNAN: The World Bank has warned that because of COVID, low- income countries have an enormous debt level. Are you saying that we are at the point where we could see what we went through a few years ago with the Greek debt crisis, where a country is, you know, basically needing to be bailed out?
DAVID MALPASS: Yes. And so the — we did a report a year and a half ago, before the pandemic, that was called “Four Waves of Debt.” SO there was the Latin debt crisis. There was the Greek debt crisis. And we’re at risk of another one now. It would be based on the poorest — low- income countries, debt went up by 12 percent in 2020. Even in the pandemic, where most of the economic activity was going down, their debts were going up. We’ve done two big reports just in the last two months on this — this big challenge.
I’ve been pushing for debt relief for the poorest countries. That’s been hard to achieve. The world just is not set up to think about it this way, of– you’re in the middle of a pandemic, you ought to have a moratorium on the payments from those countries, but there’s no mechanism to do that.
MARGARET BRENNAN: I want to ask you about climate. We just saw this weekend the big conference, the U.N. conference, wrap up. Rich countries have been pledging for a while that they are going to pitch in $100 billion a year to help low-income countries basically adapt here to extreme weather. Five to 10 times that might be needed.
So, how much did this climate change conference fall short?
DAVID MALPASS: These are huge challenges. I was glad to see them talking about specifics, like coal and methane. You know, methane is one of the most powerful greenhouse gasses. And they are looking for ways to reduce that. The leaking that’s coming from wells and from pipelines. That’s practical.
The World Bank is very much on that side. We need to find projects that are impactful, and then how do you fund them? And you’re exactly right, the amounts of funding need to be many times what’s been — what’s been talked about or provided so far.
World Bank can’t do it alone, but it — I think it’s going to take the whole world effort. We don’t want to punish the poor. And the poor are already getting punished by inflation, as you mentioned.
And, you know, China and Russia are benefiting in some ways from these conditions. China, because it’s the core of the supply chain, and Russia because it has so many energy resources. And so we have this big challenge in finding a balance in the world to pay for the climate changes that would actually reduce greenhouse gas. That can be practical. Coal is a practical one. How do you decommission an old coal-fired power plant?
MARGARET BRENNAN: Right.
DAVID MALPASS: Some operating in South Africa are 55 years old. So we’re working — the World Bank is engaged in all these issues, trying to have practical projects that are funded.
MARGARET BRENNAN: I want to ask you about something you wrote last year. You had an op-ed with Melinda Gates talking about the recovery requiring an investment in women, in particular. And you said, all countries would benefit from appropriate family leave policies and quality childcare.
So, as an economist, are you saying paid leave is essential to a recovery?
DAVID MALPASS: Well, all countries need family leave policies. So, I don’t know about paid. That’s a — you know, I don’t want to comment on a U.S. political issue. But for the world, the women in the labor force — and I heard Secretary Yellen talking about that — this is vital because they’re a key part of how countries can grow.
And it’s not just in the labor force. Women need to be included in inheritance rights, for example. In some countries they can’t do that. And especially girls in education is a vital need for the world. If you’re going to develop, that has to be a starting point for it. And some of the world is not at that point. And so we work hard on those issues, gender equality issues and inclusion in the financial system, the labor force, and so on.
MARGARET BRENNAN: Understood. Making the economic argument, not the political one.
We’ll be right back in a moment.
MARGARET BRENNAN: That’s it for us today. Thank you for watching. Until next week, for FACE THE NATION, I’m Margaret Brennan.