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Stocks Surge Post Electionis; The GOP and Hillary Clinton; Howard Schultz Talks Starbucks Money; How Will President Barack Obama Be Remembered?; Ray and Janay Rice to Testify at Appeals Hearing Today

Aired November 06, 2014 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(COMMERCIAL BREAK)

POPPY HARLOW, CNN ANCHOR: Good morning everyone. Thanks for joining me. I'm Poppy Harlow, in today for Carol Costello.

We are just moments away from the opening bell. This morning, investors keeping an eye on the stock market after the Dow and the S&P 500 hit record levels following Tuesday's big win for Republicans.

Big question now: will the momentum stay alive? This is the key question always.

You know, just a few weeks ago, we saw the 400 point dip, by the end of the week we were recovered.

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Never got that big correction everybody was looking for. Remember how worried people were at the beginning of October. Look, the stock market, Poppy, is up 150 percent over the past six years. And now that you have GOP-control of Congress, the mood among investors is that this rally can continue. You might have less regulatory, more pro-business legislation that comes out of these chambers. You might have -- or at least a blunt to what they perceive as a Democrat effort to, you know, tighten regulation on banks and energy. So there's just this optimism yesterday that drove these to record highs.

HARLOW: But what about the average investor or, frankly, all of us? We look at the market, then it dips and we think, OK, now is a good time to get in. Now it's way back up and I'm sort of thinking, oh, I missed it.

ROMANS: I know.

HARLOW: I mean for the average person invested for the long-term, what does this mean?

ROMANS: So this means, when you see a big pullback like we had in October and the market continuing higher now, you've got to remember the key is to be always buying stock in your 401(k) at very -- a variety of intervals, dollar cost averaging, so that you get stocks cheaper when they sell off and then you get to enjoy it when they -- when they rally. That's what's most important here.

I think, Poppy, one criticism of this big stock market rally is that half of Americans aren't invested --

HARLOW: Exactly.

ROMANS: And wages are flat. So sometimes we talk about records in the stock market on (INAUDIBLE) the GOP rally --

HARLOW: It means nothing (ph) for so many of us.

ROMANS: It doesn't except if stock market increasing mean that companies are going to be --

HARLOW: Confident.

ROMANS: Confident. If they're going to start hiring. If they're going to start investing. Right now a lot of companies that have their money in the bank, trillions of dollars actually sitting in the bank, you want them to start buying other companies. You want them to start investing in new -- in new workers and in new technologist and that can start --

HARLOW: That's true.

ROMANS: That's when main street starts to feel it.

HARLOW: That's true. Christine Romans, thank you.

ROMANS: You're welcome.

HARLOW: Appreciate it this morning.

All right, if you thought campaign season was over -- who really thought that -- think again. Things are just gearing up, folks. The midterms might be behind us, but the race for 2016 and the White House, it is well underway. Just listen to Kentucky Senator Rand Paul, who says the GOP's win indicates voters are fed up with politics as usual in the Democratic Party.

(BEGIN VIDEO CLIP)

SEN. RAND PAUL (R), KENTUCKY: And, frankly, I think that yesterday was a repudiation of Hillary Clinton. Think about it, 90 percent of incumbents win but over 50 percent of the candidates that she campaigned for that were incumbents lost. So that really is -- that is a message that the public sent both to the Clintons, to President Obama and to their policies.

(END VIDEO CLIP)

HARLOW: It is very worth pointing out here that Rand Paul has not decided whether he is going to run for the White House in 2016, which could explain why he was so quick to criticize Hillary Clinton. She is the presumed Democratic nominee in 2016 and many political experts agree she'd be pretty hard to beat.

Here's the thing. Her efforts on this year's campaign trail, they did not seem to help. Leading up to the midterms, Hillary and Bill Clinton spent campaigning time in 25 states for more than 30 candidates. In the end, pretty much all of those big name candidates she was with, well, they lost.

Let's dig deeper with CNN political commentator S.E. Cupp and former communications director for the DNC, Brad Woodhouse.

Thank you both for being here this morning.

BRAD WOODHOUSE, FMR. COMMUNICATIONS DIRECTOR, DNC: Good morning.

S.E. CUPP, CNN POLITICAL COMMENTATOR: Sure.

HARLOW: Good morning.

Brad, to you first. Do you agree with Paul? I mean if you looked at his FaceBook page after -- you know, late Tuesday night, early Wednesday morning, he put up all of these photos with Hillary Clinton with those candidates she had backed and #hillarylosses. Is this a repudiation of Hillary Clinton?

WOODHOUSE: Oh, heck no. I mean shoot -- no, I mean, look, Rand -- it's a big tell that Rand Paul wants to make this about Hillary Clinton. He wants to run for president. He wants to appeal to the Republican and Tea Party base. And, you know, attacking the Clintons is one way to do that.

I don't think this is a repudiation of Hillary Clinton. I think this is, as people discussed yesterday and will, you know, in the days ahead, there are two different electorates in the midterm and in the presidential election. You know, it wasn't the end of the world for Republicans that they lost the presidential election. It's not the end of -- for Democrats -- end of the world for Democrats that we lost the midterms.

But I think what the Clintons did, particularly Hillary Clinton, will suit her well going forward because she was willing to go to tough places, places where the odds were against her, and I think democrats in particular will appreciate that, and I think she'll reap the dividends of that.

HARLOW: I want to talk about that in just a moment and in terms of the electorate that did come out and actually vote and who didn't. But before I do, S.E., I want to get your reaction to these numbers. When you look at some of the exit polls from Tuesday, 34 percent of people say they would vote for Hillary Clinton in 2016, no matter who else was in the race.

CUPP: Yes.

HARLOW: What do you make of those numbers?

CUPP: Well, look, Brad is right to the extent that I think if Jesus were campaigning for some of these Democratic candidates, they still would have had a tough time.

WOODHOUSE: Yes. CUPP: But I think what those numbers speak to and, you know, her record on the campaign trail speaks to, is the fact that so much has changed in Hillary Clinton's Democratic Party since the last time she held elected office. Back in 2006, you could be a Democrat who opposed gay marriage, a Democrat who voted for the Iraq War, a Democrat who cozied up to Wall Street. Back then, she used to hype her husband's record on welfare reform and lowering abortion rates. These are just not things that Democrats can talk about now. So when she goes to a rally for Martha Coakley in Boston, she looks like an Elizabeth Warren wannabe. She's just kind of an anachronism in her party and I'm not sure she completely represents where Democrats are today. She'll have to do some contortions over the next two years to get there in time for 2016. That might not be convincing enough by that time, though.

HARLOW: Brad, I want your response to S.E., but also --

WOODHOUSE: Please.

HARLOW: Let's talk about who came out and who voted. This is a non- presidential year. You know, a lot of people have been saying, look, you didn't have as many minority voters out, young voters out for their base. Do you think that that is a leg up for you guys in 2016?

WOODHOUSE: Well, of course I do. And, look, I think -- this is a problem that Democrats have to solve. The president has spoken about this. We have got to figure out how we take presidential year voters that come out in big numbers, younger voters, minority voters, and make sure that they understand the stakes in the midterm election. Sometimes I think a party doesn't under -- a party's base doesn't always understand the sakes in the midterm election when they hold the White House. And we've got to do a better job than that.

But I've got to -- I've got to disagree totally with S.E. on where Hillary Clinton is. I mean the party has changed. Look, the Republican Party has changed.

CUPP: Yes.

WOODHOUSE: Look at what the Tea Party's grip is on the Republican Party. So maybe it would be accurate to say that both parties --

CUPP: Yes.

WOODHOUSE: Have moved to the edges, but Hillary Clinton -- 83 percent of people in the exit polls, Democrats in the exit polls, say they would like to see Hillary Clinton run for president or supported her running for president.

CUPP: Well, Brad, I've -- I mean, yes, I've said -- I've acknowledged this as well, the party for someone like Jeb Bush has changed a lot since the last time he held elected office, too.

WOODHOUSE: Yes.

CUPP: So you're absolutely right. But where Hillary is concerned is, she actually had an easier time of it this time because of what you just said, the people who turned out were older and whiter. When the people who are turning out for Democrats are younger and minorities, then she really doesn't speak to where the Democratic Party is on a number of issues. So she's got a lot of work to do in 2016.

WOODHOUSE: Well, I think -- I think we're getting a little ahead of ourselves. She hasn't announced yet and I think we ought to see --

CUPP: OK.

WOODHOUSE: What it is -- what it is --

HARLOW: OK.

WOODHOUSE: I think we ought to see what it is she actually advocates for when, you know, when she -- you know, when she runs, but it's --

CUPP: Which Hillary shows up, you're right.

HARLOW: Guys, guys, we're out of --

WOODHOUSE: Well, no, no, but it's a -- but it's a --

HARLOW: Guys, we're out of time. I've got to leave it there. Got to leave the viewers hanging.

CUPP: Oh! Thank you.

HARLOW: Will she run. Won't she run.

WOODHOUSE: Thanks, Poppy.

HARLOW: And, also, how close is she going to get to President Obama in the next few years, given a lot of people are criticizing him for, you know, being too isolated. We'll see what happens with that as well. S.E. Cupp, Brad Woodhouse, thank you both very much.

We'll be back in just a minute.

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HARLOW: Got your morning coffee yet? Did you pay for it in cash? It's an interesting question. I sat down with the CEO of Starbucks, Howard Schultz. He told me, first of all, how many millions of you are using your app to pay for your coffee at Starbucks. And he also thinks cash is going to be a thing of the past. Really?

(BEGIN VIDEOTAPE)

HOWARD SCHULTZ, CEO, STARBUCKS: We're now processing 7 million mobile transactions a week.

HARLOW: Your role as CEO has transitioned a bit. You're looking more long-term at this company, specifically in the technology aspect of it, mobile payments.

SCHULTZ: Yes. Yes. HARLOW: You actually said, Howard, the big question is, who will be

the next Visa of digital payment.

SCHULTZ: Yes.

HARLOW: Does Starbucks want to be that?

SCHULTZ: In the last 12 months, we have seen a seismic shift in consumer behavior. And that shift was the beginning of people spending much more time at home or on their mobile device shopping.

HARLOW: Your holiday sales were down last year.

SCHULTZ: Yes, and so was almost everybody because there's less people on main street, there's less people in malls and, as a result of that, every bricks and mortar company is going to have to reinvent mechanism to create traffic in their stores. We're now processing 7 million mobile transactions a week. There isn't a company in America that is close to 1 million. That's over 15 percent of tender. And I think we are in a unique position --

HARLOW: Total tender?

SCHULTZ: Yes. We're in a unique position because we're the only company in America that literally has created this new behavior inside Starbucks stores with such frequency.

HARLOW: Buying with mobile?

SCHULTZ: Yes, buying, paying with mobile or gifting with mobile.

HARLOW: So --

SCHULTZ: So as a result of that, you now see eBay splitting off PayPal. You now see Apple creating Apple Pay.

HARLOW: You see that as a good -- as a good thing for you?

SCHULTZ: Well, I think that's very -- I think that's positive because those companies obviously recognize that there's going to be a big winner and winners that are going to replace cash as a method of payment. Starbucks is --

HARLOW: Replace, not --

SCHULTZ: Yes, replace. At some point in time, we are going to be much more significantly driven to mobile pay and it is going to be a de minimus level of cash being used as a currency, over time. What I would say is that we will be in -- at the middle of many of these conversations going forward in which Starbucks will have a significant role to play.

HARLOW: What does that mean?

SCHULTZ: It means that Starbucks, as a coffee company, will be able to leverage the equity of our brand and our mobile payment platform to participate in how people are going to pay for goods and services both inside our stores and possibly outside.

HARLOW: So let me ask you this again. Possibly outside. You're the one who said the big question is who will be the next Visa of digital payment. Does Starbucks want to be that and might we see a Starbucks, I don't know, Bucks Pay spun off from the coffee company?

SCHULTZ: I would say that the opportunity for that certainly exists. A lot has to happen and I think we are at the forefront of many of those conversations. We should leave it at that.

HARLOW: Apple Pay? Competitor? Make you nervous? Partner?

SCHULTZ: It doesn't make me nervous at all because I think anything that Apple or PayPal or others do that brings the consumer to a higher level of trust about mobile payment is positive for the marketplace and Starbucks.

(END VIDEOTAPE)

HARLOW: Thought it was just a coffee company. Will Starbucks be your new credit card? That could seriously happen. You can see a lot more of that interview with Howard Schultz on cnnmoney.com. We'll be back in just a moment.

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HARLOW: After Tuesday's crippling defeat in the midterm elections, President Obama may find his final two years in the White House very lonely. He meets with congressional leaders tomorrow, but his allies in the Senate are no longer in the majority.

Obama's support from the American people is dwindling; his approval ratings only about 40 percent. In fact, David Rothkopf of "Foreign Policy" magazine suggested Obama could end his presidency as the most isolated president since Richard Nixon, writing, quote, "Obama will reap the results of his political and policy narcissism in a way that will not only be difficult for him personally but will be bad for America and its role in the world."

Douglas Brinkley is a presidential historian at Rice University. He joins me now. I can't think of anyone better to assess what this means in the historical context. First, what is your reaction about that statement about the president and isolationism?

DOUGLAS BRINKLEY, HISTORIAN, RICE UNIVERSITY: Well, he is a bit of an isolated president, but, you know, the point of the matter is when he leaves office we're going to judge Barack Obama on a few key factors. I mean, was the economy better? Did he -- he inherited the great recession, how is Wall Street doing? How is unemployment? If those figures hold up, the president will get an OK mark on it, and things get boiled down.

People will more remember the saving of General Motors, the killing of Osama bin Laden. The first term and the second term will kind of morph together. So this idea that Barack Obama is wildly unpopular I think is wrong. Look, there is no such thing as a Jimmy Carter Democrat or George

Herbert Walker Bush Republican, but there is such a thing as a Barack Obama voter, and that's 95 percent of the African-American community has stayed by this president and there's going to be a big legacy for him not just as president but as a -- one of the great African- American leaders like Frederick Douglass or Booker T. Washington.

HARLOW: You know, w heard the president say yesterday in his speech that he will work with Republicans. Take a listen to part of what he said.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Still, as president, I have a unique responsibility to try and make this town work. So to everyone who voted, I want you to know that I hear you. To the two- thirds of voters who chose not to participate in the process yesterday, I hear you, too.

(END VIDEO CLIP)

HARLOW: That really stood out to us. Do you find it unusual at all to hear the president mention those who did not vote? I mean, he emphasized, to the two-thirds of you who did not vote. What does that tell us about his mindset?

BRINKLEY: Mindset is a lot of his constituents didn't come out. Young people really didn't turn out for this midterm election. It usually helps the Democrats. And then it wasn't the turnout you would expect for Latinos, African-Americans, gays, groups of people that sometimes in a presidential election cycle pour out because it's become such a Hillary Clinton versus Jeb Bush, whatever it might be. The media fanfare draws people in.

So he's kind of bummed, saying, look, this was to be expected. What the president has going in his favor is looking back at past midterms. They're always bad for an incumbent president.

The key thing for our country is can we get anything done, Poppy, in the next -- with Congress and the White House. I think on things like Ebola, there will be $6.2 billion the president's asking. Congress will probably give him that money on Ebola. There will probably be a vote on going to fight ISIS with Congress. You might get some corporate tax reform done. But on the issues of immigration, I don't see it happening. And President Obama is threatening to use executive power and he probably will.

HARLOW: Yes, we heard that again yesterday. I wish we had a lot more time to talk to you about all these issues. We'll have you back soon. Douglas Brinkley, thank you very much.

We'll be back in just a moment.

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HARLOW: Ray and Janay Rice are expected to testify separately today in an appeal hearing to have his NFL suspension lifted. Commissioner Roger Goodell initially suspended Rice for two games for hitting his then-fiancee but then changed that to an indefinite suspension when that elevator video of the attack surfaced.

CNN's Andy Scholes joins me now. Good morning, Andy.

ANDY SCHOLES, CNN SPORTS: Hey, good morning, Poppy. And you know everyone was waiting to see if Roger Goodell was going to have to take the stand in this case. He did. And the big question with Goodell is what did he know and when did he know it, regarding the tape of Ray Rice striking his then-fiancee, Janay, in a casino elevator.

Now, Goodell was the first person to take the stand in Ray Rice's appeal hearing yesterday. That's according to multipe reports. Goodell testified for more than two hours. Now, there's a gag order on the hearing, so what he said is still unknown. And there's no clear time frame when U.S. District Judge Barbara Jones will decide on Rice's appeal, but all signs point to next week when the hearing is over.

And if Rice's suspension is overturned, he should be available to play right away. Now, whether any NFL team will take a chance on Rice this season, that's yet to be seen. Teams unlikely to -- or likely are to shy away from him to avoid any off-the-field distractions during the season. But as we've seen in the past, for example with Michael Vick getting signed by the Eagles after doing time in prison for his role in a dogfighting ring, the NFL is a league where, if you can still play, you can get a second chance.

All right, I have to show you this video that's blowing up on the internet. During Drake University's Bulldog Madness event on Tuesday, freshman Alex Tillinghast had to make four shots to win a brand new pickup truck. Well, he had a little trouble with that lay-up, but he knocks down the free-throw. Then he knocks down the three-pointer. And then using the power of his red afro and khakis, he nails the shot from half-court to win the truck. And he will now forever be a legend on the Drake campus.

All right, in the NBA, it's been a rough start for Lebron and the new big three in Cleveland. The Cavs were at the Jazz last night. Game was tied with three seconds to go and Gordon Hayward hits a fade-away at the buzzer. Jazz shocked the Cavs, 102-100. Cleveland is 1-3 to start the year.

We got some more NBA action tonight on our sister station, TNT. My undefeated Houston Rockets hosting the defending champion San Diego Spurs. And in the nightcap, we're going to have the Mavericks and the Trailblazers. Another exciting night of NBA basketball. Poppy?

HARLOW: We will be watching. Andy Scholes, thank you. Appreciate it.

The next hour of NEWSROOM begins after a quick break.

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