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QUEST MEANS BUSINESS
Biden Awarded Presidential Medal of Freedom; FBI, Justice Dept. Probe into Clinton Email Inquiry; Government Ethics Office Slams Trump Conflicts Flan; U.S. Markets Close Lower After Trump Speech; Fiat Chrysler Accused of Cheating on Diesel Emissions;
Aired January 12, 2017 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] BARACK OBAMA, U.S. PRESIDENT: .Jill once surprised Joe by painting hearts on his office windows for Valentine's Day.
And then there are these Biden kids and grandkids, they're everywhere. They're all good-looking. Hunter and Ashley, who lived out that family
creed of raising good families and looking out for the least of our brothers and sisters. Bo, who is watching over us with those broad
shoulders and mighty heart himself. A man who left a beautiful legacy and inspired an entire nation. Naomi and Finn and Maisy and Natalie and little
Hunter, grandchildren who are the light of Joe's eyes and gives him an excuse to bust out the squirt gun around the pool.
This is the kind of family that built this country. That's why my family is so proud to call ourselves honorary Biden's. As Yates put it, because I
had to quote an Irish poet, and Seamus Haney was taken, "Think where man's glory most begins and ends, and say my glory was, I had such friends."
Away from the camera, Jill and Michelle have each other's backs, just as much as when they're out championing our troops. Our girls are close, best
friends at school. Inviting each other for vacations and sleepovers. Even though our terms are nearly over, one of the greatest gifts of these past
eight years is that we're forever bonded as a family.
But, of course, I know that the Obamas are not the only one who feel like they're part of the Biden clan, because Joe's heart has radiated around
this room. You see it in the enduring friendships he's forged with folks of every stripe and background up on Capitol Hill. You see it in the way
that his eyes light up when he finds somebody in a rope line from Scranton or just the tiniest towns in Delaware.
You see it in the incredible loyalty of his staff, the team who knows that family always comes before work, because Joe tells them so every day. The
team that reflects their boss' humble service, here in this building, where there have been no turf wars between our staffs. Because everybody here
has understood that we are all on the same mission and share the same values. There's just been cooperation and camaraderie. And that is rare.
It's a testament to Joe and the tone that he set.
And finally, you see Joe's heart in the way he consoles families, dealing with cancer backstage after an event. When he meets, kids fighting through
a stutter of their own. He gives them his private phone number and keeps in touch with them long after.
To know Joe Biden is to know that love without pretense, service without self-regard, and to live life fully. As one of his longtime colleagues in
the Senate, what happened to be a Republican once said, "If you can't admire Joe Biden as a person, you've got a problem. He is as good a man as
god ever created."
So, Joe, for your faith in your fellow Americans, for your love of country, and for your lifetime of service that will endure through the generations,
I would like to ask the military aide to join us on stage. For the final time as president, I am pleased to award our nation's highest civilian
honor, the Presidential Medal of Freedom.
And for the first and only time in my presidency, I will bestow this medal with an additional level of veneration, an honor my three most recent
successors reserve reserved for only three others, Pope John Paul II, President Ronald Reagan, and general Colin Powell. Ladies and gentlemen, I
am proud to award the Presidential Medal of Freedom with Distinction to my brother. Joseph Robinette Biden, Jr. Will the aide please read the
[16:05:00] MILITARY AIDE: Vice president Joseph R. Biden, Jr., in a career of public service, spanning nearly half a century, Vice President
Joseph R. Biden Jr., has left his mark on almost every part of our nation. Fighting for a stronger middle class, a fairer judicial system and a
smarter foreign policy. Providing unyielding support for our troops, combatting crime and violence against women, leading our quest to cure
cancer, and safeguarding the landmark American Recovery and Reinvestment Act from corruption.
With his charm, candor, unabashed optimism, and deep and abiding patriotism, Joe Biden has garnered the respect and esteem of colleagues of
both parties and the friendship of people across the nation and around the world. While summoning the strength, faith, and grace to overcome great
personal tragedy, this son of Scranton, Claymont, and Wilmington has become one of the most consequential Vice Presidents in American history.
An accolade that nonetheless rests firmly behind his legacy as husband, father, and grandfather. A grateful nation thanks vice president Joseph R.
Biden, Jr., for his lifetime of service on behalf of the United States of America.
JOSEPH R. BIDEN JR., U.S. VICE PRESIDENT: Mr. President -- please. Please. Thank you. Thank you. Please. Thank you. Ricchetti, you're
fired. To the press, Ricchetti is my Chief of Staff.
I had -- I had no inkling. I thought we were coming over, Michelle, for you, Joe, Barack and I and a couple of senior staff to toast one another
and Ricchetti what an incredible journey it's been.
Mr. President, you got right the part about my leaning on Jill. But I've also leaned on you and a lot of people in this room. I look around the
room and I see great friends like Ted Kaufman, who's been so much wisdom. This like Mel Monzack. look around here and I'm startled. I keep seeing
people I don't expect. Madam President, how are you?
Mr. President, look at my new boss over there. But you know, I get a lot of credit I don't deserve, to state the obvious. And because I've always
had somebody to lean on. From back at time in 1972, the accident happened, I leaned on -- and I mean this in a literal sense -- Chris knows this, Dodd
knows this and Mel knows this and Ted knows this. I leaned on my sons, Beau and Hunter. I continue to lean on Hunter, who continues to, I know,
in a bizarre kind of way, raise me. I mean, I've leaned on them.
And, you know, Mr. President, you observed early on that when either one of my boys would walk in the room, they would walk up and say, dad, what can I
get you? Dad, what do you need? And then Jill came along and she saved our life. She -- no man deserves one great love, let alone two. But
everybody knows here I am Jill's husband. Everybody knows that I love her more than she loves me. With good reason. And she gave me the most
precious gift, the love of my life, the life of my love, my daughter, Ashley.
I continued to lean on the family. President, you kidded me once, you heard that in the preparation for the two debates, vice presidential
debates that I had, only had two, that Beau and Hunt would be the last people in the room. And Beau would say, "Look at me, dad, look at me.
Remember, remember home base. Remember."
[16:10:00] So -- and the secret service can tell you, Mr. President that Beau and Hunt and Ashley continued to have to corral me. We were at one of
the national parks and I was climbing up on top of a bridge to jump off of the bridge with a bunch of young kids and I hear my sons yelling, "Dad, get
down! Now!" And I just started laughing so hard, I couldn't stop. And I said, "I was just going to do a flip, a full gainer off here." He said,
"Dad, the Secret Service doesn't want you up there, dad. Look at me, dad."
You know, so, we've never figured out who the father is in this family. And Mr. President, you know that with good reason, there is no power in the
vice presidency. As a matter of fact, I just did for Nancy Pelosi's daughters, they had readings of the constitution -- you probably did one
for her -- and they had me read the provisions relating to the vice presidency in the constitution. And there is no inherent power, nor should
there be. But Mr. President, you have -- you have more than kept your commitment to me by saying that you wanted me to help govern.
President's line, other people often don't hear that it often, but when people say, can you get Joe to do such and such, he says, "I don't do his
schedule and he doesn't do mine." Every single thing you've asked me to do, Mr. President, you have trusted me to do. And that is a -- that's a
remarkable thing. I don't think, according to -- I see the president of Georgetown here as well -- I don't think according to the presidential and
vice presidential scholars, that kind of relationship has existed. I mean, for real. It's all you, Mr. President. It's all you.
The reason why when you send me around the world, nothing gets -- as my mom would say -- gets missed between the cup and the lip, because they know
when I speak, I speak for you. And it's been easy Mr. President, because we not only have the same political philosophy and ideology, I tell
everybody and I've told them from the beginning and I'm not saying this to reciprocate, I've never known a president and few people I've ever met my
whole life, I can count on less than one hand, who have had the integrity and the decency and the sense of other people's needs like you do.
I know you're upset when I told a story about when Hunt and I were worried that Beau would have to -- that he would, as a matter of honor, decide he
would have to step down as Attorney General while he was fighting his battle. Because he had aphasia. He was losing his ability to speak. And
he didn't want to be in a position where to him everything was about duty and honor. And I said -- and he may resign, I don't know. I just have a
feeling he may. And Hunt and I talked about this. And I said, he doesn't have any other income, but we're all right, because Hunt's there and I can
sell the house.
We were having a private lunch, like we do once a week. And this man got up, came over, grabbed me by the shoulders and looked me in the eye and
said, "Don't you sell that house. You love that house." I said, "It's no big deal, Mr. President." He said, "I'll give you the money. We'll give
you the money. Promise me. Promise me. You won't sell that house."
I remember when Ashley, Mr. President, we were in the oval and Ashley was in an elevator. And the elevator plummeted to the -- she was with a group
of people -- I forget which building in Philadelphia -- it plummeted to the ground. And the media service was worried that she may have been badly
hurt. And I got up to take the call, and you didn't let up until you made sure your service, followed through and made sure everything was all right.
But you know, Mr. President, you know, we kid about both, about Mary and we both did that kind of thing. But the truth of the matter is, I said this
to Michelle last night, Michelle is the finest First Lady in my view that has ever served in the office. There's some other great first ladies, but
I really, genuinely mean it.
When I got to meet Michelle's brother, and he told me about how you guys were raised. And I got to know and love your mom. If your mom was 15
years older, she could have been my mom, I mean, literally. The way you were raised. The way we were raised. There wasn't any difference.
And I knew that this decision to join you, which was the greatest honor of my life, was the right decision. On the night, we had to go and accept the
nomination, the formal to be nominated at the convention, and Finnegan, who is now 18 years old, was then 10 years old. And she came to me and said,
"Pop, is it OK if the room that we're in, Finnegan, Maisy and Naomi, that we have the beds taken out." And I said, "Why?" He said, "Maybe the Obama
girls and your brother's children, maybe they would come down, all sleep together in sleeping bags." And I give you my word as a Biden, I knew when
I left to go over to the convention, open that door, and saw them cuddled together, I knew this was the right decision. I knew it was the right
decision. I really did.
Because Mr. President, the same value set, the same value set. Folks, you know, I joke with my staff that I don't know why they pay them anything,
because they get to advise me. Let me explain what I mean by that. As the president of the University of Delaware, where my heart resides at any home
campus in Delaware, as he can tell you, I get to give you advice. I get to be the last guy in the room and give you advice on the most difficult
decisions anyone can make in the whole world. But I get to walk out and you make it all by yourself. All by yourself.
Harry Truman was right about the buck stopping at the desk. And I've never, never, never, never, never, never once doubted on these life-and-
death decisions, I never once doubted that your judgment was flawed. Not once. Not once. And we've disagreed and we've argued and we've raised our
voices, once we made a deal, we would be completely open like brothers with one another.
But Mr. President, I've watched you under intense fire. I will venture to say that no president in history has had as many novel crises land on his
desk in all of history. The Civil War was worse, the World War II was worse, World War I, but Mr. President, almost every one of the crises you
faced was a crisis of first instances.
I and I watched that prodigious mind, that heart as big as your head, I've watched you. I've watched how you've acted. When you see a woman or man
under intense pressure, you get a measure and you know that, Michelle, and your daughters know it, as well. This is a remarkable man. And I just
hope that the asterisk in history that is attached to my name when they talk about this presidency is that I can say I was part of, part of the
journey of a remarkable man, who did remarkable things for this country.
[16:20:00] You know, I can't let a comment go by without quoting an Irish poet. Jill and I talk about why you were able to develop the way you
developed and with the heart you have. Michelle and I have talked about it. I've confided in Michelle. I've gone to her for advice. We've talked
about this man. You give me insight.
And I think it's because, Mr. President, you gave me credit for having understanding other people's misery and suffering. Mr. President, there's
not one single solitary ounce of entitlement in you or Michelle or your beautiful daughters. And you girls are incredible. You really are. It's
not hyperbole. You really are. Not one ounce of entitlement. And Seamus Haney, one of his poems said, when you can find someone who says it better,
use it. He said, "You carried your own burden and very soon your symptoms of creeping privilege disappeared." You carried your own burdens and very
soon your creeping symptoms of privilege disappeared.
Mr. President, you have sometimes been like a lone wolf, but you carried yourself in a way that is pretty remarkable. The history of the journey,
your journey is something people are going to write about for a long time. And I'm not being solicitous when I say this. And you're so fortunate,
both of you to have found each other. Because all that grounding, all that that you have made this guy totally whole. And it's pretty amazing.
Mr. President, this honor is, this is not only well beyond what I deserve, but it's a reflection of the extent and generosity of your spirit. I don't
deserve this. But I know it came from the President's heart. There's a Talmudic saying that says, what comes from the heart enters the heart. Mr.
President, you have creeped into our heart, you and your whole family, including mom, and you occupy it. It's an amazing thing that happened.
I knew how smart you were, I knew how honorable you were. I knew how decent you were from the couple of years we worked in the Senate. And I
knew what you were capable of, but I never fully expected that you'd occupy the Biden's heart from Hunter, Ashley, my sister, all of us. All of us.
And Mr. President, I -- I'm indebted to you. I'm indebted to your friendship.
[16:25:00] I'm indebted to your family and I'll tell you, I'll tell on a humorous note. We were having lunch, and our lunches is what's in either
one of our minds. We talk about family an awful lot. And about six months in, the President looks at me and he says, "You know, Joe, you know what
surprised me? How we've become such good friends." And I said, "Surprised you?"
But that is candid Obama. And it's real. And Mr. President, you know, as long as there's breath in me, I'll be there for you, my whole family will
be, and I know, I know it is reciprocal. And I want to thank you all so very, very much. All of you.
RICHARD QUEST, CNN ANCHOR: Well, they say politics is a blood sport and it's brutal and raw and it takes no prisoners, but in the last half hour,
we've seen the other side of that, as president Obama paid tribute to vice president Joe Biden and presented him with the Presidential Medal of
Freedom with Distinction. One of the rare occasions an American in recent history that has medal has been awarded with such distinction.
And in doing that as well, also saying, anyone who -- the president saying, anyone who doesn't like Joe Biden, there's something wrong with them. Now
let's go to Stephen Collinson in Washington. Raw, raw emotion. I mean, this was -- look, it's hard to keep a secret in Washington, but you only
had to look at Joe Biden's face when the President told him he was getting the Presidential Medal to know that was absolutely accurate.
STEPHEN COLLINSON, CNN POLITICAL SENIOR REPORTER: That's right, Richard. He had to almost retreat for a few seconds there and turn away and compose
himself, such was the shock and the modesty, I think, of the Vice President. This was a unique Washington occasion. It's not very often you
have a President and a Vice President that are so close emotionally, with their families, as well as politically. There's often great rivalries in
these -- between the president and the vice president in various administrations. That has not been the case in this administration.
And in many ways, they've come together through the difficulties they've succumbed to and overcome together. They took office in the teeth of, you
know, the biggest financial crisis since the Great Depression. They were opposites in many ways. Biden is gregarious and undisciplined. The
president is very buttoned down and quite calm.
When Obama chose Biden back in 2008, Biden was somewhat of a -- he was a respected figure in Washington. He's been here many years, of course, as a
Senator, but he was also a little bit of a figure of fun. He was known as a bit of a blowhard in Congressional hearings. But he's grown in stature,
both inside the White House and outside the White House. And I think in many ways, this was, basically, the end of a long political career. Biden
came to Washington as young Senator. He endured tragedy in his own family, and now he's basically bidding farewell to public life with this highest
QUEST: And of course, there will always be the question, where Joe Biden is concerned, if, but for, if it had been Joe Biden.
QUEST: For the election.
[16:30:00] COLLINSON: That's the question. Many people thought that he would struggle to win the Democratic nomination, to beat Hillary Clinton,
and then to win a general election. Not least because of his age. He's already over 70. But looking back, looking at the issues the election
turned on, looking at those rust belt states like Michigan and Pennsylvania, where Biden was born and Wisconsin. Places like that, in
retrospect, it seems that Joe Biden would have been able to frame an argument to white working class voters, who decided this election, that he
was a better potential president, had their interests more in his mind than Donald Trump.
And that's always going to be an asterisk in history alongside Biden. You know, Joe Biden got the Presidential Medal of Freedom today. Some people
think that he could have possibly succeeded President Obama had he run for office.
QUEST: Steven Collinson, thank you, joining us from Washington. A slightly abbreviated, an abridged version. But QUEST MEANS BUSINESS will
be back after this.
QUEST: Good evening. So, QUEST MEANS BUSINESS is slightly shorter tonight because of watching Joe Biden getting the Presidential Medal of Freedom.
But, we do want to bring you up to date.
Tonight, the Hillary Clinton email scandal has come back and we now hear there'll be an investigation into the investigation. The Department of
Justice has announced an inquiry into both itself and the FBI over controversial leaks and announcements made in the days before the election.
Allegations that will need to be proven.
Procedures were not followed. There was an improper disclosure of non- public information. There were improper considerations about the timing of the release of certain documents in the week before the election. It is
the story that just simply won't go away. Former U.S. Ambassador, Jim Woolsey is the former director of Central Intelligence and was an adviser
to the Trump transition team until last week. Jim Woolsey, this one will not go away. What purpose does this investigation into an investigation
that everybody's heartily sick and tired of have?
JIM WOOLSEY, FMR. DIRECTOR, CENTRAL INTELLIGENCE AGENCY: I think I would say that Madison planned it this way. We've gone now well over two
centuries without an interruption in our succession by elected presidents, conflicting with the Congress on matters all the time. And it's
uncomfortable, sometimes, it sometimes gets a bit silly. And a lot of people, including me, are probably kind of tired of hearing about the
Russians and the this and the that. But we've got to get it sorted out. And it will get sorted out. It will happen. The way Madison intended it.
All right, now, when I heard today, General Mattis saying that he believes the Russians were at it, did it, there's now general consensus, isn't
there, about this? Even though there is clearly anything -- there's clearly still great controversy over the dossier, over the report that the
President-elect is said to have been shown.
WOOLSEY: Well, I guess there is, yes, but I think there's a growing consensus, and Donald Trump said so in his remarks very recently, that the
Russians were the main force that was involved in getting the hacking done. And creating the potential for -- for the problems in the future. And I
want to say, that's the important thing.
It's not what has happened so far, which is a problem. The main problem is that we have got to, over the next two years, fix the voting machine, so
they are not touch screen only. That way lies madness. That means that you can't have a recount that is effective. One has to have a paper trail.
And the people who are responsible for voting procedures all around the country need tomorrow morning to get started, so that we don't have a super
mess in two years, if the Russians do something to our ability to count votes.
QUEST: Did you interpret General Clapper, Jim Clapper's phone conversation with the President-elect as sort of an on the dossier, on the Russian
dossier, as a trying to pour oil on troubled waters? Trying to rebuild a bridge, even though he won't be there. It's time to start rebuilding a
relationship between president to be, and intelligence communities.
WOOLSEY: I think so, to a certain extent. I think he felt as if he had to inform the President-elect, as elected, because he has a serious matter,
this material maybe forged, there may be all sorts of things wrong with it. But we need to understand it and get on top of it. And I think Jim Clapper
was giving the President-elect a heads up. And I think for probably something very close to the reason you just stated.
QUEST: Ambassador, thank you for joining us. I apologize, obviously, we kept you waiting longer than you'd been there, but you understand the
momentous day of watching Joe Biden receive the medal. Thank you, sir.
Wholly inadequate, was how the U.S. government's top ethicist described Donald Trump's conflict of interest plan. Now the ethicist says there's
still time for the President-elect to make it right. The director says Donald Trump should act as if the same rules apply to him.
(BEGIN VIDEO CLIP)
WALTER SHAUB, DIRECTOR, U.S. OFFICE OF GOVERNMENT ETHICS: I've been involved in just about every presidential nomination in the past ten years.
I've also been involved in the ethics review of presidents, vice presidents, and most top White House officials. I've seen the sacrifices
these individuals have had to make. It's important to understand that the president is now entering a world of public service. He's going to be
asking his own appointees to make sacrifices. He's going to be asking our men and women in uniform to risk their lives in conflicts around the world.
So, no, I don't think divestiture is too high a price to pay to be the President of the United States of America.
(END VIDEO CLIP) QUEST: Norm Eisen was at the director of the Office of Government Ethics when he made his announcement. Mr. Eisen, served as a special counsel to
president Obama. And look, we can cut this any which way and backwards. His lawyers say that he's not obliged to do anything. And his lawyers say
that the plan that they put forward passes muster and is the only workable plan that could be done.
NORMAN EISEN, FMR. SPECIAL COUNSEL TO PRESIDENT OBAMA: Well, thanks for having me, and all of that is wrong. He is obliged to do something. His
plan does not pass muster, and his plan is among the least workable ones that could be done. One, why is he obliged to do something? The
Constitution of the United States has a provision in it that forbids American Presidents from receiving foreign government cash or other
QUEST: All right. Let's not get caught up on the emoluments clause, which, you know, we could go to. Isn't the greater issue here, though,
that he's got -- he's given the business to his sons and they are at risk of being tainted and thereby, him.
EISEN: It is -- your right -- it is a very important issue, that the sons are at risk of being tainted. He's at risk of being tainted. And that by
dangling the opportunity to have access and influence all over the world, there'll be more offers like the $2 billion offer he admitted at his
preference yesterday, but don't move so quickly, off of the Constitution.
Those are humans who are at risk. But the Constitution is the most fundamental law of the land. We've never had a president take office who's
going to be in violation of the Constitution on day one. So, I care about that, too. Of course, I'm not coming, in my criticisms of this, from a
partisan place. The views I'm articulating are bipartisan. And I've supported other Trump nominees' ethics plans. Mr. Tillerson, his son-in-
law, Mr. Kushner's, Tillerson's is a little bit more advance. Kushner has made some good commitments. We'll see how they pan out. Trump needs to
meet that standard or himself, his son, the constitution will be at risk.
QUEST: How does he make that divestiture, bearing in mind the IPO option is as, I think we can agree, would be extremely complicated and very
difficult in a short period of time. And effectively, you are asking him to have a fire sale. Because simply putting Trump Tower into a blind trust
won't do it.
EISEN: Well, of course I understand the concerns. And you're right about the challenges that would face the trustee. It's complicated for a trustee
but simple for Donald Trump. All he needs to do and all presidents over the past four decades of either party have done it. Sign it over to the
trustee, with instructions to the trustee to deal with all those problems.
Now, I don't think it would be a fire sale. On the contrary, if you did an IPO, it would not even be a complicated IPO. This is a large family
business with real estate and licensing. But Donald Trump's life is complicated enough, as president. He has to make a choice. Does he want
to be president or a businessman? Let the trustee deal with that complexity. Simple for Trump, hard for the trustee.
QUEST: Norm, brilliant to have you on the program. Promise me you'll come back as this thing goes on, because it's not going away.
EISEN: I seldom have a host who's as animated as I am about these issues. I promise I'll be back.
QUEST: Excellent. We're looking forward to it. We'll have more animated guests, Randall Kroszner, former Fed Governor will be back with us after
the break. We're going to talk about the Trump rally that seems to have fizzled away.
QUEST: Oh, dearie, dearie me. The Trump rally or the Trump bump seems to have evaporated. U.S. markets closed lower. Actually, off the worst of
the day by a long way, 11 o'clock was very sharply down, but did sort of come back up. It's all about the fact that the President-elect is failing
to iron out any further details on economic policies. Now, the Trump rally has been one of the best post-election rallies in modern history. But, now
people are turning to the safest of havens of gold and government bonds. The Dow was off 63 points. Randall Kroszner is former governor of the
federal reserve. We are delighted, sir. Normally I talk to you from the Chicago booth --
RANDALL KROSZNER, PROFESSOR, CHICAGO BOOTH SCHOOL OF BUSINESS: Delighted.
QUEST: -- but you're with me here in New York.
QUEST: All the Christmas' at once. What's moving this market? I mean, what is it that they don't like the look of now, do you think?
KROSZNER: I think the rally was based on the pro-business approach that Trump is going to take relative to what was expected with Hillary Clinton
victory. Lower taxes, bringing some of the cash back to the U.S., deregulation, and then some fiscal stimulus.
QUEST: But all of that's still there. But there's a sort of a feeling that it's not going to be as easy as people first thought.
KROSZNER: It's never as easy as it is. Many people say, well, Trump didn't have everything worked out in detail. But even if you had
everything worked out in detail, you had the realities of Congress to get things through, so you never know exactly what you're going to get. And
it's going to be difficult. Always, it's going to be difficult.
QUEST: I'll give you three particular exampling. Potentially a lower corporate tax rate, a substantial one, a repatriation of corporate profits
from overseas --
QUEST: -- lower personal taxes, and stimulus and infrastructure spending. Now, that's going to boost the economy. What's your best guess of what's
it's going to do?
KROSZNER: And you also have to take into account the deregulation --
QUEST: But that's longer-term. Well, the deregulation -- you won't see the benefit of that for another three to four years, maybe.
KROSZNER: It also helps to make businesses more comfortable to do investment and to spend. So, this is, I think, it's hard to put a specific
number on it, because we don't know the exact extent of these, but I think that's clearly what the market is reflecting. That's why you've had this
very strong post-election rally.
QUEST: If he says he wants to get growth to 3 to 4 percent, which is doable. You can put the economy on steroids. But the Fed will have to
move. Because I'm guessing that the Fed would believe a 3 1/2 to 4 percent inflation rate with unemployment at 4.6, 4.7 percent is untenable.
KROSZNER: Well, certainly if the inflation rate started to get to 3 1/2, 4 percent--
QUEST: I'm sorry, I meant growth. Forgive me.
KROSZNER: Oh, yes, they would be very concerned --
QUEST: I meant growth -- thank you.
KROSZNER: -- that's going to start to generate a lot of inflation pressure. Because they've got a 2 percent inflation goal. Inflation is
starting to move up, not only in the U.S., but worldwide. So, if the Fed wants to maintain -- make sure not to go too far beyond its inflation goal
of 2 percent, they are going to have to get moving and get moving soon.
QUEST: Do you think that they are -- that the Fed is prepared to tolerate more inflation above 2 percent on the asymmetric basis that you've had so
long below, that really you can tolerate inflation, maybe 2 1/2 to 3 percent, or not?
KROSZNER: That's one of the debates within the Fed. I think very few people would be willing to go 2.5 to 3. Some people might be willing to
move 2 to 2.5 for a small period of time. But I think there's a real reluctance, because once you get to 2.5, you get to 3, 3.5, and suddenly it
floats higher and higher.
QUEST: How many rate rises -- this is how long is a piece of string question. How many rate rises would you forecast this year, bearing in
mind we don't know the effect -- I mean, we heard two or three earlier, if you look at the dot plot, it suggests one thing. What's your best guess?
KROSZNER: Well, shocks always come that are unexpected. So, they're based on what we know we have --
QUEST: I won't hold it against you.
KROSZNER: Excellent, excellent. So, they've forecast in the past three or four per year and they've given us one per year over the last couple of
years. They're forecasting about three this year, and that strikes me as roughly right, around three 25 basis points, one quarter percent increases
over the year.
QUEST: Still very cheap. Good to see you, sir.
KROSZNER: Great to see you.
QUEST: Now, one of the world's biggest car companies is accused of cheating on diesel emissions. The affected vehicles include the Jeep Grand
Cherokee. We'll talk about that after the break.
QUEST: Shares in Fiat Chrysler dropped very sharply, has become the latest car company choking on emissions scandal. The U.S. environmental agency,
the EPA, is alleging that Fiat Chrysler violated pollution laws by installing software in vehicles that allowed them to cheat on diesel
If you take a look at the actual announcement came late in the day in Milan, and whoosh, straight goes down the sharp share price, as the company
loses 16 percent of its market valuable. That's a sizable amount for a company as big and as mature as Fiat Chrysler. The fall came at the end of
the trading day, all because the EPA was about to issue a notice of violation. Now, Fiat Chrysler's chief executive says the automaker did not
defraud anyone, and that its software is compliant with the law.
(BEGIN VIDEO CLIP)
SERGIO MARCHIONNE, CEO, FIAT CHRYSLER AUTOMOBILES: We have had discussions now with the EPA on this matter since December of 2015. So, it's been more
than a year and a half. We have made tons of material available to them. We continue to discuss the issue and we are in the process now of
presenting a more complete set of control strategies that will remedy all of their concerns.
So, the issue could have been settled and should have been settled, I think, in my view, in a more efficient way, in a more business-like manner,
as opposed to evaluating this to suggestions that we're right to defraud anybody.
(END VIDEO CLIP)
QUEST: Joining me now is Drew Kodjak, the executive director at the International Counsel on Transportation. He helped uncover the VW scandal.
I'm confused here. I mean, they sort of say there was some software installed, but that it didn't break the law. What's going on?
DREW KODJAK, EXEC, DIR., COUNCIL ON CLEAN TRANSPORTATION: Great question, Richard. There are two aspects of the law. The first is that any time you
put software on a vehicle that changes the emissions when the vehicle is operated out in the real world, you have to disclose that information to
the EPA. Fiat Chrysler did not do that.
The notice of violation finds that there are eight different instances where the agency found software codes that had not been revealed. That is
a violation of the clean air act. The notice of violation clearly states that. What we don't know, and what is still under discussions between the
agency and Fiat Chrysler is whether or not those software codes are justifiable or not. Now, you can justify those codes if you can show that
they were necessary to prevent damage from the engine, to the engine or the emissions controls. And that's the existing question that's still open.
QUEST: So, this is not a Volkswagen situation, where they would have put in some software for the specific purposes of defeating the test?
KODJAK: It's close, Richard. We just don't know yet. It could be exactly the same as a Volkswagen situation. There is software on the vehicles
identical or very similar to the types of software that Volkswagen put on its vehicles. That software detects when the emissions tests are being
run, and it raises emissions when the vehicle is operated under normal driving conditions. Very similar to what happened with Volkswagen. The
only difference right now is that the agency hasn't reached a determination as to whether or not Fiat needed that software to protect the engine.
That's the difference.
QUEST: In a sentence, sir, how much more of all of this do you think is out there, waiting to be uncovered?
KODJAK: The EPA is still in the process of testing passenger diesel vehicles on those manufacturers that produce them for sale in the United
States. Since the Volkswagen scandal broke in September of 2015, we still haven't gotten a clean bill of health on those manufacturers and until that
happens, there is still a big shoe that's waiting to drop.
QUEST: And we look forward to you being on the program, to pick the shoe up and help us understand what it looks like, sir. Thank you very much,
indeed. Good to see you on the program.
KODJAK: Thanks for being here.
QUEST: A busy day. We'll have a Profitable Moment on conflicts of interest after the break. QUEST MEANS BUSINESS.
QUEST: Tonight's Profitable Moment. Many of you have been emailing me saying you don't degree on this question of conflict of interest. You
think there's nothing wrong with what Donald Trump is doing. So, I've repeated, or I've gone back to the issue in tonight's QUEST MEANS BUSINESS
newsletter. Have a read of it, and no doubt, you'll let me know what you think. You can always email me, Richard.Quest@CNN.com.
Well, that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York, whatever you're up to in the hours ahead, I hope it's profitable.
We're in London tomorrow.