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Trump Disappointed But Won't Fire Fed Chair; Widespread Catastrophic Damage Across Florida Panhandle; Healthcare Midterm Messaging. Aired 12:30-1p ET
Aired October 11, 2018 - 12:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[12:31:19] JOHN KING, CNN ANCHOR: It's an anxious day on Wall Street and in the Oval Office. Just moment ago, the president said he will not fire his handpick Fed chair but the president also he isn't happy with the Fed and its policy of tightening monetary policy raising interest rates.
Wall Street as you see, off to a rocky start today. It's been up, it's been down. Right now, the DOW is flat, down about 50 points. It's been worse throughout the day. This comes after Wednesday's 831- point plunge, triggered by a big tech stock sell off and fear over the Fed interest rate hikes which President Trump called crazy.
Christine Romans is our chief business correspondent and gets to the question of how often do we hear, if ever a president attacking the Fed like that.
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: John, over White House's criticism of the Federal Reserve is pretty rare but this is a president who sees the stock market as his personal score card. So from him, strong words for the Fed.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I think the Fed is making a mistake. They're so tight. I think the Fed has gone crazy.
The trade war with China, we're taking in billions in tariffs from China, from Chinese goods and that hasn't hurt us at all. The Fed is going wild. I mean, I don't know what their problem is but they're raising interest rates and it's ridiculous.
(END VIDEO CLIP)
ROMANS: The Fed by the way is an independent entity. Its chief was chosen by President Trump. And the president's treasury secretary does not blame the Fed but sees this as quote, a normal correction.
That fact is, the Fed has been slowly raising interest rates to keep the hot economy from overheating. Here's what's really happening. America's economy is strong, consumers are spending, companies are raking in solid profits, and unemployment is the lowest in a generation. All that economic mojo is pushing up interest rates and that's breaking out the stock market because rising yields make borrowing more expensive, John. And that increase the cost of paying existing debts.
That's bad for companies and those higher costs eat into profits. It's not great for consumers either, all kinds of loans are peg to the bond market from mortgage rates to auto loans. Maybe you've seen the mortgage rate above five percent for the first time in a long time.
So higher bond yields could hurt the housing market and car sales. Higher interest rates can also help boost the dollar and that hurts big multi-international companies like Apple and Boeing and Caterpillar that sell their products overseas.
And then there's this, John, the stocks. Stocks have been rising for nine years and counting. Even with that route yesterday, the DOW and the S&P 500 are still just only about five percent from their all time highs.
KING: Thank you, Christine Romans in New York.
Mary Katherine Ham with the Federalist joins our conversation. It used to be the presidents barely if ever or they chose (INAUDIBLE) or polite words if they were unhappy with the Fed. You do hear it from time to time but not, the Fed is crazy, the Fed is out of control. But that's Trumpian.
ELIANA JOHNSON, WHITE HOUSE REPORTER, POLITICO: It used to be a lot of things.
MARY KATHARINE HAM, SENIOR WRITER, THE FEDERALIST: It is the very definition of Trumpian and, you know, it is an independent organization. He should lay off the guy. He picked him. And he can add to that, that the reason rates are rising is because the economy is strong.
They were low for so long in order to stimulate growth and now we're trying to curb the idea that things might get bubbly and out of control. And so that's what's going on here. He could take credit for that and acknowledge the correction at the same time.
SAHIL KAPUR, NATIONAL POLITICAL REPORTER, BLOOMBERG: By the way, another reason rates are rising is the deficit is rising pretty dramatically. This Congress and this White House have raised the deficit very substantially with a tax cut package and increasing military and domestic spending.
You know who predicted that rising deficits would lead to higher interest rates? Mick Mulvaney, the White House budget director.
So partly, this shouldn't come as a surprise but it's not just one reason. There are also tech stocks have been very strong but they're declining a bit. [12:35:03] There are trade concerns about trade wars and the tariffs in manufacturing sectors. So it's a variety of things. Nobody really knows if this is the start of a trend where the economy is going to be on the down swing. Nobody is really predicting that with any confidence. It could be a bit of a blip but it does appear to be a correction at the very least.
KING: Correction at the very least. And the timing of it is not good for Republicans in the sense that we're inside four weeks now to a midterm elections, and if you look, the Republican Party, you know, they're not campaigning on this because they think they're in this anti-Trump mode right now. But they're hoping that at least in parts of the country to get a boost on this.
Which party better handles the economy? This is the latest CNN pool. Republicans, 51, Democrats 43 so it is an advantage for the Republicans and the president himself said it's one of the few issues where he is above water. On many issues, he's under 50 percent. Approved of the president's performance in economy, 51, disapproved, 42. So if nothing else, people watching the markets do this, not helpful.
MICHAEL SHEAR, WHITE HOUSE CORRESPONDENT, THE NEW YORK TIMES: But to Mary Katherine's point, there's a way even with a pretty dramatic day like we had a down day on the stock market, there's a way if the president and his people had sort of thought it through a little bit more, to kind of make the positive case even in spite of that. To talk about yes, there's, you know, we don't talk about the ups and downs on any given day. The trend is higher, look at -- and you know, don't look at that, look over here and all of the good news.
And the frustration of the party members in Congress in the Republican Party who are trying to get re-elected is that the president who has the biggest megaphone, who has the bully pulpit isn't helping direct that conversation in a way that can sort of lift all of the Republican candidates. And that's the frustration on -- that he could be doing more to do that.
KING: He speaks on his reflex and his impulse and his gut and his - he likes to fights, he likes confrontations with people. We'll see what happens in the election.
Up for us when we come back, Mexico Beach being describe now as ground zero after Hurricane Michael ripped through the Florida Panhandle. We'll take you there. Dramatic new images, next.
[12:41:25] KING: We're getting a better picture throughout this day of the devastation caused by Hurricane Michael across the Panhandle of Florida. It's the strongest storm to hit the region in recorded history. Wind speeds at 155 miles-per-hour at landfall. At least two people have died as a result of Michael including an 11-year-old girl. Storm surge up to 12 feet, sweeping through coastal communities.
Nearly 500 customers across the southeast now without power. 7,800 people at the moment taking shelter in Red Cross facilities and thousands of rescue personnel combing through that horrible debris today.
CNN's Brian Todd is in -- one of the most devastated areas in Mexico Beach, he joins us now on the phone. Brian, tell us where you are and what you're seeing.
BRIAN TODD, CNN CORRESPONDENT (via telephone): Well, John, we're probably about 50 miles north of Mexico Beach. We've been trying frantically all day to try to get into Mexico Beach over roadways and bridges. And it's been unsuccessful. Every roadway is, you know, blocked with massive trees in the way or power lines or it's been blocked by law enforcement.
One road we were not able to pass because law enforcement told us that only first responders and power crews could get in. So we tried several other roads and right now we're kind of stuck on Route 71 heading south and it's (INAUDIBLE). So we're getting the impression from this experience and from everything that we're hearing and communicating with our colleagues back home that all the roads are pretty much either close of impassable. So that's also making it of course difficult for first responders to get in.
We've seen the aerial footage of just how devastated Mexico Beach is. With houses completely flattened and water up to the roofs of some houses. And now, you know, we're getting the impression that there's -- they could be just stranded there unless some first responders can somehow get in over bridges or by boat.
KING: And as you try to get in, Brian throughout the day, when you encountered law enforcement, when you're encountering maybe families trying to return. Tell us -- just take us through your day and who you've met and what you're seeing.
TODD (via telephone): OK. Well, we've encountered a lot of law enforcement and there was (INAUDIBLE) in front of us arguing with a guy who's trying to pass and not letting him pass. So that's the kind of thing you encounter quite often.
We also just spoke a family who lives in St. Joe's Beach which is right next to Mexico Beach. They evacuated very late on Tuesday night, they got out pretty much at the last minute. They are desperately trying to get back. They're unable to get back. They're right in front of us.
And they said that they are -- they've been told by a neighbor that they think that their house is completely destroyed but they're not sure. And they're just trying desperately to get back. And that's going to be the problem for so many people who are either, you know, trying to get back and first responders trying to get in their to help. (INAUDIBLE) the impassability of these roadways and bridges.
KING: Brian Todd, appreciate the live reporting. Keep in touch throughout the day.
Now let's check in now with CNN's Jennifer Gray, she's in the weather center to help -- help us understand, Jennifer what we're seeing in Mexico Beach and why that area -- how that area got hit so bad.
JENNIFER GRAY, CNN METEOROLOGIST: Yes. I just want to give context to that video that you're seeing because this is one of the areas that was hardest hit. They got brushed with that inner eyewall so they had the strongest winds. And if we zoom down, this is the area in that video. This is what it looked like before and you saw the video just a moment ago, it almost looks like tornado damage.
Of course the winds within the storm were probably equivalent to say, an EF-3 tornado. So definitely the wind damage is going to be very, very strong, it's going to flatten structures that aren't as sturdy.
And here is on down the beach when you can see first couple of blocks, it looks like storm surge basically took those homes off their foundations.
[12:45:04] And then beyond that, they either got hit with a lot of the debris from the first couple of blocks and it compromised those structures or the winds itself.
We had inside that eyewall, almost like little fingers that looked like somewhat like a starfish. And so we almost had little vortexes inside the center of that hurricane that just whipped it even more and made those winds even more -- even stronger and more destructive because it goes blowing in all different directions. It was winds well over 100 and 150 miles-per-hour.
And so it's incredibly sad, John to see the before and after of that video and know that it's going to be months, maybe years before some of these places get back to normal.
KING: It is stunning, stunning. Jennifer Gray, appreciate that helpful context there in the weather center. And if you're wondering how you can help people impacted by Michael, you can go to cnn.com/impact.
We'll continue updating you. Impact Your World page as more information becomes available to us.
Up next, back to politics. The closing days of the 2018 midterm campaign and healthcare ads flooding the airwaves. Both parties now using it in their closing sales pitches.
[12:50:22] KING: Open enrollment season this year overlaps with the closing stretch of the midterm campaign. Democrats see healthcare as their best issue this cycle, attacking President Trump and Republicans for what they say is a huge retreat and protections for those with pre-existing conditions. Republicans are now fighting back by warning a big blue midterm wave would bring a Democratic push for socialized medicine.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You may not see it yet, but it's out there. Danger lurking in the race for Congress. Candidate Elaine Luria has quietly promised something radical and dangerous. Luria backs a gateway to a government takeover of healthcare. It would cause healthcare costs to skyrocket and deteriorate your quality of care.
UNIDENTIFIED FEMALE: Families count on it. We work hard and earn it. What if Washington takes it all away? Xochitl Torres Small supports the plan that would eliminate employer-based health coverage forcing all of us into a massive government-run system. Putting Washington bureaucrats in charge.
(END VIDEO CLIP)
KING: It's an interesting push at the end. We'll get some of the Democratic ads in a minute. But you have these Republicans essentially saying Medicare for all would destroy Medicare.
Number one, it's a healthcare debate the country will have if the Democrats do take back the House. But number two, seniors are the most dependable voters in a midterm election year. They were 22 percent of the electorate in 2014. That tells me Republicans are trying to shore that up.
KAPUR: I'm stunned by how much healthcare politics have boomeranged since 2010. When ObamaCare was unpopular, Republicans used that very successfully that year to win elections and many cycles since then. But now the issue of pre-existing conditions os salient. Democrats have made it so because Republicans have tried to pass bills in the House and the Senate that would chip away some of those protections that are overwhelmingly popular among 70 and 80 percent of the American public. So I think their best argument at the end to say, well, Democrats want to take this in this direction, here's what's wrong with that.
SHEAR: I think though it's -- when you talk to the Democrats, the Republican ads are really hard sell when they try to flip the script that has been in place for so many decades in which the Democrats are the ones that come to the defense of the big entitlement programs and the Republicans are the ones that are, you know, sort of angling to do things that might undermine them.
And I think the Democrats are pretty confident going into this last stretch that that Republican attack is not going to work. And that in fact, the healthcare issue is largely on their side.
KING: Let's listen and jump in to a little bit of that. Again, you listened to those Republican ads. Big government, out of control spending, the government will make all your choices. It's socialism. Democrats say no.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: 2.8 million Arizonans live with a pre-existing condition. Children with asthma and autism. What does it say that Martha McSally voted to gut protections for people with pre-existing conditions but she voted three times to let insurance companies deny them care? It says, Martha McSally will stop at nothing to get ahead in Washington and Arizona pays the price.
UNIDENTIFIED FEMALE: I'm a cancer survivor. So I can't afford to lose my healthcare coverage. That's why it angers me that Attorney General Josh Hawley filed a lawsuit to allow insurance companies to deny care for Missourians with pre-existing conditions. People like me denied care.
(END VIDEO CLIP)
You know, I'm struck less by the substance of the Republican messaging than by the lack of consistency. The Republicans wanted to be running on the tax cut bill and the economy. And it is shocking to me how much the Republican messages in all these ads has boomeranged all over the place from the economy to healthcare to a border wall. There just is no consistency in what they as governing majority are running on. There does seem to be a lot of consistency in what Democrats are running against.
KING: It's a great point. I was talking to a very smart veteran Republican strategist last time who said normally you have a White House political shop and a national party structure that tries to set the tone and direction and his complaint was that this White House says nothing that it's day by day with the Trump White House.
HAM: Yes. I mean, I agree with you that this seems sort of out of the blue after what we've been hearing that they should run on for so long. And I think healthcare is ranked as a top issue for people and they're worried about, but it sort of hard to parse as opioid crisis, is it pre-existing conditions, is it Medicare. And so I think it's hard to focus on what your message should be even in the space.
KAPUR: There is an 18-point lead in the CNN poll for Democrats over Republicans. So far the single payer attacks aren't really resonating.
KING: Sometimes, it helps when you litigate an issue in the campaign gives the politicians some direction where to go. We will see. That might be asking too much.
Up next for us, a local official in Florida describing Hurricane Michael as a nightmare she can't wake up from.
[12:55:00] We'll take another look at the damage in the Panhandle.
KING: Before we go today, an emotional moment. A man in Mexico Beach, Florida trying to understand Michael's devastation.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Where are your emotions today? I know --
SCOTT, MEXICO BEACH RESIDENT: Well, it's like this. I'm trying to grasp it (INAUDIBLE) I think was -- this was never in our imagination. This year was such a tremendous thing that -- I never imagined this is going to happen to our home here. So it's hard to grasp.
I mean, where do we start now? I mean, what do we do? I mean, there's nothing left here.
(END VIDEO CLIP)