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Trump's Erratic Moves Sends Wall Street into Tail Spin; Trump Blames Federal Reserve for Market Turmoil; Russia, Turkey Syria Praise Trump on Pulling U.S. Troops from Syria as Mattis Resigns; Trump Signs Bipartisan Criminal Justice Reform Bill. Aired 2:30-3p ET
Aired December 21, 2018 - 14:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[14:31:09] PAMELA JONES, CNN ANCHOR: Well, the president's erratic moves have seemingly sent Wall Street into a tail spin this month after plunging more than 400 points yesterday amid the shutdown threat.
I'm joined by Richard Quest, CNN Business editor-at-large.
The president has threatened if there's a shutdown it will, quote, "last for a very long time." Are investors right to be so concerned, fearful or have the markets seen the worst of it? What do you think, Richard?
RICHARD QUEST, CNN BUSINESS EDITOR-AT-LARGE & CNN HOST, "QUEST MEANS BUSINESS": There's nothing like pouring gasoline on the flames and embers at this time of the year, which is essentially what is happening. A bad situation is being made worse by a shutdown. We know the U.S. economy -- excuse me. We know the U.S. economy is already slowing down. The Fed chairman basically admitted that the other day. Every private economist says it will slow down quite considerably next year. Now into that maelstrom of markets being worried about a shut down, it can only be made worse when things are slowing down for the holidays and festive season. No good comes from this for an economic shutdown. And that is why the market is -- the market, by the way, that is already depressed, a market that's already about to give up the ghost and say, fine, a bear market is on the way.
BROWN: So then let's look ahead. What are the long-term risks and economic impact to what's happened this week? Are we looking at a major slowdown? Is this adding to that?
QUEST: No, a short-term slowdown will not greatly affect the long- term outlook. What will happen, though, is it will deepen the malaise about 2019. Growth slowing 3.5 percent down to 1.5, 2 if you're lucky and investors have basically capitulated. That's how one market maker put it to me yesterday. He said if you look at the numbers and the sales and the Dow and the broader market, investors have capitulated. They are selling into this. We have not yet seen, and we will, don't get me wrong, but we have not yet seen that moment when investors say, hang on, this is so cheap, it's a bargain. We must start buying.
BROWN: So we know the president watches the markets closely. This is not good for him and he has criticized the Fed for raising the rates, saying it would inevitably impact the markets. Is it fair to say a lot of the anxiety on Wall Street was created by Trump himself?
QUEST: Not totally unfair to say he's hedging his bets. The old rule, Pamela, live by the Dow and die by the Dow. That's exactly what happened. The President Trumpeted this all the way up. Look how good it's been since my presidency, look how good it's been since my inauguration. Now he has to face the fact we could be in a bear market on his watch. He has one get-out-of-jail card, economically speaking. He can claim he warned Jerome Powell and the Fed not to raise rates. They ignored him. If things get worse, you can take this to the bank, Pamela, if things get much worse he will be crowing, well, I told you so and it's all the Fed and all Powell's fault.
BROWN: But to be clear how much of it in your view really is the Fed's fault for raising the rate?
[14:34:09] QUEST: The Feds -- very little in that sense. Very little. Maybe in the last day or two. The Fed had to. The Fed was in a no-win situation. First of all, economically it makes sense to take back some of the free money on the table. Then you've got a president brow beating you not to raise rates. The Fed's part is minor in comparison to the uncertainty that has been driven -- whichever way you look at the economy at the moment, Pamela, there's an uncertainty, Brexit in the U.K., Europe slowing down, probably a recession, the United States shutdown of the government, can't agree budgets, 20 tax cuts expiring and then throw in the big one, trade with China. So it's not surprising, it's not surprising that the bull market nine years on is basically either rolling over and playing sleep or deciding it's time to give it up.
BROWN: Richard Quest, always great to have you on and hearing your perspective. Thank you.
QUEST: Thank you.
BROWN: Up next, now that Jim Mattis is resigning, there are no more generals left in the White House. Does that give President Trump even more power to fully realize his America First dream? We'll talk to the experts.
[14:40:28] BROWN: "Trump is God's gift that keeps on giving" -- those are the words from a Russian columnist and foreign affairs analyst reacting to President Trump's order to pull U.S. troops from Syria. The leaders of Russia, Syria and Turkey also praising the move that cost Trump his Defense Secretary James Mattis. General Mattis shocked Washington and the world by resigning over Trump's decision yesterday.
Joining me to discuss is CNN military analyst and retired U.S. Air Force Colonel Cedric Leighton, and Hagar Chemali, former spokeswoman for the U.S. mission to the U.N. and a former Treasury spokeswoman on terrorism and financial intel.
That you both for coming on. We do appreciate it.
I want to start off by playing what former defense secretary, William Cohen, told our Jim Sciutto after speaking to General Mattis. Listen to this.
(BEGIN VIDEO CLIP)
WILLIAM COHEN, FORMER DEFENSE SECRETARY: For Secretary Mattis, who has never been known to quit anything, every star he has on his shoulders was earned in the blood and the mud of battle. And that has to be taken into account. I think Jim Mattis was saying it in another way, saying we are betraying our allies.
(END VIDEO CLIP)
BROWN: Colonel Leighton, do you agree with Cohen and Mattis that pulling U.S. troops is a betrayal to our allies, specifically the Kurds?
COL. CEDRIC LEIGHTON, CNN MILITARY ANALYST: Oh, I absolutely do. You're looking at also not only the Kurds but Israel and other allies in the gulf region. This is a very serious issue. It's one thing to pull troops out and have a strategy, but it's a completely different thing if you pull troops out and don't have a strategy. I'm afraid we're dealing with the latter situation.
BROWN: Hagar, you worked with the U.S. mission to the United Nations. How do you think U.S. allies will respond to Mattis' resignation and the withdrawal of American troops from Syria and Afghanistan? Most allies were blindsided by the move.
HAGAR CHEMALI, FORMER SPOKESWOMAN, U.S. MISSION TO THE U.N. & FORMER TREASURY SPOKESWOMAN ON TERRORISM AND FINANCIAL INTEL: On the latter, I think they're going to know we're not going to be there in whatever fight it is that we have with them or if we ask for their help in something that we did with the Kurdish militia, they're going to think we won't have their back when it's their turn, when we have to return the favor back.
When it comes to Secretary Mattis' resignation, I'm sure they're thinking, as we all are, there were a group of officials in the cabinet who were not aligned with President Trump's vision but who were trying to make things better and hold up the U.S. values in foreign policy and I think they're going to be afraid that President Trump will have his way now with no backlash.
BROWN: Colonel Leighton, how can troop withdrawals from Syria and partial withdrawal in Afghanistan impact security in the region?
LEIGHTON: Pamela, there will be several impacts here. When you're looking at the troop withdrawals from Syria, which seem to be the ones that will happen first, you're seeing the potential for the Turks to take advantage of the vacuum and certainly for the Assad regime in Syria to take advantage of that, and that's not to mention the Iranians and the Russians. What you're doing is opening up this can of worms, basically, for everybody to get involved. They're all there, that are all playing various roles, but the U.S. is basically keeping a lid on a lot of conflict in that region. The fact that we're leaving is pulling the pressure off of this pots that boiling. This boiling pot is going to run over very quickly, I think, in that area.
And as far as Afghanistan is concerned, I think we're going to see a situation where the Taliban is going to become emboldened, ISIS is going to become emboldened, and it going to be very difficult for the Afghan president to not only continue the fight but to survive. That's going to be a significant factor in the geopolitical equation that governs South Asia and the northern part of the Middle East.
BROWN: And one of the points that Mattis has made in his resignation letter was the idea of recognizing your friends from your foes. We've seen American adversaries, such as Russia, Vladimir Putin praise President Trump's decision to pull these troops out of Syria. And then, on the other hand, you have the Kurds that the U.S. has been helping in Syria for quite some time. What does this mean for them and their dependence on U.S. support, Hagar?
[14:45:06] CHEMALI: It's very clear we threw them under the bus. The Turks have already done airstrikes against the Kurds in the region over the last year or so. We're leaving them to fend for themselves. And as a result of it, and as a result of their anger, they've stated they might release 3,200 ISIS fighters they have in their control. It's a travesty. It's not just a Kurds but Israel as well that will have to ramp up its efforts given the role that Iran plays in the region.
When we look in history, we have to see has there ever been a scenario when the United States was present and things were better when the United States stepped away. I can't think of anything in our recent history where that was the case. I think we have to figure out exactly what it was that prompted President Trump to make this decision.
I think Colonel Leighton's focus on Iran, Russia and Turkey is critical. Two days ago, the foreign minister had decided on an agreement on the constitution moving forward in Syria. These are the guys who have taken over and we are backing out and letting them take over. Again, I just don't see how any point in history where an example of that shows that that's the right move.
BROWN: And of course, the president would say, look, I've been open about wanting to withdraw troops from Syria for a long time, I've made clear I don't think the U.S. should be the policemen of the world. But there's a different between saying you might do something and actually doing it.
Hagar Chemali, Cedric Leighton, thank you so much.
LEIGHTON: You bet, Pamela.
BROWN: Well, it was a policy victory for the president that practically got lost in pre-Christmas chaos. A major criminal justice bill just received Trump's signature. We'll talk to the man who has been a champion of the cause all along. Van Jones up next.
(BEGIN VIDEO CLIP)
(END VIDEO CLIP)
[14:51:23] BROWN: Overshadowed in the shutdown fight and White House staff departures, today bringing a rare moment of bipartisan and a big victory for President Trump as he signed the criminal justice reform bill. The new allows federal inmates to leave prison earlier with good-behavior credits and it eases guidelines on mandatory sentences. The bill bringing together both sides for a rare moment of bipartisanship in the Oval Office.
(BEGIN VIDEO CLIP)
REP. MIKE LEE, (R), UTAH: The process of this has brought together friendships that I'll cherish for the rest of my life. I'm now texting buddies with Van Jones.
VAN JONES, CNN POLITICAL COMMENTATOR & CNN HOST, "THE VAN JONES SHOW": And when you're trying to help people on the bottom, I will work with or against any Democrat, with or against any Republican, because there's nothing more important than freedom. So thank you, sir.
(END VIDEO CLIP)
BROWN: With me now, Van Jones himself. You just saw him there in the Oval Office.
Van, congratulations. I know how hard you worked on this.
We just heard you talking there in the Oval Office. You have been a big supporter of this criminal justice reform law. Tell me why and about the journey getting to this point today.
JONES: I, for 25 years, have been working on criminal justice, youth justice. And I've been working on this issue for five years. For most of that time, both political parties were afraid to admit what everybody knows, we spending way too much people, it's a human waste of genius and money. And in red state like Georgia and Texas, Massachusetts, California, it began from the grass roots people began to push back for a better model. I wanted to do everything I could to get that to the Federal line. Jared Kushner's father went to prison and Jared understands what people are going through and he decided to fight. A lot of people got mad at me because I said, I'm willing to work with him on that issue. They said it will never happen, you will never get there, Trump will sell you down the river, and it was the opposite. We got 87 votes to 12 in the Senate. You can't get 87 votes to change a post office name these days and we got 87 votes in the House. I think yesterday we got 358 votes to 36. The country is just fed up with the nonsense. But it took a little bit of courage to break that log jam and now it's broken. This bill is going to help a will the of people but it's a First Step Act. I think you're going to see a lot of bills at the state level now, city level now, and more in the federal government. This is the beginning of a change back towards sanity.
BROWN: And it sadly is a rare example of bipartisanship. You heard Mike Lee say, "I'm not texting buddies with Van Jones."
BROWN: Exactly. You never know.
In your view, what does this bill get right and what is it missing?
[14:54:52] JONES: Listen, this bill, the "New York Times" said it the biggest criminal justice breakthrough in a generation. And 100 percent of people behind bars, if they stay out of trouble, can now come home a little bit earlier. And 100 percent of the women behind bars can no longer be shackled when they're pregnant. But half of the people behind bars can work hard, take classes and get job ready, and come home even earlier. Now you have an incentive to work hard.
BROWN: All right.
JONES: Also, they've changed up some of the bad sentencing laws and all that stuff. But we got way, way, way more to do. But we got started and that's most important.
BROWN: There's a lot of news today, but this is very important, the president signing this bipartisan bill on criminal justice reform.
Van Jones, thank you so much.
JONES: A Christmas miracle.
BROWN: A Christmas miracle.
JONES: A Christmas miracle for people behind bars and their families. And we're just getting started.
BROWN: All right. Van Jones, thanks so much.
And up next on this busy Friday, "sad, scared," and some words I can't say right here. Just some of the reaction from lawmakers to the resignation of General Mattis as this wild week comes to an end. Can anyone bring calm after the chaos?