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Military Leaving Syria; Wall Street Braces for Turmoil; Trump Claims Progress with China; Reclaiming Meaning of January 1st; Passage of First Step Act. Aired 9:30-10:00a

Aired January 1, 2019 - 09:30   ET


[09:30:00] MAJOR GEN. JAMES "SPIDER" MARKS (RET.), CNN MILITARY ANALYST: And also there are the steps that are necessary to insure that at a very tactical level the handoff is taking place in a very, very deliberate way so that the ongoing missions can continue to be successfully fought and achieved.

But also we have to keep in mind that there is a possibility that the United States would have to redeploy back into Syria. And so you've got to keep the ground available for the United States to do that.

And so these are the steps that they're going through right now. And this is a deliberate withdrawal.

Now, the challenge becomes, Poppy --


MARKS: Without getting into too much baseball is, once the actual troops start to remove, they do the handoff with partners and allies, and once the United States troops start to remove themselves from the combat area, they have to do it in a very quick way because you become very vulnerable when your weapons systems and your soldiers have now clicked themselves onto redeployment as opposed to the possibility for engagement.

HARLOW: Let me ask you about the man at least currently replacing former Defense Secretary James Mattis, whose last day was yesterday. He, of course, we saw in that -- in those final remarks that he gave expressed confidence in his deputy secretary, Patrick Shanahan, who is taking over as acting secretary. Do you agree with his conferred? Because let's take a look at his resume here. And I just wonder if you have any concerns as we -- as we pull this up -- if you have any concerns about his relatively narrow portfolio at the Defense Department in terms of the job that he now has with no experience in international affairs or counterterrorism.

MARKS: Well, I think the point you just made, Poppy, is a key thing. I'm not sure what his experience is in terms of foreign policy and in terms of international negotiations.

HARLOW: Right. MARKS: So he will have to be surrounded by folks who have that in

their portfolio. So there's a level of expertise where that can get accomplished.

But what you have really is a very solid manager. And you look at the body of his work.


MARKS: The ark of his life is he's been involved in business. He's very much a manager. He leads organizations. He doesn't have the breadth of experience that a Jim Mattis had. And that's -- let's be frank, that's a very difficult guy to follow. Jim Mattis, I think, was immensely qualified for the position. Obviously came, you know, in -- had to cross swords with the president and decided it was time for him to put somebody else there.

So Patrick Shanahan's going to step in. He's got continuity. He knows where the bodies are buried. He knows what the current issues are. You know, he's current with what is happening right now. There is a team in place. And like any organization, there will -- there will be some pickups. But I think we probably are going to see the SEC DEF, he's got an acting in front of his title right now --

HARLOW: Right.

MARKS: But I think he'll probably be the SEC DEF.

HARLOW: You do?

MARKS: That becomes an easy decision.

HARLOW: So let me get you on this before you go.

The State Department's anti-ISIS envoy, Bret McGurk, left his post officially also yesterday. Another very important role, a very important voice. And let me read you part of what he said upon departure. Quote, I wish my former civilian and military colleagues well as they work under extremely difficult circumstances to protect the interests of our country.

It has been reported -- there is reporting that he resigned, at least in part, due to the president's decision on Syria, just like Mattis. Do you think that is what his message was referring to and what do you make of that word choice, extremely difficult circumstances to protect the interests of our great country.

MARKS: I think what we're seeing in those words are -- it's a leader's message to those with whom -- you know, his colleagues, those with whom he's had to work, both above him and then laterally and below him that says, look, folks, stay focused on the tasks and the latest mission that you've received. Once you get a mission -- in the military, when you wear a uniform, or whether you're in civilian clothes, when you get a mission, that mission remains valid until the mission is accomplished or it has changed and morphed into something else and there's been some agreement as to what that's going to look like. So the message always is, stay in your lane, stay in your lane, stay focused, lean forward, keep going the work that we're asking you to do and don't worry about all the hair that's on this and all the dust that's being kicked up. Stay in your lane. Stay focused. Let us, whoever we are, worry about all that other stuff. But I need you to stay focused.


MARKS: And that's the message that I think needs to come and did come from Jim Mattis and McGurk as well.

HARLOW: Understood. And we thank them for their extraordinary, extraordinary service.

General Spider Marks, thank you very much.

MARKS: Thanks, Poppy.

[09:34:44] All right, investors, listen up, 2018 may have given you a bad hangover. Stocks worst year in a decade. Will 2019 bring something better?


[09:40:00] HARLOW: All right. Welcome back.

Investors on Wall Street entering 2019 after the worst year for stocks in a decade. The markets closed today after a wild December, but a new year could bring new things or the same old problems. All eyes now are on Washington, D.C. and the turmoil there and what it all means for the markets.

With me now is former Trump economic adviser and our senior economics analyst Stephen Moore, the author of a new book. I'm sorry, my friend, I should have, you know, pulled it up there on the screen for you, "Trumponomics."

Thanks for being with us.


HARLOW: And Happy New Year. Happy New Year.

Look, I mean, it was just a wild year, a wild December. We saw the Dow down 5.6 percent, the S&P down 6.2 percent for the year, the Nasdaq down 4 percent. The current political environment is not encouraging any investors. What's your outlook and what's your warning for 2019?

MOORE: Well, Poppy, why all the negativity? I mean, you're right, this was not a good year for investors. But for, you know, look at the jobs market. This is probably the best jobs market we've had in 50 years. We have seven million more jobs today than people to fill them. We have the lowest unemployment rate. Wages are finally starting to rise. So it's a -- you know, you're right --

HARLOW: So what's the market freaking out about then, Stephen? What's the market so worried about?

MOORE: Oh, I think they're -- yes, well, first -- by the way, the last week has been pretty good, Poppy. I mean the last -- since December 24, when we had the big sell-off on Christmas Eve, we've regained about 2,000 points. So I think that was the best week in terms of point gain in American history.

But, look, there are a lot of reasons to be jittery, no question about it, Poppy. You know, I'll mention a couple of them. I mean the big one, obviously, is the China trade deal. And that's been really eclipsed in recent weeks by the government shutdown and the Fed actions and some of the other turmoil.

But, look, this is a -- you know, this is a high stakes game we've got going on with China right now.


MOORE: They have right now, what, about 50 days, I think, from the 90 days that, you know, Donald Trump sat for the Chinese to come up with a deal. I actually am somewhat optimistic. I'm going to -- count me as optimistic that China is going to come forward with some kind of deal. By the way, you talk about a bad stock market.


MOORE: Our market was down 5 or 6 percent this year. Theirs was down 30 percent. So they - their markets have been really hit.

HARLOW: So let me ask you about that.

MOORE: Yes. Yes.

HARLOW: Let me ask you about that, Steve.

We saw the president over the weekend, he tweeted, quote, big progress being made. The markets liked that, right, on a China trade deal.


HARLOW: We still don't know what that progress is. We don't have details.

MOORE: Right.

HARLOW: But we do know that China's economy, not just the stock market, is suffering. I mean we just got this factory data yesterday that's really bad. The factory sector contracted in China for the first time in two and a half years. Does that make Xi Jinping more likely to come to the table? Do you think that he will come with more concessions to President Trump?

MOORE: Well, you would think so, right? I mean that, what, 30 percent decline in the stock market. They've got warehouses and factories and docks just full of goods and merchandise they can't sell right now. And that's with a 10 percent tariff. If -- you know, what Trump is saying is, look, at the end of this 90-

day period, which I think is at the end of February, if you don't come forward with a deal, you're going to get slapped with a 25 percent tariff.

Now, look, I'm a free trade guy. I don't like tariffs. But I do think this is going to get President Xi off the dime. I think he's going to come forward with a phone call in the, you know, probably very close to that deadline.

And, by the way, if I'm right about that, and I -- you know, I don't -- I think maybe 60 percent. I can put the odds at 60 percent they get some kind of deal to make a deal --


MOORE: Then the stock market's going to go through the roof, because I think that's what's been really holding back, you know, investor confidence.

HARLOW: Well, it -- it's not just a deal. It depends what the deal is.


HARLOW: But we don't have a ton of time and I've got to get you on two very, very important words for 2019.


HARLOW: Debt ceiling. Debit ceiling for 2019. Sometime in the second half of this year, there is going to be a fight over raising the debt ceiling because right now the federal government is expected to spend a trillion dollars more this year than it will bring in.


HARLOW: And if Congress and the president can't even decide on funding the government to keep it open from a partial shutdown, are the markets right to be spooked about them coming to any sort of agreement when it comes to raising the debt ceiling, especially given the fact that it is Mick Mulvaney, who is the president's chief of staff, who as a congressman railed against doing so?

MOORE: Well, look, my good buddy Larry Kudlow, who is the chief economist for Donald Trump, you know, feels very strongly, and I agree with him, that a, you know, a debt ceiling showdown would be a mistake.

Now, look, we have to get government spending under control. I think all Americans agree with that. But I don't think you want to play with the debt ceiling crisis. And so I'm hoping that gets averted. But, let's face it, Poppy, you never know.

HARLOW: But it -- is there any indication to you -- is there any indication to you, from the behavior we have seen over the last few weeks, that a protracted debate and fight over the debt ceiling will not happen? And we saw, by the way, how it hurt the economy the last time it happened.

MOORE: Well, we have a debt crisis in this country. There's no question about it. Government spending is out of control. You know, I would give Trump very high grades for the economy, but I wouldn't give him high grades on controlling spending. And that's a --


[09:45:09] MOORE: That's a problem. So there could be a showdown, but, look, I don't think Donald Trump is going to push that button. I think we're going to get the debt ceiling extended. And I'm optimistic today. What can I say, Poppy?

HARLOW: All right, come back to me this summer and let's see how we're doing. Let's hope you're right.


HARLOW: Thank you. Stephen Moore, Happy New Year. Thanks again.

MOORE: Thanks. You too.

HARLOW: Here's your book. There's the plug, "Trumponomics."

All right, today is not just about resolutions and football, of course, it's about a lot more, including civil rights. Next, why civil rights leader Jesse Jackson says Americans should rediscover the true meaning of January 1st. He's with me next.


[09:50:12] HARLOW: Welcome back.

Well, today, civil rights leader, Reverend Jesse Jackson, delivering a message for the country in a new opinion piece in "The New York Times." Here's part of it. He writes, for every American who cherishes freedom and democracy, New Year's Day should mean far more than college bowl games and parades. The nation must revive and reclaim the true meaning and significance of January 1st, Emancipation Day.

President Abraham Lincoln signed the Emancipation Proclamation in 1863, freeing the slaves in the south. And it is a critical moment in our nation's history celebrated by African-American Christians across the country and watch nights on New Year's Eve in those services.

Joining me now is Reverend Jesse Jackson to talk more about his piece.

Thank you for being with me.


You know, Poppy, one of the things that is seen as freeing the slaves saved the union and freed the slaves. America was -- the bloodiest war we've gone through, the Civil War. And if we had lost the war, we would not be celebrating the Declaration of Independence, not the Constitution. HARLOW: Let's --

JACKSON: And so when Lincoln made that move to take blacks out of the south and take away the back line of the confederates and take away their farm and economic base, it shifted the power of the war and we won the war. The union was saved and slavery ended at the same time, really.

HARLOW: Reverend Jackson, and let's talk about some of what you write in this piece. You write, 2019 must be about the vision of a fully equal society. What is the most important thing you think could happen this year to get towards true equality?

JACKSON: Well, the protected right to voter is the most base (ph) -- the protect their right to vote. You know, in 19 -- in 2016, Hillary won by 3 million votes but lost. Something's wrong with that. In 2016 -- 2018, Mr. Trump lost by 9 million votes and yet he won the Senate. And so equal protection under the law and voter -- voter fairness is critical.

Health care, I thought that was the premier contribution President Obama made was for 26 million Americans health care really for the first time and the Trump administration was determined to undermine access to health. Now, there are 4 million people -- 4 million fewer people with health care. So the right to vote and health care and clean up these jails of those who are in jail --


JACKSON: Who are nonviolent crimes but they're making a jail a hotel. These are things basic.

HARLOW: Let's talk about -- about that, about criminal justice reform. A way that we saw Congress truly come together at the end of last year. And you write about -- in this opinion piece about spending Christmas morning this year at the Cook County Jail praying with the inmates, as you do every year. And you note 74 percent of the inmates there are African-American. Disproportionate compared to 24 percent of African-Americans that represent the population there.

The president recently signed into law the First Step Act. I know you've been very supportive of that. The goal is to reduce recidivism, really focus on rehabilitation, address mandatory minimum sentencing. It's the First Step Act, though. What do you hope the second step will be?

JACKSON: Several steps. One, those who are in jail now with the idle time should be learning how to compute, using apps and codes and how to program. They must leave jail with a -- and get a skill, transportation, and a job so you won't have recidivism. If they leave jail with no place to stay and no job and no transportation, they will come back because jail becomes a hotel, jail becomes a comfort zone. And so it's not enough to put them out because the jails since -- really since Willy Horton, the jail industrial complex has become much too expensive. So put them out is to dangerous us. To put them out and a plan to break up recidivism would be a step in the right direction. HARLOW: Let's listen to what the president said last night in this

interview that he gave to Fox News.


DONALD TRUMP, PRESIDENT OF THE UNITED STATES: If you look at unemployment, we're at a 50-year low.


TRUMP: For African-Americans and for Hispanics and for Asians, we're at an all-time historic low. The history of our country low. And I don't know if somebody could do better than that.


HARLOW: He doesn't think any 2020 presidential challenger can do better than he has on that front. But here's what you write this morning. Quote, candidates must be challenged to share their vision of what an equal, non-discriminatory, multi-racial, multi-ethnic, multi- religious, non-sexist society looks like.

I'm interested, reverend, in your message to Democratic contenders, to those on the Democratic side, who will jump in to run for president, as you ran twice before. What's your message to them on that front?

[09:55:03] JACKSON: Well, you really need an urban policy that is sustainable. You know, in Chicago, where the most killing is taking place, last year 530 were killed, eight communities have unemployment above 20 percent, poverty above 40 percent. There's an inequality factor here. There is a disparity factor.

If we have -- the reason we do so well on the football field when Alabama plays Georgia or plays Clemson, as the case may be, the playing field is even, and the rules are public and the goals are clear, the referees are fair and the score is transparent. It's not true in the economy. And there must be more access to affordable education, affordable health care, job training, and jobs to begin to even it out.

HARLOW: We will see who jumps in the ring. We know one name already, Elizabeth Warren. We'll see who else jumps in on the Democratic side and what their plan is on that front.

Reverend Jesse Jackson -- Reverend --

JACKSON: Well, she cannot -- she cannot -- given her work in consumer protection, she cannot be ignored as a -- she will -- she will occupy a significant space in this race.

HARLOW: Yes, we'll watch. I think we've got a lot more names about to jump in here.

Thank you very much for your time this morning.

JACKSON: Thank you. HARLOW: All right, we are learning new information about a retired Marine, American citizen, who Russia has detained and is calling an American spy. I just spoke to his twin brother in his first interview. Much more about the disappearance of Paul Whelan, next.