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Obama Talks U.K. Vote; U.K. Brexit Vote; U.S. Markets Hit by U.K. Vote. Aired 2-2:30p ET

Aired June 24, 2016 - 14:00   ET

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

[14:00:00] BARACK OBAMA, PRESIDENT OF THE UNITED STATES: That will continue to unite all of us. And that is the work that brings us here today.

The world has shrunk. It is interconnected. All of you represent that interconnection. Many of you are catalyzing it and accelerating it. It promises to bring extraordinary benefits. But it also has challenges. And it also evokes concerns and fears. And so part of why this global entrepreneurship summit has been so close to my heart, something that I've been so committed to, is because I believe all of you represent all the upside of an interconnected world, all the optimism and the hope and the opportunity that that interconnected world represents. But it's also important in these discussions to find ways in which we are expanding and broadening the benefits of that interconnection to more and more people. And that's what so many of you are doing.

You know, we're gathered here at Stanford, in the heart of Silicon Valley, which is one of the great hubs of innovation and entrepreneurship, not just for America, but for the world. This is a place that celebrates our ability as human beings to discover and learn and to build, to question, to re-imagine, to create new ways to connect with each other. It's where two guys in a garage, Bill Hewlett and Dave Packard, launched a global company, where student projects became Yahoo! and Google. Those were really good student projects. My student projects weren't as good.

It's where entrepreneurs, like so many of you, get an idea and you build a team and you work to turn it into reality and you launch products and companies and entire industries that transform the world. That's the power of entrepreneurship. And it's never been more important.

In today's world, where our economies have undergone dramatic shifts, where businesses don't stop at borders, where technology and automation have transformed virtually every industry and changed how people organize and work, entrepreneurship remains the engine of growth, that ability to turn that idea into a reality, a new venture, a small business that creates good paying jobs. It puts rising economies on the path to prosperity and empowers people to come together and tackle our most pressing global problems, from climate change to poverty.

When people can start their own businesses, it helps individuals and families succeed. It can make whole communities more prosperous and more secure. It offers a positive path for young people seeking the chance to make something of themselves, and can empower people who have previously been locked out of the existing social order, women and minorities, others who aren't part of the old boys' network. Give them a chance to contribute and to lead.

And it can create a culture where innovation and creativity are valued, where we don't just look at the way things have always been, but rather we say, how could things be? Why not? Let's make something new.

The spirit speaks to something deep inside of all of us. No matter who we are, what we look like, where we come from. You look out across this auditorium, you're all of different backgrounds and cultures and races and religions. Some of you are from teeming cities. Others are working in small rural villages. But you have that same spark, that same creative energy to come up with innovative solutions to old challenges. And entrepreneurship is what gives people like you a chance to fulfill your own dreams and create something bigger than yourselves.

We live in a time when more than half the world is under the age of 30. And that means we've got to make sure that all of our young people around the world have the tools they need to start new ventures and to create the jobs of the 21st century, and to help lift up entire populations.

[14:05:00] And so many of you are already doing this. As I travel around the world, one of the extraordinary things that I had the opportunity to do is to meet young people in every region and to see the problem solving and the energy and optimism that they're bringing to everything from how to generate electricity in environmentally sound ways and remote places that are off the - off the grid right now, to, you know, how do you employ women in remote areas who all too often have been locked out of opportunity. You just see enormous creativity waiting to be tapped. And part of our job, part of this summit's job is to make sure that we're putting more tools, more resources into the hands of these folks who are changing the world, and making sure that all of you know each other so that you can share best practices and ideas and spread the word.

Now, I know that the daily reality is not always as romantic as all this. Turns out that starting you own business is not easy. You have to have access to capital. You have to meet the right people. You have to have mentors who can guide you as you get your idea off the ground. And that can be especially difficult for women and young people and minorities and others who haven't always had access to the same networks and opportunities. You deserve the same chance to succeed as everybody else. We've got to make sure that everybody has a fair shot to reach their potential. We can't leave more than half the team on the bench.

That's why we've invested so much time and effort to make sure that America is helping to empower entrepreneurs like you. So we held our first summit back in 2010. Since then, we've brought entrepreneurs like you together in Turkey and the Emirates and Malaysia, Morocco, Kenya. And all told, we've helped more than 17,000 entrepreneurs and innovators connect with each other, access capital, find mentors and start new ventures. Seventeen thousand.

WOLF BLITZER, CNN ANCHOR: So there's the president of the United States speaking at Stanford University, delivering his official reaction to this historic decision by the U.K. to withdraw from the European Union.

Let's assess what we just heard. Joining us, our White House correspondent, Michelle Kosinski. Also with me here in Washington, our CNN political analyst, the host of "The David Gregory Show" podcast, David Gregory. Susan Page is with us. She is the Washington bureau chief for "USA Today." And Greg Ip is the chief economics commentator for "The Wall Street Journal."

Michelle, the president says this is not going to affect the overall U.S.-U.K. relationship, although he's clearly deeply disappointed by this decision.

MICHELLE KOSINSKI, CNN WHITE HOUSE CORRESPONDENT: Right, and it won't. Of course it's not going to affect that relationship. And the president also emphasized today in another separate statement that the U.S. also has a very strong and vital relationship with the E.U. So the president wants to say, we are close with everybody. Those ties are still strong. They're going to continue.

There's somewhat of a reassurance in that. The president did so - did say, though, that he spoke to Prime Minister Cameron by phone. He said he feels confident that this is going to be as orderly a transition, at least as is possible.

But he did mention some of the force behind this, saying that this speaks to the ongoing challenges in the world that are brought on by globalization. I think it was interesting to hear the vice president speaking today. He's traveling in Ireland. He gave a speech earlier at a university. And he kind of broadened it out to the sentiment and the ground swell that's going on not just in Britain that led to this, but elsewhere in the world. He also connected it to the U.S., connecting it to the sort of rhetoric that goes along with Donald Trump, but these were thinly veiled references. He didn't mention him by name. But Biden said that these kinds of challenges that lead to anger and frustration provide fertile terrain for reactionary politicians and demagogues pedaling xenophobia, nationalism, and isolationism.

So you can see how the White House feels about this. I mean we just heard the president give that speech that some took to be a lecture to the British people back in April, laying out why he felt that going it alone was a bad idea. That nations are stronger when they act together as a bloc. So certainly, you know, this is going to shake things up. The president wants to say, you know, there's some status quo that remains there here, but this is a disappointment for the White House.

BLITZER: It certainly is, as the president made it clear when he was in the U.K. in April, he wanted the U.K. to stay in the European Union.

[14:10:02] David Gregory, what did you hear from the president that stood out in your mind? DAVID GREGORY, CNN POLITICAL ANALYST: It's an important political

point he made, that as we talk about and even celebrate globalization, the free flow of capital and people around the globe, the interconnectedness of our economies that as a political matter we have to understand that there's a reaction to that. There is a nativist politics throughout Europe and in the United States as well. People who are saying, yes, but what about me? I was left behind by all of this progress, by all of this globalization. People who feel the economic stress, who feel that they're not active civically at all, not active politically. And these are people who are then complaining about identity, or complaining about immigration, the changing nature of their countries in Europe or even in the U.S.

This is a potent political force with which politicians have to deal. In America, Donald Trump is on the cutting edge of that. And Hillary Clinton and President Obama have to be able to deal with this politically. And I think that was a significant note of caution today from the president, putting it on the agenda.

BLITZER: Yes, because he's got the globalization on the one hand, which he makes it clear, and a lot of people feel, that's good for the elites. But populism, on the other hand, there are a lot of people, average people, aren't feeling those benefits.

PAGE: And, you know, of course, some of its racial and ethnic. We know that. But some of it's not. Some of it's a sense that the government has not been listening to me. The government is not responding to my concerns. I raise my concerns, nothing happens to address them. That's certainly one of the messages we heard from the British electorate. It's one of the messages we hear here too, and it's a warning I think to Hillary Clinton, who has long experience in government, reflects in some ways a lot of continuity. People are saying, I'm voting for change, not more of the same, even if it seems risky.

BLITZER: Greg, 28 members of the European Union, now without the U.K., 27, but there's great fear other countries in the European Union are going to follow Britain's lead now. That whole European Union could crumble.

GREG IP, CHIEF ECONOMICS COMMENTATOR, "WALL STREET JOURNAL": Yes, and I think that's one of the things that the United States worries about. You know, the United States has been a sponsor and a believer in the European project right from the early days as a way to strengthen and unify the continent, first as a bulwark against Soviet hegemony.

I think this creates a lot of problems. Within Europe, Britain was always on the side of the United States in terms of its military priorities, its economic priorities. A European Union without Britain is one that will be harder to align with American interests.

BLITZER: Yes, that's one of the reasons there were positive statements coming out of Moscow today from the Russian president, Putin. You heard Matthew Chance report from Moscow, they're pretty happy about this over there.

IP: Oh, absolutely they are. I mean all this stuff which eats away at essentially the so-called neoliberal model is just like manna from heaven for Putin.

BLITZER: Greg Ip, thanks very much.

Susan Page, David Gregory, Michelle Kosinski, guys, thanks very much for that.

That's it for me.

Coming up, U.S. markets near - nearing closing time, plunging after that historic Brexit vote. We're going to get a check on Wall Street when "Newsroom" today with Brianna Keilar starts right after this quick break.

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[14:16:59] BRIANNA KEILAR, CNN ANCHOR: Hi there. I'm Brianna Keilar. And we are right now watching the global shock waves of a decision that will go down in history books. The United Kingdom has just voted to leave the European Union, turning its back on decades of intimate cooperation with neighbors across the English Channel, in favor of going it alone.

Back here in the U.S., well, right now your nest egg is probably shrinking. Wall Street and your 401(k) have been taking a beating all day. The Dow fell more than 500 points after the opening bell and it remains there, down 517 points right now.

Around the world, stock markets are nearing record losses. In Britain's currency, the pound plunged to its lowest level in 31 years. The implications of this so huge that Britain's prime minister, David Cameron, who fought for the U.K. to stay in the union, just announced his resignation after losing one of the biggest political gambles of all time.

And all of this as the presumptive Republican nominee, Donald Trump, happened to be in Scotland to open a golf course. His prediction, making its way back across the pond, America is next.

Joining me now, Nic Robertson.

Nic, talk us through this. Tell us how this transpired.

NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: It began, if you go back far enough, to deep divisions within David Cameron's conservative party, the ruling party here. These divisions go back decades when Britain first went into the European Union. He then promised them going into the last election that they would have a referendum - an out referendum on the European Union. The debate heated up. It came to boiling point in the past week. What happened across the country, big swaths of the country voted for leave. Scotland voted to remain, but now threatens to break off from the rest of the U.K. London voted for remain and a few of the other bigger cities in the country.

So what we now see is a country that is divided. David Cameron has offered his resignation. There are other - there's other political turmoil here. The leader of the opposition, who was also for remain. There are politicians in his party calling for him to leave.

And now we see as well the financial implications of this. David Cameron had warned that Britain would be worse off, that trade would be worse, that if we left the European Union, people would have less money in their pockets. What people are seeing right now is the British pound falling in value. There's a lot of people, and I've spoken to them today, that voted for leave, and they hope that in the coming weeks that the situation with the pound will level itself out. The financial experts I've talked to think that the pound won't rebound as far as it was before the referendum was called.

Brianna.

KEILAR: All right, Nic Robertson there at 10 Downing Street. Thanks for that report.

And as new reality settles over Europe, U.S. stocks are getting hammered. I want to go live now to Alison Kosik. She is at the New York Stock Exchange.

Give us a sense of how the markets are reacting here and what might we anticipate by the closing bell, if we expect that it will remain where it is, down more than - the Dow down more than 500 points.

[14:20:00] ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Well, it certainly looks like the selloff is going to stick. And it very well could get a little bit worse as we get closer to the closing bell. We have about less than two hours to go until the closing bell and it's just not getting any better.

And part of the reason is because you've got a lot of investors who were caught off guard about what happened. You've had investors all week literally banking on what they thought were the British people voting to stay in the European Union. You could see that in the way that the trade was going all week. There were several rallies this week. And the expectation was that the U.K. would stay in the E.U. And then when you have investors wake up today and find out just the opposite, they're surprised and not surprised in a good way. So Wall Street does not like surprises, and this is an outcome that brings a lot of uncertainty, and Wall Street does not like uncertainty.

So you're seeing a huge flight to safety. You're seeing a lot of investors are buy gold. That is considered a flight of safety. You also see a lot of investors running to buy U.S. government bonds as well. So you're seeing this sort of transform the market in a certain way and we're not seeing it get any better at the moment. Right now, as we've been talking, we've been seeing the Dow fall even more.

Brianna.

KEILAR: And this is what Americans are watching right now. All right, Alison Kosik at the New York Stock Exchange, thank you so much.

I want to bring in our panel now to discuss this some more. We have David Rothkopf, CEO and editor of "Foreign Policy Magazine" and author of "National Insecurity." We have Rana Foroohar, she's CNN global economic analyst and assistant managing editor at "Time." And we also have Mark Zandi. He is the chief economist at Moody's Analytics.

So, Mark, I think people are watching here in America, they're watching what - obviously, the Dow down. They're looking at their 401(k)s. But what does this mean for the average American when we're talking about borrowing money, when we're talking about mortgage rates, for instance?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Well, you know, I think net/net this isn't going to be a big - this is not going to have a big impact on the average American. I mean as the previous journalist was talking about, stocks are down big today, but they had run up quite significantly in the last few days in anticipation of a stay vote. So all we're doing here is coming back to where we were.

And interest rates are actually lower, Brianna. I mean they're buying Treasury bonds. That means mortgage rates are going to come down. And it may, in fact, come down enough that many homeowners will be able to refinance their mortgages again. So, you know, unless this signals a broader splintering of the European Union, which you can't rule out, certainly a risk, but if that does not happen, then I don't think the fallout on the American economy, our economy, will be that significant. We'll be just fine.

KEILAR: Rana, what does that mean if there is a further splintering of the European Union?

RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: Well, I think it means a lot more volatility. And, you know, the problems that have underscored the European debt crisis for many years have not gone away. Brexit is just - you know, could be just the first domino. You still have sort of a two-tiered Europe. You have a strong core with Germany. And then you have these peripheral countries, Italy, Portugal, Spain, which actually has an election vote on Sunday, that are more problematic. They have very different economies. It's always been difficult to bring them together. There's no real political union. A lot of people think that until there is a kind of United States of Europe, that we could continue to see problems like this, like the potential fragmentation of Europe rise and fall. And there will be market volatility off the back of that for sure.

KEILAR: David, former U.K. Prime Minister Tony Blair just spoke with CNN's Wolf Blitzer about the parallels that we're seeing between the leave movement in the U.K. and also the movement for Donald Trump here in the U.S. Here's what he said.

(BEGIN VIDEO CLIP)

TONY BLAIR, FORMER BRITISH PRIME MINISTER: Look, who you elect as president is up to you. I mean, let me just put it like that. But what I do think is that there is a strange coming together of populism from the left and the right that you would think that populism of left and right doesn't have much in common. And curiously, they have a lot in common. Thinking that isolating ourselves or shutting our borders is the way to deal with it, it's not. There are solutions for the future that we've got to put forward before people. And the danger is, there's so much anger at the moment, that the anger displaces what are frankly the more rational answers.

(END VIDEO CLIP)

KEILAR: And so he says, David, he says isolation is not the way to go, that this isn't really the answer to frustrations. But it's also a pretty natural reaction, right, of what you would expect from those frustrations with what's going on in Europe and also in the U.S.

DAVID ROTHKOPF, CEO AND EDITOR, "FOREIGN POLICY MAGAZINE: Yes, I think there are a number of factors that are playing to people's economic anxieties right now. You have globization. You've got refugee flows. You've got new immigration flows. You've got technological change that's producing greater productivity and eliminating jobs in favor of automation. All of these things make people anxious about their futures, and demagogues, people like Farage (ph) in the U.K., or Marine Le Pen in France, or Donald Trump in the United States, tend to play to those fears and try to take advantage of them.

[14:25:21] That said, I think the stakes are very different in the United States. I also think that the way we get from here to an election in November requires passing through our Electoral College system, which makes it very, very hard for Donald Trump to actually become the next president the United States. So I don't think that we can say, well, because the Brexit happened, Trump is more likely to happen. But I do think we can say that this economic anxiety is going to drive a political nationalism in Europe, in the United States. We've seen it in the Philippines. We've seen it in other parts of the world for some time to come now.

FOROOHAR: Yes, I completely agree with that. And I think that what these two events have in common, potentially the situation in the U.K. and the elections in the U.S., is that the elites are completely out of touch with the masses. There is a major trust gap between the elites and the mass populations in almost every country these days, and that's why the markets were so surprised by this. The markets were only pricing in about a 25 percent chance of a leave vote. They just couldn't believe that it would happen. But Wall Street and Washington are in this sort of elite bubble. The rest of the mass population is feeling something very different.

KEILAR: It is, Mark, sort of wishful thinking, right, where if the expectation - oh, there's just no way that -

FOROOHAR: Yes.

KEILAR: You know, they're going to leave. At the same time, you had a lot of Democrats and Republicans who thought, oh, Donald Trump's not going to gain any traction, and here he is, the presumptive Republican nominee.

FOROOHAR: Yes, I totally agree with that.

ZANDI: Right. Right. No, I think - yes, I think that's very true, Brianna.

KEILAR: Mark, go ahead. Mark, go ahead. ZANDI: Yes, no, I mean I do think we are - many people are

underestimating the just angst and anger among a large segment of the population. And it - you know, it is understandable in the sense that, you know, here we are seven years after the great recession ended. I mean, believe it or not, this economic recovery, we've been growing for seven years, but we're still not quite at full employment. I mean we don't - we haven't employed all those part-timers who would like more hours. There's a lot of people who have stepped out of the workforce that say they want work. And so wage growth has just only started to pick up.

So people just don't really believe. They don't feel it. As a result, you know, seven years is a long time. And perhaps, more importantly, it' about - it's about expectation. So if you've been kind of in this - this tough financial world for long, you begin to think it's never going to end, and not only for you, but for your children. And when that happens, you get - you get angry and you just listen to the strongest voice. Whether it's right or wrong, it doesn't really matter, it's just a strong voice. And I think that's what we're observing in many parts of the world, including here in the United States.

ROTHKOPF: Yes, I think you're ended up with a kind of a leadership gap on the other side of the equation too. It's easier to be a Trump and to say everything's wrong. It's harder to say, what do we do specifically?

ZANDI: Yes.

KEILAR: Yes.

ROTHKOPF: How do we create a job? How do we redefine the new economy? How do we find the money to invest in infrastructure? And I think that's going the be the challenge for Hillary Clinton -

FOROOHAR: Yes.

ROTHKOPF: In the run-up to November, is to say, I have a positive response to this, and to see whether that actually assuages the fears that have driven people in the direction of demagogues like Trump.

KEILAR: David, Rana, Mark, thank you -

ZANDI: But you know the irony here - the -

KEILAR: You know, I'm so sorry, you guys, I have to leave it. I'm loving this conversation.

ZANDI: No, no.

KEILAR: But I'm going to leave it there for time. Thank you so much to all of you for talking through this with us. We appreciate it.

Coming up, this messy divorce, as it's being called. Now that the Brits have spoken, how does a split from the European Union play out? It's never been done before. Also, the domino effect and what's to prevent other European countries

like France and the Netherlands from also voting to leave?

And more on parallels between Brexit and the U.S. presidential election. Why Donald Trump says President Obama is to blame for this result in the U.K.

It's a busy Friday. Stay with us.

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