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Amanpour
Interview With Author Archie Brown; Interview With Former Federal Deposit Insurance Corporation Chair Sheila Bair. Aired 2-3p ET
Aired April 16, 2020 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
[14:00:00]
CHRISTIANE AMANPOUR, CHIEF INTERNATIONAL CORRESPONDENT: Hello, everyone, and welcome to "Amanpour." Here's what's coming up.
Promising coronavirus news from Germany. The super tester, where the curve is flattening and some lockdown is lifting. I'll ask the health minister,
Jens Spahn, how they did it.
Then, the forces shaping the climate and the debate amid the pandemic, with atmospheric scientist, Katharine Hayhoe, and her husband, pastor, Andrew
Farley.
And --
(BEGIN VIDEO CLIP)
RONALD REAGAN, FMR. PRESIDENT OF THE UNITED STATES: Mr. Gorbachev, tear down this wall.
(END VIDEO CLIP)
AMANPOUR: The difference the right leaders can make at the right time. Historian, Archie Brown, on Thatcher, Gorbachevian and Reagan and the end
of the Cold War.
Welcome to the program, everyone. I'm Christiane Amanpour, working from home in London.
Governments around the world are wrestling with their coronavirus response, weighing whether to keep the health lockdowns in place or to restart their
frozen economies. Here, the U.K. will stay at home for another three weeks. While China, Denmark and more begin a gradual return to business.
President Trump says the United States has passed the peak of new cases, and the White House is proposing new guidelines to reopen parts of the
country, though public health experts warn a strong testing program is still needed. This comes amidst more dismal economic news as another 5.2
million workers filed for unemployment. Overall, then, that's 22 million Americans who have lost their jobs in less than a month.
Meanwhile, protesters are marching in several states, demanding a return to work with some calling strict stay-at-home rules government overreach.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I'm here to protest the rights of the people. I truly believe that there are some people that are at a higher risk than others.
Us people that are at a lower risk, I feel like we should have continued at our lives and continued working.
(END VIDEO CLIP)
AMANPOUR: And a lot of these protests were, in fact, organized by conservative activists and groups in the United States.
Now, in Germany, of course, there have been infections, but the death rate has been low. How the government -- now, the government plans to ease the
lockdown and reopen some schools in early May. So, what are they doing right? Jens Spahn is Germany's health minister and he was also its deputy
finance minister. And he's joining me now from berlin.
Minister Jens Spahn, welcome to the program.
Can I just ask you, what gives you the confidence and why do you have the confidence to start with a gradual release and relief of this lockdown?
JENS SPAHN, GERMAN HEALTH MINISTER: Good evening to London, Christiane. First of all, that Germany so far has to get through this. So, good makes -
- one, makes the German people very humble and grateful, not overconfident. We've seen a very dynamic situation of the outbreak in the middle of March
and then we took measures locking down social life, measures of social distancing, and that makes it possible, actually, to slow it down, the
outbreak.
And now, we have numbers was down of new infections here in Germany and this gives us a chance actually to reopen, step by step. And that is
important, step by step, to a new normal. This won't be like it was before. For example, social distancing, wearing masks, needs to be in place for
months. And we need to lift -- to learn to live with the virus, we need to live with the virus, and that means we only can start step by step, as you
said, by opening small shops, for example, by starting school again for the elderly pupils. And then after two weeks, we will have a review and decide
if to take another step or not.
AMANPOUR: Because all of the obvious things like bars, restaurants, sports, gyms, et cetera, they don't open up, right?
SPAHN: They don't open up yet. And I would say many of these like parties, clubs, discos, will be the last ones to open up, because that is really the
situation where the virus has the biggest chance, actually, to be transmitted to another person, because you are very near to each other, you
party, you might drink alcohol. I would say that's the last thing that will be opened. What is more important to people is school, kindergarten and, of
course, the possibility to go to work.
AMANPOUR: This came after several days of consultation, we understand, between the chancellor, health experts, regional leaders in Germany.
Describe to us, was there tension? Was there differences? I mean, do some think they shouldn't be lifted? Do others think they should be lifted much
more rapidly?
[14:05:00]
Because every country is now going through this process of planning for a reopening. And many countries have not laid out, you know, any sort of, at
least blueprint for how they're going to do it. So how did you get to this point in terms of just the consultation?
SPAHN: Well, first of all, I find it very normal that there is a controversial debate on this in a democratic, liberal country. Anything
else, actually, would be something that would have worried me, to be honest. Because, I mean, we have taken measures that are very hard for the
life of people. I mean, we have -- regarding the freedom of movement, for example, measures in place that -- like never before and at the time of the
federal republic. And so, there needs to be a debate. But we need to find the right balance.
It's not public health or the health of people versus economy. Because they both are very much interlinked. You can't have a well-equipped health
system without a strong economy, for example. So, what we need is to find the right balance between social life, between business life and, of
course, health security and the health of the people. And that needs a good debate and that needs an approach step by step, of that, I'm very much
convinced.
This is a new virus. This is a new situation. And because of that, we are very precaution. At the one hand -- at the one side and at the other side,
of course, we want to get back to a new normal. And that means that all German citizens, actually, need to be with us in this, because we all need
to change our behavior in all day's life.
AMANPOUR: Yes. I mean, you saw, probably, some of these protests that have erupted in the United States, certain groups. Many of them, it has to be,
say, organized politically, start to protest against certain governors and talk about sort of government overreach and an infringement on liberty. I
guess you haven't -- well, you've said that there has to be a debate about it. But can I ask you just quickly about the statistics?
You did have a much lower death rate. I'm going to try to find the figures on this. Your death rate is at about 1.9 percent versus 12.8 percent in
Italy, 12.7 percent here in the U.K. I wonder how you account for that. And also, we have to say that within the last 24 hours, your statistics show
that you've had about 315 deaths. Can you explain to us, you sort of said testing and social distancing, but what made you so way ahead of the
testing, for instance? Which is a huge controversy here in the United States, in many places. It's not nearly sufficient.
SPAHN: Well, we had a big chance of huge testing capacities from the very beginning actually. And that gave us a chance to detect what's going on, to
get a really good picture of the epidemic situation here in Germany, from the beginning, to see the mild and asymptomatic cases, as well. And these
are important to really see and to know what's going on.
And with this testing capacities from the beginning, that was already a big advantage. And then we traditionally, actually, have big ICU capacities
here in Germany. And we even manage to increase them by postponing, for example, elective operations and elective treatments in hospitals. We asked
hospitals to postpone mid of March. And meanwhile, we have 10,000 empty ICU beds here in Germany. We were able to actually treat all patients with
ventilation that needed it. And I'm very happy that actually we made this together, with the health care workers and the hospitals here in Germany.
So, our biggest chance, actually, and opportunity was to take it very serious from the beginning, to know from the beginning, what's going on in
the country and to prepare as good as possible.
AMANPOUR: Because this is absolutely crucial. Today, one of the most eminent scientists in Britain, Professor Niall Ferguson, went public and
said that this government needs to accelerate its testing capabilities and its ability to test, because it's really, really not anywhere near where
they promised or where it needs to be. And as I said in the United States, as well.
Would you say that it is testing, like, for instance, Dr. Anthony Fauci says, that will allow economies to reopen? I mean, can you do it without
having a testing capacity, at scale?
SPAHN: Well, testing is one big issue in this, that's definitely for sure, but that's not all. What really is important, and testing is helpful for
that, but is not enough, is to detect new cases immediately when they occur and to figure out who were the contact persons in the past days. To detect
them and to isolate them immediately too.
[14:10:00]
That is actually what all the countries that so far are more or less able to manage this really show that you need to detect and to isolate the
patients and the contact persons to stop the infectious chain as early as possible. And when you manage to do that, actually, you never reach a high
number, a too high number of infections per day.
And by too high, I mean, you never reach that number, actually, when your health system is not anymore able to cope with those who need, for example,
ventilation or intensive care. That is, for me, the top priority. To make sure that we have the treatment for every patient, the treatment that he or
she needs, especially in intensive care. And for that, you need to have control about the number, about the outbreak, and for that, you need to
detect and isolate, and testing is one part of it.
AMANPOUR: And obviously, historically, your country has poured a lot into the health sector. But can I ask you this, because you are also the third
largest contributor to the funding of the W.H.O., you're obviously on top of the controversy. President Trump has pulled U.S. funding, it is the
major funder for the W.H.O. We've been digging into this extensively. Obviously, China was not transparent from the beginning. W.H.O., you know,
perhaps repeated a lot of what China was saying in the beginning. But the facts and the records show that W.H.O. early on warned every government to
take precautions, even before it knew the extent of this problem.
So, my question to you, how does it help in a global pandemic or what do you think the effect will be of the U.S. defunding it for a period of time?
SPAHN: Well, Christiane, the United States of America has been a long- standing partner and financial supporter of the World Health Organization, and that was, and is, very much appreciated by all of us. So, if they were
to freeze their funding for the organization, that would be a big setback.
And we think our position is that in times like this, we need international cooperation and the role of the W.H.O. and this is crucial. So, they have
our full support. And there -- no doubt, I mean, of course, you always can optimize the internal processes of governance of an international
organization and you always need to debate this after the crisis.
Of course, we have to debate the lessons learned. We have to reflect what went wrong and what can be done better, but that should be done after we
have overcome this. And however, in general, I just want to emphasize that this blame game has no winners. I mean, all of us, we all need -- well, we
all have the responsibility for the protection of our people. And the truth is, we all -- we're not fully prepared for what occurred.
AMANPOUR: Minister, I want to ask you, because a lot of this is about politics as well and many are casting President Trump's action in terms of
politics, in trying to deflect, certainly, criticism of the United States for not taking this situation as seriously, as fast as it should have done.
And I just want to read you a tweet from an investigative reporter, Andrew Kaczynski, on April 16th, this is President Trump. On February 10th on
China and W.H.O., China is very professionally run in the sense that they have everything under control. We just sent some of our best people over
there, World Health Organization, and a lot of them are composed of our people. They're fantastic.
So, as we know, the president praised China early on and it praised the W.H.O. early on. I just want to know whether you think, even if there's a -
- you know, you said, a blame game doesn't help anybody and could, in fact, make things much worse. But is there a risk now of disarray? Are you
worried that a big, big amount of money that the W.H.O. needs, particularly if this moves into the developing world, where only the W.H.O. is there to
help, could really cost more lives?
SPAHN: Well, in general, my main duty is to make sure that German citizens get well and health (INAUDIBLE) as good as possible. So, I don't want too
much comment on other countries' strategies. But in general, two or three remarks. First of all, this crisis, this international crisis should not be
politicized. I mean, it's about the life and death of our people. It's a very serious situation. And there should be no political game in this.
[14:15:00]
Second, this is a global crisis. And a global crisis needs a global answer and global action. And for that, we need international organizations like
the W.H.O. to coordinate and to support. By the way, especially support those who really need more support than German, the U.S., Europe, countries
in Africa or Southeast Asia, who really need the support of W.H.O.
And a third thing, just about China, if I might. Just one lesson learned, definitely, for all of us, every country -- any country affected by the
outbreak of a new virus, including China, should share its data and findings from the very beginning. Knowledge and data is crucial in this,
and to have it as early as possible. And one lesson learned, that's for sure, definitely, is that any country, really, should share it from the
beginning. And that definitely can be done better.
AMANPOUR: Absolutely. Can I just ask you, because you're talking about global solidarity and don't point fingers in the middle of this and lives,
et cetera? There obviously has been quite a lot of criticism of the E.U. and all the individual countries for also not pulling together. You know,
banning exports of crucial gear at the beginning, keeping them for yourselves, all countries were doing that to, you know, for your own
citizens. But nonetheless, you know, it went kind of against the E.U. spirit.
Can I just play you what Ursula von der Leyen, she was a former minister in your own country, now the head of the E.U., this is what she has said about
this state of affairs currently.
(BEGIN VIDEO CLIP)-
URSULA VON DER LEYEN, EUROPEAN COMMISSION PRESIDENT: When Europe really needed to be there for each other, too many initially looked out for
themselves. When Europe really needed an all-for-one spirit, too many initially gave an only-for-me response. And when Europe really needed to
prove that this is not only a fair-weather union, too many initially refused to share their umbrella.
(END VIDEO CLIP)
AMANPOUR: So, Minister Jens Spahn, I mean, look, she's pointing it out, and even now, there's no unity in how to sort of rescue economies. I know
yours is taking a big hit like many others. But, of course, some would like to see a sharing of the debt burden. Is that ever going to be possible? And
what do you say to kind of failing the test of unity in Europe at this time?
SPAHN: Christiane, this is a very stressful time for the European Union, no doubt. And like in too many crises before, actually, the European Union
at the beginning seemed to be disorganized, even paralyzed. That's true as well. But we have pulled things together and stand strong together now.
For example, we are helping each other. Germany is taking patients from Italy, France, Spain, to be treated here and ventilated here in Germany. We
even able to donate a couple of hundreds ventilators to other countries in Europe. Or from the economic perspective, the 500-billion-euro package that
the European financial ministers negotiated. That is a big, big support and that is actually solidarity, European solidarity when and where it is
needed. And it is in the spirit of the European Union and at the same time, it is the right balance between financial soundness and European
solidarity.
So, yes, at the beginning, I would agree, Ursula von der Leyen is right. But meanwhile, we have managed to put things together. And I'm, by the way,
very sure this European Union will get out of this stronger than before.
AMANPOUR: Important point. Minister Jens Spahn, thank you so much, indeed, for joining me.
So, these are, of course, difficult times, but if there is a silver lining in coronavirus news, it is this. The economic shutdown is causing at least
temporary relief from air and water pollution. In China, satellite images show air pollution rates dropping dramatically. Researchers say improved
air quality could save 50 to 75,00 lives. And in Venice, fish are returning as the canals become visibly cleaner.
So, could this be a harbinger of a low-carbon future or could economic and political pressure turn the clock back again on climate regulation?
Katharine Hayhoe is an atmospheric scientist and author of the U.S. national climate association and her husband, Andrew Farley, will join us
in a moment. He's a leading evangelical pastor.
So, Katharine Hayhoe, welcome to the program.
First, let me just ask you. You saw the pictures. Everybody sort of saw the pictures at the beginning of the global economic lockdown, that seem to
show the air was cleaning and we could breathe better. Tell me, as an atmospheric scientist, what you saw and what you felt about the longevity
of that situation?
KATHARINE HAYHOE, CLIMATE SCIENTIST: Well, the question that you asked at the beginning is exactly the question. We are seeing a glimpse of what our
blue skies and our clean air and our clear water would look like in a clean energy future.
Now, we have not achieved those today through sustainable methods. People have to return to work, children need to return to school, the economy
needs to start back up. But if we had that economy powered by clean energy, that is what our skies, our water, and our land would look like.
AMANPOUR: So, I mean, I mentioned China, down by 25 percent of carbon and pollution. Delhi, India, which is very polluted, down by 71 percent. But
here's the question, then, people are going to say and ask, is the cost of clean air and clear skies a total halt of the global economy?
HAYHOE: It is not if it is achieved through sustainable methods. What are those? Those are massive increases in efficiency, which could take the
United States halfway to its Paris goal all by itself. Transitioning our economies to clean sources of energy, a transition that is already
underway, with about 70 percent of new electricity around the world being installed today, being wind or solar energy. And reducing our independence,
ultimately, on the old and dirty fuels that have served us we for centuries, but are no longer our future.
AMANPOUR: So, what do you think is going to come out of this? You know, we've got many -- you know, people who have -- who are activists and
scientists on this who just -- you know, just hope that this is going to be a turning point. What do you actually think? Because, again, you know,
airliners haven't been flying in the way that they normally do. And there's been a massive, massive drop, you know, carbon dioxide emissions dropped 31
percent from airlines in March. You know, that's 28 million tons of carbon dioxide. That's great news for the planet, great news for us. But again, is
it sustainable? What does airline travel look like after the, you know, economy gets back up and running again?
HAYHOE: The changes that we have seen today, very few of them are sustainable. I certainly hope that people have recognized that there are
different ways to communicate and engage without having to be physically present all the time. But as the economy ramps back up, so, too, will our
carbon emissions. But that's not to say that we haven't learned something.
Because what we have learned is that when we act decisively to confront a risk that challenges us all, we can make a difference. Imagine this.
Imagine that if the pandemic leads to maybe about a 10 or 15 percent reduction in carbon emissions around the world, temporarily, just for a few
weeks, imagine if those reductions had been achieved through sustainable methods, like efficiency and clean energy, we would be a quarter of our way
to the Paris goal for the United States and for the world, in just a matter of weeks. It showed us that when it really comes down to it, we are able to
act.
AMANPOUR: Katharine, what -- because the army, the U.S. army and many have said that climate change are threat multipliers, you know, in all sorts of
areas around the world. Do you think that climate change, the warming, the carbon pollution -- I mean, it's too early to know, but does it also, in
your experience, accelerate the danger of viruses? I mean, we do know that in SARS, according to the statistics in China in 2003, patients from
regions with high air pollution was twice as likely to die from SARS. Can you put that into context in this pandemic?
HAYHOE: And the majority of that air pollution comes from burning fossil fuels, which is also where the majority of our carbon emissions come from
too. A new study out of Harvard University, just last week, showed that that is also true for coronavirus. Those of us who live in very dirty,
polluted areas, our lungs are already vulnerable, putting us at much greater risk, if we do contract the virus.
We also know that climate change is increasing the spread of other different types of viruses. Not influenza-type viruses, but ones that are
carried by mosquitos and ticks, like lime disease, zika, chicken chikungunya and malaria. As the world warms, the carriers of these
diseases, the mosquitoes and ticks are spreading further and further forward.
One of the biggest reasons we care about climate change is the same reason we care about the pandemic. Because it puts our health and our safety, that
of our friends, our family, our loved ones, and our communities on the line. And that's why to care about climate change just as with the
pandemic, we don't have to be a specific type of person politically or otherwise, all we have to be is a human living here on planet earth.
[14:25:00]
AMANPOUR: So, now, let me ask you about, for want of a better term, what's happening under the cover of darkness, what's happening under the cover of
this pandemic by the Trump administration with all sorts of EPA regulations. We just heard today they plan to relief some of the
restrictions on mercury and other pollutants that come out of, for instance, the coal industry. We also, obviously, know that the end of
March, President Trump or the administration announced it is rolling back Obama-era fuel standards. Those, obviously, are meant to reduce carbon
emissions and weaken fuel economy standards.
This -- President Obama himself reacted to saying, we've seen all too terribly the consequences of those who denied warnings of a pandemic. We
can't afford anymore consequences of climate denial. All of us, especially young people, have to demand better of our governments at every level and
vote this fall. Well, you know, that's not too subtle a message to vote for leaders who believe in saving the environment.
But what do you make, given, you know, you've been part of the assessments for the country, of these rollbacks and this sort of lessening of the
regulations on the protections that exist already?
HAYHOE: Unfortunately, these rollbacks will attack the very thing that is threatened by the pandemic, which is our health. Why do we have regulations
on pollution? It's because pollution affects us. And so, rather than moving in the right direction, with the rollback of these standards, we are moving
in the wrong direction, putting even more people at risk.
AMANPOUR: Katharine, I want to ask you, because we did announce that your husband is there with you, Andrew Farley, he's a pastor. And I know that
you two have, you know, discussed from different perspectives, from your perspective as a scientist, from his perspective as an evangelical
preacher, how to commute -- how to communicate rather climate care, for want of a better word, to the congregations and to the people who are most
resistant to it.
So, if Andrew is able to join in and if he can hear, I would love to ask him that question. There you are. Andrew, welcome to the program.
ANDREW FARLEY, EVANGELICAL PASTOR: Yes. Hello, hi.
AMANPOUR: Tell me about how you deal with. It's great to see you.
FARLEY: Yes. Well, it's God's creation. And so, I think as a pastor, we look at things from that perspective and we say we're called to take care
of God's creation, to do a good job with it and to not make decisions that put it in jeopardy.
So, clearly, we live in a fallen world, that's what we believe. So, if we believe that, when rape occurs, when murder occurs, when anything of that
sort occurs, then why not also agree that we can make mistakes about our environment and suffer the consequences, because that just seems to be the
way that the planet rolls every day.
AMANPOUR: So, that sounds eminently sensible and, you know, you framed it in, obviously, the terms that your community will -- should understand. Are
they -- is your message on climate actually resonating with your evangelical congregation?
FARLEY: Yes. Well, I really don't have a message on climate. As a pastor, I find that it is a very volatile message because it's attached to
politics. It's -- I find it nearly impossible to communicate about climate issues because you look at a thermometer, a thermometer is not Republican
or Democrat, and it would seem to be an objective measure of what is happening around the world.
Nevertheless, as soon as you hit some hot-button issues and use some buzz words related to climate or global warming or anything like that, people
immediately seem to image we're tanking the economy, we're hurting our own nation, we're no longer competitive with others. And so, I think what
happens is, we jump from the problem to the proposed solutions so quickly and people end up plugging their ears because we don't have adequate
solutions pitched besides perhaps a carbon tax and that sort of thing, and then people hate the word tax. So, on and on it goes. The moment you raise
the issue, well, they go to the solutions that they don't like.
AMANPOUR: So, Katharine, how does that make you feel because, you know, we've said before and you've told us before that, you know, the solutions
don't have to be more painful than the actual problem. I mean, could you go to the -- to your husband's congregation and give them some factual
solutions on this?
HAYHOE: Oh, yes, and I absolutely do.
[14:30:00]
But Andrew really hit the nail on the head; 99.9 percent of the rejection of the science that we see and hear so frequently actually has nothing to
do with the science, it has nothing to do with theology. It has to do with perceived solutions.
People perceive solutions as only belonging to one-half of the political spectrum. And so a lot of what I do, what I end up doing is talking to
people about bipartisan solutions, about economic solutions, about even conservative solutions that they can get on board with and they can
actually support.
And that's what changes so many minds.
AMANPOUR: Andrew, I want to ask you, finally, because you saw this whole controversy about many, many Christians wanting to go to church on Easter.
Like many people all over the world, they want to go to church or mosque or synagogue for their high holy days.
But, obviously, churches have been closed down, but there were a lot of people who were defying these sensible orders to keep distance.
Again, how did you deal with that in your congregation. Do you do a lot of online preaching?
ANDREW FARLEY, EVANGELICAL PASTOR: Yes.
You know, we have seen the whole gamut across the United States and around the world in terms of Christians reacting to this coronavirus pandemic. I
have seen so many people say, this is God's judgment. It got to the point where it just made me so sick inside that I ended up writing a book, a
short e-book that people can download at my Web site, AndrewFarley.org.
And I was telling them, this is not God's judgment. You don't stop God's judgment with a pill. You don't stop God's judgment with a vaccine. You
don't stop God's judgment with a quarantine. This is humans doing this.
This is a result of what we have caused. And so then you say, are we not going to be responsible, given what we have caused? To turn a blind eye to
the reality and bury our heads in the sand and say, well, I'm invincible because I'm a Christian, I mean, the Apostle Paul was sick.
And the early Christians took care of him. Timothy, the young pastor in the Bible, he was sick and had frequent ailments. It's just nonsense for us to
act so foolishly, not to mention to disrespect the laws of the land and disregard the advice of the CDC, all in the name of being supposedly
invincible.
I think, sometimes, God allows all kinds of things just to teach us that we're frail and that we're weak and that we need to be dependent on him and
use Godly common sense.
AMANPOUR: Well, it's been great to hear both of you perspectives.
Andrew Farley, thank you so much. And, Katharine Hayhoe, as always, thank you for being with us on the climate science. Thanks so much. We will check
in with you guys again.
Now, as we mentioned earlier, 22 million Americans filed for unemployment benefits in the last month. And the whole global economy has taken a
beating.
Our next guest, Sheila Bair, was chair of the Federal Deposit Insurance Corporation. That is the agency designed to make banking safer for
consumers like you and me. She was once called the little guy's protector in chief.
And she joins contributor Sheelah Kolhatkar to discuss how not to repeat the mistakes of the 2008 bailout.
(BEGIN VIDEOTAPE)
SHEELAH KOLHATKAR, CNN INTERNATIONAL CONTRIBUTOR: Sheila Bair, thank you so much for joining us.
SHEILA BAIR, FORMER CHAIR, FEDERAL DEPOSIT INSURANCE CORPORATION: Happy to be here.
KOLHATKAR: In March, Congress passed the CARES Act, a $2 trillion bill intended to extend aid to families, businesses large and small across the
country. And this is an enormous transfer of taxpayer funds to private businesses.
The potential for abuse for fraud, for waste, for the dispensation of political favors is obviously very high.
How would you rate the oversight mechanisms that have been attached to this emergency money?
BAIR: It does authorize an inspector general to provide oversight of this, as well as a congressional oversight committee, similar to what we had when
-- with the TARP funds that were appropriated during the great financial crisis.
Frankly, those tools could have been stronger. There's really no job protection for the I.G., as we see. That perhaps is a problem. And then the
oversight commission has no subpoena authority. So, it can hold hearings, but it can't require the presentation of witnesses or documents.
So, I think those things help. I think the restrictions on buybacks and dividends was appropriate. It's not to say shareholders are bad people or
anything like that. They're not. But the best use of capital right now is not for shareholder payouts or a lot of executive compensation.
[14:35:07]
The priority right now should be on operations. So those legal restrictions that were placed not only on the industry-specific assistance to airlines,
but also more generally to this $500 billion worth of federal reserve lending facility, those restrictions apply as well.
And I think they were appropriate.
KOLHATKAR: Yet President Trump just removed the inspector general who had been appointed to oversee that money.
You know, does this raise concerns for you about what's going to happen with that bailout?
BAIR: Well, it does.
I mean, I think it creates a chilling effect, clearly. And you do want some stringent oversight. I would like to think and hope that corporate
recipients of this aid will understand the terrible crisis that our country is in and will responsibly use the funds where it's really needed, which is
support operations and payroll.
But a little oversight of that will help discipline, I think, keep everybody more honest. So the thought that this I.G. is not going to be
independent, could be fired at whim, is troubling. And that's not to get into the particular person or candidate.
I don't weigh in on that. I don't know the person. But I think the process was not a good one. And we need whoever that person is to feel empowered to
do his or her job, without fear of reprisals.
KOLHATKAR: Congress had a lot of leverage when they were debating this bill. And they obviously were in a position to ask a lot of the companies
who were going to be receiving taxpayer money.
And there was a lot of talk about restricting stock buybacks, restricting the use of the money for executive compensation, requiring companies to
commit to retaining workers.
However, there's concern now that some of those conditions were not strict enough. What do you think?
BAIR: Well, we don't know.
As far as I know, Secretary Mnuchin has not granted any exceptions. There is another concern, which is that the Fed has its own facilities too that
is provided to intervene in corporate debt markets, to lend to larger businesses, which were not covered under the CARES Act. And so those
restrictions generally are not applying to the Fed programs.
It's just the programs which are really directly tied to CARES Act funding where we're seeing those restrictions apply. So, it does create a concern
whether this is going to be a giant loophole.
But my worst nightmare, my worst nightmare in all of this is that three months from now, four months from now, we look back on this. Where did the
money go? Who got helped? OK, here we go again. Wall Street got the money, big corporations got the money, private equity funds got the money, still
trying to get those checks out in the small businesses and households.
And that will just -- first of all, it's wrong, but it will also just creates so much more of political cynicism and upheaval. That's the last
thing our country needs right now. We need to come together.
So, again, I hope government will have consistent restrictions across the board, but also that companies themselves should exercise some self-
restraint, understand we're in a crisis and help your workers. Don't be trying to line your own pockets right now with this money.
KOLHATKAR: Should we be bailing out companies like Boeing?
BAIR: No, I got to tell you, I don't have much sympathy for Boeing.
I think there is a real issue, companies that were obviously in serious trouble before this happened, having nothing to do with COVID-19. I know
that's a little -- sometimes, that can be judgmental, but Boeing is such an obvious outlier in this.
No, I think Boeing should have more like the process we used with GM, where you take them through some type of structured reorganization or bankruptcy,
continue to fund the company, so employees can keep their jobs they can keep production.
But, clearly, there's a profound cultural issue. I call it the Wells Fargo of the aircraft industry, because it just seems like there's a very bad
cultural issue. And we really -- I don't see a lot of changes at the top.
The board is basically -- what the board was, a member of the board, the lead director for many years, is now the CEO. I'm not sure what that
accomplishes. And so, yes, I think we need a fundamental change at the top.
KOLHATKAR: What about the airline industry itself?
BAIR: Well, there again, I think some are more sympathetic than others. Some -- airlines have been right up there with bags. They have been up
there with the buyback activity.
So -- and they have taken out a lot of debt, so that makes them less sympathetic. On the other hand, transportation has been hit, obviously,
very hard, with the government-ordered shutdowns and social distancing requirements.
So, I do think it's appropriate to help them. But, again, maintaining those restrictions on buybacks, dividends, executive compensation, which Mr.
Mnuchin has done -- doing at this point. He's also requiring that they give -- provide some equity investment to the government.
[14:40:00]
So, I mean, that has its pros and cons, but one of the pros is, when those companies come back, the share price will go up significantly, and that
will help cover the risk of losses to the government.
So, for now, it's look like Treasury is being pretty tough with the airlines. And I think we should feel good about that.
KOLHATKAR: The Treasury secretary, Steve Mnuchin, has an enormous amount of discretion in terms of handing out this bailout money, who gets what.
In 2008, he was part of an investor group that took over a failing mortgage lender in California, IndyMac. The company went on to foreclose on 36,000
homeowners, and there was some controversy about that. Do you think he's the appropriate person to be playing this role in this current crisis?
BAIR: Well, a couple of things.
I think, so far, I would give him high marks. He supported these restrictions. He's -- so far, he's refusing to grant exceptions. So I do
think we need to give him credit for that.
He's a Wall Street guy, no doubt about it. And so I think it's not -- it's fine to have Wall Street people with Wall Street experience in your
administration, but you need a diverse group of people with diverse perspectives providing input for these programs.
In regard to the foreclosure activity, I don't -- some of that, I'm personally familiar with. Some of it, I'm not. But I will say, in his
defense, IndyMac Bank was a very, very weak bank that, when it failed, already had a lot of borrowers who had not paid for several months, who had
abandoned the property.
They also had, unlike -- different from a lot of the other mortgage lending, but that particular bank had made a lot of loans to people who
were making investments. They weren't living in the property.
So I do think, in fairness to him, that drove up the foreclosure numbers in a way that probably differentiated IndyMac, the bank that he and his
consortium bought, from other mortgage lenders.
So, I do think that needs to be noted. So I don't -- I can't agree with everything this administration has done. I had a lot of problems with the
tax bill. I won't say I agree with everything. But, on this one, I'm going to be hopeful that he also holds the line.
It's interesting. One -- during the 2008 crisis, Hank Paulson was really the only one of the team dealing with this that had worked on Wall Street.
But I actually found that he could be tougher than Tim Geithner or Ben Bernanke.
And I think one of the reasons was is, he knew Wall Street. He knew when he was being played or when they really needed help. So, I'm hoping that maybe
Mr. Mnuchin's Wall Street experience will make him skeptical and cynical when some of these folks come with their palms out wanting some help.
So I'm going to hope for the best here. But, so far, I really like the fact that he has said no to all these requests make exceptions to the
restrictions back in the CARES Act.
KOLHATKAR: In 2008, there was a real sense -- afterwards, there was a real growing public outrage about the way things have played out, a feeling that
the banks have been saved, a lot of the senior executives were making more money than ever, bank profits recovered very quickly.
BAIR: Right.
KOLHATKAR: But average wages, earnings of American families took years to recover.
So how can we prevent that from happening again?
BAIR: Part of the problem is, we have financialized our economy.
So every time we get into a crisis, we default to the Fed. And I'm not blaming the Fed on this. Congress has -- saw -- found it easy to cede
economic policy to the Fed.
And what the Fed does is, they lower interest rates, and they put a lot of money into big banks, because those are their tools. That's an observation.
It's not a criticism.
But then, with every cycle, you get more debt, you get a bigger financial sector. It's not sustainable. You get asset bubbles. At some point, people
only borrow so much. The debt has to be repaid.
The cycle is just not sustainable. So, I celebrate the fact that we're focusing more on grants now to help alleviate this crisis. I actually
think, for small businesses, they could provide additional assistance. They should think about this district grant assistance too, instead of loans.
Those loans are forgivable, but get away from these debt-infused credit bubbles to drive our economy, downsize the financial sector. We should have
done that after 2008. Maybe this time around, it will give us some better political will to do so.
I also think the transmission mechanism -- and I wrote a piece on this morning, that the Fed as an administrator of providing funding could
actually be quite helpful. There's new technology now that basically would allow businesses and households to have the equivalent of their own reserve
account at the Fed, which is what, of course, the big banks have, why it's so easy to get money to them very quickly.
So, technology is there to do that. And a couple years ago, that seemed like a really kind of out-there idea. But there's a growing -- there are
actually some central banks experimenting with it now, and a growing number of experts saying, yes, we have the technology, so that the Fed as
administrator could get funds much more quickly to households and businesses than the current kind of antiquated payment system we have.
[14:45:05]
KOLHATKAR: Sheila Bair, thank you so much for being with us.
BAIR: Thanks for having me.
(END VIDEOTAPE)
AMANPOUR: Now, here is the latest on Captain Tom Moore, a heart-warmer, if ever there was one.
The 99-year-old war veteran has now completed his goal to walk around his garden 100 times before his 100th birthday on his walker. He's raised an
outstanding 15 million pounds for the NHS since he started out a week ago. And he crossed the finish line with an honor guard from his old regiment.
Remember, he was really only looking for 1,000 pounds.
Now we go from World War to the Cold War.
Historian Archie Brown wants to finally debunk the theory that the West won the Cold War through military and economic might alone. In his book "The
Human Factor," Brown argues the success was really down to stellar leadership that seized the day and changed the shape of our world.
He dwells on three strong characters at the center of this drama, U.S. President Ronald Reagan, Soviet leader Mikhail Gorbachev and the British
Prime Minister Margaret Thatcher.
And Archie Brown joins me now to discuss this.
Welcome to the program.
Let me start by asking you, what you -- well, you deliberately called it "The Human Factor." I think it's really interesting. What were you saying
with that title?
ARCHIE BROWN, AUTHOR, "THE HUMAN FACTOR": That was a phrase that Mikhail Gorbachev himself used a great deal.
He was emphasizing the importance of the individual, both within Soviet society and in international relations. And I think that, indeed, these
three leaders were people who made a difference.
But I have to say that Gorbachev made a substantially more bit of difference than either of the other two. There was no one else within the
Soviet leadership who have pursued remotely the same policies as he did.
AMANPOUR: You know, you make an incredibly interesting argument that it was because he started to sort of change internal situation in the Soviet
Union, with glasnost and perestroika and all those words that we remember from them, that that sort of enabled the ability to engage with Reagan,
with Thatcher, and vice versa.
Can you just tell us a little bit more about that?
BROWN: Well, certainly.
The -- Gorbachev spoke about the new thinking. And it was in domestic policy, as well as in foreign policy. He consciously pursued a
pluralization of the Soviet political system, and left the country fairer than it's ever been.
One of the most important things about him was his open mind. He continued to evolve as a politician. His ideas became more radical by the year. And
in that respect, he was probably the most open-minded of the three, which is remarkable, given that he had risen up through the ranks of the Soviet
Communist Party.
Nevertheless, the other two played crucial roles as well. I don't want to decry them, by any means. But if you look at the realistically alternative
candidates to Gorbachev, when his predecessor died in March 1985, there was none of them who would have pursued these policies.
And so the idea that it was military strength, Western military strength that ended the Cold War is wrong, because until the early 1970s, the United
States had military supremacy over the Soviet Union, but the Cold War continued to get colder.
AMANPOUR: You know, it's really interesting, because Gorbachev obviously had been asked this question many times. Who ended it? Did you? Did Reagan?
And I remember, on one of the major anniversaries, he wrote an op-ed in "The New York Times" or somewhere saying that it took both of us. Without
him, I couldn't have done it. Without me, he couldn't have done it.
But I want to ask you about the really interesting linchpin, the go- between, which was your boss at the time, Prime Minister Margaret Thatcher, the U.K. prime minister, the Iron Lady, as the Soviet dubbed her.
You were called to her country place, Chequers, to discuss this new leader, right? Give us a sense of what you discussed with Margaret Thatcher then.
BROWN: Well, she has lots of seminars, similar party seminars.
I was involved in three government seminars. The foreign secretary was there. The defense secretary was there the first time as well.
And one of the strengths of Margaret Thatcher was that she really did her homework. She worked incredibly hard to understand the countries and
problems she was dealing with. And that was especially true in relations with the Soviet Union.
And so she read a lot of papers before the seminar. Before she met Gorbachev, she would read his speeches. And she interrogated us. We wrote
papers. The foreign secretary, Geoffrey Howe, in his memoirs said that she was unusually restrained in listening to the experts and not interrupting
them.
[14:50:08]
(LAUGHTER)
BROWN: Poor Geoffrey Howe couldn't put a sentence through before she interrupted him.
But she did actually listen to us, because we had useful information for her, and we weren't any kind of possible threat to her, the way that her
ministers might be perceived to be.
AMANPOUR: And that sort of started changing the world, because it was Margaret Thatcher, as you recount and as history remembers, who said -- I
think I'm paraphrasing -- I like Mr. Gorbachev, I can do business with him.
She liked him. Ronald Reagan adored her and was willing to trust her, right? I mean, how did she persuade the staunchly anti-communist President
Reagan, who had made all these very, very strong statements and speeches against the Soviet Union?
BROWN: Well, the fact that he considered her to be a soul mate -- I mean, he many times he referred to her as a soul mate. Both ideologically and
politically, they saw eye to eye. And she couldn't be regarded as soft in communism.
She was as much a hard-liner historically as he had been. So she had a lot of influence, as long as Ronald Reagan was in the White House. And that
made her all the more important an interlocutor for Gorbachev, though she had a direct influence on him to.
She -- by the very bigger of her arguments, she helped him to realize how Soviet policy had been perceived in Western Europe, and, for example, the
fact that the Soviet Union had a great advantage in conventional forces, and that was why Britain and France were so keen to hold onto their nuclear
weapons.
Gorbachev responded by unilaterally cutting the Soviet conventional forces drastically, so that they were no greater than those of the West.
AMANPOUR: This is just an interesting piece of color.
I mean, Margaret Thatcher, according to the book, when she first met Ronald Reagan, turned to her foreign secretary and pointed her head, as if to say,
there's nothing there. And Gorbachev, after the disastrous summit in Reykjavik in 1987 -- '86, he said -- he described Reagan as sort of
primitive, a caveman on this particular issue.
Describe Reagan's evolution, because he also wrote a very prescient speech in 1983 about the complete bankruptcy of the Soviet communist experiment.
BROWN: Yes, I think it's worth emphasizing that that was not Margaret Thatcher's last word on Reagan, nor was it Gorbachev's last word.
AMANPOUR: Yes.
(CROSSTALK)
BROWN: Thatcher really respected Reagan, and she knew that his intellect was not as sharp as hers.
And Gorbachev was well aware that he was intellectually superior to Reagan. But he also acquired the respect for Reagan. He thought his political
instincts were not bad.
And Reagan was somebody who was prepared to look at the big picture. He shared with Gorbachev a desire to rid the world of nuclear weapons. Of
course, Margaret Thatcher wanted to keep them. She believed they were essential as a deterrent.
But both Reagan and Gorbachev were prepared to see a world without nuclear weapons. And they came quite close to agreeing on that at Reykjavik in
1986. And they failed to agree only because of Reagan's obsession with his anti-ballistic missile, his SDI, Star Wars project.
AMANPOUR: Archie Brown, what about the idea of -- I mean, this is -- they really engaged with the enemy. They weren't afraid to engage with the
enemy.
And, of course, you can look at engagement with Iran and how that's gone back and forth. And you can look at right now the terrible relations
between the United States and President Putin, between the West and President Putin.
Do you have, like, a final quick comment on how we got there, and now we're here? It's almost like we have gone backwards.
BROWN: I think one of the lessons of this end of the Cold War period is that engagement is essential.
And that was what Margaret Thatcher was persuaded to do at that seminar in 1983 in which I took part. But, in that respect, she was also following the
Foreign Office advice, which she had been previously reluctant to accept.
And it's never been the case that Russia, for example, becomes a more liberal or more democratic country if it is isolated.
So, I think whether we're dealing with Russia or Iran, engagement is essential, if you want to begin to improve relations.
AMANPOUR: Well, history certainly taught us that.
Thank you so much. It's a really fascinating book, a fascinating take, and really important to talk about it in this time of -- as we put a lens on
leadership and all the other issues that are out there, even though coronavirus takes the -- most of the oxygen right now.
Archie Brown, author of "The Human Factor," thanks so much for joining us.
And that is it for now. You can always catch us online, on our podcasts and across social media.
[14:55:03]
Thanks for watching, and goodbye from London.
END
