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Reality of U.S. Economy Out of Synch with Perception; U.S. Embassy in Kiev Wants of Unusual Russian Military Activity; Mobs of Thieves Target U.S. Stores in Smash-and-Grab Crimes; Everson Griffen Getting Care After Incident at His Home. Aired 9:30-10a ET
Aired November 25, 2021 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KEVIN HASSETT, FORMER CHAIRMAN, WHITE HOUSE COUNCIL OF ECONOMIC ADVISERS: Thanks, Poppy. I hope you got your turkey in before you came to work today.
POPPY HARLOW, CNN ANCHOR: I'm not doing it. My husband is --
HASSETT: I'm free-riding, too.
HARLOW: Well, I'm making everything else. But my husband is grilling the turkey for the first time. So TBD on how it turns out. I will let you know.
HASSETT: Good luck.
HARLOW: Bless him for doing that.
Kevin, let's talk about the broader economy because of course we've got inflation concerns which we'll get into. We've got a really jammed up supply chain. But you've got the lowest unemployment since 1969. You've got retail sales up 16 percent. You've got a record stock market, and the broader economic story is good for this White House, but consumer sentiment is at a 10-year low. Why the disconnect?
HASSETT: Right. Well, I think consumer sentiment is responding to the fact that inflation is the highest we've seen in a long time. And it's just like an economic reality, that people's wages don't adjust as fast as prices. So prices have gone up a lot this year. And maybe people's wages will go up a lot. You know, I don't know when your salary gets changed, but a lot of people it's January. And then maybe they won't be quite so unhappy because the wages will have caught up to prices.
But right now, the people go into the pump and then they go to the grocery store, they don't have a lot of money left for food at the grocery store.
HASSETT: And I think that has a big effect on sentiment. On the claims data, it's actually -- there is a sense in which it's kind of a negative sign because the firms are having such a hard time finding new workers.
HASSETT: That they have completely stopped letting go of guys that maybe aren't performing. And so claims are about the lowest on record. You know, economists talk about rose flows of the job market, and they like to see those behind. Lots of hires and lots of separations. And when you're not getting lots of hires, you don't get many separations, and it could mean that the whole economy is kind of congealing because firms can't find new workers.
HARLOW: That's a really interesting point. So Moody's and others say look, a lot of this concern that the Build Back Better plan is passed. It would cause runaway inflation or overblown. That's one of the words that Moody's uses. And it's really going to have a limited impact on inflation. What do you think?
HASSETT: Yes. I disagree with that. And the way to think about it is that the bill, like, even if we accept like the CBO score, I know like the Committees for Responsible Budget says it's off by a factor of two, but forget about that arguing that right now. That, you know, they've got a big expansion of the child credit or continuation of the expanded child credit, big expansion of the Affordable Care Act, maybe a couple hundred billion dollars for public housing.
All of that money is more or less spent on the first year or two. And then the pay-fors, you know, so you can say, OK, aggregate demand and aggregate supply are about cancelling out the pay-fors. They're almost the same than the pay-fors are spread out over 10 years. And so right now we've got inflation running really high, and then we're going hit a dollop to the economy with a big dollop of more government spending in the next year and there's just no way it doesn't make inflation go from the six we're at now to maybe even the double digits.
HARLOW: So most of the spending hits will start hitting next year, and is spread over a decade, but I understand your concerns. I think we're all concerned, we want the White House to be right that this inflation is transitory. We all hope so. But if it is not, the reality is, Kevin, isn't it, that the administration doesn't have a lot of levers to pull?
HASSETT: No, they don't. You know, the lever to pull is what Ronald Reagan did, that inflation happens when demand runs ahead of supply, so if you want, you know, the Fed can attack demand with interest rates, but you can also feed supply by having sort of business friendly tax cuts, which I don't think those will possibly be on the table with Biden.
But again, you're right, the spending is spread out over 10 years. But almost all of it is in the first two years. And so they really are, you know, shooting the fire hose at the economy next year of spending. And given the supply disruptions that we have right now, if the inflation ends up being transitory, then it will be one of the bigger shocks in my economic life and it will be the first time that's ever happened. Once you usually get to about six where we are now, you usually get to 10. HARLOW: I will also say --
HASSETT: Usually gets to 10.
HARLOW: This is a unique moment in that we haven't had an economy like this pulling out of a pandemic in this way. So there are a lot of unknowns. Let's see, let's hope it's transitory.
HASSETT: That's fair.
HARLOW: I do want to ask you about the bipartisan, let me emphasize bipartisan, infrastructure bill that passed. You've got the former President Trump targeting the Republicans who voted for it. You yourself in your piece for the "National Review" called infrastructure spending, quote, "One of the better things the government does with its money." What is your message to any of your fellow --
HARLOW: You know, any Republicans who are targeting those 13 of their fellow Republicans for voting for this thing.
HASSETT: Well, Poppy, you know, you've known me for a long time, you know I'm not really a political expert and whether it helps Democrats in the next election or whatever if they -- you know.
HARLOW: Yes, I mean, about what it does for this country.
HASSETT: I don't know that's -- no, but I'm saying -- exactly. So the piece I wrote was it's actually, you know, a mild positive for the economy. It will be spread out over many years, which right now with inflation being high is kind of a good thing. You know, the American infrastructure is one of the worst in the world. So spending money on that is really hard to get too excited about.
But that's as an economist. I think the people who are getting really upset about it are, you know, thinking politically about, oh, if this passes, then they get to do more over here and that's just not a game that professional economists --
HARLOW: Yes. I hear you. All right. Good for you for staying out of that. Final question. And I'm really intrigued and confused by this, so obviously there is major pain at the pump for so many people. But the president making this decision, which was at least in part political, if not more so, to release 50 million barrels from the Strategic Petroleum Reserve. It's like 2 1/2 days' worth of gas.
Even, you know, gas experts say it's going to maybe lower prices best case 15 to 20 cents a gallon in a matter of weeks, which does matter. But I am interested in why you think the price of gas is so high because when you compare as an asset class oil to the rise we've seen in other asset classes, it's risen only about half as much. So why is gas so much more expensive? HASSETT: You know, the gas market is a pretty weird one that I ended
up as CEA chair or the White House having spending a lot of time on because basically every state or every region has different rules about how much ethanol you need to have and things like that. And so you can't really shift gas from one part of the country to the other part of the country very well. And so when you get pockets of the country that have disruptions, the prices, like right now in California, the other some places with five bucks a gallon, I paid $4 a gallon in Connecticut on my way up here to Massachusetts to celebrate Thanksgiving.
You know, those pockets of the country are seeing especially high increases, but the, you know, the release from the Strategic Oil Preserve, another way to put it in perspective is that we build pipelines to stop the disruptions, and if you open the Keystone Pipeline, then you would previously about a month, delivered about a month the amount of oil that President Biden released.
And so these localized disruptions explain the huge spikes in gasoline prices and there are some places where gas is still, you know, in the $3 range around the country.
HARLOW: Yes. OK, hope for some relief for a lot of folks soon.
Kevin, have a wonderful holiday. It's really nice to see you.
HASSETT: Thanks. You too, Poppy. Good to see you, too.
HARLOW: Still ahead, a rash of smash-and-grab robberies targeting high end stores with tens of thousands of merchandise just gone. The details ahead.
HARLOW: Welcome back. President Biden is reaffirming support for Ukraine amid reporting from CNN that the administration is seriously considering sending military advisers and potentially extra weaponry to Ukraine as the country says nearly 100,000 Russian troops are amassed near its border.
This comes as the U.S. embassy in Kiev warns American citizens of, quote, "unusual Russian military activity" and the security conditions could change with little notice. Right now both Russia and Ukraine are reportedly stepping up military readiness with combat drills.
Let me bring in CNN military analyst, retired Major General James "Spider": Marks.
Geneal, good morning. It's good to have you. I wish it were on better news. But you've got -- there you go. Your shot froze for a second. You've got this warning from the State Department which also follows a warning from the State Department telling Americans not to travel to Ukraine, their advisory level is now at a level four.
How plausible at this point is a wider war between Russia and Ukraine?
MAJ. GEN. JAMES "SPIDER" MARKS, CNN MILITARY ANALYST: Well, what's really troubling about all this is that it does not look like what happened back in 2014 when Russia occupied Crimea. Entirely different circumstance. What Russia has now is forces in Ukraine in support of Ukrainian separatists. They also have Crimea which we understand, but they also have forces on the border. There are two course.
Now what happened back in 2014 is Russia infiltrated forces into Crimea and then on command these forces put on their uniforms and took over all those element, that infrastructure of governance and occupied. It was quite an elegant operation when you look at it. What we see now is the application of very precise, very large kinetic force. The likelihood is frankly I mean, it's really a tossup.
The challenge is that clearly what Putin does at the tactical level is he's very aggressive, wants to poke holes and find gaps in where those alliances and partnerships might exist within Europe, and clearly with the United States. The challenge that we see right now is clearly this administration, the Biden administration, is being tested on the heels of what might be perceived globally as a form of, you know, decreasing power and influence. So that's where we are right now. This is brinksmanship, is what we're looking at.
HARLOW: So what do you do if you're the Biden administration? We know from our reporting they're considering sending weaponry, even potentially helicopters, it would have been sent to Afghanistan before the pullout. You've got this proposed lethal aid package being considered as Ukraine is warning publicly that an invasion they believe could happen as soon as January.
There are some that are concerned that if the U.S. were to step it up and send weaponry, for example, that could be seen by Russia as a major escalation. And that that could back fire.
MARKS: Yes, this is all about balance, right? Look, the Ukrainians in the United States have had a warming relationship, but we've got -- we've got issues because when we establish our relationships, we always have criteria that in many cases the other nation can't meet, right? A lot of corruption issues, et cetera.
But in this particular case, the United States has said -- has had some very robust foreign military sales and some -- what you described as a lethal package of aid that's been available. We want to make that available. We also want to make sure that the Russians understand that we have this dialogue with Ukraine, they understand that, but that we are in fact going through with this aid package.
And what we sent to the Ukrainians is important. There should be defensive, primarily defensive weapons systems. Not anything that would give the Russians the perception that they want to try to push or extend what the current boundaries look like. Because you have to acknowledge that the Russians are in Ukraine right now, supporting separatists. That needs to simmer down. That need to -- you know, kind of find the level of stasis and the U.S. aid should provide that.
HARLOW: Major General "Spider" Marks, thank you very much for your expertise every day and especially for coming on this Thanksgiving.
MARKS: Thank you, Poppy.
HARLOW: I hope you have a good one with your family.
MARKS: Thanks so much. You as well, Poppy.
HARLOW: Thank you.
Well, large groups of thieves in California strike again, targeting two more high end retailers. Up next, how investigators are responding to what has been a surge in the brazen smash and grabs hitting the state.
HARLOW: Well, groups of thieves have once against targeted high-end retail stores in California. This time they hit an Apple store, a Nordstrom, making off with more than $20,000 worth of merchandise according to officials. And these are the latest in a series of smash- and-grab thefts across the country. Now stores are scrambling to boost security as the busy holiday shopping season begins.
Nick Watt has the reporting.
NICK WATT, CNN CORRESPONDENT (voice-over): Oakbrook, Illinois, a coordinated smash-and-grab swarm overwhelmed security at a Louis Vuitton store, more than 100 grand in handbags and more were stolen. In downtown San Francisco this past weekend, another Vuitton store and more hit by a mob.
UNIDENTIFIED MALE: This is not a problem limited to San Francisco.
WATT: Just outside the city, burglars, their arms filled with merch, made their getaway from a Nordstrom's Saturday night. An employees was pepper sprayed during the brazen raid.
BRETT BARRETTE, MANAGER, PF CHANG'S WALNUT CREEK: Probably saw 50 to 80 people, in like ski masks, crowbars, like a bunch of weapons.
WATT: They fled in 10 cars. Three arrests were made, two guns recovered. Sunday night another raid at another Bay Area mall.
CHIEF LERONNE ARMSTRONG, OAKLAND, CALIFORNIA POLICE: The thing that we are not used to is these groups' willingness to actually use firearms and shoot at people.
WATT: At the Grove down in L.A. a Nordstrom was hit Monday night. $5,000 worth of good stolen, $15,000 worth of damage. This mall had beefed security after the protests that followed the murder of George Floyd.
RICK CARUSO, OWNER, THE GROVE: You saw these bad guys with 20-pound sledge hammers having a very difficult time to break a window because all of our windows have ballistic film on them.
WATT: Many more malls now beefing up security and Californian authorities promising action.
GOV. GAVIN NEWSOM (D), CALIFORNIA: These people need to be held to account. We need to investigate these crime, we need to break up these crime rings, and we need to make an example out of these folks.
WATT: In Oakland this weekend --
ARMSTRONG: We will have tactical teams deployed throughout the city.
WATT: But as we saw what that San Francisco raid, even when cops are quick to the scene --
UNIDENTIFIED MALE: These (EXPLETIVE DELETED) ain't playing.
WATT: With a mob, many will still get away.
(On-camera): So why is this happening right now? Well, the stores are fully stocked for the holidays and there's also a market for stolen goods this time of year. And some experts tell us, the penalties for this sort of crime just aren't high enough. Here in California, for example, if you steal goods worth 950 bucks or less, that's not a felony. That's just a misdemeanor.
Nick Watt, CNN, Los Angeles.
HARLOW: Nick, thank you for the reporting.
Well, a tense situation ends thankfully peacefully. Next, what authorities say unfolded for more than 12 hours inside of the home of Minnesota Vikings defensive end Everson Griffen.
HARLOW: Well, the Minnesota Vikings defensive end Everson Griffen is, quote. "out of his house without incident," and is getting the care he needs after he allegedly fired a weapon in his home Wednesday morning and refused to leave for a number of hours. He did tell authorities that someone entered his house and needed assistance. But police say they were unable to locate an intruder.
Let's go to Coy Wire. He joins us from Atlanta.
Good morning, Coy. I'm just so glad that this ended peacefully and with no one hurt. COY WIRE, CNN SPORTS CORRESPONDENT: Yes. Yes, absolutely, Poppy. As
you mentioned the Vikings' Everson Griffen is now safe getting the care he needs after posting a disturbing series of videos on social media that have since been deleted. Deputies and mental health professionals went to Griffen's home early yesterday morning after he called 911. He told dispatchers that he had fired a weapon, but no one was injured.
Officials say that no intruder was located and the 33-year-old initially refused to leave his house but eventually did come out peacefully. Here's the Vikings' general manager Rick Spielman on the incident.
(BEGIN VIDEO CLIP)
RICK SPIELMAN, MINNESOTA VIKINGS GENERAL MANAGER: Their family is our family, and it's important at this moment that we respect the health, the safety and the well-being of everyone that is involved in this situation. And I know he's receiving the care and the support he needs along with his family.
(END OF VIDEO CLIP)
WIRE: Well, the four-time pro-bowler played his first 10 NFL seasons in Minnesota, spent time with the Cowboys and Lions last season, Poppy, before returning to the Vikings. Griffen has a wife, three children. His latest post on Instagram was a day ago, celebrating his wife and one of their sons' fourth birthday -- Poppy.
HARLOW: We're thinking of them today, for sure. And we're glad, we're glad that he's getting the help he needs.
Coy, thank you. And Happy Thanksgiving.
WIRE: You too, Poppy.