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Key Inflation Measure Hits 39-Year High; Appeals Court Rejects Trump's Bid; Smollett Found Guilty. Aired 9-9:30a ET

Aired December 10, 2021 - 09:00   ET

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

[09:00:00]

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KEILAR: God, that moment brings me so much joy, Berman, watching that, you know.

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CNN's coverage continues right now.

ERICA HILL, CNN ANCHOR: A busy Friday morning here. Good morning. I'm Erica Hill.

JIM SCIUTTO, CNN ANCHOR: And I'm Jim Sciutto.

We do begin with breaking news on the U.S. economy. The consumer price index, key indicator of inflation, jumped 6.8 percent over the past year. That is the highest level in this country in nearly 40 years. Many Americans, like you, already feeling a pricing pinch heading into today's report. We should note, it's not entirely bad news.

HILL: That's right. There are other factors, including falling oil and gas prices, high consumer spending and markets fighting off fears of the omicron variant. Those are all positive signs pointing to a strong economy. Wages also expected to increase for employees next year.

The White House preemptively working to temper expectations ahead of this morning's report. Overnight, Treasury Secretary Janet Yellen reportedly urging lawmakers not to be spooked by new inflation numbers as they continue to consider the price tag of President Biden's social spending bill.

What does all this really mean? Let's bring in CNN chief business correspondent Christine Romans.

So when it comes to higher prices, I mean, look, we can all attest to that. We've seen it in different areas. What does this report tell us?

CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: I mean these are the numbers that really quantify the gut punch for American consumers, right? That gut punch that feels like it really peaked there in November. And 6.8 percent is a big number. I mean you're going all the way back to the '80s when, you know, Stevie Wonder and "Ebony and Ivory" was at the top of the charts, right? We were wearing clogs and satin jackets. I mean this is something we have not see in modern times, numbers like this. And you look at a line chart of inflation, and you can see, this is the worst in years and certainly the most meaningful price inflation we've seen in our recent memory.

Strip out food and energy, and this growth rate is 4.9 percent year over year and half a percentage point -- half a percent just for the month from October to November. And it has been energy driving much of this. You've seen that. We've talked about gas prices. And those -- those prices have been moderating in the past few weeks, which is why some economists are saying they think this might be the worst.

You can see that you had some really sharp core, core -- core rates earlier in the year and that appears like it might be moderating a little bit here.

We also know that the shortages, because of supply concerns, we're hearing from CEOs and we're hearing from the White House, and we're hearing from supply chain managers, that they're starting to see how those are going to work themselves out. But demand is strong. I mean this is a sign of a really strong economy, guys. People are rushing out all at the same time to buy the stuff they want after we've been in a huge pandemic.

SCIUTTO: What portion of this, Christine, are energy prices, gas, home heating oil, natural gas for home heating, because we know that that is trending downward, at least based on where the markets stand today.

ROMANS: Yes, and that's rear view mirror. I think it's a really good point that you're making there, Jim, because we know that this was -- you had 30, 40, 50 percent increases in your energy costs year over year the last few months and we know that that is now moderating. So hopefully that energy part of inflation, consumer inflation, is not going to be as big of a deal heading into the end of the year.

Look, and the Fed is in inflation fighting mode right now. They dropped that word "transitory" or "temporary."

SCIUTTO: Yes.

ROMANS: They are preparing -- the Fed is the inflation fighter. It's not the White House. It's not business. It's the Fed. And the Fed is in inflation fighting mode will be ending early probably a lot of its stimulus and eventually we'll start raising interest rates because it's a strong economy, they're going to have to tap on the brakes. SCIUTTO: Yes.

HILL: Christine Romans, appreciate you putting it in plain English, as always. Thank you.

SCIUTTO: For sure. Transitory probably one of the worst reads on this of the year.

ROMANS: Bad call.

SCIUTTO: For more on -- for more on this report, we are joined now by CNN economics and political commentator, Catherine Rampell.

Good to have you on, Catherine.

Big picture here, I wonder, because, you know, some of this is policy. You'll hear from Republicans, or even a Joe Manchin, they'll talk about the big inject of money from the Covid relief plan. But some of it's, frankly, just structural, right, because this is a global supply chain crisis. This is a global reaction to the slowdown during the pandemic and things are heating up again.

In your view, how much of this is on the president, how much of this is on the markets?

CATHERINE RAMPELL, CNN ECONOMICS AND POLITICAL COMMENTATOR: I will state the same line I always give when I'm asked about how much the president controls the economy, he gets too much credit when the economy is good, too much blame when the economy is bad.

SCIUTTO: Yes.

RAMPELL: That's the case for inflation here as well.

Look, it's not that policy makes no difference here. Both monetary and fiscal policy probably had been expansionary, had been pushing up demand, pushing up prices as a result. But as you point out, we are coming out of, I hope, a global pandemic.

[09:05:03]

And that has created a lot of growing pains for the economy right now because you have these supply chain problems around the world, not just in the United States, but in China and elsewhere. We don't know how all of those will respond, of course, to omicron in the months ahead.

You have demand way up. You have consumers shifting more of their basket of purchases away from services and towards goods, which is also driving up the cost of goods, of course. So, the bottom line, of course, the pandemic is still very much in control of the global economy and you're seeing that in these inflation numbers.

HILL: So, if the pandemic is still in control, Catherine, I think that the question for a lot of people is, what do I look at? And you wrote about this, this week, when it comes to inflation, everybody's going to take -- you know, as with most things, they're going to take what they like, what works best for their narrative, whatever that may be, certainly politically, and spin it that way.

So, as the average American watching, what should I look for? What should I be pointing to this morning?

RAMPELL: Well, what you want to be looking for is, what elements of this report are a little bit more forward looking. So, as you've already discussed, some of the numbers on energy prices were really eye-popping, but those have come down since these data were collected because of a combination of, you know, reaction to omicron, supply chains hopefully normalizing, warmer weather in the case of natural gas, for example. So that, you know, the numbers in this report may not be as telling.

But there are some other causes for concern in this report that might worry people, including the rent numbers, for example.

SCIUTTO: Yes.

RAMPELL: Or the food numbers. The prices of both of those items have been going upward. Food may be easing in the months ahead. We don't know. But the rent and owner equivalent rent in particular are concerning and suggest that we may have sustained price pressures for a little while longer.

SCIUTTO: Yes. Yes, because rent, I mean, they're sticky numbers, economists will say, because you sign on for, you know, maybe a 12- month lease.

I do want to ask about a general disconnect here, right, because I certainly don't want to underestimate the effect of inflation. People feel it every time they go to the grocery store. That said, wages are up. You have, you know, historically low unemployment rate but also new jobless claims. I mean talk about going to 1969, right, for a weekly jobless claim like we saw yesterday here.

How do you explain that disconnect? Is it perception or is it just that the income et cetera is not matched up with what people are paying for stuff?

RAMPELL: It's a little bit of both, to be fair. There are a lot of good things happening in this economy. Like I said, demand is way up. Unemployment is actually quite low in historical terms and it's much lower than many people had forecast it would be right now. The job market looks very strong. The size of the economy, you know, GDP is higher than it was pre-pandemic. So there's a lot of good stuff happening here. But those prices really affect people day to day. And it weighs on consumer psychology, even though their incomes are up, overall, when -- especially when you account for things like the government transfers that they've gotten over the past year and a half, you know, those stimulus checks and child tax credits and things like that. Their incomes are up, even accounting for inflation, but they're worried about whether that inflation will persist and they're living standards as a result will decline in the months ahead.

SCIUTTO: Yes.

HILL: Catherine Rampell, always good to have you on. Thank you.

And we're going to continue to follow this, obviously, and the reaction next hour. Reaction from the White House Counsel of Economic Advisers, Heather Boushey will join Jim. So, stay with us for that.

Meantime, the House select committee investigating the January 6th attack is now one step closer to receiving former President Trump's White House records. Yesterday, a federal appeals court unanimously rejecting Trump's claims of executive privilege. The former president now has just two weeks to ask the Supreme Court to review that decision. We'll see.

SCIUTTO: CNN law enforcement correspondent Whitney Wild, she's been following this.

So, Whitney, how likely now, and how quickly I suppose is the key question here given the timeline, that the Supreme Court takes this up and gives final word?

WHITNEY WILD, CNN LAW ENFORCEMENT CORRESPONDENT: Well, I think that's going to depend a lot on the argument that the Trump team can make. And it's an uphill battle because the appeals court decision makes very clear that these judges just don't think that the trump team made any legitimate arguments. And what you have to do it try to get the Supreme Court to even look at your case is prove that there is a very good chance that you'll actually succeed. And what this appeals court decision does is basically eviscerate the Trump team argument that that's at all possible.

One of the key argument here that the appeals court made in ruling against the Trump team is that they say, frankly, Trump has not articulated an actual harm. He can't even say why it would be problematic to release these records. That was just a list of -- a list of arguments that they made in their decision, the 68-page decision coming out last night.

The timeline here is critical, as you point out.

[09:10:01]

This is 14 days, like, 14-day pause on the appeals court decision. So that means that the Trump team has 14 days to try to get the Supreme Court to see it their way and possibly take this case up. If the Supreme Court does that, it will be because four people on the Supreme Court said that they think this is at least worth hearing. So they need four votes to hear this case. A very short timeline. But certainly an uphill battle, again, because the appeals court was definitive in their -- in their explanation that this has no merit.

The trump team, however, saying this morning, and last night, that this was always destined for the Supreme Court. So, I guess we'll see.

HILL: Indeed we will. We will be watching.

Whitney Wild, appreciate it. Thank you.

Joining us now to dig a little deeper, former assistant U.S. attorney Kim Wehle, law professor at the University of Baltimore.

You know, Kim, I was struck by something that I heard last night. Kim is also, of course, the author of "How to Read the Constitution and Why," a book that I need because I am not a law professor.

You (INAUDIBLE) Harvard Law Professor Noah Feldman (ph), who, of course, is also a witness in President Trump's first impeachment, said to CNN last night that in addition to this decision pointing out that Trump's legal team had not explained the why here, why this could cause so much harm, that it also went on to say that this was a clear effort to delay the efforts of the committee, essentially trying to mess with Congress. And he said that was code, that was a sign to the Supreme Court not to take up this case.

Would you agree?

KIM WEHLE, FORMER ASSISTANT U.S. ATTORNEY: Well, I think the full 68- page opinion was assigned to the United States Supreme Court to not take up the case because they also signaled in there that this was their -- the president, the former president's claims that this was a political maneuver, that it was somehow improper were just flat out wrong in that they couldn't even dispute that this information is, of course, relevant.

I, unfortunately, you know, these are three more progressive, I would say, leaning, and I say that just because all three of them have a history dealing with either inside government or dealing with government, I'm not -- I just don't know, especially after what happened with abortion where the court took up -- didn't instill an injunction in Texas, even though that law is clearly unconstitutional, and is taking up abortion when there was no reason to take it up, I just don't think we can anticipate what it's going to do in this moment with this particular case, even though I agree 100 percent with the court of appeals.

There's one president at a time. That's Joe Biden. There's not two presidents. And so the idea that somehow Donald Trump, in his -- in his sort of civil, you know, private citizen capacity can override both Congress and the executive branch that are the sitting government right now just doesn't even make logical sense let alone legal sense.

SCIUTTO: I was going to ask you to read this court, right, because it's been fairly activist on issues that it wants to pipe in on, right? And particularly as it relates to presidential powers, right, and the argument of some, right, inconsistent in its interpretation of presidential powers, dependent on the party of that president, right, if you look at some of the decisions where it endorsed a broad definition of presidential power under Trump and then seemed to move the other way under Biden. Again, I'm quoting from folks who follow the court much more closely than me. But as you look at this court and its current makeup, what do you think is the most likely outcome?

WEHLE: Well, I think the most likely outcome, if they take the case, is that they were affirm the lower court and maybe come up with a test. Because here we're talking about the Presidential Records Act. Congress, after Watergate, said, listen, the documents in the White House don't belong to any person in the White House, they belong to the people. And set up a system for managing that. And in that statute it says former presidents get to weigh in. And it's that language that Donald Trump has sort of seized on.

So my guess is the Supreme Court could decide, well, we want to give a balancing test for when former presidents have problems with what sitting presidents do. But I agree with you, Jim, I mean the thing that stands out with me, some of us remember the Trump policy of sending people back to Mexico pending their hearings in the immigration status. This U.S. Supreme Court has enjoined the Biden administration to affirmatively go back to the former president's policy. To me, that is really hamstringing the power of a sitting president.

So, again, unfortunately, this court really has politicized itself, and there's just no guessing what will happen. My guess is they will take it, and they will affirm it, but have it -- have their say in it.

HILL: It's fascinating because as you talk about the politization, right, over the last couple of months, there's also been this push by different justices to say, oh, we're not -- this is not a political court, this is not how we work, this is not what's happening. And one of the main questions this morning really is, as people are trying to decide whether, you know, trying to gain whether they'll take up the case is, what will be more political, right, to take it up or not.

WEHLE: Yes. And I think these justices do think about what the implications are going to be for the next president.

[09:15:02]

They've always done that. But, again, you know, the way the law works is there are -- different from politicians in that there are rules and standards that govern judges. Unless you get to the Supreme Court. Then there's really nothing.

And, up until recently, the court has consistently apolitically, for the most part, I mean with some exceptions, followed those rules of conduct. It's not the case right now. And so when people talk about packing a court, that is should Congress expand the court, I think it's really unpacking the court because we are in the moment where this court already is politicized, and we have to just keep an eye on it going forward.

SCIUTTO: Kim Wehle, thanks so much.

WEHLE: Thank you.

SCIUTTO: Still to come this hour, Jussie Smollett guilty of falsely reporting a hate crime, now will face sentencing. Just how much jail time could he see? That's coming up.

Plus, new this hour, the CIA is revamping its entire spy program. How it's trying to confront challenges from China and Russia.

HILL: And, hospitalizations -- Covid-related hospitalizations soaring in a number of states. One Michigan hospital that's actually seen more Covid patients this week than at any other time during the pandemic. We're going to take you inside. You'll hear directly from the patients and the nurses in that hospital.

Stay with us.

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[09:20:39]

SCIUTTO: The former "Empire" actor, Jussie Smollett, now facing possible time in prison. This after a jury found him guilty of falsely reporting a hate crime. Smollett was convicted on five of six felony counts of disorderly conduct for making false reports to police.

HILL: Ultimately, the jury rejected Smollett's testimony that he did not stage a fake hate crime for publicity.

CNN's Sara Sidner is live in Chicago, joining us this morning.

So, Sara, what do we expect from the sentencing?

SARA SIDNER, CNN SENIOR NATIONAL CORRESPONDENT: So, the judge has a great deal of discrepancy here. He can -- he can decide to send Smollett to jail for up to three years, and give him a $25,000 fine, or he can decide not to give Jussie Smollett any jail time. It really is up to the judge's discretion in this case.

We should mention that those five of six counts that he was found guilty on have to do with what he told police in January of 2019. Two of those are him falsely reporting that he was the victim of a hate crime, and three of those are because he falsely reported that he was the victim of a battery. And it was all from the same overnight, early morning alleged attack that he told police about.

And there were so many things that went on in this case, so many dramatics in the courtroom. One of the big things, though, one of the most important parts of this case were these two brothers, the Osundairo brothers, who took the stand and said, look, we apologize for what we did and our part in this, but we did take part in this hoax attack against Jussie Smollett because he asked us to and he gave us some money to do so, $3,500. That has been their story after they were arrested initially and then they were let go. You see that picture there of these two men walking down the street in dark clothing. They said that was them, that they perpetrated this hoax because Jussie had told them that he wanted publicity, he wanted this to go out on social media, and then police got involved and this all tumbled.

Jim.

SCIUTTO: Yes, tumbled, to say the least.

Sara Sidner, thanks so much.

Let's speak now to Joey Jackson for more on the legal analysis of the verdict. He's a CNN legal analyst, criminal defense attorney.

Joey, you made the point that part of the issue here, right, is that Smollett doubled down on this, right, even after the questions arose.

Do you believe he will face both jail time as well as civil financial liability here?

JOEY JACKSON, CNN LEGAL ANALYST: Yes, Jim, I really do.

Good morning to you and good morning, Erica.

I think there's a number of imperatives when you look at sentencing that a judge is going to consider. What is that? Punishment, deterrence, rehabilitation. We know certainly his prospects for rehabilitation are excellent. He's a young man and certainly has a future. I think the judge will be hung up -- or maybe hung up on two other things, punishment and deterrence. Why? When you look at the issue of punishment, you have to look and you have to say, well, you know what, this was a fake report regarding a hate crime. There's so many other people who are suffering from hate crimes that are genuine, and what does it do to diminish and devalue them? I think the judge will be very concerned about that. The punishment for that, and the message it sends from a deterrent perspective.

Number two, you talk about the resources that were expended on really looking for these people who did it and how could they and how would they engage in such hate, and then you find, never mind, that's not the case. And so with regard to resources expended, when there are other needs in that city, I think that's not going to be lost on the judge.

And, very briefly, Jim and Erica, the final point is that you now went and you testified at trial, you have a right to do that. But when you testify and you give evidence that the jury clearly believes was a lie, based upon when you're on trial, which is, because of a lie, or lies, that I think concerns a judge.

So, yes, I do believe that jail will be behind this and I also think, from a civil perspective, we know that there's that lawsuit about the reimbursement issue. I think that certainly factors in and there will be reimbursement as well on the civil aspect.

HILL: Joey, I also want to get your take -- we're following the trial of Kim Potter as well. Daunte Wright's girlfriend testified yesterday that she was the only person who tried to help him, that she tried to stop the bleeding.

[09:25:00]

Take a listen to some of that.

(BEGIN VIDEO CLIP) ALAYNA ALBRECHT-PAYTON, DAUNTE WRIGHT'S GIRLFRIEND: I was the only one who, out of everybody there, who was trying to help him. Trying to push on his chest and call his name. And he wasn't answering me.

I took my belt off and I just grabbed like whatever was in the car, I don't remember if it was a sweater or a towel or a blanket or (INAUDIBLE), I just grabbed whatever it was and put it on his chest.

(END VIDEO CLIP)

HILL: Such an emotional moment. And also just heartbreaking as she's relaying what happened.

JACKSON: Yes.

HILL: How important will that testimony be, Joey?

JACKSON: I think very, Erica, for the following reason. I think what you want to do when you're a prosecutor is remind jurors of the consequences here. This was the consequence of action. The defense wants to, and has been arguing, that this is an accident and give her a pass, this is what prosecutors will do to show, should we really be giving an officer a pass who needs to preserve life? I think that also, and having her testify, demonstrates his life, the value of his life and whether or not the police did enough thereafter to assist him.

And so while cases are not -- and do not turn on emotion, I think the fact is, is that people are people, but evidentiary-wise I think it's very important and very compelling testimony, and that's why the prosecutor had her on the stand.

SCIUTTO: All right, the shooting in Oxford, Michigan, now. There's a probable cause hearing for both Ethan Crumbley, the suspect in the shooting, but his parents.

How soon does this case go to trial? What do you think happens to the parents in this?

JACKSON: So -- yes, so you know what happens, Jim, is that there are always delays. Certainly there are standards and protocols and, yes, a probable cause hearing has to happen within two weeks of an actual arrest, et cetera. What is a probable cause hearing? It's just a hearing at which you have to establish to the court, to the satisfaction of the court, that there's reason to believe that a crime was committed and that the defendants who are under arrest, as we look at there, are the ones who committed it. It's a very low standard. You're not proving guilt beyond a reasonable doubt. Thereafter, you have issues with respect to discovery, which is the release of information, police reports, documents, body cams, anything else that you may have as to each of them individually. So, it's an open question, Jim, as to actually when it will go to trial or if it will go to trial. Remember that there are always bargains and other things that could be reached as you move forward. But compelling cases as to both the son and the parents.

SCIUTTO: Joey Jackson, thanks so much.

Of course the questions in that case were all about missed warning signs.

HILL: Yes.

SCIUTTO: Police are now crediting two students for heeding some warning signs, thwarting an alleged plot for a mass shooting at a campus in Florida.

John Hagins was taken into custody after posting troubling messages to a group chat on Snapchat.

HILL: Police say the 19-year-old threatened an attack similar to Columbine. He was threatening that that attack would happen at Embry- Riddle Aeronautical University on the final day before winter break.

(BEGIN VIDEO CLIP)

CHIEF JAKARI YOUNG, DAYTONA BEACH POLICE: By the grace of God, those two students came forward and thwarted that plan.

He has already confessed to making these statements. He has confessed to it. He may want to claim that it was all a joke, and he wasn't serious about it, but we don't find anything funny about discussing a mass shooting on a campus.

If he was looking for attention, he's got it.

(END VIDEO CLIP)

HILL: You just saw these pictures here. Police found a collapsible rifle and ammunition inside a backpack when Hagins was taken into custody. He's now being held without bond on numerous charges. Among them, attempted first degree homicide.

Still ahead here, CNN is going to take you inside a Michigan hospital. That state setting new Covid-19 records, nearly two years into the pandemic. And despite being hospitalized with the virus, as you will see, that is still not convincing some people of the power of a vaccination.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I didn't want to be vaccinated.

UNIDENTIFIED MALE: You did not want to be vaccinated?

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: You think you'll get vaccinated after this?

UNIDENTIFIED FEMALE: No.

UNIDENTIFIED MALE: Why?

UNIDENTIFIED FEMALE: I should be OK now.

UNIDENTIFIED MALE: You think?

UNIDENTIFIED FEMALE: Yes.

(END VIDEO CLIP)

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