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CNN This Morning
San Francisco Weighs Reparations; Kevin O'Leary is Interviewed about Business; Abbe Gluck is Interviewed about the Abortion Pill Ruling. Aired 8:30-9a ET
Aired April 11, 2023 - 08:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[08:30:00]
UNIDENTIFIED MALE: Some places where we could see that is the list of people who were displaced from housing.
NICK WATT, CNN NATIONAL CORRESPONDENT: Some say no one should qualify.
JOHN DENNIS, CHAIRMAN, SAN FRANCISCO REPUBLICAN PARTY: Are you responsible for the sins of your ancestors? If were going to sit down and have the conversation, I need to hear the answer to that. That's really persuasive.
WATT: And you haven't heard that yet?
DENNIS: No. No, I haven't. Afraid I haven't.
WATT (voice over): Sheryl Davis has been getting messages from all over.
SHERYL DAVIS, EXECUTIVE DIRECTOR, SAN FRANCISCO HUMAN RIGHTS COMMISSION: The things that you think would no longer still be said, where you call people monkeys or you tell people to go back to Africa, or you say, you know, get up off your lazy butt and work.
WATT (on camera): People are saying that?
DAVIS: Yes.
DEAN PRESTON, SUPERVISOR, SAN FRANCISCO COUNTY BOARD OF SUPERVISORS: I really do hope all of us in city leadership, especially with these attacks, speak up loud and clear and proud in defense of and support of the Reparations Advisory Committee's recommendations and make them happen as soon as possible.
(END VIDEOTAPE)
WATT: Now, the final report from that task force is due in June. Then the supervisors and the mayor would have to vote. This might also go out to the voters. It might go on the ballot. One member tells me that that five million figure will stay. And I'm also told to expect legal challenges.
Don. DON LEMON, CNN ANCHOR: Yes. Hey, Nick, can I just ask you something real quick? Do you think municipalities and cities all over the country are watching what happens here? Because that is the whole idea about reparations -
POPPY HARLOW, CNN ANCHOR: I think so.
LEMON: It's not just like giving people money, it's about people of color, especially not having the opportunity to build generational wealth as white Americans have been able to.
WATT: Yes. Yes, listen, the people in San Francisco say we are hoping to provide a model for the rest of the country, but they make it clear, we're not providing a model in terms of that dollar figure. They make it very clear that that dollar figure is specific to San Francisco because it is such a ridiculously expensive city. But, yes, they are hoping this will be a model, a beacon, that the rest of the country can look to and take from and use and follow.
Guys.
LEMON: Nick Watt, thank you.
WATT: Thanks.
KAITLAN COLLINS, CNN ANCHOR: Also, a new study this morning shows that Americans are finding it's actually more difficult to borrow money. What is the impact? Why is this happening? How long could it last? We have none other than the "Shark Tank" finance expert Kevin O'Leary. He is here, live.
LEMON: Uh-oh. Uh-oh, shark infested waters in the studio.
(COMMERCIAL BREAK)
[08:36:12]
LEMON: OK, so if you take a look right there on your screen, that is one Miss Poppy Harlow over there getting ready to interview her Yale law professor, who also happens to be the former special counsel to the president, about what's next in the legal fight over abortion pills. That is coming up. So, stay tuned for that.
But first, your money this morning.
Americans are having a harder time borrowing money. A survey conducted by the New York Federal Reserve Bank found that nearly 60 percent of Americans say it is harder to obtain credit than a year ago. That is the highest level since it began crunching the numbers in 2013. At the same time, consumers say inflation is going to be worse, not better, in the year ahead. Let's hope -- hopefully there's some good news in this interview.
Joining me now is the chairman of O'Leary Ventures and "Shark Tank" judge Kevin O'Leary, aka Mr. Wonderful.
Thank you -
COLLINS: You have a lot of names.
LEMON: Yes, a lot of names and a lot of hats, right?
KEVIN O'LEARY, CHAIRMAN, O'LEARY VENTURES: I like aka. That's like - that's great (ph).
LEMON: Aka.
So, thank - listen, you deal a lot with small businesses as an investor. As a CEO, what are you telling me? Why is it so hard -- why is it so much tougher now to borrow money?
O'LEARY: It's all happened in the last two weeks. What's -
LEMON: In the last two weeks?
O'LEARY: Yes. I mean we survey our CEO, we have over 50 investments in private companies in almost every state, almost every geography in America, and we're constantly in contact with them. And obviously financing, particularly receivables. When you're a small business doing 50 million, maybe you have 100 employees, you have 60 to 90 days of your sales tied up in receivables with big box retailers maybe or whoever else you're selling to. We used to be able to factor that, it's called. In other words, borrow against those receivables at around 7 to 9 percent. Today, that has gone from 17 to 39 percent in two weeks.
LEMON: Wow.
O'LEARY: And so the reason that happens, very simple, Silicon Valley Bank. It sent a shockwave through all the regional banks that do a lot of this factoring, or hedge funds, or private equity firms, and money is tight and it's really hard to borrow now.
COLLINS: Yes. Well, and Jamie Dimon was talking to Poppy last week in that interview and he was talking about interest rates staying higher for longer is his prediction.
O'LEARY: Yes, I think he's right. I think inflation - I think the Fed will raise another 25 basis points in the May meeting.
Here's the thing, though, the effect of this drying up of capital to small business has not been shown up yet in the CPI data. So I would - I'd put up my hand up to the Fed and say, let's pause. Let's wait and see the effect of this drying up of liquidity and also let's wait and see what the data says about rent because it's rolling over. Rents are down in most cities that are not coastal -
LEMON: Not the coastal cities.
O'LEARY: By 20 percent.
LEMON: Yes, but you don't think that the Fed is going to do what you say? You don't think they're going to take a pause? O'LEARY: No, they - I come finally to the place where I would put up my hand and say, wait, pause, let's just wait. Wait 60 days, but I don't think they're going to do that. They're probably going to raise another 25 basis points.
COLLINS: Can we -
LEMON: Yes, go on.
COLLINS: No, go ahead, because I have an idea or some things I want to bring up (INAUDIBLE).
LEMON: Well, I was going to talk about the regional banks. You're saying this all happened with SVB and is that what you -
COLLINS: Yes.
LEMON: That's your idea as well. Is it -- the regional banks, are you saying there is - is there more of a need for regional banks, is this -- or is there less of a need because of -
O'LEARY: Well, we had this ongoing dialogue together right here at this desk.
COLLINS: Every week.
O'LEARY: And I'm arguing that we'll now move to super regionals because they're - the small guys will not be able to attract -
LEMON: What is that?
O'LEARY: In other words, do we really need 3,000 small banks in America? No. Maybe we get by with 1,000 small banks and the major money center banks.
The -- but all I'm saying is, let the market be the market. It doesn't matter what I say. What matters what the market says because I personally, and I can assure you that there are millions like me, do not want to guarantee every single account in every tiny bank because some percentage of them are run by idiots. I'm sorry I said that, but it's true.
COLLINS: Well, and some percentage of big banks are run by idiots too, wouldn't you say that?
O'LEARY: That's true, but let the markets be the market.
COLLINS: It's not just small banks.
O'LEARY: Let the market be the market.
[08:40:00]
If an idiot is running a bank, they will be forced out of that position. And we should not be forced to guarantee every tiny bank. Here's the problem. And I pursued you on this last time we were
talking. Where would you put your own money today with -- now that you know that these regional banks are so unstable?
COLLINS: We disagree on this fundamentally because I think small banks are important. And what I was going to -
O'LEARY: Only because you think you have an imputed guarantee up to 250,000. And I'm saying, I'm not giving that to you anymore, and so is the rest of America.
COLLINS: Well, it is - you are giving it to me, though. It is still in place. They haven't gotten -
O'LEARY: Well, I'm not OK with it.
COLLINS: They haven't gotten rid of that yet. I understand that. But to the point about small banks is, what Jamie Dimon was saying in this interview with Poppy is saying that he thinks they're important because it's a community branch, people can go -- let me say why -- people can go in, they feel more comfortable going into a bank that they know that is run by people they know in a town that they know, they can learn more about their finances.
O'LEARY: Kumbaya. Kumbaya.
COLLINS: It's not kumbaya. You -- someone learns more about their finances -
O'LEARY: Let's talk about - let's talk about Jamie Dimon. What do you think he's going to say? He's got to talk his book. He's getting billions of dollars coming in every week. I'm part of that. I've moved a bunch of money to JP Morgan because it's safer than a small bank. And he's got to say, oh, I've got to support the small guys because they're important. He's talking his book. He's doing -- he's saying the right thing because, frankly, those banks aren't going to be around in 24 months. That's my opinion.
LEMON: Did you hear what I was whistling?
O'LEARY: Yes, kumbaya.
LEMON: No, I was whistling the "Andy Griffith Show," Mayberry.
COLLINS: We'll continue this saga disagreeing over small banks.
LEMON: Poppy, did you want to get in on this?
HARLOW: I would just say -- hi, Kevin. I would just say that, you know, everyone should read Jamie's annual letter that came out about a week ago talking about how we need a healthy banking system writ large, right? Yes, JP Morgan got assets from this, but we need a healthy banking system writ large.
I'll see you next time.
LEMON: She's going to say it, but you don't get to respond.
COLLINS: (INAUDIBLE) later.
O'LEARY: Look at that.
LEMON: She's got to do an interview.
COLLINS: Thanks, Kevin O'Leary.
LEMON: Thank you, Kevin.
HARLOW: A major legal battle over an abortion pill is underway, and women across the nation could lose access from that. Just days from now, the Justice Department is stepping in. That's ahead.
(COMMERCIAL BREAK)
[08:46:19]
COLLINS: We have new developments just into CNN in the mass shooting at the bank in Louisville, Kentucky, that happened yesterday and left five people dead. The mayor's office is now telling CNN THIS MORNING they hope to release 911 audio of calls made later today, and also that they have seen the surveillance video and say, quote, it's clear the initial responding officers immediately engaged the shooter. They maintain that officers saved lives, saying there were other people in the building at the time that they arrived. We'll have more for you on that in a moment.
HARLOW: Meantime, the Department of Justice, along with the manufacturer of abortion medication, has asked a federal appeals court, the Fifth Circuit, to put on hold a Texas judge's ruling that could block access to the drug Mifepristone across the country. DOJ lawyers argue Judge Kacsmaryk's ruling had, quote, upended decades of reliance by blocking the FDA's approval of Mifepristone and depriving patients of access to this safe, effective treatment based on the court's own misguided assessment of the drug's safety. In its filing Monday, the government asked the Fifth Circuit to stay Kacsmaryk's order until this case goes through the process. And it looks like it's going to be fast tracked to the Supreme Court.
With us now is Abbe Gluck, professor of law and faculty director of the Solomon Center for Health Law and Policy at Yale Law School. She's also a professor at Yale Medical School, and she served as special counsel to President Biden and special counsel to the White House Covid-19 response team. And, full disclosure, was my professor last year in law school, civil procedures, et cetera interpretation, the hardest exam I've ever taken. Thank you very much.
But I just thought of you because you're perfect in terms of your health background and your legal background. So, why does it matter, and why did DOJ appeal this?
ABBE GLUCK, PROFESSOR, YALE LAW SCHOOL: Thanks, Poppy. It's great to see you.
HARLOW: Good to be here.
GLUCK: It's incredibly important that DOJ appeal this case. So, first of all, this case is an unprecedented ruling by a lower court judge who substituted his own judgment for the FDA's expert judgment that this drug was safe and effective. This ruling has enormous implications for Mifepristone, the abortion medication, and that's so important, but it also has implications for the entire spectrum of FDA review. It's essential that DOJ take this ruling all the way up through the appellate process, even to the Supreme Court if necessary, to reverse the lower court ruling, which could really cripple FDA review.
HARLOW: So for Democrats and some Republicans, like Nancy Mace, who said on this program yesterday, just ignore it, you're saying, no, this has to go through the legal steps.
GLUCK: Yes, I mean, there's a process here. So, on the one hand, if you just ignored the ruling, you're sort of acknowledging that it exists and you're not actually fighting it, and the FDA shouldn't do that. And after we follow through the entire spectrum of appeal, there're be time and room if the rule of law does not get upheld for the Biden administration to open its toolkit and make sure the drug is effective (ph).
HARLOW: Because you worked so closely with the Biden administration in the White House, as special counsel to the president on these medical issues of Covid-19, what really can the Biden ministrations do here? If the courts -- if the Fifth Circuit doesn't go in their way, or if it goes to the Supreme Court, they don't go that way, what can the Biden administration do? Because this looks like the first time a judge has ever ordered the FDA to pull something from the shelves it has been deemed safe for more than two decades.
GLUCK: Yes. Let me just back up. It is an unprecedented ruling. It is the first time that a federal judge has substituted his own, independent judgment, or its own judgment, for the expertise of the FDA, right? So, the first thing the Biden administration has to do is it has to get this ruling reversed. We cannot have cases where people are allowed to challenge drugs 20 years after they've been approved, when they've been shown safe, as effective, and get pulled off the market. It would completely undermine the entire pharmaceutical -- legitimacy of the pharmaceutical market.
HARLOW: What if they don't prevail, right? What -- literally, like, the Fifth Circuit's going to be a challenge, no?
GLUCK: Right. If he - OK, so, God forbid we get to the Supreme Court and the Supreme Court does not uphold -- does not reverse the case, as I think it will, because the case has a lot of flaws, and we can talk about some of the flaws, and the plaintiffs don't have submission concrete injury.
[08:50:10]
They're suing 23 years late, way past the statute of limitations. But then the Biden administration has options. People talk about exercising enforcement discretion. They talk about reapproving the drug. But I just want to say, that's incredibly premature because -
HARLOW: OK.
GLUCK: You don't want to have this precedent on the books for any drug, right? So, it's important as Mifepristone is, we really need to think about this in the big picture of the legitimacy of the FDA.
HARLOW: OK. So,, let's just finally take this too, if it does go to the Supreme Court, because right now the case that Judge Kaczmarek ruled on was a statutory case, right? But if it goes to the Supreme Court, constitutional questions will come into play, right? The supremacy clause, the commerce clause, et cetera. But Dobbs, overturning Roe versus Wade, told us -- that court told us the majority states rights. This is the opposite of that.
GLUCK: Right. So this case is a statutory case in the sense that it goes to the authority of the FDA and our deference to their expert judgment. When it gets to the Supreme Court, is going to be inevitably linked to Dobbs, which is the case that overruled Roe versus Wade, where the court said, as you said, that we're leaving the abortion decision to the states. And in the Supreme Court, the court is going to have to ask, does this decision, which does the opposite, which issues an injunction against the entire provisions of the pill for the whole country -
HARLOW: Right.
GLUCK: Does that conflict what the court understood to be the landscape it was setting forward in the Dobbs case.
HARLOW: Could the court do that?
GLUCK: Could -
HARLOW: I mean overrule essentially what they -- make an opposite argument of Dobbs.
GLUCK: Well, I think it's sort of apples and oranges because in this case we're talking about a statutory -- in this case we're talking about a statutory rulings. What the court is going to be focusing on in this case is whether we want any federal court, on any issue, on any drug, substituting their expert scientific judgment for the FDA. It's going to have implications for the Dobbs ruling -
HARLOW: Right.
GLUCK: But it's not going to be on the same legal terms.
HARLOW: So broad.
Professor Gluck, thank you very much.
GLUCK: Thanks for having me.
HARLOW: We'll be right back.
(COMMERCIAL BREAK)
[08:55:36]
LEMON: And incredible save. In the final seconds, by Wrexham's AFC's Ben Foster. That is the Welsh soccer club owned by actors Ryan Reynolds and Rob McElhenney.
Watch this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Oh, Scott's (ph) from Knox (ph) County. Saved (ph). Saved by Foster (ph). Massive blow (INAUDIBLE) race.
(END VIDEO CLIP)
LEMON: Did you see them?
All right, so, Ryan Reynolds, who was going wild in the stands, joked that he was going to hug Foster (ph) so hard he'd break his ribs.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Oh my God.
UNIDENTIFIED MALE: (INAUDIBLE) that does it?
UNIDENTIFIED MALE: You son of a (EXPLETIVE DELETED).
(END VIDEO CLIP)
LEMON: You can't say that on morning TV. A little beep there. That save put Wrexham three points ahead in the title chase and a possible promotion into league two, the next tier of the English soccer system. That is a really big deal.
Beep.
COLLINS: Love Ryan Reynolds face during that.
LEMON: Yes. All right. Thanks for joining us, everyone. We'll see you tomorrow. Make sure you stay tuned for "CNN NEWS CENTRAL." It starts right after this break.
(COMMERCIAL BREAK)
[09:00:00]
