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CNN This Morning

South Florida Hit with Historic Flooding; Gabriel Sherman is Interviewed about Rupert Murdoch; Bulls Rally to Win. Aired 6:30-7a ET

Aired April 13, 2023 - 06:30   ET

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

[06:30:00]

CARLOS SUAREZ, CNN CORRESPONDENT: At least a one in 200 year rainfall event. All this according to a CNN analysis of precipitation statistics from the National Oceanic and Atmospheric Administration.

On Wednesday evening, officials in Fort Lauderdale asked residents to avoid driving or traveling to or across the city. In a news release they told residents, quote, public works staff are clearing drains and operating pumps to mitigate the water as quickly as possible.

The Fort Lauderdale Hollywood International Airport was a drenched mess for many travelers, as shown by this video posted on Facebook. Another person posted this video and photographs on Twitter. An airport almost completely paralyzed by the historic flooding. By Wednesday evening, the airport was closed.

Heavy rain in Miami-Dade County as well. Here too, in the city of Miami, residents are experiencing severe flooding. In Hialeah, streets have become rivers. For many residents of this mobile home trailer park, the water is not draining fast enough.

On Wednesday night, the National Weather Service told residents in south Florida to stay off the roads and not attempt to travel unless they're fleeing an area subject to flooding or under an evacuation order.

(END VIDEOTAPE)

SUAREZ: And coming back out live, cities across Miami-Dade and Broward County, they're using portable water pumps in some neighborhoods, all in an effort to try to get this water out. The situation is bad enough here in Broward County that schools have been canceled for the day. And over at Fort Lauderdale Hollywood International Airport, that's about a five-minute drive from where we are right now, that airport is not scheduled to reopen at the earliest until later today. And already, according to Flight Aware, we're looking at about 300 canceled or delayed flights.

Guys.

DON LEMON, CNN ANCHOR: Yes, this is -- this is giving like hurricane type weather images. Carlos, thank you so much. Appreciate it.

POPPY HARLOW, CNN ANCHOR: Well, this morning, Oscar winning actor Jamie Foxx is recovering after being hospitalized. His daughter posted on Instagram last night that he had experienced some sort of medical complication. She said, luckily, due to quick action and great care, he's already on his way to recovery. We know how beloved he is. We appreciate your thoughts, your prayers. The family asks for privacy during this time.

We know Foxx has been filming a new movie in Atlanta but there's no word on exactly what happened. We're thinking about him this morning.

LEMON: Yes, one of the most talented people out there.

HARLOW: Amazing.

LEMON: Yes. So, we wish him very well. Jamie and the entire family.

Plus, this. It is -

HARLOW: You already -- you know the music?

LEMON: It's no hard -

HARLOW: It's not hard.

LEMON: It is not hard - there's something missing here -

HARLOW: Yes.

LEMON: From Rupert Murdoch and - I don't know this music. I would imagine it's "Succession," but go on.

HARLOW: Come on, you know this music.

LEMON: I don't know this music. I - I saw the first couple of episodes and then I -

HARLOW: I was watching it on the train back from D.C. yesterday.

LEMON: Yes. OK, so this is from - we're talking about the "Vanity Fair" piece, right?

HARLOW: Yes.

LEMON: And Gabe Sherman is going to come up. But it talks about what's going on with the Murdoch family, Rupert Murdoch and this whole trial that's going on. And so Gabe Sherman's going to be here straight ahead.

(COMMERCIAL BREAK)

[06:37:23]

LEMON: As we saw just moments ago, when we had Marshal Cohen live from Wilmington, Delaware, in just a couple of hours, jury selection for the Dominion Voting Systems $1.6 billion defamation case against Fox News will get underway. And this morning we are learning that the past 12 months have been pretty chaotic for Rupert Murdoch, and it goes beyond this high stakes case. "Vanity Fair's" Gabriel Sherman has the behind the scenes reporting on the billionaires, media mogul's health problems, his divorce, a broken engagement and a real life succession battle among his kids. There's even signs that a hit HBO show has been getting under his skin.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Dad's gone. We have to trust each other.

UNIDENTIFIED FEMALE: And what about me?

Don't lie to me.

I've got a lot of options.

(END VIDEO CLIP)

LEMON: Well, Sherman has been struck by how diminished Murdoch's own influence has been after the 2020 election, writing, Rupert called Trump before Biden's inauguration to tell him to accept defeat graciously, the source said. Trump refused. Trump threatened to start his own channel and put Fox out of business. The source said Murdoch seemed trapped by the people he radicalized.

Gabriel Sherman joins us now. He's a special correspondent at "Vanity Fair." And you can read the article on vanityfair.com and "Vanity Fair's" May issue, which hits newsstands on May 2nd.

Good morning to you. We're so happy that you're here.

So, this has been going on for quite some time. It's more than just the Dominion case. So, what gives here as it relates to Rupert Murdoch? Does this inform you as to what may happen with this case?

GABRIEL SHERMAN, SPECIAL CORRESPONDENT, "VANITY FAIR": Yes, good morning, guys.

You know, I -- without question, I think the fact that they're in this $1.6 billion lawsuit is a result of Rupert Murdoch's diminished leadership and the fact that there really has been this vacuum at the top of the company and it allowed all these Dominion falsehoods and these lies to get onto the air at Fox because they put ratings above all else, and there was really no adult in the room to say that, you know, we can get the ratings now, but there will be long term consequences later.

HARLOW: Yes. You quote Murdoch as later testifying, he told Jared Kushner, of course, the former president's son-in-law, well, the numbers are the numbers, when Trump was so mad about the Arizona call.

SHERMAN: Yes. HARLOW: I do think a diminished Murdoch is such a fascinating part of your reporting, Gabe, that many people certainly don't see that he doesn't want people to see.

SHERMAN: Yes.

HARLOW: But you open your piece saying, Murdoch is trying to prove one last act is in him, but his erratic performance, which is thrown his personal life and his media empire into disarray, has left even those in his orbit wondering if he has lost the plot.

[06:40:07]

I wonder what your answers is to that question now that you've reported this out?

SHERMAN: Yes, no, I think sort of sadly I -- the quote -- that quote you just read answers, the question, you know, Rupert Murdoch just turned 92. And for so long he's sort of kept up this myth in the media that he's this all-powerful mogul. And what I learned after, you know, months of reporting is that, you know, behind the scenes he is really, you know, as his age would suggest, a very old man. And there's this joke inside the Murdoch family that, you know, 40 might be the new 30, but 80 is 80.

HARLOW: Yes.

LEMON: Is 80.

SHERMAN: And I think what that means is that he -- he is -- his health has been failing for a long time, and I think now we're just catching up to the fact that he's a shell of what he used to be.

HARLOW: Yes, except for that Warren Buffett's also 92, and people are still very keenly listening to what he says and following his lead. So --

LEMON: And my friend, Clive, is 90. Clive Davis is still very (INAUDIBLE).

HARLOW: There's - yes, there's even more than age. It's so fascinating.

SHERMAN: Well, but I would point out guys that Warren -

HARLOW: Yes.

SHERMAN: Warren Buffett is often, you know, he's out giving interviews.

HARLOW: Yes.

SHERMAN: You know, we really don't see Rupert Murdoch in public except we'll -- you know, maybe -- perhaps at this Dominion trial.

HARLOW: Yes. LEMON: Can we talk a little bit more about the Dominion trial because you address these revelations from the court filings that the damage is done. And you're write, in their own words, Fox hosts have been exposed as propagandists. If we lose this suit, it's f-ing bad, a senior Fox staffer told me. And you wrote the book on Fox, this is in 2014, "The Loudest Voice in the Room," that you wrote. What else are you hearing from inside -- insiders there?

SHERMAN: Yes, no, I think this is really an existential crisis for the network regardless of the financial impact. You know, reputationally, they've been exposed. The emails that Dominion has obtained in their discovery process, you know, as a reporter who's covered this world, I dreamed of getting that kind of inside look and that access to Fox News. And because of the court order, Dominion was able to get access to Fox's internal communications. And it really was as bad as you might imagine. They were, you know, lying to their audience. In private they said Trump was crazy. And then, on the air, for 24 hours a day, they would say he's the greatest thing ever. So, I think that, to me, is one of the lasting impacts of this trial, regardless of the outcome.

HARLOW: Yes, and even all those questioning about Covid and vaccine et cetera during Covid, it was -- you reveal Murdoch was always following the science and always being extra careful, you know, during Covid.

SHERMAN: Yes, I mean his - his - his then - his then wife, Jerry Hall, required everyone to test before seeing him.

HARLOW: Yes.

SHERMAN: Wear masks. Excuse me.

HARLOW: Happens to us all the time.

SHERMAN: So, yes, I mean I think the irony of the fact that they were -- I think the fact that they were really just disrespecting their audience and saying one thing while doing another, I think, will be, again, just the lasting impact of this era.

HARLOW: I just want to end on this, the sadness. Wasn't that striking to you that - that - Gabe writes, after interviewing dozens of people, I was struck by how sad all the Murdochs seem. And it made me think like, for what?

LEMON: Well, yes, can I -

HARLOW: Like, why -- why do it all?

LEMON: And one thing, because you talk about this struggle between Lachlan Murdoch and James Murdoch, and you said, a senior staffer told you that James Murdoch sees destroying Fox News - this is the other brother, his politics don't go along with Rupert and Lachlan -- he sees destroying Fox News as his mission in life when Murdoch is gone. Do you think that that could happen? Could James take control and change sort of the trajectory of Fox News? SHERMAN: Yes, that would depend on him winning the support of his two

sisters because you need three out of the four siblings to align to change the leadership. And I think there's really a shadow war going on behind the scenes for that.

But I -- to your point on the sadness, I mean all that money, all that power and it's destroyed a family.

LEMON: Yes. Yes.

SHERMAN: And, again, I think there's sort of like a lesson for everyone there.

HARLOW: Oh, yes. What matters in life for sure, a lesson.

Gabe, such a good read. Congratulations.

LEMON: Yes Power. Money. Of course, it's -

SHERMAN: Thank you, guys.

HARLOW: It doesn't - it doesn't really matter.

LEMON: Thank you.

HARLOW: Thanks, Gabe.

LEMON: Thanks, Gabe.

HARLOW: Ahead, hear from the White House's top economic advisor about the recent banking failures. What she thinks, this is Lael Brainard, about the state of the country's banking system now.

(BEGIN VIDEO CLIP)

HARLOW: Do you think there will be more bank failures this year?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[06:48:29]

HARLOW: Welcome back.

Billionaire investor Warren Buffett says even if more banks go under, depositors should not be worried about losing their money.

(BEGIN VIDEO CLIP)

WARREN BUFFETT, CHAIRMAN, BERKSHIRE HATHAWAY: We're not through with bank failures, but -- but we are - we are through the depositor. The depositors haven't had a crisis.

Banks are no bust. But depositors aren't going to be hurt.

(END VIDEO CLIP)

HARLOW: Buffet expressed unwavering confidence in the banking system's ability to protect your deposits. But as you heard him say, he still thinks more banks could fail in the future.

Yesterday, the president's top economic adviser, Lael Brainard, told me she thinks this banking system right now is sound and stable in the United States. I sat down with her in Washington, D. C., yesterday at Semafor's World Economy Summit.

(BEGIN VIDEOTAPE)

HARLOW: Do you think there will be more bank failures this year?

LAEL BRAINARD, DIRECTOR OF THE NATIONAL ECONOMIC COUNCIL: So, I think what is important is that banks have now seen -- bank executives have seen some of the stresses that the two failed banks were under and they're shoring up their balance sheets and, you know, they are convincing depositors and investors alike that they have a good strategy and they are risk managing effectively.

If a bank is not effective in doing that, then I think, you know, you might still see some investors really pushing harder. So, we'll see in the months ahead.

HARLOW: Run.

BRAINARD: No, I think this is very much an individual set of banks that took some unusual risks.

[06:50:06]

And so I think investors are just, you know, very attuned to those risks and bank management know they need to show that they have viable business models.

HARLOW: I think one of the questions now is, many Americans feel like all of their deposits, to an unlimited ceiling, are going to be insured, because that was what was guaranteed to these two banks, and how can you not do it for the rest if it were to come to that.

BRAINARD: So, we took very targeted actions in the case of two banks that were poorly managed and took unacceptable risks and failed. Those were targeted actions. They were strong actions, but they were targeted on very specific risks.

HARLOW: But does that mean should we see another bank failure in the next year it would not be the case that all depositors are protect at every level?

BRAINARD: Yes, so I think we do have -- we've seen a playbook. It works very well. But it is relevant for banks that fail. I think, more broadly, there's questions that may be addressed over a longer period of time where I think the FDIC has taken it upon itself to do a study and think about more broadly, should we think differently about deposit insurance. And that -- that's on a slower track. HARLOW: One of the things that was so striking in watching SVB and the

collapse play out is that we learned from some really good reporters that six times -- no less than six times had regulators told SVB, look, you have what you guys call matters requiring attention, and the bank didn't fix those vulnerabilities. And it turns out that in 2021 there was a Fed rule issued that that is just guidance, that it doesn't have to be enforced.

And so my question to you, Lael, is, should the public know when a bank ignores regulators six times in a row? How do you weigh the benefit of the public knowing and the risk of sparking a run on the bank if you make that public?

BRAINARD: So, I think it's one of the issues that the Federal Reserve really needs to take seriously. You're exactly right, that what happened was not just that rules were weakened, but that there was a change in supervision to much lighter touch supervision with, you know, messaging that fewer issues should be escalated, that examiners should not be as intrusive for this size class of banks.

Of course, in retrospect, we know that that was a mistake.

HARLOW: And so should the public be made aware when a bank, for example, six times ignores what regulators tell it, or do you risk a run on the bank? What's worse?

BRAINARD: So, my sense is that the bank regulators have to calibrate in a consistent way what guidance they make public or the banks need to make public and what guidance is not made public. So there's an escalation. That's for the Federal Reserve to decide. But I do think it's good practice for the public to be aware.

HARLOW: The public should know at some point, you're saying?

BRAINARD: The public should generally know how well a bank is risk managing. That's why liquidity requirements that were removed, bank capital requirements, and stress tests that did not apply to these banks, those things should help the public test and, you know, sort of continue to investigate the resilience of their banks.

HARLOW: Right, because you can understand why an investor, a fiskit (ph) investors, should know what's going on in a bank in terms of hedging inflation risk, but a depositor shouldn't have to be digging for that, right? They should, at some point, be given a heads up.

BRAINARD: And that is what stress tests, liquidity requirements, capital requirements, all of those things, that's what they are intended to do.

HARLOW: Are you in the camp with those who have said in recent weeks that they believe that a recession in the U.S. is now slightly more likely because of the banking crisis in terms of credit tightening, lending, reining in? What do you think?

BRAINARD: So, I think that banks are showing some signs of pulling back a little bit on credit. That actually could do some of the Federal Reserve's work for them. But in terms of what I see in the economy overall, you know, it's a remarkably resilient economy.

(END VIDEOTAPE)

LEMON: Good work there, Poppy.

HARLOW: She's a - thanks. She's really - she's really optimistic, but I thought it was interesting that she said, you know, at some point, when regulators are warning banks, warning banks, warning banks, the public has a right to know, right, so we don't have another SVB situation where everyone's freaked out and didn't know.

LEMON: Yes. Transparency, transparency.

HARLOW: Totally.

LEMON: Right now, officials are now conducting around the clock monitoring of air quality in Indiana as a recycling plant burns for another day. We're going to have the latest, next.

(COMMERCIAL BREAK)

[06:59:34]

LEMON: I don't know, it seems like there should be different music, but the sport should be like, ah, ah, ah.

HARLOW: What happened in sports again?

LEMON: What sports? The producer's like, move on, please.

The Bulls had a secret weapon last night in Toronto for their play-in game. Andy Scholes joins us.

Good morning, Andy.

ANDY SCHOLES, CNN SPORTS ANCHOR: Yes.

LEMON: So, what happened?

SCHOLES: Yes. Good morning, Don and Poppy.

So, you know, not often can we say that one of the players kids literally helped the team win, but that was the case for the Bulls last night in Toronto.

[07:00:00]

Listen to DeMar DeRozan's daughter, Diar, every time the Raptors shot a free throw.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So you're hearing when Raptor's shoot. She's screaming.