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14-Year-Old Boy Arrested in Serbian School Shooting; Tucker Carlson's Text Alarmed FOX Leaders; Fed Expected to Raise Interest Rates Yet Again; New Alzheimer's Drug from Eli Lilly Shows Promising Effect. Aired 6:30-7a ET

Aired May 03, 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]

JOAN BISKUPIC, CNN SUPREME COURT ANALYST: You know, the integrity of the Supreme Court, its vaunted impartiality, are really being questioned today in a way that back in the year 2000, it was unusual. You're exactly right, Poppy.

KAITLAN COLLINS, CNN ANCHOR: What a foreshadowing that was.

POPPY HARLOW, CNN ANCHOR: Right? Thanks, Joan.

BISKUPIC: It was.

COLLINS: Thanks, Joan.

BISKUPIC: Thank you.

HARLOW: Tucker Carlson's text message, another one revealed. What we're now finding out about what he said that alarmed FOX News executives so much the night before that trial was set to begin.

COLLINS: Also this morning, a disturbing development. At least eight children and a security guard have been killed when a student opened fire at an elementary school in Serbia. What we're learning this morning about a rare shooting there.

(COMMERCIAL BREAK)

COLLINS: We want to take you to some breaking news this morning as police in Serbia say that eight children and a security guard have been killed after a 14-year-old boy opened fire at an elementary school. Six more students and a teacher have also been hospitalized.

[06:35:05]

CNN's Scott McLean is live in London with more.

Scott, unfortunately, this is not always something shocking here in the United States, but this is very rare to see a school shooting like this, any kind of mass shooting like this in Serbia.

SCOTT MCLEAN, CNN CORRESPONDENT: Yes, that's absolutely right. Certainly not a common occurrence, which is why this is getting so, so much attention, because it is so, so out of the ordinary. And we're just getting bits and pieces of information coming in right now, Kaitlan. But I'll tell you what we know. This happened at a school called the Vladislav Ribnikar Elementary School. It is in an upscale neighborhood in Belgrade.

This happened according to the Ministry of Internal Affairs around 8:40 in the morning or so. So early on in the school day local time. And they say that a 14-year-old boy, who they say is a seventh grader, they're identifying him only by his initials, K.K., brought his father's gun to school and started firing.

As you mentioned, nine people have been killed, eight of them children. One of them was a school security guard. Seven injured, six of them children. One of them was a teacher. We also know that a young girl inside that school is currently inside of a hospital undergoing life-threatening surgery. Police are obviously still on scene. They are looking into the circumstances of what exactly happened.

There was also a moment where the 14-year-old boy, who was apprehended in the schoolyard, by the way, was brought out of the school. He had a jacket over his head. He was wearing skinny blue jeans and he was put inside of an unmarked car under arrest by police. There were also children coming out of that school, some of them obviously quite visibly distraught, as you can imagine.

I should also mention very quickly that gun laws are obviously much stricter in Serbia than they are in the U.S. Basically, fully automatic weapons, weapons with a concealer, things like that, those are pretty well outright banned. You can get semiautomatic weapons with a permit or a gun license, but there are also plenty of leftover guns from the conflict in the 1990s.

We don't know whether this was a legally owned gun or not, but obviously, authorities are going to give an update in the next 45 minutes and we're hoping get more information -- Kaitlan.

COLLINS: OK, Scott, after you hear from them, please let us know what they say.

Scott McLean in London, thank you.

HARLOW: All right. New overnight, we're learning what Tucker Carlson texted that was so worrisome to FOX executives and the board that it reportedly contributed to his firing. "The New York Times" reported on the message, which was sent on January 7th, 2021, obviously a pivotal day right after the insurrection, just hours after those riots at the Capitol. And he was talking about a video he saw of Trump supporters beating up, in his words, an Antifa kid.

It was redacted in the Dominion lawsuit court filings, but here is what part of "The Times" says is the behind that big black box at the bottom, right, of those filings. A quote from Tucker's text, it read, quote, "It was three against one, at least, jumping a guy like that is dishonorable, obviously. It's not how white men fight. Yet suddenly I found myself rooting for the mob against the man, hoping they'd hit him harder, kill him.

"I really wanted them to hurt the kid. I could taste it. Then somewhere deep in my brain an alarm went off. This isn't good for me. I'm becoming something I don't want to be," closed quote. "The Times" is only able to unveil the contexts of that text with interviews with peoples who spoke on the condition of anonymity. CNN reached out for comment. FOX declined. Carlson did not immediately respond.

Let's talk about this and a lot more with the co-founder and editor- in-chief of Semafor, Ben Smith. Also a perfect person to talk to because you just have this new book out that we're going to talk about as well called "Traffic: Genius, Rivalry, and Delusion, and the Billion-Dollar Race to Go Viral."

You write a lot about the rise of right-wing populism online. So we'll get to the book in a minute. But, wow, this Tucker text, do you think that's why this thing didn't go to trial?

BEN SMITH, CO-FOUNDER AND EDITOR-IN-CHIEF, SEMAFOR: I mean, this was the thing that I think every reporter was trying to get, and kudos to "The Times" for figuring it out. And, you know, the thing with a lot of the reasons people say that Tucker Carlson was fired, I think that there are a lot of viewers who would not be totally shocked to see him say something that racist. But FOX had been somehow, in their own minds, I guess, holding up this line that, you know, all these allegations of racism against Tucker and against FOX were totally false.

And I do think this line about this is how white men fight was -- may have been the last straw for them there. Made it harder to pretend anything else. The rest of the text is very dark and reflective, but I think less likely to be the thing that triggered his firing.

COLLINS: Yes. And we haven't seen FOX or Tucker Carlson comment on that text so far. We'll see what they say. On your book, you talk a lot about -- I mean, and we're talking about how the media landscape is changing, especially with the Carlson's departure from a huge slant on FOX News. You talk about in this book BuzzFeed, which of course you were editor-in-chief of BuzzFeed News, and all of these sites that depended on traffic to go viral, and also how they built so many of their company models based off of Facebook, but then once that stopped being a venue for them to use, they shrunk, essentially.

[06:40:05]

SMITH: Yes, you know, I was thinking about those sort of early days of building social media and sort of hunting for traffic when I was watching this Carlson thing, because, you know, a lot of -- there was a perception that the early internet was, among other things, left- wing. Like Facebook was -- Barack Obama visited Facebook because obviously Facebook is a Democratic institution for college kids that help Barack Obama get out the vote.

And I think a lot of people in that early sort of online world thought, well, the election of Barack Obama is like the culmination of this new digital revolution. And I think what -- but when I looked back at like who was building this world, in fact, a lot of these early right-wing figures, Andrew Breitbart, Steve Bannon, were -- you know, were there all along, were very interested, were studying these digital media tools.

And as the universe of people on social media grew, you saw these conservatives really make the most of them and channel a lot of the anger that you also see in conservative cable. Just that raw, often racially divisive anger. And take that to really fuel, among other things, the Trump campaign in 2016. And then Trump's election is kind of the culmination of that whole moment.

HARLOW: You talk about them basically sitting down, and the way you describe it, the white Ikea table from the progressive internet team looking over the shoulder. This really struck me on page 43. You wrote, "Obama and Trump. "The Huffington Post' and Breitbart. It's hard to imagine they'd have much in common, yet both movements were rooted in part in the new way of thinking about people, that came when you saw them as traffic," obviously part of your title. "Measuring interest and intent and channeling it into action."

What have we learned from that, as we look at a completely new media landscape, that in some ways is reverting back to the old, what were deemed sort of dinosaurs?

SMITH: Yes.

HARLOW: Coming back into prominence as some of these others go away.

SMITH: Yes, I mean, there was this early moment on the internet, and I was, you know, marginally part of it, sites like Gawker and BuzzFeed that I write about were, you know, it's like you were flying and suddenly you had instruments and you could see everything. You could see exactly who was looking at what. And when it came to this kind of political stuff, you could see, wow, the most divisive stuff, sometimes the most, the stuff that pushes the edge hardest is what attracts people.

And Facebook then built this kind of a mechanism, you know, where they were also looking for engagement, looking to see, well, what do people stick to, and what will people comment on? And often people will comment on the most outrageous thing, the most shocking thing. And there was a period that I think alienated a lot of people from these platforms, where that was where you opened Facebook and what you saw was the thing most likely to outrage you. And that was a choice.

COLLINS: And that was not always a given. There was this -- it's hard to remember this now, but there was a brief period where people thought they would be embarrassed to share things like that or they would be embarrassed to get into shouting matches on the internet. Clearly, not where we've ended up.

SMITH: Yes, I mean, I think we were very utopian about, you know, among other things, right, when media is social, when it's open, people are going to share fundraisers for earthquakes, they're going to share pictures of cats. You know, and nobody would ever, like, go on this big public space and just start yelling about politics because like, what a crazy, unpleasant thing to do. And everybody will hate you.

You know, that didn't exactly turn out to be how human nature works. Facebook also tweaked some dials because they kind of saw and liked the level of engagement and stickiness you got when people are screaming at each other about politics.

HARLOW: But, as Kaitlan points out, it's a choice. It's our choice. It's still a human choice.

SMITH: It's a human choice, but I think with one of the things that we saw was that the choices these big tech companies make can nudge you.

COLLINS: Yes, totally.

HARLOW: Totally.

COLLINS: Yes, I think it's more the choice that Facebook made on stuff like this.

The book is fascinating.

HARLOW: Congrats.

SMITH: Thank you. Thanks for having me on.

HARLOW: The new book, again, "Traffic: Genius, Rivalry, and Delusion, and the Billion-Dollar Race to Go Viral" is out now.

In just a couple of hours, the Federal Reserve will make a decision on interest rates, probably raising them once again. Our next guest ran the FDIC during the 2008 recession. And in the aftermath, what Sheila Bair thinks the Fed should do. She says press pause. Why? We'll ask her, next.

(COMMERCIAL BREAK)

[06:47:46]

HARLOW: Welcome back to CNN THIS MORNING. And it's a big day for the U.S. economy. The Federal Reserve is expected to raise interest rates by a quarter of a percentage point this afternoon, trying to continue this fight on inflation. It comes just days after the collapse of First Republic Bank rattled the market. Take a look at the hit to regional bank stocks. Shares of PacWest fell 28 percent almost yesterday.

All this as the U.S. government stares down a fiscal cliff, with negotiations over raising the debt ceiling set for next week. Time is running out. Treasury Secretary Janet Yellen said this week government coffers could run dry as early as June 1st if there is not a deal on the debt ceiling.

Let's bring in Sheila Bair. She was the share of the FDIC before, during and after the Great Recession of 2008 so she knows a thing or two about this.

Chair Bair, thanks very much for your time, and good morning.

SHEILA BAIR, FORMER FDIC CHAIR: Thank you. Glad to be here.

HARLOW: You spoke with my colleague Matt Egan yesterday and did a really interesting interview. And you said, look, Jerome Powell needs to pause. The Fed needs to pause and not raise interest rates. That's not most likely what they're going to do. Why do you think raising rates even by a quarter percentage point is the wrong move?

BAIR: Well, I said that last December, actually. I do think they're going too fast. I'm a hawk on inflation. They can only go so fast, you know. It was 14 years, mostly, near zero interest rates. Significant inflation. You can't reverse it overnight. And it's better to hold a steady course and hit pause, assess, than keep ratcheting up these interest rate increases.

Yes, you're right, I think I have no doubt that they're going to raise by 25 basis points. But at least maybe they can signal that now they will be hitting pause. I hope they do because, you know, the pace that they're doing this is unsustainable. And I fear later on they're going to have to start lowering rates, which is not going to be a good thing either.

HARLOW: But people that disagree with you would point to the inflation of the '70s. And I get that this is a different time and a different predicament, but the stop and go with rate hikes then prolonged that inflation pain. No?

BAIR: Yes. Well, I'm not saying stop -- they lowered and raised back then, too.

HARLOW: Right.

BAIR: I'm saying, hold course, which is to hit pause and go slower. I think that's really the key. And there are some different things going on from that period, as well. We did have a very long period of uncertain interest rate policy going up and down, up and down.

[06:50:05]

They've pretty much kept them on a sustained low level for almost 14 years. A lot of leverage has built up in the system. The system today is much more leveraged than it was back when Paul Volcker was having to contend with the inflation back then. They're also using different tools. More powerful tools. Instead of just raising rates through buying and selling securities, they are actually paying banks and money market funds, major financial intermediaries, not to lend but giving them the ability to park money at the Fed and make a quite high rate, 4.8 percent, 4.9 percent -- 4.8 percent on something called the reverse repo facility, 4.9 percent on reserve accounts.

So this provides powerful incentives in the financial system to play it safe, park your money, not lend. That is not a tool that was used during Paul Volcker days. So yes, Paul Volcker is a role model in terms of determination to fight inflation, and we need to beat inflation, but we also need to understand conditions are a bit different than the ones that he confronted. And it's just common sense. You can't go this fast. And it is, I fear, going to cause some additional stress in the financial sector.

HARLOW: JPMorgan came in early Monday morning and bought up most of the assets of First Republic Bank. It makes the biggest bank in America even bigger. I mean, JPMorgan is now twice the size that it was in 2009, when you were leading the FDIC.

BAIR: Yes.

HARLOW: Do you share the concerns that some lawmakers have about just how it is these big banks now, that are sort of seemingly the only vehicle --

BAIR: Well, it is.

HARLOW: -- to rescue or buy up these mid-sized ones?

BAIR: Well, I don't know about that. I still think it's possible for others to come in and make competitive bids. But there is a big overall issue about increased concentration in the banking sector. I do think one thing that Congress could do to help ease current jitters around uninsured deposits as well as stem this flow, this relentless flow of -- it's not just acquisitions, it's deposits that are going to be too big to fail institutions, when people get uncertain, is to provide unlimited coverage for transaction accounts.

Transaction accounts, operational accounts that businesses, nonprofits, governments have to make payroll, pay other expenses. They should be zero interest so they're not there (INAUDIBLE), at least for operational purposes. But there's a strong policy interest protecting those. They can't really move. Once, you know, you're set up, it's very hard to move at someplace else.

HARLOW: But --

BAIR: It's important to the real economy. And so I think that could help stem the flow of the deposit migration, if they would provide unlimited coverage for transaction accounts. And we did that temporarily during the great financial crisis.

HARLOW: Right. But Gary Cohn who worked in the Trump administration, top economic adviser to Trump and COO of Goldman Sachs said that's a bad idea, because it's going to be a race to the bottom in terms of folks just looking for the best.

BAIR: Right. No.

HARLOW: Go ahead. Why is it not a bad idea?

BAIR: Yes. Well, that's what -- he is absolutely right if you're talking about unlimited deposit insurance. That is a terrible idea. Transaction accounts that have zero interest, so weak banks couldn't take an unlimited guarantee and offer a really juicy rate and bring in, you know, deposit funding to take high risk. Just zero-interest transaction accounts, those that are used by businesses and other organizations to pay bills, including payroll. We did that during the great financial crisis. That would -- market expense really not an issue there because those accounts can't move very easily.

And there's a good real economy reason to protect those because you want those business, customers, and others to be able to make payroll and continue paying their bills and keep their businesses operational. So it's just transaction accounts really. Just that's the only place where I'd do it.

HARLOW: It's an important distinction.

Sheila Bair, Chair Bair, thanks very much for your time this morning.

BAIR: Sure.

HARLOW: We'll see what the Fed does this afternoon. Kaitlan?

BAIR: Yes. Right.

COLLINS: And as we wait to see what the Fed chair is going to decide today, there's also new promising data this morning that could be crucial in the fight against Alzheimer's. We're going to break down the data. And also see the ad that was made using AI, artificial intelligence, that is now raising serious concerns about the impact it could have on the election and politics.

(BEGIN VIDEO CLIP)

DONIE O'SULLIVAN, CNN CORRESPONDENT: So all the images in that ad were actually created using AI, artificial intelligence.

UNIDENTIFIED MALE: Oh, my goodness.

UNIDENTIFIED MALE: Wow.

UNIDENTIFIED FEMALE: I don't think I would have known that was made with AI if you hadn't said anything.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

[06:57:35]

COLLINS: This morning, there's promising new data just released in the fight against Alzheimer's. Eli Lilly says its new drug Donanemab significantly slowed cognitive decline. According to the company's latest clinical trials, some people who took the drug actually slowed their decline by up to 35 percent compared to those who took a placebo. The study involved 1700 participants between the ages of 60 to 85.

So joining us now to break down the study is CNN medical correspondent Meg Tirrell.

All right. Thank you so much. I mean, this means so much to so many people. We've seen how many people are struggling with this. The question, though, is how legit is this study, I think.

MEG TIRRELL, CNN MEDICAL CORRESPONDENT: It's extremely legit. In terms of running clinical trials, a phase three randomized placebo- controlled study is sort of the gold standard in terms of the strength of the evidence. And this was running a lot of patients. Lily is going to use this to file for FDA approval this quarter.

COLLINS: Wow.

TIRRELL: And what this drug does is it's the latest in a new group that is successfully removing amyloid plaques from the brain. You can see in this, a graphic we have here, the top two images are patients who are on this drug. This is an earlier study. You can see over the course of 76 weeks, that plaque, that plaque buildup in the brain, this is what this drug does, starts to get removed really significantly.

But that patient on the bottom there, you can see those yellow areas of the brain are still really present. That is showing that they have these plaque buildups that obviously stay there and this is contributing to the course of Alzheimer's disease. And so what this study showed is that by successfully removing that plaque, you can actually slow the course of the disease in this case by 35 percent on average.

HARLOW: There has been so much hope and then so much disappointment in really well-known Alzheimer's drugs. And the expense, there have been big fights in government over the expense of these drugs for older patients. How much -- do we have any sense of how much of a cost? Would it be covered by Medicare and Medicaid?

TIRRELL: That is the key question because right now there actually is a drug approved. This is called Leqembi.

HARLOW: Yes.

TIRRELL: But it is not covered broadly by Medicare. And of course, this is a population that requires Medicare coverage.

HARLOW: Of course.

TIRRELL: That drug costs more than $26,000 a year. We don't yet know where Lilly will price this if they get FDA approval. It's possible it could be similar, but we'll have to wait and see. But these are very expensive medicines. And so it's expected that when these drugs get full FDA approval, there will be a change potentially in that Medicare.

COLLINS: When could that be?

TIRRELL: So Lilly will file this drug in this quarter, and then it could probably take maybe 10 months to a year for the FDA to potentially approve it. The first drug may get full approval in July. So we could see that Medicare decision change.

HARLOW: Side effects? TIRRELL: So side effects are really important here. This is not a

benign drug to take. The most common things are things like brain swelling and these microhemorrhages or small.