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Early Start with John Berman and Zoraida Sambolin

Five States to Hold Tuesday Primaries, Georgia Governor Race in Spotlight; Economic Stress Putting Pressure on Biden White House; Global Elite Gather in Davos After Two-Year Pandemic Hiatus. Aired 5:30-6a ET

Aired May 23, 2022 - 05:30   ET

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

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[05:30:00]

CHRISTINE ROMANS, CNN ANCHOR: It's another primary eve in May with five states to hold primaries tomorrow. The state of Georgia in the spotlight with crucial races up and down the ballot, one of them between GOP Governor Brian Kemp and challenger David Perdue, a former senator backed by Donald Trump.

Let's bring in CNN Political Analyst and National Politics Reporter for The Washington Post Toluse Olorunnipa. He is also the author of the book, His Name is George Floyd. Really nice to see you this morning bright and early, Toluse.

Senator Perdue has a tough climb here compared to Governor Kemp, even though Trump blames Kemp for his election loss. If Kemp wins, what does this say about the strength of his campaign or the limits of Trump's sway? What's at play here?

TOLUSE OLORUNNIPA, CNN POLITICAL ANALYST: Yes. The limits of Trump's sway is -- that's what we are going to be watching and looking at very closely, especially as we look for the margin of victory. I think polling makes it pretty clear that Kemp is the runaway favorite in this race. He's the incumbent. He's the one that has been getting the most support among the Georgia electorate on the right, despite the fact Trump has been pretty negative towards Kemp for the last year. He's been attacking him for not helping him to steal the election in 2020 and he's made him the number one target.

But David Perdue, the former senator, is struggling. He is not polling well. He's not having much of a very vibrant campaign. He's off the air. And even with Trump's support, even with money that came from President Trump, which he does not give his money out very easily, his campaign seems to be lagging and it seems that like he's on the route to certain loss.

So, that shows that President Trump's endorsement is not the end all, be all of Republican politics, even in a state like Georgia, which has a very strong conservative party, it's not clear that just having Trump's endorsement is enough. LAURA JARRETT, CNN ANCHOR: So then, Toluse, talk to us about Trump's larger influence in these races. We focus a lot -- the media focuses a lot, I think, frankly, on Trump's endorsements. Does it help? Does it hurt? But are those voters sufficiently driven by Trump's personal vendettas against all these people, you think about someone like Georgia Secretary of State Brad Raffensperger, who, of course, didn't somehow find votes out of thin air for the president, he's punished him ever since. But it looks like at least from the reporting that voters aren't moved by that.

OLORUNNIPA: Yes. 2020 is getting further and further in the rearview mirror. And while President Trump continues to be fixated on what happened in 2020, voters are looking at their own issues, they're looking at their own pocketbooks, they're looking at what politicians are going to do to help them going forward, not trying to salve the former president's ego because he lost an election. So, there are some voters that are still motivated by the big lie, but it seems like, especially in states like Georgia, that they are more interested in what the politicians are going to do for them going forward.

So, it's not clear, especially as President Trump and other people start looking at 2024, whether focusing on election integrity, quote/unquote, will be a motivating message for voters looking to choose the next winner for the party and the next leader for the presidency.

JARRETT: And especially if you are not offering anything else.

ROMANS: Yes, exactly.

In your new book, you explain how the death of George Floyd led to activism that pushed Democrats to victory in states like Georgia. Is that still momentum? Is that momentum still here? Has it changed at all?

OLORUNNIPA: Well, two years ago, we definitely saw how that big coalition that came together to protest Floyd's death on the streets, which included black voters, it included white suburban white voters, it include diverse first members of the electorate, that was the same coalition that came together to boost President Biden in Georgia and Senators Warnock and Ossoff.

And looking back, a lot of those voters wanted the president to focus on some of the issues that were raised by George Floyd's death, whether it was police brutality with the policing bill or broader racial injustice. And some of those issues have not been passed, especially police reform. And there is some angst and a sense that maybe those voters might not come out in November because they don't feel like the promise that was made, the campaign promises have been fulfilled.

ROMANS: All right. Toluse Olorunnipa, thank you so much for getting up bright and early with us this Monday morning. Thanks.

JARRETT: Nice to see you.

[05:35:00]

OLORUNNIPA: Thank you.

JARRETT: All right. This morning, Pennsylvania Senate Candidate John Fetterman is back at home. He was released from the hospital Sunday, nine days after suffering a stroke. Fetterman won his Democratic Senate primary last week the same day that he had surgery to implant that defibrillator. Fetterman, in a statement, says he feels great and is following the orders of his doctor and his wife to rest and recover.

But home prices at record highs. We talk about it all the time, mortgage rates rising, buying a home has never been this competitive or expensive for American families. While the market is pricing out first-time home buyers of all backgrounds, black families face even bigger barriers.

CNN's Gabe Cohen is live in Washington on this story for us. Gabe, what did you find?

GABE COHEN, CNN CORRESPONDENT: Well, Laura, there is growing concern that this housing market is only widening both the homeownership gap and the racial wealth gap in this country. As you said, it's getting more and more expensive to buy a home. Redfin found the average monthly payment, once you factor in those mortgage rates, is now up 42 percent in just a year. And now more investors are coming in with cash offers and buying up properties than ever before.

And, look, that disadvantages as you said single family buyers from all background, but it's a particularly steep hurdle for many black families. Studies show they come from less wealth, they are more likely to carry debt and they paid disproportionately high rent, which, of course, makes it difficult to save for a down payment.

Black applicants are also denied home loans nearly twice as often as whites. And, look, a new report shows less than 45 percent of black families own their home, compared to 74 percent of white families. That's a gap that has barely changed since the 1960s. And experts fear it's just going to keep getting wider in this market.

I was in Phoenix last week. That is an incredibly hot market. And I spoke with two black women who are trying to buy their first homes. And now it is getting even more urgent because rent, as so many people know, is skyrocketing. For each of them, it was up close to $400. And that may not price them out of the home buying market, it could force them to leave their neighborhood.

(BEGIN VIDEO CLIP)

NICOSHA JONES, ARIZONA HOME RENTER: It's absurd and it's unheard of. It's not just pushing me out but it's pushing every other person that looks like me out here.

My focus is really to stay within my community. However, if the price is right, I'll have to leave my community, something I dread to do. UNIDENTIFIED FEMALE: It's very defeating, very discouraging. That's the American dream. Once you buy a home, you feel that you are accomplished.

You save up all this money. This is what I'm going to put down and it's your savings and then you can't go anywhere with it. It's like what is it all for?

(END VIDEO CLIP)

COHEN: And that is why experts are saying this market could actually speed up gentrification in some areas. And, remember, owning a home is the number one way families build wealth. And it has never been more valuable. A massive hurdle here is that in the U.S., we're short roughly 1, 2, 3 million homes.

The Biden administration last week unveiled a new development plan, especially for low income housing, to deal with this shortage. But it likely isn't going to make a difference for at least a few years. And in the short-term, Laura, a lot of people are going to keep getting priced out.

JARRETT: Yes, all right. Gabe, thank you so much. That's really important reporting. We talk about it here a lot, but it's different when you can put a face to it.

ROMANS: Yes, absolutely. Thanks, Gabe.

Up next, rising gas and grocery bills are issue number one for American families. How politicians in Washington are making it even worse.

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[05:40:00]

ROMANS: All right. To the economy as we start the week, and growing anxiety as Americans see gas and grocery bills rising, the stock market falling, and the R-word now, growing concern about the possibility of a recession.

Now, it's important to note here, there are signs of strength. The economy added more than 400,000 jobs last month. The jobless rate is now at pre-pandemic levels. But anyone with a 401(k) is seeing their retirement fund shrink, a little over a year of gains wiped out. The Dow just had an eight-week losing streak, the worst since 1923. The S&P 500 on the verge of a bear market, that's down 20 percent from its high.

Not everyone has a portfolio but everyone eats and drives. Gas prices are hitting record highs just in time for travel season. Inflation overall is higher than it's been for decades, there are COVID disruptions, chip shortages, supply chain bottlenecks now that baby formula is hard to find. It's a lot and reflected in our most recent polling, 77 percent of Americans say current economic conditions in the U.S. are poor. We want to bring in CNN White House Correspondent John Harwood. And, John, the president last night, this morning, was asked if America is headed for a recession, listen to what he said.

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REPORTER: In your view is a recession in the United States inevitable?

JOE BIDEN, U.S. PRESIDENT: No.

Our GDP is going to grow faster than China's for the first time in four years. Now, does that mean we don't have problems? We do. We have problems that the rest of the world has but less consequential than the rest of the world has because of our internal growth and strength.

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ROMANS: John, he acknowledged that gas prices are bad. That's the word he used. He said it is going to be a haul. He is right on that. Is he sending the right message here?

JOHN HARWOOD, CNN WHITE HOUSE CORRESPONDENT: Look, he's saying the only message he can send. Of course, on the question, is a recession inevitable, yes, it is, at some point. We just don't know when. And I think most economists think it's not going to happen in the near term.

But there is always a risk of recession, and as you indicated in the intro, there are a whole lot of economic problems that are swirling around at once that are very difficult for the American public to deal with.

[05:45:06]

As you mentioned, people are anxious about the value of their 401(k)s. They're anxious about what they pay at the gas station and at the grocery store. And it's a very difficult time for politicians. That's why Biden's numbers are so bad and that's why Republicans are poised to do very, very well in the November elections.

JARRETT: John, you say that Washington isn't really having an honest conversation about inflation. In your new piece, you say it's largely a charade. But sometimes charades work. And as that new CNN poll shows, 77 percent of the people think the economy is doing poorly, even if, overall, families are actually spending roughly the same and doing okay. What does that tell you?

HARWOOD: Well, you are exactly right, Laura. Charades do work. And this one is working very well. That's what the polling shows. But I think you have to step back a little bit and think about the content of the conversation.

Republicans act as if the inflation problem was all created by Joe Biden. Inflation is surging around the world, somewhat higher here, and Biden's policies may have contributed to that. The American Rescue Plan was likely too big. But that's not the principle cause of why we have inflation. Those of us in the media act as if it's Joe Biden's problem to solve every day. What are you going to do about inflation? It's not Joe Biden's problem to solve. It's the Federal Reserve's problem to solve. And the recession question we were just talking a minute ago depends on how skillfully they can tamp down inflation by raising interest rates.

And, finally, Joe Biden acts as if under pressure from all of these questions that greedy corporations or gouging oil companies are the reason. No, that's not the reason either. Companies are always greedy. Companies are always profit-minded. It just happens that the market forces of supply and demand right now are aligned in such a way that inflation is a result of it.

Supply chain problems, very strong consumer demand. Why is consumer demand so strong? Because the U.S. government under both Trump and Biden put a lot of money in people's bank accounts, that is cushioning the blow of inflation, but people weren't focused on that part, they're focused on what they see at the gas pump.

ROMANS: Yes. There's also a two-tier angle of that. I mean, when you look at most households, median and higher households are in much better position they are today than they were after the great recession, but low income households aren't. I think the White House has struggled to try to break through with how some of Biden's policies could help those lower income Americans, like those expanded child tax credits and other things.

HARWOOD: I'm not sure it's possible for -- in this environment for a politician to break through. There are sometimes when the political weather is just terrible and you can try, you can try to mitigate a little bit. You heard in Joe Biden's answer pointing to the things that are strong, that unemployment is very low, that growth has been pretty healthy. But it is very tough when people are in a mood as sour as this one to convince them that they ought to be thankful for some of the things that you have done.

ROMANS: And it's been two years of mass death and life changing public health crisis. I mean, you can't discount just how that has changed the psyche for now.

John Harwood, it's so nice to see you. The piece is great. I encourage everyone -- we'll tweet it out to encourage everyone to read it. Thanks, John.

JARRETT: Thanks, John.

ROMANS: And let's just look at -- everyone is so concerned about their 401(k) starting the new week, stocks index futures bouncing. They are higher this morning. And that's what sometimes happens, Laura, when you have a market like the S&P 500 flirting with a bear market down 20 percent. You start to see these bounces as people look to take advantage of those low prices. But a lot of people have been asking, like how do you bear-proof your money, right? So much of what we just talked about with John Harwood --

JARRETT: Is out of your control.

ROMANS: It's totally out of control.

A couple of things you can do. First of all, the job situation, still very good. Vanguard crunched these numbers. Vanguard found that in the first quarter, people quit their job and went to a similar job in the same industry, so basically to a competitor based on 18 percent pay increase. It paid to quit. And so that's an 18 percent raise. So, there are people who are upgrading in this economy. It's always a good time to add to savings and to pay down your credit cards.

JARRETT: And people are. They have excess savings left over.

ROMANS: Absolutely. And credit card debt is more expenses because of higher interest rates. Pay down the cards if you can.

If you are in the position to sell your house, you just heard about what a red hot the housing market is. I know you are buying --

JARRETT: Yes, I am not in the position --

ROMANS: It's a seller's market. This could be the time make that move to a new place or to downsize, right?

JARRETT: Take the cash.

ROMANS: Take the cash.

And then also about your portfolio, I mean, stay invested.

[05:50:02]

JARRETT: Don't pull all of your money out of the stock market is what you're saying?

ROMANS: By the time you freak out and find out what your 401(k) login is, you have already missed a 20 percent move. Dollar cost averaging over time is your best friend. So, those are just a few of the things that you can control if you are in that position.

JARRETT: That's really helpful. As you said, I don't even really try to keep track of where the login is. I try to lose the logins, so we just don't even look.

ROMANS: Lose the login.

JARRETT: All right. Justin Thomas mounds an epic come back in the final round to win the PGA Championship this after Tiger Woods withdrew from the tournament. Andy Scholes has it all covered in this morning's Bleacher Report. Andy, what happened here?

ANDY SCHOLES, CNN SPORTS CORRESPONDENT: Yes, good morning, Laura.

So, you have the PGA championship taking place without Tiger Woods yesterday. He made the cut, but in round three had his worst round ever at the PGA championship. Instead of putting more miles on his surgically impaired leg, Tiger withdrew from the tournament Saturday night.

But he likely has a smile on his face watching the end of the tournament, his good friend, Justin Thomas, coming up with the third largest comeback in major championship history. J.T. was down seven strokes to Mito Pereira to start the day. Pereira had the lead on 18, but this tee shot into the water. So, that would send J.T. into a playoff with Will Zalatoris and he would end up coming out on top to win his second major of his career.

And afterwards, CNN Don Riddell sat down with J.T. and asked him about the incredible comeback.

(BEGIN VIDEO CLIP)

JUSTIN THOMAS, TWO-TIME PGA CHAMPIONSHIP WINNER: I mean, when you are that far behind, you can't -- in a major, you can't do it all yourself. You need some help. And I understood that it was going to be tough for those guys just as it was and, yes, I executed when I needed to and it was just enough.

(END VIDEO CLIP)

SCHOLES: All right. The Golden State Warriors meanwhile now one win away from the NBA finals after beating Mavs in game three. Steph Curry scoring 31 points, including this no-look three late in the first half. Luka Doncic and the Mavs didn't really appreciate Steph's celebration, leading to the players from both teams needing to be separated.

Now, Luka at 40 points was on the wrong end of a monstrous dunk. Andrew Wiggins flying through the air, slamming in on Luka in the fourth quarter. Warriors win 109-100 to take a demanding 3-0 lead. No NBA team has ever blown a 3-0 lead. They are 146-0. Game four is tomorrow night.

The Celtics look to even their series with the Heat in Boston tonight. Jimmy Butler missed most of Miami's game three win, so we'll see if he's ready for game four. That one is at 8:30 Eastern.

All right, finally, Manchester City fans storming the field after winning the English Premier League title for the fourth time in five years. They scored three goals in a five-minute span to beat Aston Villa to claim the crown. A great moment after the game when Ukrainian midfielder Oleksander Zinchenko draped his country's flag over the trophy. He then broke down in tears and surrounded by his teammates.

(BEGIN VIDEO CLIP)

OLEKSANDR ZINCHENKO, MANCHESTER CITY MIDFIELDER: I am so proud to be a player. And I would love for one day to bring this title to Ukraine, for all the Ukrainian people, because they deserve it.

(END VIDEO CLIP)

SCHOLES: Yes. It's such a cool moment there for Zinchenko. And what an incredible game that was, them scoring those three goals in five minutes to win the English Premier League Title, definitely an emotional day there in that stadium.

JARRETT: That's awesome to see. Andy, thank you.

SCHOLES: All right.

JARRETT: Just ahead for you, SNL ends its 47th season with several emotional farewells. Four cast members, including fan favorites, like Kate McKinnon and Pete Davidson saying their final goodbyes.

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[05:55:00]

ROMANS: All right. Davos is back. The last time the world's CEOs, billionaires and top politicians gathered in the Swiss mountain village to discuss world's challenges, COVID was not a thing, the economy was cranking and a full scale war in Europe was inconceivable.

Let's go live to London and bring in CNN's Anna Stewart. And sometimes this is dismissed as the global elite talking big picture and so disconnected. But the news of today, I mean, they have to be right on the news, don't they? And President Zelenskyy of Ukraine is speaking right now, in fact.

ANNA STEWART, CNN REPORTER: I'm sorry, Christine, I can't actually hear your question, but President Zelenskyy has been speaking, addressing the World Economic Forum. This was the big speech everyone was waiting for. And, hey, it came in strong, those really strong statement.

Looking at where they're actually, the international community could have done more to prevent the invasion of Ukraine, saying some of the economic sanctions perhaps could have been implemented prior to this moment rather than just in reaction.

He also said that the sanctions, frankly, do not go far enough. He says there should be a full oil embargo. We know that's something the E.U. is grappling with, with some opposition from the likes of Hungary. And, actually, he went further than that. He said there should be no trade with Russia, full stop, so a very strong statement there.

Later this week, we will also hear from Olaf Scholz, the German chancellor. He will have to address some of the divisions, of course, in the E.U. And this is a Davos with a difference. Firstly, there is no snow. Of course, it's taking place in spring. But also this is a Davos with such big headwinds, from the war in Ukraine, the result in inflation, the risk of recession for big economies, as well as climate change.