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First Move with Julia Chatterley
Terry: This is a Win-Win Situation for Russia, North Korea; Remote Village Hit Hard by Devastating Earthquake; UAW President: Union, Employers Fart Apart as Strike Looms; iPhone 15 Lineup set to be Unveiled; Malpass: World is in a Growth Crisis; Mount Fuji's World Heritage Site Status at Risk. Aired 9-10a ET
Aired September 12, 2023 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:00]
(COMMERCIAL BREAK)
JULIA CHATTERLEY, CNN HOST, FIRST MOVE: A warm welcome to "First Move" great to be with you this Tuesday and a jam packed show as always beginning
with Kim Jong-Un on the move.
The North Korean Leaders heavily armed trained now in Russia according to state media. Still no confirmed time for the meeting with President
Vladimir Putin as the world of course watches on the latest on that trip coming up.
And catastrophic flooding more than 2000 people have lost their lives in Libya after a powerful storm and heavy rainfall. The fear is that number
could end up significantly higher. A live report on that just ahead too. And the ongoing search for survivors rescuers continue to battle terrain
and the heat following Friday's devastating earthquake in Morocco All the details on those rescue efforts coming up too.
and in the meantime, here's the global stock market picture on Wall Street stock futures pushing lower as investors await Wednesday's U.S. inflation
data the consumer price index are not the only ones Of course, Federal Reserve policymakers will also be watching that number closely. Perhaps
they shouldn't watch so closely. However, in the words of former World Bank President David Malpass, the Federal Reserve's monetary policy is broken.
He says we're missing the true drivers of inflation, which is government policy and regulation. And the focus should be on actually cutting rates to
grow the economy and fixing some of the other things.
We'll discuss some of his solutions later on in the show. And dialing in Apple set to unveil its latest iPhone at its annual event in Cupertino in
just a few hours' time while Google is going on trial in DC charged with violating antitrust laws in its massive search business.
We'll have all the details on that too, and what some of the consequences for Google might be if they lose that case. Lots to get to, as always, but
we do begin in Russia and these images from Russian state media show the North Korean Leader's train in the far east of Russia.
U.S. officials have long warned the talks between Kim and Putin could focus on weapons sales to Moscow after months of war in Ukraine. But here's how
Kremlin Spokesperson Dmitry Peskov described the meeting.
(BEGIN VIDEO CLIP)
DMITRY PESKOV, KREMLIN SPOKESPERSON: Like with any neighbor, we consider ourselves obligated to establish good mutually beneficial relations. We
will continue to strengthen our friendship.
(END VIDEO CLIP)
CHATTERLEY: And we've learned that North Korea's top officials including its top military leaders are among Kim Jong-Un's delegation and that
Russia's Defense Minister will also take part in these meetings.
Joining us now is Sue Mi Terry she's Former CIA Officer and Former Asia Program Director at the Wilson Center fantastic to have you on the show
with us. Is this first and foremost, about weapons and are you expecting some kind of deal on arms to be struck?
SUE MI TERRY, FORMER ASIA PROGRAM DIRECTOR, WILSON CENTER: Absolutely. This is about technology transfer. I'm sure Kim Jong-Un is not going to, you
know Russia and meeting with Putin just for food and fuel, although North Korea desperately needs food and fuel as well.
They are going to get -- Kim Jong-Un is going to get technology for his military satellites for his nuclear submarines for his long range ICBMs.
North Korea has tested -- missiles or ballistic missiles last year.
You know, they are expanding their nuclear and missile program. And he needs nuclear missile technology from Russia. And of course, Putin needs
artillery ammunition. So this is a win-win for Russia and North Korea and loss for the United States and the West.
CHATTERLEY: And we're just sharing pictures just in to CNN of the North Korean Leader Kim Jong-Un arriving in Russia. As you can see there walking
along that green train past a military procession there in salute of him and then up along a red carpet and up the stairs.
And we'll show you that again as we as we play it, but you can see the photographers there welcoming Kim Jong-Un into Russia. Sue Mi just to carry
on with what you were saying there it's not just about weapons.
There are other things but obviously that is at the crux of this relationship. The West, the United States, the National Security Adviser to
the White House, Jake Sullivan warned North Korea that there would be consequences.
What kind of consequences could we be looking at? If you look at both North Korea and Russia, they're both sanction to the hilt. Is that what we're
talking about? If we do see this deal as you presume we will?
TERRY: The problem is and I understand why Jake Sullivan obviously and the Biden Administration will wants to emphasize that there will be
consequences because this is not good news for us.
[09:05:00]
However, what are the consequences? It's very difficult when both countries are very isolated. The intention behind leaking intelligence about this
meeting last week was to pressure North Korea to not meet with Putin to pressure Kim Jong-Un.
But how can we pressure him when he's already isolated? There are no talks between Washington and Pyongyang and international environment is quite
favorable actually for North Korea in this sense. Kim Jong-Un can act with impunity without any kind of consequences.
Again, there have been some 80 missile tests last year, United Nations Security Council there's no action because China and Russia are refusing to
implement sanctions or to pressure North Korea. So at this point, I'm not certain what kind of consequences that we can really give out to North
Korea, in particular, these countries are both isolated.
Again, you know, I think this is a sign of desperation for Putin to have to rely on North Korea to get arms a pariah states like North Korea and Iran.
But, you know, I just want to see how we can penalize North Korea further. So there's not much we can do to stop this meeting.
CHATTERLEY: Yes, I think the phrase you're looking for is nothing to lose with regards, Kim Jong-Un, and to your point about the isolation for both
of these individuals. I want to hit on the point that you mentioned though, about technology and nuclear weaponry in particular.
Because clearly, I think part of the allure for Kim Jong-Un here is perhaps the provision that will help them with their nuclear weapons program and
the technologies from Russia. The question then is how the Japanese and the Chinese respond to that if there's some kind of deal on that because
clearly, they're not going to be happy. And President Putin is also aware of that fact, too.
TERRY: Of course China, Japan, South Korea, no one's going to be happy about this. Well, at least with Japan, Japan will be working closely with
the United States and South Korea. Biden has already invited President Yoon Suk Yeol of South Korea and Prime Minister of Kishida for trilateral
meeting at Camp David.
So the three countries are working together to, you know, with trilateral exercises and information sharing and Intel sharing and so on. China is an
interesting question how China will act on this, because China is not, I'm sure they're not going to welcome this news.
Also, North Korea traditionally has always played China and Russia off each other. And so if Kim Jong-Un gets closer with Putin, it means North Korea
will be less reliant on China. So China's reaction will be interesting to watch.
CHATTERLEY: And we'll see -- Sui Mi Terry Former CIA Officer and the Former Asia Program Director at the Wilson Center. Thank you so much for joining
us and for your insights.
Now to Libya, and authorities say the more than 2000 people have died after catastrophic flooding, and another 10,000 could be missing according to the
Red Cross. Officials say entire villages were washed away as the equivalent of eight months' worth of rain fell in a single day.
Ben Wedeman has been following this story for us. Ben, we heard from the Head of Libya's Emergency and Ambulance Authority on CNN and they said they
simply didn't anticipate the scale of this disaster and that people weren't evacuated in the path of this water ahead of time. That's part of the
challenge here. People just weren't prepared.
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPODENT: People weren't prepared because this sort of natural disaster has not happened in Libya in historic
memory. So everyone was taken by surprise by the intensity of this Storm Daniel and as the sort of pictures and accounts is slowly emerging from the
stricken area particularly from the City of Derna.
The situation really is looking grim indeed. In fact, CNN was able to get through to a doctor from Benghazi who made his way to Derna and he says
this, the hospitals in Derna are out of service. There are no emergency services.
People are working randomly at the moment to pick up rotting bodies. Now we've also seen video in fact of what looks like dozens of bodies covered
with blankets and what not littered outside, it appears a hospital and obviously the hospitals aren't working.
The situation is utterly catastrophic in this area. It appears that two dams upstream from Derna burst essentially sending a tsunami through the
middle of the city. Yesterday Julia we heard a spokesman for the Libyan army loyal to the government in the east of the country.
[09:10:00]
Saying that entire neighborhoods in Derna were simply washed out to see as far as the numbers go, we are hearing from one Health Minister in Eastern
Libya saying that so far, they've been able to identify 700 bodies.
But that's really just the beginning of the emerging death toll. Tamer Ramadan, who's the Head of the International Federation of Red Cross and
Red Crescent Societies, has said that the death toll in his words is huge.
And that we can confirm he said from our independent sources of information, that the number of missing people is hitting 10,000 so far.
Now aid is beginning to reach the area. The government in Western Libya based in Tripoli has dispatched 87 first responders to Benghazi, which is
the capital of the eastern part of the country along with a plane full of body bags.
Turkey, according to President Tayyip Erdogan, is sent three airplanes full of search and rescue personnel, as well as humanitarian supplies. And Italy
today announced that it was sending a team to assess the situation in Eastern Libya in preparation for a larger aid effort. But clearly the real
picture depth of the damage and the loss that has been caused by this storm is only beginning to emerge, Julia.
CHATTERLEY: Yes. Our thoughts with everyone involved there. Ben Wedeman, thank you for that report and new video from Morocco too as rescuers
continuing their urgent work to locate survivors after Friday's devastating earthquake.
So far more than 2900 people have lost their lives in the tragedy, and more are expected in the coming days. Nada Bashir spoke to people in some of the
villages near the quake's epicenter, where residents are losing hope are finding anyone else alive.
NADA BASHIR, CNN REPORTER: This is one of the villages impacted by the earthquake the village of -- - and you can see behind me just how high we
are in the Atlas Mountains. This is a remote village but it has proven easier to get to for rescue workers on the ground.
In other parts of the Atlas Mountains including the village we visited yesterday -- it is proven nearly impossible for rescue workers to reach
those impacts. In fact, when we spoke to residents there, they told us that yesterday was the first day, international rescue teams have made it on the
ground. Take a look.
(BEGIN VIDEOTAPE)
BASHIR (voice-over): Stone by stone, hour by hour the desperate search for survivors pushes on. The silence in this remote mountainous village,
punctured only by the wails of those who survived now left to mourn.
BASHIR: Well for the rescue team here this really is a race against time. There is a woman and her 12 year old daughter buried beneath the rubble and
for their family waiting anxiously for news of whether they have survived Friday's earthquake. They are quickly losing hope.
BASHIR (voice-over): Rezika (ph) has already buried 19 members of her family. Now she fears she will soon have to bury Hanish Shima (ph). On
Saturday morning, we could still hear her voice she tells me. She was alive now we can't hear her. They took too long to get here. Until now we've been
digging through the rubble with our bare hands. If help had arrived sooner, we could have rescued them in time.
They're small in size. The village of -- was among the hardest hit by the earthquake, the deadliest Morocco has suffered in decades. But three days
on, rescue teams have only just arrived. The high mountainous range simply too remote, the roads up until now still obstructed by debris from the
quake and with time running out, rescuers say this has now become a recovery operation.
SAAD ATTIA, INTERNATIONAL SEARCH AND RESCUE VOLUNTEER: I think that all working, working very hard but till now they don't need adult -- for life.
So they confirmed as all the victims which in this rubble has already passed away.
BASHIR (voice-over): Few lives in this close knit community have been untouched by death. Each body recovered a gut wrenching reminder of the
climbing death toll already in the thousands. It's unclear just how many in this village are still missing. But for those buried beneath the rubble,
just like little Shima (ph) rescuers fear it is already too late.
(END VIDEOTAPE)
BASHIR (on camera): International rescue teams are now on the ground in many of these impacted villages. We've been speaking to aid workers on the
ground and they tell us there are still villages across the foothills of the Atlas Mountains that they haven't unable to reach.
[09:15:00]
CHATTERLEY: Nada Bashir, there with that report. And a historic day in Israel too, for the first time ever, all 15 of its Supreme Court judges are
hearing a case together. They're being asked to decide whether the court has the power to overturn government acts that it considers unreasonable
for Prime Minister Benjamin Netanyahu removing that power is a key part of overhauling the judicial system.
Now, Israelis have been protesting for months over the issue. And critics say Netanyahu is trying to steal power from the courts, and is weakening
Israel's democracy in the process. Hadas Gold joins us now. Hadas just explain to us what's been going both inside of the court but also outside
too?
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Yes, the hearing in the Supreme Court has been going on now for several hours since 9 am. This could be the
only day of the hearing or could continue for just about one more day
But it's not expected to be a very lengthy trial of sorts. And what they're debating really in this hearing is the Supreme Court's own power. And this
is also sort of a constitutional argument because the law that was passed back in July.
It took away the court's ability to declare government actions as unreasonable saying that they cannot continue. This law amended a basic
law. Now Israel doesn't have a constitution, the basic laws are the closest thing to a constitution so the reason that this was so historic that the
Supreme Court has never before nullified a basic law.
Another interesting aspect of this is that the Attorney General is not arguing, excuse me, the Attorney General is not representing the government
here. And that's because the Attorney General, she believes that this law should be nullified, she does not believe that this law could stand.
So the government is being represented by private counsel. Now, the main argument behind the petitions to take to nullify this law is that it harms
the authority of the judicial scheme. It harms the authority of the judicial branch and deals with severe blow to the essence and existence of
Israel as a democratic state.
And the petitioners are also arguing that the way that this law was pushed through the Israeli parliament was inappropriate essentially. Now the
government is saying this is Supreme Court does not have the power to take away or to change basic laws and saying that that power rests in the hands
of the people in the hands of the Israeli parliament.
Now, what's been interesting is to hear the judge's response to hear the judge's commentary, it's always difficult to try to ascertain how the
judges rule just because of their comments during a trial. But you're bringing up some interesting points.
They're saying OK, if the Supreme Court does not have the power that it rests in the power of the people and the power of the parliament, what
happens if the government decides that there should not be elections for 10 years?
What will be the check on that sort of power? And what's also really interesting is another comment from one of the justices saying, and I'll
quote here, democracy dies in a series of small steps.
Now, the crux of what the Supreme Court is trying to decide is how to ensure the government acts as the -- what they call reasonably if the
judges are prevented from using this standard in the rulings because Julia here in Israel in the parliamentary system, essentially the only check on
the government on the executive on the parliament, is the Supreme Court.
And so the question is, if the Supreme Court is not able to use one of their tools in the bucket to declare government actions unreasonable to
prevent the government from taking any sort of action, where will that checks and balance lies?
And that's why you hear that question about them saying, OK, if the parliament passes the law saying there can't be elections for 10 years,
where will be that checks on the power because the people won't have that election again. Now, there will not be a decision on this in you know, in
the near future, they have a deadline by January 12th.
But that could be setting Israel up for essentially a constitutional crisis, because there is still even a question about whether this
government will abide by a Supreme Court ruling nullifying this law. So there could be a major judicial and constitutional clash, Julia.
CHATTERLEY: Yes, it's brilliantly explained. And it's very complicated. But I think the point is where does the government's power end without the
ability of the Supreme Court to weigh in on these things? The quote was important democracy dies in a number of small steps. Hadas well battled
with the cough as well. We could see you see you struggling, that's a pro. Hadas Gold thank you for that!
OK, straight ahead, well, America's major automakers hit the brakes and avoided strike powerful enough to dent the U.S. economy. We're live in
Detroit next. Plus, a collision course of a different kind Former World Bank President David Malpass is here on pulling no punches, taking aim at
what he calls broken Federal Reserve policy. That's later stay with us.
(COMMERCIAL BREAK)
[09:20:00]
CHATTERLEY: Welcome back to "First Move" and feeling the pressure America's Big three automakers Ford, GM and Chrysler's parent company Stellantis are
trying to resolve a labor dispute that could deliver a multibillion dollar blow to the U.S. economy. If no deal is found almost 150,000 workers could
be on strike as early as Friday this week.
And last week, members of the UAW were preparing to man the picket lines. Omar Jimenez is in Detroit where he's been hearing the union side of the
story. Omar right, I saw the chief actually on with Jake Tapper yesterday and he said the only people that will be hurt by a strike is the
billionaire class and I quote. But just what are some of the sticking points in these negotiations from the union's perspective?
OMAR JIMENEZ, CNN CORRESPONDENT: That's right, Julia. We've been talking to union members and some of those major sticking points are over higher
wages, cost of living adjustments, pensions, return of retiree health care, things that workers say would make their jobs fair, given the amount that
is expected from them.
Now the automakers insist they want to reach a deal without a strike avoiding what happened in 2019, when the union went on a six week strike.
But union workers say they only made incremental progress that time around this time. They don't want just incremental progress.
(BEGIN VIDEOTAPE)
JIMENEZ: This fight feels different.
LARRY DAVIS, VICE PRESIDENT OF UAW LOCAL 22: It's different.
JIMENEZ: Why is that?
DAVIS: Because there's more at stake. We don't want to strike. But you leave in us no choice, if you don't give us a fair contract.
UNIDENTIFIED MALE: We are the union.
JIMENEZ (voice-over): It's what's on the minds of nearly 150,000 United Auto Workers who are days away from a potential strike.
UNIDENTIFIED MALE: What do we want?
UNIDENTIFIED MALE: Yes --
UNIDENTIFIED MALE: When we want it?
JIMENEZ (voice-over): Once they work through negotiations, they say the world's got more expensive, but their wages got left behind.
RENE'E DIXON, GUIDE OF UAW LOCAL 22: People who aspire to be part of the automotive workforce. I can remember the last time I went to the grocery
store and was able to fill my cupboard and my refrigerator.
JIMENEZ (voice-over): Rene'e Dixon says even with 12 hour shifts, she sometimes has to work a second job just to keep up.
DIXON: I don't think I should have to do that. If the pay rate and you know, everything stays the same. There's no path and it's just going to
fall further and further back.
JIMENEZ (voice-over): It's why the union is pushing in part for at least a 40 percent raise over four years cost of living adjustments or return of
traditional pension plans and retiree health care and more. But the union and Big Three automakers for General Motors in Stellantis are very far
apart on it all.
[09:25:00]
SHAWN FAIN, PRESIDENT OF UNITED AUTO WORKERS: Still slow, but we're moving. So you know we have a long way to go.
JIMENEZ (voice-over): Meanwhile, the countdown has gone from weeks to days. One analysis as a 10 day strike on all three automakers, for example, would
cost the U.S. economy more than $5 billion. But union leadership sees this fight as bigger than all of that, especially as GM saw record profit last
year, and Ford saw near record profit.
FAIN: The talking heads, the pundits, the companies want to say that, you know, if we strike, it can wreck the economy. It's not that we're going to
wreck the economy. We're going to wreck very economy, the economy that only works for the billionaire class it doesn't work for the working class.
RANDY SANDUSKY, RETIRED WORKERS' CHAPTER CHAIR OF UAW LOCAL 22: I was able to raise a family in the auto industry. And it was a different industry
than it is today.
JIMENEZ (voice-over): Randy Sandusky retired in 2005, after working in the auto industry for decades, part of what's been lost in recent years is
retiree health care for those hires and so seven, their benefits he knows can be crucial.
SANDUSKY: I know some that are crippled, I can hardly walk and stuff I used to build handicap ramps for him to get in and out. They're out. And they're
all retired from General Motors and they don't get a lot, you know, just the sad.
JIMENEZ (voice-over): It's part of why workers now hope to make more than just incremental progress.
DIXON: I'm raising my family, I'm doing it. I'm not I'm not crying, but I'm not able to do what I should be able to do whatever is going to happen. I
know that our membership is not going to back down.
DAVIS: It's time for the average worker to be appreciated, because if you're more happy. You're willing to do anything to make the job work. And
when you feel appreciated, that's priceless.
(END VIDEOTAPE)
JIMENEZ (on camera): Now one of the points the workers in the Union stress is that back between 2007 and 2009 as Chrysler and GM headed toward
bankruptcy and federal bailouts. Workers made concessions to keep the companies afloat in part and to keep their jobs.
And they say that they haven't gotten some of those concessions back specifically retiree health care for new hires and the pension plans and so
talking to one of the workers they said we scratch their back and now it's time for them to scratch ours.
CHATTERLEY: Yes, you can understand it with the billions of dollars that they're pushing into transitioning to cars of the future a hybrid electric
vehicles the like hey, isn't there a bit of money here for us too world sake. Omar, great to have you with us thank you. OK, still to come
searching for a solution the U.S. government tackling Google in the biggest anti-monopoly case in decades, the details next.
[09:30:00]
CHATTERLEY: Welcome back to "First Move", Google may soon find itself searching for solutions. It's facing the U.S. government and more in a
legal showdown. That could mean weeks spent in court, the Justice Department and dozens of states accusing the search giant of abusing its
dominance by harming competition.
The trial could reshape what is one of the Internet's most dominant platforms. Anna Stewart is live and on the story for us. Just spell it out
for his good because it is the biggest case for the U.S. government and the tech sector since Microsoft was tackled back in the late 1990s. What's
Google standing accused of? And what's the defense?
ANNA STEWART, CNN REPORTER: So at the heart of this, it's all about the search engine. And the DOJ says Google accounts for nearly 90 percent of
all general search engine queries in the United States. I don't think that would surprise anyone at all. But the big question is has Google unlawfully
gained that dominance and a huge focus of this lawsuit?
Or the lucrative deals that Google has struck with smartphone makers like Apple, browser developers, like Mozilla wireless carriers to make Google
the default search engine. So when you buy a phone, it's what's just naturally on that phone. It's easier, of course, to opt in than it is to
opt out.
Now Google, of course, argues its business practices are legal, that they are commonplace, and that quite simply its search engine is the preferred
option for so many people. Now, what happens in terms of the results of this case will have a huge bearing on Google.
Just to give you an idea, its search business provides more than half of Alphabet's revenue. So what happens if it loses the case will be a very
interesting result.
CHATTERLEY: And what happens if they do, Anna, because if we go back in time, again, to the Microsoft case, the result was look, the view that they
had to be broken up, they then challenged it the decision then was severe restrictions. What might happen if they lose?
STEWART: I mean it's a really good question. You and I, of course, are far too young to remember the Microsoft case in the late 90s, early naughtiest.
But yes, they tried to restructure the business. That's what the government wanted. But that was overturned. I think in this case, the DOJ obviously
could go for a big fine, I don't think that's what they want.
They could go for a restructure, or they could simply go for some sort of way to stop Google from abusing what they may perceive to be dominance in
the search engine, if, of course, they win that lawsuit. So there are a few options there. They all would have a big bearing, though, on Google, how it
does business and potentially its revenue. So really, in Google's interest over the next 10 weeks, it's going to be a long trial, to argue a good
case.
CHATTERLEY: Yes, the DOJ has to prove consumer harm. That's the key. And I have to say, anecdotally, I find myself on other search engines and they
get furious with my-self and they do go back to Google. But one of the comments that I picked out which I really loved the Google President of
Global Affairs.
This is a backward looking case at a time of unprecedented innovation, including breakthroughs in AI, new apps and new services, all of which are
creating more competition. That's an interesting argument too. Not quite sure how you prove it. Anna Stewart, we'll see. Thank you for that.
Apple is set to launch its iPhone 15 lineup in less than four hours is expected to unveil the biggest change to the phone's design in more than a
decade, including a USB-C charging port. Apple has titled this year's event in Cupertino wonder lost. Clare Duffy joins us now. As exciting as I am by
quicker, more sophisticated charging, it's not that bigger deal, surely.
CLARE DUFFY, CNN BUSINESS WRITER: Yes, Apple will have to roll out some additional updates.
CHATTERLEY: Right.
DUFFY: And additional feature announcements for this iPhone 15 lineup if it wants people to upgrade and this is a really crucial sort of Crux for Apple
right now. The company's sales have fallen in the last three consecutive quarters because people just aren't upgrading their mobile devices as
often.
[09:35:00]
So Apple is going to have to announce some other things we may see some of the more typical things like color changes potentially a price hike. But
this update to the USB-C charger would be really significant. It means that for consumers like me, I've got a phone for personal use and a phone for
work use.
And potentially my Android and my iPhone could be using the same charger, which would be at you know, a significant convenience for people and
potentially really a reason to upgrade to this new iPhone 15. We may also see things like the next generation air pods and Apple Watch in this
announcement.
And I think the other major thing I'll be watching for today is whether we get any updates about this vision Pro headset, this is the headset that
Apple unveiled earlier this year that will combine virtual reality and augmented reality. And it's expected to launch early next year.
And so Apple may use today's event as an opportunity to tease the more features potentially announced a specific launch date and sort of drum up
excitement ahead of that product launch next year.
CHATTERLEY: OK, I was listening, but my head just exploded when you held up those two phones and you've got an Android phone and you have an Apple
phone and you managed to do the two and not go crazy trying to adjust for screens.
DUFFY: Yes, but I would I would like to not have to pack two different charges when I go on vacation.
CHATTERLEY: Yes --
DUFFY: So you know I'm looking forward to this update.
CHATTERLEY: I'm just a captive audience. Unfortunately, you're the one out there that can manage both. Clare Duffy, thank you so much for that. Now
after the break rising rates is not the answer to rising prices and risks more economic pain. So says the Former World Bank President David Malpass
who's speaking out against Fed policy on inflation, that's next.
CHATTERLEY: Welcome back to "First Move", monetary policy at the U.S. Federal Reserve is "Broken". And then there's the sound of silence over
what's actually driving inflation today. That's the warning from David Malpass, who stepped down as the President of the World Bank Group in June.
In his latest op-ed in today's Wall Street Journal, he pulled their punches in his assessment of the Fed, led by Jerome Powell describing the Central
Bank's inflation model that is used to justify rate hikes is antiquated when the real drivers of inflation he says government policy and regulation
and all we're really doing today is putting growth at risk.
[09:40:00]
The solution he says is a government commitment to a strong U.S. dollar and that of course is critical to price stability. Also allowing dynamic
business investment aka improves regulations on things like bank lending. And finally, don't be silent about excess government spending and debt.
And I'm pleased to say David, joins us now. David, oh, as always, we have much to discuss. Welcome to the show. I do want to start with this op-ed,
because I do like it. The two immediate risks to inflation are, I think fuel prices, and wage prices. And the premise of your op-ed is saying,
look, these are the remit of government.
Whether it's regulation on MSC energy policy that's pushing up prices, longer term, or social security payments that mean that there's fewer
workers than we need in the workplace. This is a problem and it's not the Feds.
DAVID MALPASS, FORMER PRESIDENT OF WORLD BANK GROUP: Hi, Julia, that that's right. The Feds already hiked by 5.5 percent. And so if that's not enough,
it may be that that's not the only tool that should be used. So the point here is to recognize that if you just keep hiking rates, you're going to
hurt production more than consumption.
And that's going to only add to inflation. That's especially true because the government is one of the big parts of the economy, and they're
indifferent to interest rates, you could go to 10 percent. And it wouldn't stop the government from spending. So shouldn't there be a more direct
focus on the things going on in the economy that are undercutting the productive side of the economy.
CHATTERLEY: Yes, and this is a key, I mean, you point out, and you caught my attention with this, that we're applauding the resilience of the U.S.
economy at 2.1 percent GDP. But actually, that's weak by historical standards, and it's propped up by, to your point government spending excess
debt levels.
And that does nothing to improve future growth or boost our productivity. And actually, the Federal Reserve is an enabler of that by buying up lots
of government debt.
MALPASS: That's why for 10 years, now they had the rates at zero, it didn't cause inflation. So you wonder about, do they really think there's that
much connection between their rates and inflation? And in the meantime, they were holding down the yield curve really intervening heavily in
markets.
That these are not small numbers, they ended up with a peak of $9 trillion of bonds. So it massively adjusted the world towards activities that are
funded by people issuing bonds, that means big governments, big corporations, and that slowed the world growth.
So we have this decade, already more than a decade of slow average growth. And so there has to be a thinking that we have to break to a much faster
growth plane from the U.S. And then that can help the whole world lift off of the crisis that it's in. It's in a growth crisis, that is really hurting
people around the world. So I think we have to try new tools.
CHATTERLEY: Yes, I want to come to the rest of the world, because you and I feel very passionately about this. But the final point, because I know
people reading this article, as I did, will be thinking about this too the three steps that I mentioned and we can show them once again.
You say the Fed could elicit an immediate improvement in inflation expectations and in growth by sort of signaling in terms of policy that
would lead to rate cuts a stable dollar and smaller Central Bank, or government bond holdings by the Central Bank it all sounds great in theory.
But in practice, David, how do you do that without inciting some form of panic to your point? We're a decade in now at least, it's what we've come
to expect, what investors have come to expect?
MALPASS: I think there would be a balance between the prospects of shorter term interest rates going down, but the Fed owning less of the long term
bond portfolio, from the standpoint of the amount of money in the economy, it would be the same, but it would be shifted toward more growth uses.
Commercial Banks wouldn't have to be lending so much to the Fed, you know, the Feds paying top dollar for giant amounts of money that they borrow out
of banks and money market funds, that would be returned gradually to those entities for making loans, business loans, commercial and investment loans
that are, I'm sorry, commercial and industrial loans that are so important to small businesses.
And so that businesses look ahead. So they would immediately get the point and say, aha, we're going into a growth phase that includes lower interest
rates. And so I'm going to make investments that pay off quickly, and it helps the rest of the world in the same way.
CHATTERLEY: Yes, it's a vital point and we need to keep discussing it. Let's talk about the rest of the world, David, because we are have been in
a dramatic rate rising environment and that's exacerbated the pressure that's been faced by some of the poorest nations in the world.
[09:45:00]
And those least able to afford it at a time as we discuss often on this show, big steps need to be taken towards things like climate change and
society security. You are at the forefront of debt negotiations of trying to give some breathing room to some of the poorest nations at the head of
the World Bank. Where are those debt negotiations today, David?
MALPASS: Unfortunately, I think they're still stalled. These are difficult issues. But what I found in six years at the U.S. Treasury and then at the
World Bank, was that the forces that be, in the world don't really want to change the system. One of the things going on is, as the international
institutions put more money into countries, it almost all goes to the creditors.
So from the standpoint of world moneymakers, they really like the current system where they make loans, they earn interest. And then if the loans go
bad, they get bailed out by a multilateral system. The problem is the people of the countries are left in bad straits, because they have to be
the conduit.
The farmers have to work extra hard, in order to pay extra money, in order to pay for the debt that was taken on years before. Let me take a moment to
express condolences to people in Morocco, but also around the world. You know, in Libya, they're having flooding 2000 people dead that they know of
already.
And it's feared to go more, but the victims of 9/11 were in yesterday's thoughts and minds in the in the U.S. of the Maui fires, and of the
Afghanistan evacuation that still is causing trauma and difficulties for millions and millions of people.
And so I think we have to think about the very difficult lives that are being led in much of the developing world, in part because that their
governments don't have good policies to allow businesses to actually operate MIT women to be in the workforce, children and girls to be
educated.
And so those are, I think, pressing global points and made worse now by the interest rate increases that are coming across the world. That was
inevitable, but they're left with floating rate debt, and no way to restructure it. Zambia still doesn't have an MOU.
CHATTERLEY: Yes.
MALPASS: In Ghana, they haven't made progress on defining the universe that has to be included in the debt restructuring. Chad supposedly had the
common framework success, but there was no debt restructuring. So the people of Chad weren't benefited at all by the efforts of the international
community.
CHATTERLEY: Yes, I mean, David, you've just given us a global tour. And I know, at the head of the World Bank, you are at the heart of these
discussions and understanding I think the suffering of people on the ground and the complications to your point, I think you called it the forces that
be, the powers that be, that have vested interests that don't want things to change.
David, how do we break that? Whether it's the United States, whether it's the private sector, whether it's China, as the biggest creditors in the
world? How do we bring them to the table and say, actually, this is one world and whether it's climate mitigation or social stability, rather than
wars, breaking out. And conflict and migration, we all have to be part of the solution here. How do we do that? How do we get there?
MALPASS: I think individual countries have to lead and really push initiatives. We just saw the G 20 meeting in India. And they there is talk
about one world but I have the impression that what people want to do is make lofty promises, but not actually spend money or make the changes that
are needed in order to get the adjustments going on.
On the debt one, I advocated in Japan at the two meetings of the G7 in Niigata, in Hiroshima, that the G7 ask the IMF and the World Bank to really
make progress on debt. They didn't do it. It's part of the G 20 process. It's moving very, very slowly, in fact, not moving.
And so I think this is a problem of the world kind of wanting to look at someone else and say they should solve this problem when it has to really
be self-selected by important by countries that can really have an impact and then for them to focus on it and get to a solution.
CHATTERLEY: Yes, if not us, who? David, keep fighting the fight, please. We will continue to have these conversations and try and help some of these
institutions accountable along with it.
[09:50:00]
Great to chat to you sir, we'll speak again soon.
MALPASS: Thanks Julia.
CHATTERLEY: Thank you, David Malpass there. OK, still to come one of Japan's most iconic attractions under threat, as tourists and hikers put
Mount Fuji is World Heritage status at risk, that's next.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to "First Move", the climbing season has ended on Japan's iconic Mount Fuji giving the UNESCO World Heritage Site a much
needed break. The number of visitors has skyrocketed in recent years. But as Kristie Lu Stout explains, the surge in tourism could cost the mountain
its World Heritage status.
(BEGIN VIDEOTAPE)
KRISTIE LU STOUT, CNN INTERNATIONAL CORRESPONDENT (voice-over): Human traffic jams on sacred Mount Fuji.
UNIDENTIFIED MALE: Very cool that just like a traffic jam.
STOUT (voice-over): An ambulance on route to an injured hiker litter on the mountain side, it decided to Japan's popular tourist site that is not in
the guidebooks before Mount Fuji Ranger Miho Sakurai it's just another day on the job.
MIHO SAKURAI, MOUNT FUJI RANGER: There are definitely too many people on Mount Fuji at the moment. The numbers are much higher than before.
STOUT (voice-over): Famous for its snowcap volcano, Mount Fuji has inspired artists and been a pilgrimage site for centuries. Less than two hours away
from Tokyo, Japan's highest peak attracts visitors globally and in 2013 became a UNESCO World Heritage site over tourism has become a big problem.
This year, a post COVID tourism boom has brought thousands more hikers to Mount Fuji. According to a Yamanashi Prefectural Government official, the
environmental damage being done could cost Mount Fuji its heritage status, according to the local government.
MASATAKE IZUMI, YAMANASHI PREFECTURAL GOVERNMENT OFFICIAL: Fuji san is screaming out in pain. We can't just wait for improvement. We need to
tackle over tourism now.
STOUT (voice-over): Volunteers take away tons of trash each year. Climbers urge to donate $7 to help keep the mountain clean, but not everyone pays
up. As Sakurai says some behavior is even harder to control.
SAKURAI: People of all experience levels come here including first timers. We want to prevent accidents, so we give them advice.
STOUT (voice-over): The risk of altitude sickness and hypothermia has been increased by a trend called bullet climbing where hikers begin their ascent
at night, pushing on until dawn according to the Yamanashi Tourism Board.
According to the local government, they start their hike from a place called Fuji's fifth station, where the number of climbers arriving here
from Tokyo has more than doubled between 2012 and 2019. The local government also says it wants to shift from quantity to quality tourism.
[09:55:00]
It says replacing the main road to Fuji with a light rail system would be a more sustainable solution.
SAKURAI: I'd be devastated if Mount Fuji's World Heritage status was taken away. I wanted to have that status forever, so we'll do our best to keep it
that way.
STOUT (voice-over): But with no easy fix in sight, Sakurai will keep doing her best to protect the mountain she loves. Kristie Lu Stout, CNN, Hong
Kong.
(END VIDEOTAPE)
CHATTERLEY: And finally on "First Move", an American astronaut has set a new record for time in space. And he did it by accident. Frank Rubio is in
his 356 day aboard the International Space Station the longest any U.S. astronaut has spent in Earth orbit, but it actually wasn't supposed to be
this way.
He was slated to return to Earth in March. But the Russian spacecraft that was meant to take him home sprung a coolant leak so he stayed and stayed
and stayed. And now he's got a ticket to ride home later this month after a total of 371 days in space, fingers crossed. That's it for the show.
"Connect the World" is up next. I'll see you tomorrow.
(COMMERCIAL BREAK)
[10:00:00]
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