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Reality Check on Referendums in Ukraine; Mark Zandi is Interviewed about the Economy; Twitter Set to Depose Musk. Aired 8:30- 9a ET

Aired September 26, 2022 - 08:30   ET

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

[08:30:00]

GEORGE F. WILL, COLUMNIST, "THE WASHINGTON POST": Well, first of all, right and left are hard to apply to Mussolini, who began life as a firebrand socialist journalist and was a socialist forever. I mean he said nothing outside the state, nothing against the state was his totalitarianism. Hardly conservative as I understand conservatism.

But before people can down her, before people go off on another frighted flee saying, oh, my God, yet another crisis of western civilization. In 1946, '47, the party she now represents had a strong echo of Mussolini nostalgia. That's a long time ago. In 1947, the Democratic Party of the United States was, in Congress, dominated by hard segregationists from the south. Democratic Party changes, the party in Italy changes. Give her a chance.

KEILAR: Give her a chance.

WILL: Yes.

KEILAR: You're -- I do want to ask you about your book, because your book reflects on this tumultuous period. And it is 2008 to 2020. Well, here we are in 2022 and I wonder, what is the postscript to you of that?

WILL: It hasn't been written yet, but it will be written in 2024. If the country is presented with Biden against Trump 2.0, the country will be in a swoon of despair, it seems to me. But I don't expect that to happen. I don't expect Mr. Biden will run again. And I think once Mr. Trump enters the fray, if he enters the fray -- and I'm not sure his ego is strong enough to risk a second defeat - but when he enters the fray, someone else will enter. And when one person enters against him, you'll get eight more against him.

Now, that's the problem for Republicans. If you have Trump on stage with eight different people, he has a lock on 30 percent of the Republican nominating electorate, and 30 percent's enough to win in a -- when you have so many people on stage. But my guess is that this - that the political market is going to work. There is a demand for something different for both parties. And the political market will supply that demand in 2024.

KEILAR: What will the product be? We will see.

WILL: We shall.

KEILAR: We shall see what people want.

George Will, thank you so much. It's always lovely to have a conversation with you.

WILL: Glad to be with you.

KEILAR: Ukraine's President Zelenskyy says the referenda in Russian- occupied regions of Ukraine, if you can even call it that, these are really sham votes, he says they can lead to tragedy. The history of these sham votes when we get a "Reality Check," next.

ERICA HILL, CNN ANCHOR: Plus, Rihanna once reportedly turned down the Super Bowl because she said she couldn't be a sellout. Now she's going to headline.

(COMMERCIAL BREAK)

[08:36:51]

HILL: Fighting still raging across eastern Ukraine as Russia begins to hold what Ukrainian officials calls fake referenda in controlled territories, forcing Ukrainians to vote on becoming part of Russia.

Of course, it's far from the first time we've seen this move from the Kremlin. John Avlon with this "Reality Check."

JOHN AVLON, CNN SENIOR POLITICAL ANALYST: Russian President Vladimir Putin is desperate to distract from the fact that Ukraine and western sanctions are revealing his weakness to the world. After trying denial and threats, now he's drafting 300,000 Russians to fight without training in a war they never asked for, resulting in protests and people trying to flee the country. He's also trying to annex key strategic areas in eastern Ukraine through sham referendums, which are illegal under international law, giving the illusion of democracy to a dictator's invasion. It's the geopolitical equivalent of putting lipstick on a pig.

It's a move he's made before in Crimea, where Russia received a totally legitimate 97 percent of the vote while west's lack of focus and resolve back in 2014 made this larger war almost inevitable.

It turns out that the U.N. calling the referendum invalid didn't deter anybody. But, as you hear reports of Ukrainian citizens being forced to vote to join Russia literally at gunpoint, understand that this illegitimate election ploy is not Putin's invention.

As President Harry S. Truman said, the only thing new in the world is the history you don't know.

Now, the man from Independence, who's finally getting a statue under the Capitol dome this week, was, of course, president at the time of the Second World War and the dawn of the Cold War. So, he would have recognized this power grab for what it is. That's because this is just another Soviet cut-and-paste job by Putin. Look at how Stalin took control of the Baltic states beginning in

1939. First, he intimidated them into accepting mutual assistance packs, which allowed the Soviets to move military bases into Estonia, Latvia and Lithuania. That made it pretty easy for the Russians to invade, which is what they did next, overthrowing the existing governments amid mass deportations.

The third step was a sham parliamentary election which they won overwhelming, resulting in those parliaments voting to join the USSR.

Now, the people weren't fooled. The U.S. slammed the Soviet actions saying that the three sovereign nations were deliberately annihilated by devious processes and predatory activities. The west never recognized Soviet control of these countries, but that was called comfort until the fall of the Berlin wall. Russia would replay its strategy to install (INAUDIBLE) governments in Poland and Romania after the Second World War as well.

But even Stalin didn't invent this fake referendum land grab because he was taking notes from his dictatorial mirror image, Adolf Hitler. Yes, the Nazis used the fake referendum extensively in the run-up to the Second World War, snowing some weak-kneed leaders into believing that lopsided referendums in the Sudatin (ph) land and Austria were legitimate and that finally, maybe, peace would be at hand.

This was naive in the extreme. Some ballots were pre-marked to elect Hitler, while gangs of Nazi brown shirts would literally drag people to the polling stations and the people who refused to vote to join Germany were beaten up and paraded through the streets wearing signs saying, I am a traitor to the people.

[08:40:06]

This is the historic precedent that Vladimir Putin is drawing upon to justify Russian aggression and then pretending that he is defending the integrity of Russian territory, while gaining his land bridge to Crimea. It's a plan that's predicated on the west, forgetting their condemnations and thinking that maybe reluctantly agreeing to this annexation will somehow stop the war by appeasing the aggressor. It ain't going to work. There will be some who will argue that in the coming days, but it's not going to work in the long run because people who were occupied have long memories.

The Ukrainians aren't about to let 15 percent of their land be taken by Putin in perpetuity, especially when the dictator has been revealed as brittle and his military far less competent than advertised.

But Putin's cynical gain of occupation followed by a sham referendum isn't only an attempt to rewrite reality, it also denigrates the idea of voting by design. It's part of his overall effort to downgrade the idea of democracy itself. This is nothing less than an attempt to cause doubt, a big leap on a (INAUDIBLE) invasion, to make it seem that there was popular support for it in the first place. Some autocrat aficionados might buy it. But the actual tallies that matter will be found in mass graves and by deserters who seek sanctuary. Illuminated by history's light, we can see that Putin's desperate

attempt to push through these sham referendums is just a sick mimicking of Stalin and Hitler. And whatever short-term effects, it's the latest reminder of how self-styled strong men are really weak.

And that's your "Reality Check."

HILL: John Avlon, appreciate it.

Taking a quick look at stock futures. As you can see, arrows all heading south this morning. Economists fear a recession looms. So, we have tips to protect your money just ahead. Moody Analytics chief economist is with us next.

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[08:46:03]

HILL: After a sharp fall in U.S. stocks, investors are worried about even more rate hikes from the Federal Reserve. The hikes, which increase just how much it costs to borrow money, of course, are meant to reduce still high inflation. But at this point, even some optimistic experts are concerned the Fed's actions could actually land the U.S. economy in a recession.

Joining us now, chief economist for Moody's Analytics, Mark Zandi.

Mark, good to see you this morning.

So, this is the growing concern, right? We've been hearing about concerns of recession for some time. There are concerns, not just in the U.S. but globally. When you look at this, if a recession is sort of inevitable at this point, can you give us a sense of how bad this is going to be? Is it a severe recession? Or maybe not quite so bad?

MARK ZANDI, CHIEF ECONOMIST, MOODY'S ANALYTICS: Yes, well, I wouldn't say inevitable. I think that -- it's not inevitable. And I do think the economy has a number of things going for it, which suggests that if we do go into recession, that it will be a modest downturn. And, you know, one of the reasons for optimism is the American consumer. That's you and I as consumers.

We're, you know, I'm painting with a broad brush here, certainly lower income households are struggling more than others. But broadly speaking, we're in pretty good shape. You know we have lots -- everyone has a job, unemployment's very low. We saved a lot of money during the pandemic when sheltering in place because of the government support. Leverage is low. Debt is low. People really haven't taken on a lot of debt in general. And they've done a really good job locking in the low interest rates that prevailed before rates started to rise in the last few months.

Stock prices are down. Housing values are starting to turn over. But, you know, even with that, we're still a lot wealthier today than we were a year or three or five years ago. So, you know, you add that all up and it feels like the American consumer, which kind of drives the train for our economy, and even for the global economy in some respects it's in a pretty good spot.

So, what that suggests is, well, maybe we don't go into recession. You know, maybe the consumer hangs tough here. But even if we do, it should be a relatively modest downturn, not very long and not deep, certainly not by the standards of recessions we've suffered since World War II.

KEILAR: You were kind of getting at this, Mark, which is that, you know, obviously not everyone experiences the economy the same way. So, you know, are we going to see a situation where it definitely feels like a recession for some people and doesn't at all for others?

ZANDI: Yes, no, that's a great point. You're right, I mean, the economy is going to slow. The -- under any scenario, job growth is going to come to -- close to a standstill. Unemployment is going to start to rise. And that does mean that folks that are harder pressed, generally lower income households, that it will feel like a recession, right, because they don't have the savings, the cash cushion, the support. They don't have the assets. They don't have stocks, probably don't own their own home. So it's going to feel very much like a recession to those - to that group.

Obviously, the folks in the top part of the distribution of income, or even, you know, high middle income, you know, it's not going to feel great. It's certainly not going to feel like, you know, things are going really well, but they'll be able to navigate through, you know, reasonably well because they do have a lot of cash cushion in savings. So, you're absolutely right, it's very difficult to paint with a broad brush here in the weakening economy dead ahead. For a big chunk of Americans, it's going to feel pretty uncomfortable.

HILL: When we look too at what's gotten more expensive, we look at this continuous rise in interest rates from the Fed, right? And part of this is to ideally, you know, cool things off. But the impact that it's having on many Americans is pretty big. I mean you look at the cost of, if you're able to buy a home, how much more if you're looking for a mortgage now, how much more that could cost you. The cost of getting a car. Even just people who carry even a small amount of credit card debt. That is really starting to be felt. What's the ripple effect of that?

ZANDI: Yes, no, you're right, I mean it's -- there's hops - so called hops and choices. There's no good choice here, you know, (INAUDIBLE) when they're raising rates because, you know, raising rates now is putting pressure on lots of households.

[08:50:07]

As you pointed out, credit card rates are going up. If you want to buy a car or a home, it's now a lot more expensive, prohibitive, you know, from any potential first-time home buyers.

But, you know, if the Federal Reserve doesn't slow the economy, and doesn't bring inflation in, then we've got a real problem down the road. And if history is any guide, the Fed will ultimately have to press on the brakes, raise rates a lot harder, raise rates a lot more than they're doing now and I won't be here telling you it's going to be a modest recession, a moderate recession, I'll be telling you it's a - it's going to be a doozy, meaning, very long, a year or so, high unemployment, very painful. So, the idea here is to take some pain up front here, try to get inflation back in reasonably well so you can avoid, you know, a lot of pain down the road, but there's really no good choice.

HILL: Mark Zandi, good to see you this morning. Thank you.

ZANDI: Sure thing.

HILL: The CIA unveiling a model of a Aymen al-Zawahiri's hideout. The model that was used to brief President Biden on that mission to take out the al Qaeda leader.

Plus, very soon Elon Musk will come face-to-face with Twitter's lawyers after backing out of a multibillion-dollar deal to buy the social media site.

KEILAR: And Hurricane Ian on track to become a monster storm tonight as it turns toward Florida. Our live coverage continues ahead.

(COMMERCIAL BREAK)

[08:55:41]

KEILAR: The CIA unveiling a model of al Qaeda leader Ayman al Zawahiri's residence shortly after his death. The White House released a photo that showed the president talking to CIA Director William Burns with a closed Zawahiri safe house in -- actually, had a box -- you see that wooden box there -- this was a model, actually, you couldn't see it, it wasn't open at the time, but it was there on the table before the president and other officials before an American drone strike killed al-Zawahiri.

So now what you have is a chance to actually see the contents of that box. It is this model depicting a white-walled home with at least five stories, three partially obscured balconies. And this is on display now at the CIA Museum inside of the agency's Langley, Virginia, headquarters.

HILL: Happening today, Twitter's lawyers set to question billionaire Elon Musk in a deposition that could last several days. This is all a part that ongoing litigation after Musk tried to walk away from the $44 billion deal he had struck to buy the social media company earlier this year.

CNN's Donie O'Sullivan has been following these developments.

So, several days of depositions here for Elon Musk.

DONIE O'SULLIVAN, CNN CORRESPONDENT: Yes, to be a fly on the wall.

HILL: Yes.

O'SULLIVAN: That is -- it's not going to be open to the public. We'll eventually get to learn some of what's happening the next few days. But it's going to be really, really interesting because we've seen over these past few months, as Musk has been trying to back out of this $44 billion deal, he's been making all sorts of claims about Twitter, about how many bots are on the platform.

You know, it's quite different to do that, to tweet it, than it is to under oath in a deposition. So, I'd imagine we'll be seeing Twitter's lawyers pushing him on some of those claims.

HILL: Where does the whistleblower figure into all of this?

O'SULLIVAN: Yes, so the Twitter whistleblower, Peiter Zatko, better known as Mudge, you know, we broke that story here on NEW DAY. He is the former Twitter head of security and he's made all sorts of claims about security on the platform, but also importantly about the number of bots. He has said that Twitter has lied to Elon Musk about how many bots are on his platform.

And, look, the timing of him going public was a bit fortuitous for Musk. And we actually asked the whistleblower about the timing.

Have a listen.

(BEGIN VIDEO CLIP)

PEITER "MUDGE" ZATKO, TWITTER WHISTLEBLOWER: This isn't about one person. This is about something that everybody should care about with large companies, which is, you know, the honesty and the truthfulness of the data that's being presented publicly represented, national security implications and whether users can trust their data with these organizations.

(END VIDEO CLIP)

O'SULLIVAN: So that's Peiter Zatko there, who is, you know, by all accounts a very, very credible whistleblower. He is a legend in the cybersecurity community. He has also now been deposed in this, as has former CEO of Twitter Jack Dorsey. It's all kicking off in three weeks' time in Delaware is the trial. It's expected to last a week. We'll be down there covering it every step of the way. If you have recommendations for restaurants in Wilmington, please slide into my DMs, you know, on Twitter.

HILL: There you go. There you go

O'SULLIVAN: We'll be there for quite some time.

HILL: I know a guy in D.C. now who probably has some recommendations for if you're talking about Delaware. Going out on a limb there.

O'SULLIVAN: Great (ph).

HILL: But, yes, you'll be moving to Delaware. I'm surprised that's only expected to be a week, b the way, because it feels like there's so much coming out of it now.

O'SULLIVAN: We'll see what happens. Yes. There's going to be lots of fireworks.

HILL: We'll be watching. I'll be watching your coverage and then you can send the restaurant recommendations back, my friend.

O'SULLIVAN: Absolutely. Of course.

HILL: Always nice to see you, Donie, thank you.

CNN's coverage continues right now.

JIM SCIUTTO, CNN ANCHOR: A very good Monday morning to you. I'm Jim Sciutto.

Right now, Hurricane Ian gaining strength as it churns across the Caribbean with 75 mile an hour winds. Florida's entire West Coast now on high alert with the storm expected to intensify into a major hurricane tonight. Its path is uncertain for now, but residents along Florida's west coast and panhandle are preparing for powerful winds, dangerous storm surge and heavy rainfall.

[09:00:00]

People already waiting in long lines outside of stores looking to stock up on supplies while they can. They're also filling sandbags, prepping homes and businesses.