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Quest Means Business
Trump Prepares for Sate of the Union; Bezos, Buffet, Dimon take on Health Care; Cybercriminals Target Cash Points; New York's Infrastructure Under Severe Strain; Twitter to Clamp Down on Fake Followers. Aired 4-5p ET
Aired January 30, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] STEPHANIE SY, CNN HOST: Trading has come to a close on Wall Street, and the Dow suffers its biggest single-day point drop in eight
months. It is January 30th.
President Trump prepares his State of the Union address. We'll lay out the state of the Trump economy, markets and infrastructure.
The Amazon effect on health care. Bezos, Buffett and Jamie Dimon team up to try and simplify the sector. And a cybercriminal's target, physical
ATMs. We'll explain jackpotting. I'm Stephanie Sy. This is QUEST MEANS BUSINESS.
Good evening. As President Trump prepares to take an economic victory lap in tonight's State of the Union address, the Dow has suffered its second
biggest single day fall since President Trump's election. This tells it all. The story of the day. The Dow was down as much as 411 points at one
point. It recovered very slightly to close off at 361. All three of the major U.S. indices closed lower, in fact, and health care was by far the
worst sector.
Let's look at the stocks in the Dow. Right now, you can see just a couple of stocks edging up there. Caterpillar and P&G, but the rest of the Dow
all trading lower today. At the same time, a volatility has spiked to its highest level since August.
I want to go to Tim Anderson now. Who joins me on the New York Stock Exchange. Tim, what's going on? Two days in the red? What's your take on
what's driving this sell-off and how does the average investor read into it?
TIM ANDERSON, MANAGING DIRECTOR, TJM INVESTMENTS: You know, I don't think the average investor should be that concern. Clearly, we've had a very
strong month of January. The S&P 500 is still up right about 5 percent on the month. And I think that there are some pension funds and some -- and
some other funds that because of the very strong rally got a little bit over weighted in their stock versus bond model and had to just do some
portfolio adjustments toward the end of the month here. You'll also obviously had some news in the healthcare sector. That's one of the worst-
performing groups today along with big pharma. And I think we need to see how this shakes out over the next couple of days. But in general, I don 't
think people are going to be terribly concerned about this. There was certainly no panic or frantic exiting toward the end of the day.
SY: Are you drawing any straight line between the rise in ten-year bond yields and the potential for rising interest rates overseas to what we're
seeing in the equities markets today?
ANDERSON: Well, it can certainly come to play a little bit. And one other item that might come into play a little bit, I've seen a couple of reports
of the likelihood of four interest rate hikes for the year rather than three is up to 25 percent. Apparently, that was only 5 percent a couple of
weeks ago. Now a lot of people are talking about maybe the ten-year going to 3 percent. I think that the market is not going to be terribly
concerned with that unless it goes there in a real hurry. I think the market will be much more concerned about the speed of a bond market
selloff, rather than rates drifting higher. Which I think most people expect will happen as we get into the rest of the year.
SY: OK, Tim, do me a favor and stay put because I want to get back to you. But I want to also -- it's important to put today's fall into context. The
Dow is still up nearly 8,000 points since President Trump's election. It has set new record highs 99 times along the way. And until this week's
loses. One thing was abundantly clear that is the disconnect between events in Washington and on Wall Street.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: We finally did it. We finally hit 22,000.
DONALD TRUMP PRESIDENT OF THE UNITED STATES: The stock market hit an all- time record high today, over 22,000.
UNIDENTIFIED MALE: The president's jumping onboard with it because it's a strong economic number. How much effect he has on it, I'm not really
clear.
RICHARD QUEST, CNN HOST: What a day. Christmas has come early to Wall Street. The Dow Jones has passed the 24,000 mark.
On the one hand, we have this market roaring up.
TED WEISBERG, PRESIDENT, SEAPORT SECURITIES: Right.
QUEST: But on the other hand, we have an element of disarray in Washington.
[16:05:00] At what point, if at all, and maybe not, do these worries become relevant?
WEISBERG: Well, I think they're all relevant, but they seem to be Trumped almost daily by the prospect of better corporate earnings and a better U.S.
economy and better world economy. Because at the end of the day that's what's going to drive the stock market, not politics.
QUEST: Take a look. There you have it, Dow at supersonic speed.
TRUMP: We have broken a lot of records. We're breaking another one today. The stock market is way up.
QUEST: Once again, Brian, the president choosing to absolutely focus on the economic numbers.
What on earth is going on here? Who knows.
UNIDENTIFIED MALE: Total madness.
QUEST: Total madness, absolutely.
(END VIDEOTAPE)
SY: So, Tim, I want to bring you back. As you know, I think the montage we just showed which is this exuberance that we've seen in the markets and
yet this insane news cycle. Let me ask you, why do you think the markets have been able to shake off the political turmoil in Washington, in the
Trump administration?
ANDERSON: I just think that for the financial markets that's going to be the new normal for at least the remainder of the next three years of the
Trump administration. I think that what investors are focusing on are the tax reform package and other initiatives that the administration is going
come out with. The infrastructure spending program that they've started to dribble out a little bit over the last few days. And certainly, the much-
less onerous regulatory environment, although it's much harder to quantify in dollars and cents as being credited by a lot of business leaders as
being very simulative for their environment also.
SY: All right, Tim Anderson from the New York Stock Exchange. Thanks a lot, Tim.
ANDERSON: Sure.
SY: And from the state of the markets, to the State of the Union. In just a few hours people across the U.S. and around the world will hear what
president Donald Trump has to say on the outlook for America when he speaks to Congress. And there is plenty of speculation about the tone the
president will take. But there is one thing he is sure to do, praise his own economic achievements. For one thing, U.S. employers added 2 million
jobs in 2017. GDP growth quickened to 2.3 percent. Consumer confidence is also rising.
And expect the president to boast about last month's Republican tax cuts. Especially after some of America's biggest companies responded by handing
their staff pay raises and bonuses. I want to welcome Stephen Moore who is an economic adviser to the Trump campaign, and in fact, he spearheaded the
tax reform bill. He is now CNN's senior economics analyst. Stephen, it's nice to see you.
STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Nice to be with you.
SY: You've been giving president Trump a lot of credit for the strong growth we're seeing in the U.S. economy. But these are wins we're seeing
in bonuses, wages and jobs. Are they short-term wins?
MOORE: Well, that's a great question. I mean, I hope not. I hope that we'll see a lot more of this. And you know, it's been amazing and the tax
cut's only a-month-old and you see every day whether it's FedEx or Verizon or AT&T or the big one by Apple and so many of the companies, Disney that
have announced these bonuses and pay increases and that's exactly what we hoped to see, you know, when we devise this tax plan. We really wanted it
to benefit middle-class workers.
SY: Right.
MOORE: So, yes, we hoped that this would be the continuation of a trend. We also want to see, by the way, continued investment by businesses. That
may be even more important than, you know, some of these bonuses.
Are these companies investing in new factories and equipment and bringing jobs back home to the United States? So far, you know, if you looked at
that GDP report that came out last week -- although the number wasn't quite as good as we had hoped. You know, the business investment was at a
healthy level and that is eventually what leads to, you know, more jobs and higher-paying jobs.
SY: Moody's is out with a new analysis today, Stephen that says the tax bill will have a limited effect on the U.S. economy. Because companies are
more likely to prioritize, at least share buybacks, M&A, paying down existing debt, things like that. Do you disagree with that?
MOORE: You know, there will be some of that. No question about it. They'll reduce some of their debt and improve their balance sheet which is
a good thing. We don't want another financial crisis. Some of it will be passed on to shareholders in terms of dividend payments. By the way, I don
't see anything wrong with that. That means the 100 million Americans who own stocks will have more cash on hand that they can use either to reinvest
in new companies or spend on other things. And so there will be a combination.
[16:10:00] But again, what we hope to see is that they invest that money. And one of the reasons we think they will invest it in expanding their
operations is because the tax rate is lower, their incentive to invest is raised. For example, we provide, for the first five years we provide
immediate expensing for capital purchases. Which when I talk to people when run companies like AT&T or FedEx or other great company, they say this
is a big impetus for us to go out and spend.
I'm predicting, by the way, that one of the reasons we had the bad quarter -- not quarterly report and somewhat disappointing. We had hoped for three
and we got 2.6. There was some indication the companies were delaying their activities at the end of 2016 -- end of 2017, so that we can do it in
2018 to take advantage of the tax cut this year.
SY: I want to touch on a point before I let you go that you raised in the first answer. You yourself wrote just a few days ago that the most
important indicator of the success of Trumpenomics will be wages for middle income workers. Now in your analysis when is that going to happen, and
will it happen before Trump is up for re-election? Because this tax bill was originally called jobs and wages. When are we going to see that?
MOORE: Yes. Last year I just got some new census bureau data that shows in 2017 the average median income of the average family rose by about
$1500. So, that's a nice increase. That means their wages and salaries were rising.
SY: Ok, but that's pre-tax bill. That's pre-tax bill.
MOORE: I know. I know. But it also -- it's not just taxes that are affecting the economy. It's regulation. It's energy policy. It's the
whole panoply of activities that Trump is pursuing that are pro-business. But in answer to your question, you know, it does take -- wages are usually
the last thing to rise in a recovery. So, first you'd see the businesses investing. Then you would see some consumer spending. And hopefully what
you're going to see, and you see signs of this already. As the labor market tightens and it is tightening. Because so many areas of the country
now have shortages of works, rather than shortages of jobs. They are going to have to pay their workers more to retain them. And that's one reason
I'm optimistic that we are going to start to see some nice pay raises in 2018 and 2019.
SY: All right. Stephen Moore, thank you very much for your insights. Appreciate it.
MOORE: OK, take care. Have a great day.
SY: You too.
It's been a bad day for U.S. stocks, but it was a really bad day for one sector in particular, health care stocks. They took a beating. Just take
a look. Pfizer, UnitedHealth, CVS and many others ending deep, deep in the red and it's all because of these three guys. JPMorgan's Jamie Dimon,
Amazon's Jeff Bezos and Berkshire Hathaway founder, Warren Buffett. They are teaming up to fix U.S. health care and together they're considering
getting into the health insurance business. It is a sector these men have had their eye on for some time now.
(BEGIN VIDEO CLIP)
JEFF BEZOS, CEO, AMAZON: Health care is going to be one of those industries that is elevated and made better by machine learning and
artificial intelligence. And I actually think Echo and Alexa do have a role to play in that. And we do have people at Amazon thinking about that.
JUDY WOODRUFF, ANCHOR PBS: Are we now at the point where the country does need to think about some sort of single-payer system in some form or
another?
WARREN BUFFETT, CEO, BERKSHIRE HATHAWAY: With my limited knowledge, I think that probably is the best system. Because it is a system -- we are
such a rich country and in a sense, we can afford to do it. But in almost every field of American business, it pays to bring down costs.
(END VIDEO CLIP)
SY: Paul La Monica joins us now for more on this. Paul, this is a really complicated sector, and I think we're all anxious to hear more details
about what these three titans have planned in the health care industry. What are we talking about here?
PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes, this really can disrupt the multibillion-dollar health care industry. And that's why you saw
United Healthcare was the worst performer in the Dow today. Pfizer had decent earnings and its stock fell, too. And shares of CVS, Walgreen's,
the two big drugstore companies, they got hit really hard as well. Investors are nervous. I think particularly because of the Amazon angle.
Because we all know what Jeff Bezos' M.O. is. He comes in, he sees a business and he quickly lowers prices and makes it very, very difficult for
others to compete. If you do that in healthcare, that's great for consumers, obviously, not so great for CVS particularly as it's trying to
buy the big health insurer ETNA for nearly $70 billion.
SY: There was a huge reaction given how few details we have? What details do we have? Are they going to start -- we know this is for their U.S.
employees?
LA MONICA: Yes, not for everyone in America.
[16:15:00] SY: So, they're going to set up an insurance for their employees? Are they also setting up a hospital network potentially?
LA MONICA: It really is vague at this point. We don't know what the extent of these plans are going to be like? Is it going to be as simple as
co-pays when you go to visit your doctor for an annual check-up? If you're getting prescription medication or will these companies be covering life-
saving emergency surgeries and other things like that --
SY: They just know it's going to change the game?
LA MONICA: We really don't know. It should change the game because we're talking about three giants of industry. And like I said, Bezos, he's not
doing this to put costs high. It's not when he does.
SY: In fact, what Warren Buffett said as he described the motivation behind this partnership. He said that health care is a tape worm on the
U.S. economy. So, their ultimate goal is to reduce costs. But potentially to reduce costs for all Americans. Is this all theoretical at this point
or when we might we see these guys actually do some stuff?
LA MONICA: Presumably, they will be working on trying to get an actual plan out one would think in the next few weeks or months. I can't imagine
that they would just announce this and then sit ideally by. But you're right, Stephanie, clearly Obamacare, the Affordable Care Act. The is much
to like about that, but there are lots of critics, of course, of that plan, as well and president Trump is now doing everything he can to unwind or
neuter many of the things --
SY: Oh, yes. I mean, the tax bill killed the individual mandate which a lot of analysts say will kill Obamacare? Are these guys coming up with an
alternative just because the system is just not working?
LA MONICA: I think the private sector realizes that they may have to come and save the day. And that the big insurance companies, the drug
companies, companies like CVS that's increasingly now in many different aspects of health care. It's not really in their best interests to do it.
It's really in their best interests to make profits. Not to say that Jeff Bezos is an altruist completely. He's the world's richest man for a
reason. But he's been able to amass that wealth by this brilliant strategy of undercutting all of his rivals.
SY: They do say it's going be a non-profit company. We should mention that. Paul La Monica thank you so much.
LA MONICA: Thank you.
SY: Still a lot of questions there.
All right. First there was hacking and then came skimming and now there's something called jackpotting. Find out the latest tech scam bank robbers
are using across the U.S.
[16:20:00] (COMMERCIAL BREAK)
SY: The U.S. secret service is warning about a hacking scheme called jackpotting. It's a technique thieves are using to steal wads of cash from
ATMs. They've already snatched more than $1 million. Samuel Burke is following all of the developments in London. I mean, Samuel, this is crazy
to see the pictures of how this works. I mean, the money just kind of comes pouring out of these machines. Are these crooks messing with the
hardware on the ATMs or the software or both?
SAMUEL BURKE, CNNMONEY TECH AND BUSINESS CORRESPONDENT: Stephanie, this is a problem that started here in Europe, went over to Asia. Has been in
Mexico for the past year and is now creeping its way on to the shores of the United States. They actually have to be physically present, these
criminals/hackers.
Let me walk you through exactly how this happens. It's usually standalone ATMs like the ones you might see at a pharmacy or the even the drive-
through part of a bank. So, somebody has to be physically present. Then they use tools, physicals tools like an endoscope. Usually you think of
that being used in a doctor's office. But they use that stick with the camera on it. So that they can see right on their smartphones what's
happening in the ATM. They push the reset button. They might replace the hard drive just like -- a hard drive rather. Like the one that you have in
your computer, replace it with their own hard drive and then use software and maybe even start working on it remotely. So, it's physical presence,
plus hacking and then once they've done all that the cash starts spewing out like they've hit the jackpot. Unfortunately, that's the bank's money
and not their money.
SY: Yes, no kidding. I mean, the bank customers' money. Is this like coordinated. Is there a YouTube video that shows people how to do this?
Has anyone been caught?
BURKE: I was just speaking with the secret service actually. An agent who's in United States telling me that they think that there are some
Americans involved here. But that actually they must be working with foreign organized crime. A part of a much bigger ring, basically. And
that they think that they're sharing the information among each other. So, not necessarily getting this information from the internet except in
private channels, not the dark web. Again, amazing to think that this has been going on for so long outside the United States and now finally it's
coming onshore there.
SY: I guess my other question is what are the -- because there are a couple of companies that own a lot of these ATM machines. Right? In the
United States, the banks usually don't own them. What are they doing? Can they do anything technically to crack down on this?
BURKE: That's right. I've been talking to Diebold, which is one of the biggest makers of ATM machines and I want to put up what they say here.
Because it comes back to something that I see so often when I'm reporting on cybersecurity. They say, quote, the ATMs that are currently being
targeted are older legacy Diebold units. It's important to remind financial institutions to keep their security up-to-date much like updating
the batteries on your fire alarms.
When I was speaking that Secret Service agent, I said, is this just an excuse from the company? Because we hear it so often. He said, no, this
is true. We just need these folks to also keep their systems up-to-date. So, it's the same advice when we talked about the WannaCry attack on
Windows. We've talked about Apple viruses on iPhones. You have to keep the iPhone up-to-date with that annoying message. The annoying message on
Windows and even the ATMs have to be kept up-to-date.
SY: All right, that makes a lot of sense. Thanks for breaking that down for us, Samuel Burke.
Stopping malware at the source is a top priority for Ukraine's President, Poroshenko, who says he is working hard to improve cybersecurity. And as
he told Richard Quest, the situation is improving step-by-step.
(BEGIN VIDEOTAPE)
PETRO POROSHENKO, UKRAINE PRESIDENT: Two months ago, we make a very well- developed legislation against cybercrime and cybersecurity supporting. We have effective cooperation with NATO. And we have a special NATO trust
fund especially dedicated to Ukraine about cybersecurity. And we have an effective cooperation with the old NATO member states with the
cybersecurity. And Ukraine now has an effective mechanism improving step- by-step, month-by-month for the better protection for cybersecurity both from Russia. Because most of these cyber-attacks doing from Russia and
protect them inside of Ukraine.
QUEST: Because you don 't want the reputation, do you? You don't want to be the bad place of bitcoin.
POROSHENKO: We are not that place of bitcoin. And we are open for our partner to have an effective cooperation to stop it.
(END VIDEOTAPE)
SY: Ukraine's president also told us there is one major obstacle in the way of growing the economy, war. According to him, 20 percent of Ukraine's
economic output is in Russian-held areas. But he says he's optimistic about reform.
(BEGIN VIDEOTAPE)
POROSHENKO: First of all, I can say that this was one of the most successful half a year for the reform. Because can you imagine that in a
very short period of time we introduce voted and implemented the health care reform, education reform, pension reform, which normally is quite
unpopular. But we decisively implemented that. We launched in euros for the privatization to make it transparent. With the using of the Anglo-Sax
law and many, many others. Cybersecurity, national security and defense reform, finishing the judicial reform and launching the effective anti-
corruption infrastructure and presenting now the anti-corruption court.
[16:25:00] QUEST: Are you seeing the effects in GDP growth? The reverse of inflation, the downward spiral of unemployment? I mean, how much longer
before your people will feel real benefits of this? Are your people seeing the benefits of economic growth?
POROSHENKO: I just -- this is the first year when the reforms which was done for the three years start to bring the first results. First,
attachable results. This is the economic growth which we demonstrate 2.5 percent this year and 3.8 percent are the growths of the World Bank next
year. We have 1 million vacancies in the country. We have almost the lowest level of unemployment ever. We increase pension. We increase
salary. The most important thing, macroeconomic stability is much stronger now.
QUEST: So, are you getting the support that you need, say, for example, either from the European Union or the United States? The previous
administration was far more vocal in its support and its real support? Are you being abandoned by President Trump?
POROSHENKO: Frankly speaking, we have a strong and reliable support from the United States. Seeing my first appearance in the United States
Congress in the year 2014. We have a billion-dollar loan guarantee. We have many positions through the IMF. But for the national security
position, for delivering the defense weapons. We have a green light only now and this is extremely important for us. We have an effective support
from the European Union and the most important thing, we have a sanction against Russia from the whole world. And this is very important part of
the support of global coalition for Ukraine.
QUEST: But do you feel that the current administration is giving you the level of support you need?
POROSHENKO: Short answer. Yes.
(END VIDEOTAPE)
SY: Well, Europe is officially enjoying a growth spurt. 2017 was the EU's best year for GDP growth in a decade. Both the eurozone and the EU as a
whole grew 2.5 percent in 2017, faster than the U.S. The last time the EU managed that level of growth was before the 2008 financial crisis. And
those GDP figures couldn't keep European stock markets from falling. Tuesday, all of the major indices closing in the red with London's FTSE and
the German Dax among the worst performers.
Still ahead, there's no easy road to success especially about you talk about actual roads. We look at how fixing America's infrastructure could
be one of Donald Trump's biggest challenges yet.
(COMMERCIAL BREAK)
[16:30:00] SY: Hello. I'm Stephanie Sy. There's more QUEST MEANS BUSINESS in a moment, when President Trump wants to put an infrastructure
plan in motion. We'll show you what that may look like beneath the streets of New York. And not even the president is immune from the problems of
fake Twitter followers. Twitter is promising a response. Before that, the headlines this hour.
The Dow closed the day off at 363 points. That's its worst single-day fall in eight months. Health care stocks dragged the market lower. Jeff Bezos,
Warren Buffet and Jamie Dimon unveiled a plan to get into the health insurance business. Donald Trump is just hours away from delivering his
first State of the Union speech, even as the cloud of the Russia investigation hangs over his presidency.
A source says to expect eye opening tough talk on North Korea. The White House says Mr. Trump will also make a strong pitch for his infrastructure
proposals in a show of bipartisanship towards the Democrats.
The U.S. Treasury Secretary defended the Trump administration's decision on Monday not to move forward with new sanctions against Russia. Instead the
U.S. released a list of prominent Russians with ties to the Kremlin and said the legislation in place is already working. But Stephen Mnuchin said
Tuesday, there will be sanctions that come from that report.
Kenya's main opposition leader Raila Odinga has declared himself the people's president of Kenya. He held a mock swearing-in ceremony Tuesday
in Nairobi. The government is now calling Odinga's opposition movement a criminal group. Odinga is protesting the election of Uhuru Kenyatta and
won a disputed election rerun last year.
Saudi Arabia says it's crackdown on corruption has recovered more than $107 billion and authorities are now winding down the investigation. In early
November, dozens of royals, government officials and prominent businessmen were detained at the Ritz Carlton in Riyadh. Most suspects have now been
released after paying hefty fines.
In his State of the Union address today, Donald Trump is expected to bring up a pressing issue for many Americans. The nation's infrastructure. The
latest national infrastructure report by the American Society of Civil Engineers, which comes out every four years, gives the country a damning
grade of D-plus. Mr. Trump has called for an overhaul that would cost more a trillion. And as Clare Sebastian reports, some of the greatest need is
in the president's own backyard, New York City.
(BEGIN VIDEOTAPE)
CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): The Acela Express from Newark, New Jersey, to New York's Penn Station takes about 14 minutes,
plenty of time to get a sense of the urgent need for upgrades.
JOHN PORCARI, INTERIM EXECUTIVE DIRECTOR, GATEWAY DEVELOPMENT CORPORATION: You're about to see the portal bridge right off my shoulder here. It's a
swing bridge. It opens for river traffic. So sometimes it doesn't close the way it needs to. They use a mallet to close it.
SEBASTIAN (on camera): A mallet?
PORCARI: A mallet.
SEBASTIAN (voice-over): Fixing the portal bridge is just the beginning. Right now, this stretch of rail runs on just two tracks, meaning If
anything goes wrong, it could cause chaos all along the northeast corridor used by 800,000 people a day.
PORCARI: That's the Secaucus station.
SEBASTIAN: The gateway program is a series of station and track expansions along this 10-mile stretch aims to fix that. The cost for phase one alone
is more than $14 billion.
PORCARI: By international standards it's substandard. So, while it's safe, it's old. It's not as smooth as it needs to be. It doesn't have the
capacity that it should.
SEBASTIAN: And perhaps the most critical part of all, the tunnel under the Hudson. The plan is to build a new one to the south and repair the old one
eventually doubling capacity.
PORCARI: We're in a 107-year-old tunnel, a marvel of engineering. When this tunnel was opened to service the Titanic was still under construction.
So, it's a remarkable piece of infrastructure, but it needs to be rebuilt after Hurricane Sandy flooded it.
SEBASTIAN: Hurricane Sandy was a wake-up call. Both sides of the tunnel flooded causing irreparable damage.
PORCARI: If you look at those bench walls you can actually see the saltwater corrosion. It was never designed to withstand saltwater from the
inside.
SEBASTIAN: New York and New Jersey have already committed to paying for half the entire project.
SEN. CHARLES SCHUMER, (D) NEW YORK: This gateway tunnel is vital to our New York economy.
SEBASTIAN: And yet despite repeatedly promising to fix the nation's infrastructure.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Our infrastructure will again be the best in the world.
SEBASTIAN: In December the Trump administration called an Obama-era deal to fund the other half non-existent.
UNIDENTIFIED MALE: Failure is not an option. What country would allow a single point of failure to jeopardize on a daily basis 10 percent of its
GDP?
[16:35:00] SEBASTIAN (on camera): What is your message to the current president? If he funds this will you name it after him?
UNIDENTIFIED MALE: Naming rights are available.
SEBASTIAN: So, it could be the Donald J. Trump Hudson Tunnel?
UNIDENTIFIED MALE: We would do that in a heartbeat in return for the federal 50 percent share.
SEBASTIAN (voice-over): Clare Sebastian, CNN Money at New York's Penn Station.
(END VIDEOTAPE)
SY: Any plan to overhaul U.S. infrastructure would likely face political hurdles. One concern is how much of a burden individual states would have
to bear and it's something our next guest has spoken out about. Larry Willis is president of the AFL-CIO's transportation trades department. And
Larry, thanks so much for being with me.
Let's start with --
LARRY WILLIS, PRESIDENT, TRANSPORTATION TRADES DEPARTMENT, AFL-CIO: Good to be here.
SY: I'll get into the funding in a moment, but ostensibly the president's infrastructure plan would be a major boon to many workers who fall under
the transportation unions. How optimistic are you that the massive infrastructure overhaul is going to happen?
WILLIS: Well, we're going to fight very hard for it. I think by any measure and any metric, our infrastructure system across the board in
transportation specifically is failing. Maybe not failing is not completely fair, because as you report the American Society of Civil
Engineers does give it a D+. But that's close enough to failure for my taste. And your report highlighting the problems that Amtrak is having
with its gateway tunnel. They even have tunnels that are older than that. They have a tunnel that dates back to the end of the civil war. We have
transit systems across the country that can't keep up with the capacity and demand that passengers are putting on it. We have 58,000, 58,000
structurally deficient bridges in this country.
SY: I mean, it's scary.
WILLIS: It's crazy.
SY: And I don 't think anyone denies that infrastructure is in crisis in this country. The question is how to pay for it. Right? And so, I wonder
how a lot of the plans that Trump has for infrastructure have leaked out. How aligned or misaligned is the president's plan to the solutions that
labor has called for to address the infrastructure crisis?
WILLIS: One thing that we have consistently said is that for highways and transit and bridges, there is a funding mechanism through the Highway Trust
Fund. The problem with that over the years has been is that the federal gas tax that funds that has not risen and has not risen one penny in the
past 25 years. And in the interim, obviously, construction costs have gone up, our needs have gone up, people are using fuel less because they're
moving to fuel-efficient cars, which is a good thing. But we need to really take a solid look at seeing if that gas tax can be adjusted. The
Chamber of Commerce, it's not often that labor leaders such as myself and the Chamber of Commerce agree on an issue, but on raising the gas tax we
are in full agreement.
SY: Hard to find the political will for that on both sides, from what I can tell, so let's talk about Trump's plan.
WILLIS: Sure.
SY: Because he wants to commit only $200 billion as part of the federal contribution to his $1 trillion infrastructure plan over 10 years. Do you
see any possibility of the other $800 billion coming from states, the private sector and the municipalities? Is that a viable plan to you?
WILLIS: Well, quite frankly, we're a little skeptical that you can turn $200 billion into $1 trillion. I mean, $1 trillion doesn't even get you to
the number that the engineers have identified to fix our broader infrastructure problem. And you have to remember when you talk about the
$200 billion, that is over ten years. So obviously, $20 billion a year, you know, given the needs that we've already discussed, that really is a
drop in the bucket.
SY: Right.
WILLIS: But we are concerned that states that are already cash strapped aren't going have the resources to come to the table with the type of money
that the Trump plan may propose. That's asking a lot of some municipalities in a difficult fiscal environment for them. And while there
are definitely projects that the private sector can and should be involved in and there have been examples of these public-private partnerships, you
know, having some benefit, they really are a minority of situations where they can be utilized.
We have to make sure that the public is protected when we introduce the private sector and that workers are protected. Because after all, when you
have a private company come in, they're going to want to turn a profit. So, we have to do things to make sure that the transportation project in
question, or the infrastructure project in question serves the public interest, and there are a lot of projects out there that just aren't
qualified for that.
SY: Do you think there will be a bipartisan moment sure to agree on something that can move infrastructure forward in this country?
[16:40:00] WILLIS: Well, that's going to be our goal and something that we've been working very hard on. You know, we did a highway transit bill
in 2015. It wasn't enough money, quite frankly, but it was a step in the right direction and that was a bipartisan package. And you know, we worked
with Chairman Schuster on the House and others in the Senate and Democrats. Obviously, President Obama was in office at the time, but we were able to
get that done and it was a good bill. There's a good framework there, by the way, that you can use for the current infrastructure investment at
least on the highway and transit and bridge side. So, there's a history of bipartisanships on
Infrastructure and that is the path forward in our opinion.
SY: All right. Larry Willis, thank you so for joining us, appreciate it.
WILLIS: Thank you.
SY: The state of the U.S. can have major implications for economies around the world. In Davos, Richard Quest caught up with Colombia's finance
minister who said a strong U.S. economy is helping to lift his country, too.
(BEGIN VIDEOTAPE)
MAURICIO CARDENAS, COLUMBIAN FINANCE MINISTER: More than the increasing oil prices is the faster growth in the U.S. that the IMF is arguing is
causing this better economic outlook for Colombia. The growth in the U.S. means a lot for Colombian exporters.
RICHARD QUEST, CNN HOST: And yet the weakness in the dollar, again, a double edge.
CARDENAS: Yes.
QUEST: Because that creates difficulties for your currency and at the same time that weaker dollar obviously makes exports and things better for you.
CARDENAS: Yes. But our currency, Colombia's currency, weakened so much with the declining oil prices that some strengthening of the currency is
not bad. It helps. It makes our foreign debt cheaper. It also helps bring inflation down. So, I'm not worried about this slight appreciation
of the Colombian currency.
QUEST: As you look forward, what is the one policy now that Colombia needs to introduce?
CARDENAS: The main concern, Venezuela, Venezuela. So, what do we need?
QUEST: But there's no end in sight to that tragedy.
CARDENAS; Well but things are going so bad. I mean you see the recent numbers in Venezuela. Which are not official because the central bank is
no longer publishing any data. But the information that is gathered by the people that are in the field, the surveys, inflation of 10,000 percent per
year. The currency has depreciated at the same pace.
Anyway, it's a disaster waiting to happen. The Maduro regime is going to end. But what we need to do, and this is the main message here in Davos,
is have a plan for the day after. So, who's going to finance Venezuela? We need to bring goods to Venezuela.
QUEST: Who leads on that plan do you think? Because the various other countries, regional leaders, who should take the lead?
CARDENAS: The IMF has to play an important role. The Inter-American Development Bank, the World Bank, I think Venezuela will need at least $60
billion for the recovery. We have to start this because who's going to put that money? Colombia is willing to contribute because we're going to be
selling much of what Venezuela needs. The food, the input for the manufacturing sector, the pharmaceuticals that the population needs.
QUEST: If as long as this tragedy continues you are still feeling affects, spillover effects.
CARDENAS: We have half a million Venezuelans now living in Colombia.
QUEST: Exactly.
CARDENAS: We give them food. We give them shelter. We give them medicines. We give them education for the children. It is part of the
solidarity of Columbia. These are countries that are very close, families that, you know, live on both sides of the border, so we have that
solidarity. But we are worried that these increases. Because we could not deal with a million or two million.
QUEST: But the longer they are there the longer there is a permanence to their staying there.
CARDENAS: Yes. So far, they've found jobs and they are making a living in Colombia, but we want to create awareness that this is something we're
doing with our own funds in Colombia, with half a million Venezuelans. But we cannot do it with a million or 2 million.
(END VIDEOTAPE)
SY: News just in to CNN, the head of Hawaii's Emergency Management Agency has resigned. A preliminary investigation into that false missile alert
sent to people in Hawaii on January 13th showed that the employee who triggered the alarm seemed confused and froze after sending it and that
person in question has been fired.
Well, not even President Trump is immune from the problem of fake social media followers. Twitter is promising to tackle the problem, we look at
why it is so important. Coming up.
[16:45:00] (COMMERCIAL BREAK)
SY: Twitter says it's working to stop companies from creating and selling fake accounts that's after "The New York Times" investigated the issue.
And while the accounts may be fake, the possibility of money for those behind them, very real. A so-called influencer with 100,000 followers
might earn $2,000 per tweet, that's according to the data from Captivate. Ten times the number of followers would mean of course ten times the
earnings.
Alexander Taub is the cofounder and CEO of SocialRank which analyzes social media followers. He says tackling fake accounts is easier said than done.
(BEGIN VIDEOTAPE)
ALEXANDER TAUB, CEO, SOCIALRANK: I think the networks do know it's a little difficult. How do you figure out who necessarily is a fake follower
and then on top of that how do you remove them from the system? It's not as easy as just, you know, someone identifies as someone who is fake.
SY: So, what you're saying is there are not clear technical solutions for what these social media platforms can do to tamp down on what "The Times"
investigation is calling straight-out fraud.
TAUB: Yes. It's definitely going to be a challenge for the networks. There was an article I think in "Mashable" over the week end or at least
yesterday that there may have been like a small purge for bot followers from Twitter after the article came out, but, yes, it's not the easiest
thing to figure out and to solve.
SY: What does this mean for the bottom lines for these social media platforms? Influence, as you know, in social media, that is currency. If
you can simply buy influence from bots, what does it mean? How do you value people with social media followings?
TAUB: It's not easy. It's actually a big technical challenge and there are a lot of companies out there, a lot of agencies out there trying to
help brands better understand the value they're getting if they're working with an influencer, a celebrity or another company. I think something to
be wary about is you can be a big brand, like let's say an Apple or a Samsung and you can theoretically go and buy fake followers for someone
else. You don't need to have the log-in information for that company to be able to buy it. So, someone can go and for whether it's a company or a
celebrity, you can theoretically tarnish someone's reputation by buying followers for them without their knowledge. So, I think there's going to
be a lot of issues there.
SY: There are so many aspects to this that are potentially criminal. Not to mention the fact that they're actually a company like this taking actual
Twitter user identities, in some cases, minors -- according to "The New York Times" investigation -- and re-appropriating those for their bots.
TAUB: Yes. There's definitely -- it's interesting because there's definitely an illegal aspect around that. You know, creating a fake
account isn't necessarily illegal. It's against the terms of service for the network so they can obviously delete that, but yes, when you're
starting to, you know, do identity theft that starts getting actually illegal-ware, there's big ramifications.
[16:50:00] SY: So, the New York Attorney General has opened an investigation as you probably heard in response to this "The New York
Times" investigation. But I guess my question is what responsibility do the social media platforms bear in all this?
TAUB: I think you know, after a big article like this, you'll see the networks respond and try to figure out and build better technology to
identify these people and remove them from the network. I think there is responsibility from the social networks. It's hard when, you know, whether
you're growing very quickly or not, to take, you know, fast action and remove these people from the community.
(END VIDEOTAPE)
SY: Still to come, female staff at the BBC claim they're being treated unfairly. Today the corporation released a report saying it is not biased
against women.
(COMMERCIAL BREAK)
SY: A new report commissioned by the BBC concludes the British broadcaster has no gender bias regarding pay for its on-air staff. But admitted its
approach to setting pay is not perfect. The report has already been criticized by some senior female journalists. The BBC has agreed to cut
some male presenters' pay while some women will get raises.
And BBC Director Tony Hall said, today's report does not find evidence of gender bias in decision making, but it shows that we have real and
important issues to tackle.
For more on this, I am joined by Joanne Lipman, she is author of a new book, it's out today and it's called 'That's What She Said, What Men Need
to Know About Working Together." Joanne thanks for being with us. Your timing is impeccable.
So, no evidence of gender bias. Let's just start there with this BBC report because it's the news of the day. How do you measure for gender
bias? Isn't it implicit and unspoken and often subconscious?
JOANNE LIPMAN, AUTHOR, "THAT'S WHAT SHE SAID": Well, sure. And in "That's What She Said," I actually talk quite a bit about subconscious, implicit
bias. Right? Which are biases we don't even know that we have. And they really have an enormous impact. I mean, there was one study that was done
-- this is a computer survey -- computer study, it was a model of a company that's 50-50, male female at the entry level. And they programmed in just
a 1 percent bias against women. By the time you reach the top level of the company, it is 65 percent male. So, we know that this implicit bias has a
real measurable effect.
SY: Right. And it's why this BBC report doesn't seem conclusive to everyone and it's controversial. I also want to ask you about the
response. So, the BBC's actions are to actually lower the pay of men and this is reflected in other actions taken by men recently, right.
[16:55:00] The CEO of easyJet decided to take a pay cut. Certain on-air anchors at the BBC, men, have decided to take a pay cut. I don't know if
this is just me, but it seems to miss the point. What do you think of this as a response?
LIPMAN: Yes, it absolutely, misses the point. Look, I think, the place we need to get to be a place where everyone is paid according to their
achievements and to their history, right? So, the unfortunate thing that we're seeing here is that when there are these pay disparities, it
virtually always goes in favor of men and not for women. And so there have been a number of companies in the United States, and now there is
legislation in several countries abroad, that are saying we have to publicize that gender wage gap. I do think that that legislation is an
excellent idea.
SY: I mean there was an Obama-era rule in which major companies had to have pay transparency not just when it came to gender breakdown, but racial
breakdown.
LIPMAN: Yes, yes, that's being rolled back. But in Iceland for example they just passed a legislation that men and women must be paid equally.
Iceland where I spent time for "That's What She Said," Iceland actually has a gender equity budget office and in the U.K., there is legislation now
where you must show your gender wage gap. Now what's interesting is that when you do that, when you publicize it, it actually is sort of the best
medicine. That sunlight really makes a difference.
SY: Women need to know these numbers when they negotiate, and I know you get a lot into that and those sort of cultural issues, as well, and what
men can do in your new book, "That's What She Said." Joanne Lipman, thank you so much.
LIPMAN: Thanks for having me/
SY: All right, were going to take one last check of the markets. The Dow closed the day off 363 points, that's its worst single fall in eight
months. Healthcare stocks dragging market lower with Jeff Bezos, Warren Buffett and Jamie Dimon. You know those guys. The unveiled a plan to get
into the health insurance business.
And that's QUEST MEANS BUSINESS, I am Stephanie Sy in New York. The news continues here on CNN. Thanks for watching.
END
