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Quest Means Business
Former U.S. Air Force Intelligence Specialist Charged with Spying for Iran; Trump Intending to Sign Border Deal to Avoid Shutdown; Philippine Journalist Who Challenged Duterte Arrested; First Images of Rare African Black Leopard Successfully Filmed; Schultz Talks Taxes, Business Conflicts in CNN Town Hall Debate; U.S. National Debt Hits Record $22 Trillion; Prada Forms Diversity Council Amid Blackface Backlash; Flower Prices Spike Over Valentine's Day; UPS Gears Up for a Valentine's Day Delivery Deluge; Shutdown Fears Subside, Trade Hopes Lift Stocks; Google Announces $13 Billion Investment in U.S. Aired 3-4p ET
Aired February 13, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ZAIN ASHER, ANCHOR, CNN: Look at that, I would say, it is certainly a glass half full kind of day. Optimism certainly abounding. A sea of green
all over the big board with just one more hour to go in terms of trading. This is what's moving markets on Wednesday the 13th of February.
Donald Trump says trade talks with China are, indeed, going well on the eve of a new round of negotiations. The U.S. government is set to avoid
another government shutdown giving markets two reasons to cheer today. And oil prices keep climbing as Venezuela's dueling presidents compete for
international support. Hello, everyone, I'm Zain Asher and this is "Quest Means Business."
All right, welcome, everybody, I am Zain Asher. Tonight, we are seeing high stakes in the battle between Venezuela's, not one but two competing
presidents. Juan Guaido supporters have yet again taken to the streets just as Guaido is actually making a power play for control of Venezuela's
oil industry.
Guaido plans to install a new board of the state-owned oil company. He is actually attempts to strike a blow at Nicolas Maduro's hold on economic
power. Meantime though in Washington, Donald Trump has promised to keep up the pressure on Nicolas Maduro. Obviously, he has been vocal in his
support for Juan Guaido.
The visiting Colombian President says support for Guaido is only getting stronger.
(BEGIN VIDEO CLIP)
IVAN DUQUE MARQUEZ, PRESIDENT OF COLOMBIA: President Guaido, who is the person about to lead this transition in Venezuela has a strong support and
we need to give him even stronger support. I think what happened with the E.U. has been very important. We will host the Lima Group next week in
Bogota and we will -- all the countries in the hemisphere will give him stronger support he needs to lead the transition in Venezuela.
(END VIDEO CLIP)
ASHER: Whoever emerges as the uncontested president of Venezuela certainly not be able to do it alone. They are certainly going to need a lot of
international support. Both Guaido and Mr. Maduro are looking to foreign governments, amassing globally allies as they try to claim a grip on power.
Juan Guaido has two western heavyweights in his corner, the United States of course and most of the European Union. He also has many of his
neighbors in South America. Unsurprisingly, Russia and China are on the side of Nicolas Maduro. Maduro is also hoping India will start buying more
Venezuelan crude and there are reports, he is reaching out to fellow OPEC countries trying to shore up support among oil allies.
Eric Farnsworth is Vice President at the Council of the Americas. He is joining us from Washington. So Eric, as Juan Guaido mulls these new
appointments on the board of Citgo, for example, how will that help him generate revenue and how will an increase in revenue help him gain control
of the country especially when Nicolas Maduro says he's not going anywhere.
ERIC FARNSWORTH, VICE PRESIDENT, COUNCIL OF THE AMERICAS: Zain, what a pleasure it is to join you today. Thanks for having me on. You know, this
is very much part of a strategic effort by Guaido and his supporters to name a parallel government, essentially, both ambassadors abroad and
officials representing him and his interim government and now the next step in perhaps the most important step economically is to name officials to the
Board of PDVSA, the state energy company, as well as Citgo as you mentioned.
And this is the life blood, this is the wind pipe of the Venezuelan economy. What it will do in the immediate term, it's unclear. Certainly,
there is going to be a legal mess in terms of who can deal with whom, but at a minimum, what it will do, it will increase uncertainty and the
uncertainty will be among the international community in terms of who they are able to deal with and the business community as you know, hates
uncertainty, so that will reduce their willingness perhaps to engage with the Maduro regime.
And so that's one way to begin to get their arms around the energy sector, which again really is the driver of Venezuela's economy.
ASHER: Yes, I mean, that is as you said sort of the bloodline, the heart that is pumping money through the system. So how does Guaido -- I mean,
just aside from appointing members to the board, how does he actually get control of oil production of PDVSA, and I mean, is that really possible if
Maduro is still in the picture?
FARNSWORTH: Well, that's a key question. I mean, he has got the support of the international community, but he doesn't have control of either the
energy sector or certainly the security forces to enable him to enforce the takeover of the energy sector.
[15:05:08]
FARNSWORTH: There is a reality on the ground in Venezuela and that is the Maduro regime even though it's not recognized by most of the international
community still controls the commanding heights of the economy, controls the security forces et cetera.
So until the Maduro government shifts, it is going to be very problematic in terms of actually getting control physically over the energy assets that
Venezuela has.
ASHER: Western countries, the United States, members of the European Union back Guaido. They have been very vocal about that. But what are they
giving him in terms of financial resources? I mean, obviously Guaido now has control of certain assets and bank accounts that belong to Venezuela
based overseas, fine, but are they actually putting their money where their mouth is in terms of giving him the resources he might need to be able to
take power?
FARNSWORTH: Well, there's a lot of as you say, there's money that's no longer allowed to be paid to the Venezuelan regime, the Maduro regime and
that's being made available to Guaido. Most of the assistance that's been declared and delivered to this point has been on the humanitarian side,
which is to say to help address the massive humanitarian crisis at the borders with Colombia.
You showed the clip of the Evan Duque, who is in Washington today, the President of Colombia, also the Brazilians are now looking to perhaps
develop essentially, refugee camps on their border with Venezuela to address the people flows that continue to come across the border.
So a lot of that aid has gone to refugee relief, where it should, frankly. It's problematic to actually pay money directly to the interim President.
That opens the door to perhaps, Maduro to say, "Look this guy is being directly supported by foreign interests. We can't have that."
So that would be a particularly problematic issue, but a focus on the humanitarian assistance, I think is widely recognized as something that's a
good thing to do.
ASHER: Of course, I mean, we talk about money and oil and control and which allies are supporting who, but you have to be human about this. I
mean, there are hundreds of thousands of people that are at risk of starving, if not dying because they are not able to get the resources that
they need.
But Eric Farnsworth, we'll have to leave it there. Eric Farnsworth on the stalemate happening in Colombian politics right now, that country has not
one, but apparently two presidents -- Venezuela, excuse me, not one but apparently two Presidents. Eric, thank you so much.
Okay, the Egyptian billionaire, Naguib Sawiris says he is ready to make a big investment in Venezuela on one condition. The Chairman of Orascom told
our John Defterios that he is prepared to take the risk provided President Nicolas Maduro is out of the picture.
(BEGIN VIDEO TAPE)
NAGUIB SAWIRIS, EXECUTIVE CHAIRMAN, ORASCOM INVESTMENTS: I'm worried about this guy that he decides not to leave even over blood. I mean, that he
would initiate -- that we shed blood in order to stay, because if he had any decency or any dignity, he should leave. A leader that his own people
and doesn't let aid inside and says that it is contaminated, that is an excuse, because he knows that there is no excuse of leaving your people
hungry and people want to send aid. So, I pray to God that we get rid of him.
JOHN DEFTERIOS, EMERGING MARKETS EDITOR, CNN: You have a case with this 300 barrels of oil, huge mining deposits, people don't remember the
Venezuela of the past, pre-Chavez, pre-Maduro, but there is a lot of potential there. You would invest, you are suggesting, but you need a
clearing out of this leadership.
SAWIRIS: Of course, you know, I usually try to avoid investing with leaders of this sort. When people accuse, but you're investing in North
Korea, I've done a lot of good in North Korea because the people of North Korea did not have a way to communicate.
And we all know that communication is the first human right and it's the first way to say what you think about the regime or communicate with your
other people in case you have any queries, and I also wanted to -- I contributed to North Korea true peace by telling them that their economic
model is not the right model, they need to join the whole world. So I've been doing a lot of good there. And nobody would ever go there thinking he
is going to make money in North Korea.
DEFTERIOS; It's extraordinary because the natural resources are terrific in terms of vast oil reserves.
SAWIRIS: And gold.
DEFTERIOS: Gold and their mining deposits, but this is the Venezuela of the past and it hasn't realized it for the last 20 years of this
leadership, that's the reality. What would it take you to go back into Venezuela?
SAWIRIS: Just Maduro to leave. If he leaves, we'll be one of the first ones to go there. You know, I mean, he's turned his people into starving,
into burglaries. You know, when you are in Caracas, you get mugged three or four times a day, and you can't say it's because there is a lot of
crime. No, it's because of hunger.
I mean, when you are desperate, you have nothing to eat, of course then, you will try to do anything. It's like -- this was actually even during
Chavez. I went during Chavez twice. But Chavez had the charisma so he could get away with it. This guy is flat.
DEFTERIOS: This could be a pretty nasty game. You have China and Russia in for $70 billion nearly that over the last 10 years and the U.S. trying
to make a power play, right now encouraging the opposition to continue trying to provide aid. How does it play out on the geopolitical stage in
your view as a businessman?
[15:10:09]
SAWIRIS: I do hope that America will win this time because we're on the right side. You know, we're on the right side. These people have forced
the elections. They have suppressed their people. They have hungered their people. I don't know why the Russians and -- I think some people
don't put principles into the game to see where -- why would they support someone like that? I mean, they say, they are not leftists any more, they
have the same economic model that we have. So it's just to play games with the west. I don't know. I don't know what their theory in supporting a
guy like that.
(END VIDEO TAPE)
ASHER: After the break, the dire consequences of a no-deal Brexit for the carmaker, Ford. There are fears it could actually move production out of
Britain, which of course means, job losses, and flights to and from Belgium have been shut down for nearly 24 hours. We'll explain why air traffic
controllers are on strike.
(COMMERCIAL BREAK)
ASHER: Al right. Welcome back, everybody. So a strike by air traffic controllers in Belgium has meant that all flights in and out of the country
have been cancelled since Tuesday night, but now that shutdown actually almost over.
In the next hour, planes can actually begin flying in and out of the country again, so that's good news for passengers. Three unions that
represent air traffic controllers are calling for higher wages.
Joining me now, Filip Lemberechts is the Secretary of one of those three unions who actually called for the strike, so Philip, thank you so much for
being with us.
Obviously, this is a hugely important day for your group. Just walk us through what exactly in detail are you demanding at this point?
FILIP LEMBERECHTS, SECRETARY OF ACLVB-CGSLB: At this moment, we are dealing with the infamous wage law which has been imposed by the government
and that wage law determines that for the coming two years that the salaries can be raised by 0.8%. So there's really been put a maximum on
wage negotiations in different enterprises.
ASHER: So where did negotiations stand right now?
LEMBERECHTS: Yes, exactly. They are being discussed on a national level. I am representative of airport companies on Brussels airport, but this wage
law, this wage bill really affects all of the different companies, whether they are performing well or whether they are performing bad.
[15:15:04]
LEMBERECHTS: The salaries can be raised by 0.8% on a maximum level. Just for comparison, if you compare wages at Brussels Airport, pilots who earn
6,000 euros less in Dusseldorf, for instance, in Germany, at the end of the year he still wins 4,000 euros on a net level.
And we really think that companies who perform well, if there is a profit to share amongst the workers, companies who perform well, they should be
able to distribute more and I think people are entitled to more than 0.8%.
ASHER: Okay, so you're upset that there's a cap on how much wages can increase by per year regardless of performance or if a particular employee
is doing well, their wage increase should be more than what you say, 0.8%.
So when you think about just the amount of havoc that has been wrecked on - in terms of what passengers are going through, delayed flights,
cancelations, that sort of thing, I mean, has this been -- do you think this has really been effective, a 24 hour strike? Has it been effective,
do you think in terms of getting passengers and ordinary people on your side?
LEMBERECHTS: I think negotiations have been going on for weeks. The call for the strike has not been made yesterday or the day before yesterday. It
was well announced beforehand, and most companies were able to deal with it and make preparations so that -- it was not a wild strike. It was well
organized and it has been hugely successful, it was well followed.
But the thing is, the strike was never -- it was never a goal in itself. The thing is, at the moment it's really the last resort in calling to a
strike because it's not only workers are not only unsatisfied by the wage gap that has been put, but also the work-life balance in the last few
years, going in a very bad direction.
Ten years are ago, in Belgium, it was possible at the age of 50 to go in a part-time work regime, just to make it easier to continue working in the
later stages of your career. Pension age has been raised until 67, but the benefits for old people to work in part time regimes have been cut.
ASHER: You're saying though that overall this was a last resort. But Filip Lemberechts, keep us up to speed on what happens with these
negotiations. Thank you so much for coming on the program. Be well.
Okay, European markets closed mostly higher on hopes of a U.S.-China trade deal. The greatest gains were actually in London. The FTSE 100, let's
take a look here, up almost 1%. Madrid was the notable exception. There it is. It's pretty much the only red on the screen closing ever so
slightly lower, basically flat and that follows the rejection by the Spanish Parliament of a draft budget proposal that pushes the country close
to an early national election.
Okay, let's talk more about European business. Ford is the latest in a long line of companies warning about the risk of a no-deal Brexit. There
is a lot of fear especially in the business community in the U.K. The company reportedly told Prime Minister Theresa May that it might have to
actually move some production out of Britain if an agreement cannot be reached, if there is indeed, a no-deal Brexit.
Only last week, Ford's Executive Vice President told our Richard Quest how important the outcome of Brexit is to the company. Take a listen.
(BEGIN VIDEO CLIP)
JOE HINRICHS, EXECUTIVE VICE PRESIDENT, FORD: We need certainty to plan our business. We need freedom of movement of goods and people across the
countries to do that. And it can impact a lot of people if we don't do this right. So we're hopeful that parties will work together to find a
resolution that works for both sides and we encourage both governments to do that.
RICHARD QUEST, ANCHOR, CNN: Right. Is Ford planning to move production if they don't?
HINRICHS: Well, it's too early to tell. Obviously, very important that we know where all this plays out from a trade and tariffs and customs and
duties. We're working together to hopefully make sure we can avoid some of those things.
(END VIDEO TAPE)
ASHER: Okay, we've got Anna Stewart covering the story from London, so Anna, you know, Ford has obviously talked about the consequences of a no-
deal Brexit as being catastrophic, their words not mine.
What will it mean for the company, just in terms of -- give us the specifics in terms of layoff, in terms of revenue loss, in terms of moving
production outside the U.K. What will it mean?
ANNA STEWART, REPORTER, CNN: So they have been fairly vocal. Earlier this year, they said that a no-deal Brexit could cost them $800 million this
year alone. But what was being reported today in British media outlets was some conference call with the Prime Minister where Ford suggested they
would have to move production outside of the U.K. if a no-deal Brexit comes about.
Now that is something we have asked Ford, whether that is confirmed. They said to us they will do whatever action is necessary although they have
nothing to announce today.
Now, to give you an idea of how many people they employ, that's 13,000 people in the U.K. and this echoes a very similar story we had from Airbus
...
[15:20:08]
STEWART: ... who said their existence in the U.K. is under threat by a no-deal Brexit. They employ 14,000 directly in the U.K. and over 100,000
through all of their supply chains.
So what is the problem here? What does a no-deal Brexit or any kind of Brexit frankly look like on day one? And the problem is no one knows. No
one could tell business what it will look like. So I popped over to Calais to just take a little bit of a closer look at how it could plan out.
(BEGIN VIDEO CLIP)
STEWART (voice over): The port of Calais, geographically speaking is the Brexit front line, and not since the 1800s has it faced a threat like this
from across the channel.
(BEGIN VIDEO CLIP)
JEAN-MARC PUISSESSEAU, CEO, CALAIS PORT: We are now investing 6 million euro to be prepared for the Brexit, but what shall we do? If we don't do
anything, we will not be prepared.
(END VIDEO CLIP)
STEWART (voice over): Jean-Marc Puissesseau this is the CEO of the port where he says 3,000 to 4,000 trucks cross to and from Britain by ferry each
day. A no-deal Brexit could put an end to frictionless trade and force trucks to clear customs.
(BEGIN VIDEO CLIP)
ALEX VEITCH, HEAD OF POLICY, FREIGHT TRANSPORT ASSOCIATION: Even adding a couple of minutes for the most basic checks, even that will tailback up to
about 20 kilometers either side of the border.
(END VIDEO CLIP)
STEWART (voice over): The French, the British say are decidedly ill- unprepared. Battle plans are being drawn up. U.K. trucks recently testing an airfield near Dover as a place to queue if the warnings come to pass.
Puissesseau is defiant. His Brexit plan, a holding area where 250 trucks can go through additional checks. He is confident custom will run
smoothly.
(BEGIN VIDEO CLIP)
PUISSESSEAU: There will not be any more control except the question, "Monsieur, do you have the papers ready?" If it is yes, there will be
exactly the same.
STEWART (on camera): You're opening a lot of faith and trust in all of these hauling companies knowing what to do and doing it.
PUISSESSEAU: Yes. Yes. I think so.
DAVID ZACCHEO, BRITISH HAULIER: No, I don't think they are. I don't think they are going to be ready to cope with the potential volume of vehicles
that are going to be stopped.
(END VIDEO CLIP)
STEWART (voice over): The first shots may have already been fired. The U.K. government recently announced plans to divert traffic away from
Calais.
When he heard the news, Puissesseau said the British Transport Secretary was no longer welcome at his port.
(BEGIN VIDEO CLIP)
PUISSESSEAU: It's pity. Really a pity. To know that just in front of that 36 kilometer, it will be the third country -- I still don't believe
it, but it's a reality.
(END VIDEO TAPE)
STEWART: But what is extraordinary as you look at the Port of Dover and the Port of Calais and they have totally different ideas of what Brexit
will mean, what it will look like on day one. No one seems to know, no one can agree. And this is a big deal for a business like Ford as we have
heard today because their supply chains are fluid and some of the parts that go into a car cross the border multiple times before it is vetted --
Zain.
ASHER: Yes, that's one thing that Ford is really worried about that's why they are referring to it as catastrophic. They don't know what is going to
happen in terms of their supply chain if there is a no deal Brexit. Anna Stewart, we've got to leave it there. Thank you so much. Have a great
evening.
All right, let's turn to U.S. markets for you. It's about 40 minutes or so left of trading in New York. The Dow is up 150 points. It's been pretty
much in the green all day. Major markets set to close with solid gains after President Trump's very strong indication that he's going to sign a
deal to avoid another government shutdown.
Remember, we had a government shutdown that actually closed the government for 35 days. President Trump is going to try and avoid that this time.
Also, helping stocks hopes are high that the U.S. and China will strike a trade deal, or extend the deadline before new tariffs kick in.
One of the reasons why a deal is so important for China is because the Chinese economy is going through a major slow down, but Chinese centers are
working overtime to try and cover up any sort of reporting or news out there of bad economic news.
Matt Rivers actually spoke to two business owners in Beijing who are feeling the pinch.
(BEGIN VIDEO TAPE)
MATT RIVERS, CORRESPONDENT, CNN: So I have lived in China now since 2015, and one of the first things I noticed when I got here was this sense of
economic optimism that when it comes to individual opportunity, things were looking good.
But over the last couple of months, there's a thought that maybe that's begun to change.
RIVERS (voice over): To be fair, there's a lot of reasons to be pessimistic these days. For starters, there's that giant trade war you
might have heard of. China also just posted its slowest annual GDP growth rate since 1990 and the main stock market lost more than a quarter of its
value since early last year.
Things have cooled enough that you don't have to be an economist to notice.
(BEGIN VIDEO CLIP)
ZHANG YUQI, REAL ESTATE ACCOUNTANT(Through a translator): We usually set up payments with our clients before the Chinese New Year, but this year is
particularly difficult to get our payments on time.
(END VIDEO CLIP)
RIVERS (voice over): Zhang Yuqi works in construction and renovation and says a rough real estate market means her clients are not selling as many
apartments as before. It's enough to make her think about her own spending habits.
She is now using an app that lets her pay for big ticket items over time, like a new car.
(BEGIN VIDEO CLIP)
ZHANG: We can't afford to buy it at its full price, but we can choose to buy it in small installments and pay it back month by month.
(END VIDEO CLIP)
[15:25:07]
RIVER (voice over): In 2018, China new car sales shrunk for the first time in 20 years. iPhone sales were off 15% and luxury brands could face a
tough 2019.
In a slowing economy, what people choose to spend their disposable income on changes.
(BEGIN VIDEO CLIP)
ZHOU CHANG, OWNER, MOVIE TIME FITNESS (Through a translator): Working out isn't like eating or housing, those are must haves. Working out isn't.
(END VIDEO CLIP)
RIVERS (voice over): Joe Chang owns a gym in Beijing that has seen slowing sales this year. A trend he sees has forced other gyms to close throughout
the city.
(BEGIN VIDEO CLIP)
ZHOU (Through a translator): Most people already have housing loans and car loans and so on. Only when they can lower that pressure a little bit
can they consider other needs like working out.
(END VIDEO CLIP)
RIVERS (voice over): Amidst slowing traditional growth drivers like manufacturing, China is depending on consumer spending to support the
economy.
A recent consumer confidence survey by a Beijing based Capital University puts 2018's fourth quarter index at 99.4. Anything below 100 means
consumers aren't optimistic overall about the economy.
RIVERS (on camera): Now, some economists say there are still plenty of reasons to be optimistic about the Chinese consumer. Spending on services
rather than goods, think travel, leisure, healthcare is actually up.
There's a big tax cut that could be in play this year and retail sales will still grow. But the fact that I can easily come out on the street here and
find multiple people who will tell me that they are worried about the economy, well, that's different than it was when I first got here. Matt
Rivers, CNN, Beijing.
(END VIDEO TAPE)
ASHER: Howard Schultz is the largest owner of Starbucks shares which is may explain why he has a net worth of $3.5 billion according to Forbes.
The former CEO tells CNN that won't be a problem in terms of his Starbucks shares if he is elected President of the United States, but ethics experts
disagree.
We'll explain why after the break.
(COMMERCIAL BREAK)
ASHER: Hello, everyone, I am Zain Asher. Coming up on the next half hour of QUEST MEANS BUSINESS, the size of the U.S. national debt hits a new
record, $22 trillion, trillion by the way with a T. And some of the world's top fashion brands are in damage control modes after a string of
racism scandals.
But first though, these are the headlines we're following for you here on Cnn. The U.S. Justice Department has charged a former Air Force
Intelligence specialist with spying for Iran. According to indictment, Monica Witt defected to Iran in 2013 and revealed a highly classified
intelligence collection program as well as the identity of a U.S. Intel officer.
And Cnn has learned that U.S. President Donald Trump will reluctantly sign a border security deal to avoid another government shutdown. It contains
only a fraction, only a tiny bit of the money that he's repeatedly demanded for his border wall with Mexico. It's still possible he may look for other
funding sources though to make up the difference.
And a Philippine journalist who has been an outspoken critic of President Duterte has been arrested. Maria Ressa was charged with cyber libel for an
article she wrote in 2012. Her lawyer says the charges are politically motivated. Ressa has won awards for her criticism of Duterte's brutal war
on drugs.
And this shadowy creature is mythical no more. For the first time in a century, we've confirmed images of the elusive black leopard in Africa. It
took biologists months of watching and waiting to get these shots with remote cameras in Kenya.
OK, so he spend the first few weeks of his exploratory campaign for the White House slamming tax plans, to soak the rich, but last night in a Cnn
town hall, former Starbucks CEO Howard Schultz admitted that people like him should actually be paying more in taxes. Take a listen.
(BEGIN VIDEO CLIP)
HOWARD SCHULTZ, FORMER STARBUCKS CEO: I should be paying more taxes, and people who are in the bracket of making millions of dollars or whatever the
number might be should be paying more taxes.
POPPY HARLOW, CNN: Are you talking about you should pay 2 percent higher, 10 percent higher, 20 percent higher federal income tax?
SCHULTZ: I don't -- Poppy, I don't know what the number is. What's being proposed at 70 percent is a punitive number, and I think there are better
ways to do this.
HARLOW: So what's not punitive?
SCHULTZ: I don't know what the number is. But what I'm suggesting is, I should be paying higher taxes.
(END VIDEO CLIP)
ASHER: All right, so Poppy Harlow tried to hold his feet to the fire there, but he clearly did not want to get into any specifics. What's
interesting though is that the biggest market for Starbucks will actually soon be China facing the prospect of being America's second in a row,
second in a row businessman president.
Schultz distanced himself from Donald Trump and said, he would take the necessarily steps to avoid any sort of conflict of interest.
(BEGIN VIDEO CLIP)
SCHULTZ: If I run for president, I'm running not as an independent. I'm running as an American, wrapping myself in the American flag. My first
order of business is to put the American people first in everything I do and there will be no conflict of interest in anything I have to do legally
to separate myself from my financial interest with regard to China will be completely done. I am not Donald Trump.
(END VIDEO CLIP)
ASHER: Oh, he said it loud and clear, "I am not Donald Trump". Schultz still owns though more than 30 million shares of Starbucks stock worth more
than $2 billion, certainly a pretty penny. I want to bring in Nia Henderson who is live at Washington for us.
So Nia, if he does --
NIA-MALIKA HENDERSON, CNN SENIOR POLITICAL REPORTER: Hey there, Zain --
ASHER: Hey, my dear -- if he does become president, and that is a big "if" by the way, be real, OK? Should he sell those shares? I mean, Donald Trump
had a lot of conflicts of interests, different conflicts of interests, but should Schultz be selling those shares?
HENDERSON: No, you would think that would be the expectation right, obviously, with the Trump family and with Donald Trump in particular. This
idea of putting something in a blind trust and the idea of having his children do much of the business with still conflicts of interests have
come up and it's something that Democrats are certainly or still interested in and will look into.
I think as you said, this idea of Howard Schultz following in the foot- steps of Donald Trump and going into the White House is a big "if", right? He isn't going to run as a Democrat, he's not going to run as a Republican
as Donald Trump obviously did.
He's facing the prospect of running as an independent, and this idea he has argued that there are all of these people in the middle who might find his
proposals attractive. But one of the problems is he doesn't really have many proposals. He has a lot of criticism for the left, on the right,
Republicans and Democrats as you saw him there criticizing someone who had a tax proposal and a tax rate proposal.
[15:35:00] But again, no specifics coming from him as to what he would do in terms of the tax rate on the super wealthy.
ASHER: Right, well, he did talk about this idea that people like -- I mean, yes, you're right. He didn't get into specifics, right?
HENDERSON: Right --
ASHER: But he did mention that people like him should be paying more in taxes. Obviously, he was against Ocasio-Cortez's 70 percent on people
making over 10 million. But he --
HENDERSON: Yes --
ASHER: Thinks people like him should be paying more in taxes, so do you think that if he does become president, he will actually hold himself to
that?
HENDERSON: You know, again, this is going to take a lot of sort of imagination for me to imagine him in the White House --
ASHER: But listen -- no, Nia --
HENDERSON: Yes --
ASHER: Everybody says --
HENDERSON: Right --
ASHER: The same thing about Donald Trump. Let's be real, let's be real --
HENDERSON: No, it's true, it's true -- no, you're absolutely right. You are absolutely right --
ASHER: Everybody laughed, everybody --
HENDERSON: Yes --
ASHER: Laughed --
HENDERSON: Everybody laughed, you know, I think it will be more likely for him to become president if he actually ran in one of the fields of
Democrats or Republicans, and then you know, he picks up support going along the way, whether he challenges Donald Trump or a Democrat.
I just think it's incredibly hard for an independent --
ASHER: I see --
HENDERSON: To do that. So in that way, he would be certainly different than Donald Trump. But listen, stranger things have happened, right?
ASHER: Right --
HENDERSON: You know, and if you look back in history, you're right. We did think that Donald Trump didn't have much of a chance in the Republican
primary there, he won, he's the president now. You know, looking back at history in terms of independent candidates, Ross Perot in 1992, he got
about 20 million votes, but he also kind of was a character, right?
ASHER: Right --
HENDERSON: I mean, he was criticizing NAFTA, he was --
ASHER: Howard Schultz is a bit more strait-laced.
HENDERSON: Yes, he's very strait-laced, right?
ASHER: So do you think that -- do you think that this country really does have an appetite for another businessman president?
HENDERSON: I think you will find some people, perhaps that have an appetite for a businessman. We obviously saw that in New York, for
instance in a smaller way with Mayor Bloomberg, he might run in the Democratic primary. But listen, I think the way that he's going about it,
really criticizing the left, criticizing the right.
There isn't a real middle in this country that is a sort of a silent center in the way that they talk about it. Democrats tend to like the policies
that Democratic politicians are putting forward. Republicans tend to like what they're seeing out of this White House and out of -- out of this
Congress.
So I think he's going to find it hard to find any sort of constituency. Maybe he draws a little bit from Republicans kind of the Chamber of
Commerce-type of Republicans. Hard to see where he draws Democrats, maybe sort of independent Democrats, you know, kind of Democrat-leading
independents. But you know, what states does that look like?
Where is he able to actually put together enough votes --
ASHER: Right --
HENDERSON: To win the electoral college? So it's hard. But listen, he's out there selling books, he had a, you know, pretty engaging town hall and
conversation last night with Poppy Harlow, I think more to come from him. And certainly, ideally for his prospects as president or even just as a big
thinker on the political stage, I think for him, he's got to put more policy on, you know, put specifics out there --
ASHER: Yes, because he really did sort of dodge Poppy's questions --
HENDERSON: Yes, I mean --
ASHER: On the specifics.
HENDERSON: Yes, on everything almost, yes --
ASHER: Nia, one thing I love about my job is when I get to interview my friends on TV.
HENDERSON: That's right, this is so great. Always going to see -- we go way back --
ASHER: We go back, way back.
HENDERSON: I know, this is so great --
ASHER: So great --
HENDERSON: I'm so glad to be here --
ASHER: Nia, I'll see you soon, thank you so much.
HENDERSON: Thanks Zain, be good, girl.
ASHER: Bye honey. OK, so Howard Schultz says the greatest domestic threat facing the United States is actually its massive debt pile. The balance on
the government credit card has actually hit a new record, I'm talking about $22 trillion, that's up by $2 trillion since President Trump took office,
and it's not the only debt threat.
Let's look at personal debt, because not just national debt, it's also personal debt that most -- a lot of Americans are dealing with,
specifically 7 million Americans are seriously behind on their car payments.
And by the way, that is a record. And corporate debt, we've talked about how the corporate debt pile is getting bigger and junky as well, 17 percent
of publicly-traded companies in the United States had trouble making interest payments at the end of last year. So warning signs for all of our
credit cards. Another friend of mine --
ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Hello --
ASHER: This is such a fun show. Alison, thank you so much for being with us. So $22 trillion --
KOSIK: Yes --
ASHER: In debt, this is what the U.S. is dealing with. When you think about the Republicans perspective, normally Republicans hate debt, they
hate borrowing, but yet they signed off on this massive corporate tax cut. Have they created a monster?
KOSIK: OK, so it's not just one administration, it's not just one party, Zain. Republicans, Democrats, I think everybody has got a finger in this
pot. We've seen the national debt actually rise over the past century. So, you look at, say, even during the George W. Bush administration, we saw
the national debt accelerate.
And then it really picked up in speed when the Obama administration went ahead and passed the stimulus package to keep the economy afloat. And then
interestingly enough, when Donald Trump took office, we did see a leveling off of that debt, but now we're seeing it spike, and I mean spike in a big
way.
You look in the last 11 months, we've seen the national debt jump $1 trillion in just 11 months, why?
[15:40:00] A lot of it has to do with that tax cut plan that Trump pushed to get passed, which of course is now going through the economy. So, we're
seeing the effects, and then the corporate tax rate, those rates are now lower. So those taxes that corporate America pays are lower, which means
the Treasury gets left less revenue as well.
ASHER: It's interesting because, you know, you mentioned it's spiking, leveled off you said, and then it spiked --
KOSIK: Right --
ASHER: Since President Trump took office. He on the campaign trail blamed Obama a lot for quote, unquote, "bankrupting this country", and now he's
guilty of the same thing. So just talk us through what the consequences are of $22 trillion in debt on my children, on our future grandchildren.
KOSIK: OK, so just to give you an idea how much of an impact it would have on GDP, right now, the national debt versus the GDP is at 78 percent. So
the estimates are at the track we're going, if this continues, we're going to go ahead and see the debt ballooning by 2029 to a level of 93 percent.
So every American should care about this, why? Because in the long run, it messes with economic growth. So when you've got this large public debt, it
can wind up driving up interest rates which can affect those little things in the economy called interest rates.
Those components that could help create or hurt economic expansion so it can cause interest rates to go higher which means loans of every kind can
go higher, and that can undercut a lot of economic growth that we see. So that could happen over time.
So you can see, you know, our kids, you know, living through times, really tough times where the economy is being dragged down by higher interest
rates because of all this debt --
ASHER: Yes --
KOSKI: That the U.S. economy carries --
ASHER: So it is a big problem.
KOSIK: Yes --
ASHER: Alison Kosik, we've got to leave it there --
KOSIK: My pleasure --
ASHER: Thank you so much. OK, so when we come back here on QUEST MEANS BUSINESS, some of the biggest names in fashion are under fire for designs
like this. Designs that resemble blackface, that's next.
(COMMERCIAL BREAK)
ASHER: Prada announced Wednesday it's going to be forming a diversity council to elevate voices of color within the company and the fashion
industry as a whole. Film Director Ava DuVernay and artist Theaster Gates -- well, actors chair as well.
Prada is one of many high-end brands recently accused of creating designs resembling blackface. The company faced a huge amount of backlash on
social media back in December for its line of monkey-like figurines, I'll let that sink in.
Earlier this month, Gucci was criticized for this, its black wool jumper -- look at the mouth cut-out, so that's another design that resembles
blackface as well.
[15:45:00] And also, gosh, so many, just this week, Katy Perry was called out over two pairs of shoes from her personal line that they actually
removed from the collection. She said she never intended to inflict any pain whatsoever, but celebrities including Spike Lee and T.I. are calling
for boycotts of all of these brands.
Julee Wilson is the fashion MP, director, Essence, she joins us live now. So, would you support boycotting these brands or is it all about just
opening up the dialogue to a conversation to educate these brands about why blackface is so hurtful?
JULEE WILSON, FASHION & BEAUTY DIRECTOR, ESSENCE: I think it's both.
ASHER: OK --
WILSON: I think we need to make them see that we're serious. You know, and you do that with the dollar in the bank. So by taking our money away
from them, they'll see that we mean business and we want to make sure that they step up to the plate and make sure that they're doing what's right,
yes.
ASHER: Because, you know, a lot of these mistakes, I can't say for sure, but I don't believe any of these embarrassing mistakes would have happened
if you literally just had one black person in the room. One black person in the room while you were making these decisions.
WILSON: Absolutely.
ASHER: So it goes to show that the problem -- yes, it's ignorance, but it's also just the lack of diversity in the fashion business as a whole.
So many of these brands making huge mistakes within weeks and months of each other.
WILSON: Absolutely. They love our culture, they love our swag and they capitalize on that in their advertisements and in their campaigns, yet,
they don't have people that look like us in the board rooms making these decisions as employees. So, it's really hurtful and it's honestly
exhausting. I mean, we've talked about this ad nauseam every few years or every few months, something like this comes up --
ASHER: It's not just -- it's not just every few years, I feel as though just over the past month or so, I've seen people making mistakes with
blackface and they use a lot. Whether it's Megyn Kelly, whether it's the Virginia governor, I think that was a long time ago, fine, but still the
attorney director -- the Attorney General of Virginia as well and then all of these fashion brands. Why is all of this happening now? I mean, is it
some watershed moment for our culture, do you think?
WILSON: I mean, I think it's a watershed moment for them to get their acts together. But -- like to your point, this has happened in the past. And
we just haven't -- they just haven't learned from it. They keep doing it over and over again.
So I do think it's another opportunity for us to make sure that we hold them to their word about their making these councils, they're bringing on
diversity, making sure that they do right by us because this is ridiculous. This is blatant.
ASHER: Why is fashion so -- I mean, listen, we've talked about hashtag Oscars is so white.
WILSON: Right --
ASHER: Why is fashion, hashtag, so white as well. I mean, you have diversity in the movie business, I mean, obviously, Oscars, you know, they
had their own issues. But there's diversity in the movie business, there's diversity in the music business, in the entertainment business as a whole.
But with fashion, it just seems a little bit harder for black people to penetrate. Why is that?
WILSON: I don't have the answers, if I did, I think that I would be screaming it from the rooftop. I think it's just an industry that feels
like since they're creative, since we're all accepting, then the spotlight hasn't been shown on to fashion as much because it just seems like, oh,
they're so diverse when it comes to like --
ASHER: It feels so western definition of beauty. That I think is part of the problem.
WILSON: Absolutely. But again, you know, they will, you know, capitalize on black culture, and we are the culture, black people, and so they'll
capitalize on that, yes, we're not the ones in the board rooms, we're not - - I mean, why would that sweater be caught on shelves, if there was someone of color in the room saying, you know what? You don't understand the
nuances of black culture and what this means to us and how hurtful that is. That's ridiculous.
ASHER: It's also -- I mean, I think that one other issue is that for a lot of the European brands, they might not be as familiar -- this is just me
playing devil's advocate. They might not be as familiar in Europe with the history of blackface in the United States. So when you think about Prada
and Gucci -- I mean, Katy Perry, there's no excuse. But with Prada and Gucci, that could be part of the issue as well.
WILSON: Absolutely, but you know, when you look at Gucci, Gucci has a partnership with Dapper Dan.
ASHER: Of course --
WILSON: So why wouldn't you even run that by someone as iconic as Dapper Dan to say, look, this is what we're doing, these are some of our designs
that we're putting on shelves, he's there as a resource if it's someone who you actually, you know, care about and respect their opinion in your
company. Why wouldn't you have him, you know, weigh in?
ASHER: Yes, but I think they don't even realize it's a problem to begin with, so they don't even think maybe we should have someone of color weigh
in. That's part of the issue, but --
WILSON: Right --
ASHER: Listen, and I think people are learning their lesson now, right?
WILSON: I hope so.
ASHER: OK, so we're going to leave it there, thank you so much --
WILSON: Yes, thank you --
ASHER: Appreciate that. Right, after the break, florists try to woo romantics everywhere ahead of Valentine's Day with the slew of beautiful
bouquets. And if you're wondering why they cost a little bit more this year, I'll explain why after the break.
[15:50:00] (COMMERCIAL BREAK)
ASHER: Look at what a kind, thoughtful, amazing team I have. Valentine's Day flowers for me, red roses and a card -- let's see, let's see -- oh,
someone left the price on, $40 for these red roses. So why are they suddenly more expensive on Valentine's Day?
The answer is because florists can't stockpile and it's a simple case of basically supply and demand. The shops order as much as they can. The
Netherlands is a major exporter and uses an auction system to sell. So put all of that together and it depends how much retailers are really prepared
to pay, and that affects how much you end up paying when you go to the florist on Valentine's Day.
For those of you who can't face going the florist, you can always send them to your lover. Let's take a look. Here's my card, here it is, OK. So
let's see -- oh, perhaps not. UPS is expecting to ship 89 million flowers this Valentine's Day, that's actually up 1 million compared to last year.
Take a listen to how the delivery giant copes with the demand.
(BEGIN VIDEO CLIP)
KEVIN WARREN, CHIEF MARKETING OFFICER, UPS: As you can imagine, it's quite a challenge and you need a company that has a lot of assets and
capabilities to do that. We're actually taking these flowers out from South America and within 48 hours, delivering to our customers, our end
customers within the next couple of days.
So you need a company that has a world class airline, you need a company that has a world class fleet of packaged cars and professional drivers.
Obviously, we need refrigeration capability to make sure these flowers stay temperature-controlled and don't wilt.
And we also have to have some sophistication around cross-border activity, and how do we work with border patrol and FDA to make sure the flowers get
across the borders the right way. So all of those things really have to come and come together to make sure that your viewers and all the romantics
out there don't get disappointed, and their flowers and packages get delivered on time.
ASHER: All of those romantics of which I am certainly one. But just reading, apparently, there's going to be 1 million more flowers delivered
this year compared to previous years. What is driving that increased demand, do you think?
WARREN: Yes, so obviously, you know, there are some mega trends that are helping in that area. One is -- one of which is e-commerce.
[15:55:00] So e-commerce is growing faster than the rest of the rest of retail. So the ability to be able to kind of go online, pick the flowers,
pick the destination and do that from either your computer or your tablet or your phone and be able to turn that around in 48 hours, that convenience
and the ability to turn around that quickly is absolutely a driver of the increased demand.
ASHER: So, peak flower demand period is from what I understand, the end of January to around now, of course, Valentine's Day is tomorrow. How much is
demand actually dropped tomorrow or rather the day after Valentine's Day?
WARREN: Well, you know, we definitely see a kind of a seven-day period of peak demand around Valentine's Day -- Valentine's Day. So what we've done
is we've dispatched an additional 50 aircrafts to make sure we can handle that demand. And by the way, that ability to be able to kind of scale up
and scale down is the capability that UPS has, and we demonstrate that even most prominently during our holiday peak season which is from Black Friday
through Christmas.
So we're using that same ability to be able to kind of scale up to make sure we handle the delivery during this Valentine peak period.
(END VIDEO CLIP)
ASHER: All right, well, hopefully, my husband remembers to send me one of these this time tomorrow, if he doesn't, Steven if you're watching, big
trouble. OK, there are moments left to trade on Wall Street, we'll have the final numbers and the closing bell right after this quick break.
(COMMERCIAL BREAK)
ASHER: All right, guys, there are moments just about two minutes or so left in terms of trading on Wall Street. The Dow, as you can see, behind
me, is set to end probably higher after President Trump's indication that he is going to be signing a deal to keep the government open, after all.
Also helping stocks, hopes are high that the U.S. and China are going to be striking a trade deal or extend the deadline for new tariffs to kick in.
The broader indices, let's take a look, are all up less than 1 percent or so. The energy and industrial shares are the best of the day.
Shares of Google's parent company are up half of 1 percent. Google says it's going to be investing $13 billion this year in data centers and
offices across the United States. Google says that, that will lead to tens of thousands of new jobs. And that is the closing bell behind me --
(BELL RINGING)
There it is, ringing, and that means QUEST MEANS BUSINESS is over, I'm Zain Asher in New York. "THE LEAD" with Jake Tapper is next, you're watching
CNN.
END
