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Quest Means Business
Jerome Powell Says He Does Not See A Recession Looming; Brexit Turbulence Is Expected To Continue; Aid Arrives In The Bahamas; Former Zimbabwean President Robert Mugabe Dies at 95; Hurricane Dorian Makes Landfall in U.S. After Devastating Bahamas; U.K. Police Chief Criticizes Prime Minister Boris Johnson for Political Speech. Aired 3-4p ET
Aired September 06, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:12]
ZAIN ASHER, CNN INTERNATIONAL HOST: All right, the Dow up 86 points despite the fact that the jobs report came in a little bit worse than had
been anticipated. It seems as though investors are hopeful that the Fed will be cutting rates in the fall.
It is the final hour of trading on Wall Street, a brief stop earlier in the day, the Dow is now finally higher as we head to the close. Let me show
you what investors are watching.
Jerome Powell says he doesn't -- doesn't see a recession looming, that in spite of new data that shows the risk of a downturn is rising.
And big tech under fire. Facebook and Google are facing antitrust investigations.
And aid arrives in the Bahamas. You'll hear how companies are helping.
Coming to you live here at the New York -- world financial capital -- New York City. It is Friday, September 6th, I am Zain Asher in for Richard
Quest, and this is QUEST MEANS BUSINESS.
A warm welcome, everyone. I am Zain Asher, no cause for alarm. The U.S. Fed Chairman says he is not expecting a recession anytime soon. That's
despite a U.S. jobs report that showed the economy is losing some of its momentum -- 130,000 jobs were added last month, a solid number, but low
expectations. Unemployment remained unchanged at 3.7 percent. The pace of hiring is slowing. The August number would have been worse without 25,000
temporary employees hired to help out with next year's U.S. Census. That's not denting Jerome Powell's outlook on the U.S. or global economy. Take a
look.
(BEGIN VIDEO CLIP)
JEROME POWELL, U.S. FEDERAL RESERVE CHAIRMAN: The consumer is in good shape, and really there's -- our main expectation is not at all that
there'll be a recession. I did mention, though, that there are these risks, and we're monitoring them very carefully. And we're conducting
policy in a way that will address them.
But no, I wouldn't see the recession as the most likely outcome for the United States or for the world economy for that matter.
(END VIDEO CLIP)
ASHER: Interesting. Our Matt Egan is here to dissect that. So Jerome Powell is saying that he doesn't see a recession looming, despite what
we've talked about, about inverted yield curves et cetera et cetera. What do you think the analysis is based on in terms of economic evidence?
MATT EGAN, CNN BUSINESS LEAD WRITER: Well, you know, it's worth noting that Central Bankers are not going to actually just come out and say they
see a recession coming, even if they do. So I guess it's not shocking that Jerome Powell said that. But he does have some reason to be optimistic
here.
I mean, he pointed out that consumer spending has been strong. The labor market, yes, it's softening, but it still remains pretty solid. And so as
long as that continues, consumers, you know, they make up the vast majority of the economy, so that can really overshadow some of the manufacturing
problems being caused by the trade war. So that's why he's optimistic.
But listen, I mean, Powell did say the outlook is murky. He said there are significant risks. And he did acknowledge that the trade war is causing
problems as far as business investment goes.
ASHER: One question that Jerome Powell seems to get asked quite a bit is about, you know, obviously, his relationship with Donald Trump and Donald
Trump continuing to put pressure on the Fed in terms of cutting interest rates.
He was asked today, listen, is 2020 affecting any kind of calculation when it comes to cutting interest rates? His answer was, "No, absolutely not."
Obviously, his job is to make sure that the public knows that he isn't affected politically, despite Donald Trump continuing to influence him.
EGAN: Right. It's so interesting that this question keeps coming up. But I guess we should not be shocked by it. I mean, we had President Trump
just tweeting again this week, I think it was today really kind of questioning Jerome Powell again.
And so the fact that you know, Powell just has to keep answering this question just shows how there is a lot of concern over, you know, the
political impact here.
Also, in the background, there's that Bill Dudley op-ed that really got a lot of attention last week. And I think he was trying to sort of dispel
any sort of notion that the Fed is playing politics. He said it really, really strongly. It was really the strongest thing he said all day, "The
Fed is completely focused on the economy."
ASHER: All right Matt Egan live for us there. Thank you so much. As you heard, the Fed Chairman did acknowledge, quote, "significant risks ahead,"
namely, trade uncertainty and a global slowdown. The U.S. manufacturing is also struggling, too.
According to the Institute of Supply Management, the sector contracted for the first time in three years in August. The New York Federal Reserve
appears less optimistic than Jerome Powell, it sees a 38 percent chance of a recession over the next 12 months and political tax on the Fed remain a
constant feature.
A few hours ago, the U.S. President tweeted, "Jerome Powell, where did I find this guy?" Austan Goolsbee, is a former Chairman of the U.S. Council
of Economic Advisers. He is now an Economics Professor at the University of Chicago Business School, and joins us live now from Chicago.
[15:05:14]
ASHER: So Austan, let's talk about the Jobs Report specifically, 130,000 jobs added. There was particular weakness in retail and energy.
Manufacturing also showed a slowdown as well. Just give us your analysis.
AUSTAN GOOLSBEE, FORMER CHAIRMAN OF THE U.S. COUNCIL OF ECONOMIC ADVISERS: I thought it was pretty weak, you know, and I liked that you highlighted
that there was this temporary increase in employment from the hiring Census workers, which happens once every 10 years.
If you take out the government employment, the private sector employment was down under 100,000, which is okay. It's not like it was a terrible
month. But it's just not very impressive and it was not what we were expecting.
And I think it just is another thing to throw into the bucket. There's two buckets. One bucket says recession is coming. And one bucket says no, no,
we can inch this thing out a bit longer.
This one is somewhere between those two, but for the people who think that things are slowing down, this is kind of evidence of it slowing down.
ASHER: You had Jerome Powell there say that, you know, he is not factoring a recession in terms of the immediate future. What do you make of those
comments? Would you agree with him? Does he have a point?
GOOLSBEE: I don't know that I would totally agree with him. But you know, as your previous guest described, you're very circumscribed in what you can
say.
If he thought a recession was coming, he can't get up and say, "Well, I'd say we've got a 90 percent chance of recession." So you've got to take the
signals as they are given and they sometimes are subtle.
I think Chairman Powell clearly left it open for himself that he said, "I don't foresee this as the most likely outcome that we would have a
recession. But there are definitely risks. And we're going to keep our eye on those risks."
The irony here, of course, is that with the President of the United States, so actively hounding the Fed in an inappropriate manner, you know, both
insulting but also trying to pressure the Fed. He is one of the things that is keeping the Fed from being more dovish than I think they would
otherwise be.
Because if they just start doing what the President asks, there are going to be a lot of people who will say, "Do we no longer have an independent
Fed?" So I kind of think the President is shooting himself in the foot a little bit here.
ASHER: That's a very interesting analysis. But you mentioned two buckets. One is sort of the good bucket in terms of what bodes well for us economic
outlook. And obviously, the other bucket is the opposite. Wage growth in the U.S. coming in at 3.2 percent increase. What do you make of that?
GOOLSBEE: Yes, pretty strong. That's, you know, the strongest thing in the economy that if you are not nervous about recession, the two things
you'd point to would be consumer confidence remains strong, and consumer spending is strong, and tied to that the labor market is very tight.
We're seeing wage growth finally. You know, the last two or three years, we've started to see wages kick up, where they were flat for a very long
time. Those are our strongest components.
And then the weaker components are, we never really got anything like the increase in business investment from the tax cut that was promised that
remains relatively weak.
The rate of change is kind of going the wrong way. The University of Michigan's consumer confidence numbers came out, and they had that. They
showed the biggest drop in six years. So hopefully that's a blip and doesn't spread over, but confidence is -- you know, it's a shallow pool,
and you've got to be careful diving in too fast in the shallow pool and you bang -- you knock your teeth out or something.
If you're counting on consumers to remain confident, even in the face of escalating trade wars, slowdowns around the world, and if we start getting
some mediocre jobs numbers, I think that that might be overconfident in the consumer's ability to keep us above the fray.
ASHER: Austan Goolsbee, live for us. Thank you so much. Okay, let me give you a quick look at how U.S. markets are doing as we get into the last
55 minutes or so of trade. The Dow is continuing its winning streak, about 80 points or so despite that relatively lukewarm jobs report that Austan
Goolsbee was just talking about there.
It looks set to end the week on a high, on optimism over renewed trade talks between the U.S. and China and most companies on the Dow, let's take
a look, up firmly in the green. Intel, Boeing and Home Depot, the retailer among some of the best performers there.
All right, let's look across Europe now. European stocks finished the week with modest gains. All eyes will be on the ECB meeting next Thursday when
the Central Bank is expected to turn out some new form of stimulus as well.
[15:10:11]
ASHER: And as you know, it has certainly been a stormy week in British politics and the Brexit turbulence is expected to continue. The latest is
that the House of Lords has approved a bill to block a no deal Brexit delivering a second body blow today for the embattled Prime Minister.
Earlier, the country's opposition party said they intend to vote against a snap election when it is put to them on Monday. On the other hand, the
U.K. High Court ruled that Mr. Johnson's government can prorogue or suspend Parliament next week.
All of that chaos has thrown British manufacturing into uncertainty. Businesses stockpiled in the first quarter, but output fell off sharply in
the second quarter. Make U.K. represents the interests of British manufacturers. It's CEO, Stephen Phipson told me earlier that investment
is down and the sector needs a deal with the Europe. Take a listen.
(BEGIN VIDEO CLIP)
STEPHEN PHIPSON, CEO, MAKE U.K.: People are unable to stockpile to the same extent. We're coming up for the Christmas period. Warehousing space
is short. It is presenting quite a lot of changes to the manufacturing sector.
And in the meantime, what we're seeing is European orders are reducing, because obviously, people are uncertain of the terms of trade if we leave
the E.U. without an orderly Brexit. And of course, that means investments has virtually come to a grinding halt.
So we need to see an end to this uncertainty. I think that's the critical message for our sector at the moment.
ASHER: So in terms of an end to uncertainly, there's really no end at this point in sight. What sort of reassurance do you need from the British
government at this point?
PHIPSON: Well, we need to see a deal. The Prime Minister is constantly reassuring us that despite all the debate we see in public, they are
working hard to get a deal. We are firmly behind that with the government. We absolutely need an orderly Brexit here to maintain confidence, and to
really start the investment cycle back in the sector in this country.
So as soon as we can see some lights at the end of the tunnel of that, we will have a lot more certainty about the way forwards. But we've got to
get through this very, very unstable situation that we're in politically at the moment, obviously.
ASHER: And so British manufacturing represents about 10 percent -- 10 percent of the U.K. economy overall. If the manufacturing sector there in
the U.K. starts to really, really hurt more than it already is, what sort of wider implications will that have on the British economy as a whole, do
you think?
PHIPSON: Well, I mean, 10 percent of GDP, that's the official number, but we are 45 percent of the exports of the country. And we're plus 600
billion in exports in total, 45 percent of that are manufactured goods. So it's a really important part of the economy of the country.
We have 2.7 million people employed. And obviously, if you look at investments, and particularly in R&D investment, the manufacturing sector
accounts for a very large part of that.
So it's an important sector and government is absolutely focused on making sure that we are fit for the future here. But we need an orderly Brexit to
get us through this uncertain period. We need a deal with the E.U. to make sure as we leave the E.U., we do so in a way that doesn't damage this
sector and restores confidence. And I think that's the clear message that we are making sure that government is hearing and they are hearing it and
they're assuring us that they are going to work hard to get this deal across the line.
ASHER: And how has the fluctuations in the pound that we're seeing, how is that affecting the manufacturing sector? Because there is always this tug
of war between, you know, obviously, how it benefits and hurts importers versus exporters.
PHIPSON: That's right. So you would have thought that there would have been a big benefit for our exporters with a weakening Sterling. And in
some cases, that's happened. But if you combine really what's happening with the global trade difficulties with Brexit uncertainty, what we're
seeing is a sharp decline in export orders, which means that effectively, some of that has been eroded by price reductions.
And of course, in this country, a lot of our work is buying materials in from overseas. And of course, they cost more money and then we transform
those into finished products. And then they get shipped as export.
So really, it's at -- we've still seen a depressing set of numbers in terms of margins of businesses as those pressures have taken hold. So it hasn't
benefited the exports of the country a great deal in terms of the reduction of Sterling.
(END VIDEO CLIP)
ASHER: And we're seeing more and more incredible scenes of devastation in the Bahamas as international aid begins to arrive there. We'll check what
companies are doing to help.
(COMMERCIAL BREAK)
[15:17:03]
ASHER: As international aid has started to arrive in the Bahamas, we're getting a clearer picture of the utter devastation Hurricane Dorian has
caused. The death toll now stands at 30. But officials unfortunately expect that number to soar to what they call unimaginable levels.
Fears that some residents have made their way to heavily damaged Abaco Airport to wait for the aid and relief that is trickling in. Paula Newton
has more.
(BEGIN VIDEOTAPE)
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT (voice over): It is so much worse than they had feared. The Abaco Islands forever scarred now by mass
destruction. Home after home, entire rooftops blown away, debris scattered in unrecognizable heaps, boats tossed like confetti. The images belie the
obvious question: How could anyone survive this?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Okay, okay, okay, okay. You're okay. It's going to be okay. We're going to be okay.
(END VIDEO CLIP)
NEWTON (voice over): We arrived by helicopter in Man-o-War in Abaco with Billy Aubrey (ph), embracing his wife Shauna (ph) after days of not knowing
if she was dead or alive.
Shauna (ph) hunkered down with friends in their Seaside home until the roof blew off and they all scrambled to find anything still standing.
(BEGIN VIDEO CLIP)
NEWTON (on camera): So Nancy, this is what kept you guys alive. This little --
UNIDENTIFIED FEMALE: This little room kept us alive. This is it. We came in and hunkered down, and Shauna (ph) was on the ground crying, and we were
just trying to --
UNIDENTIFIED FEMALE: I was hysterical.
NEWTON: What did it sound like in here at the time?
UNIDENTIFIED FEMALE: It was loud.
UNIDENTIFIED FEMALE: Well, there was a lot of crashing and banging and whirling.
UNIDENTIFIED FEMALE: Stuff, we thought, was coming through this wall.
(END VIDEO CLIP)
NEWTON (voice-over): So many in the Abaco Islands lived through hours that resembled a horror movie, exposed to winds that topped 250 miles an hour
like tornadoes touching down every minute.
(BEGIN VIDEO CLIP)
SHERRIE ROBERTS, SURVIVOR: Words can't describe it. I don't wish it on nobody. Nobody, words can't describe it. Because they could never
categorize -- categorize this, never.
UNIDENTIFIED MALE: My grandfather ran out in the middle --
ROBERTS: It was like an atomic bomb went off.
(END VIDEO CLIP)
NEWTON (voice over): Residents here tell me their little island paradise is unrecognizable, even to them. They are resourceful and self-reliant,
they say, but they could have never imagined a storm as powerful as Dorian.
(BEGIN VIDEO CLIP)
NEWTON (on camera): You know, there's no better way to describe to you the force of Hurricane Dorian to be right here where people rode out the storm
in their living rooms, in their dining rooms.
I mean, look at this. The roof blew off the house here. The entire kitchen came down. Their refrigerator ended up here on the ground. Their
living room and dining room furniture is strewn all over. People describe these things being tossed around the island like projectiles. They all
cowered, hovered in their bathrooms and closets, anything they could find to take shelter.
(END VIDEO CLIP)
[15:20:12]
NEWTON (voice-over): There are now the beginnings of recovery but only the basics: medical attention, private helicopters to take out those who are
sick, the elderly, young families.
(BEGIN VIDEO CLIP)
JEREMY SWEETING, ABACO ISLAND COUNCILOR: I'm sure it will never be the same again. But I mean, the people are strong here, and we're going to try
to do our best to rebuild the best way we can. But we know it will never be the same.
(END VIDEO CLIP)
NEWTON (voice over): This was a storm of biblical proportions, Abaconians tell me, and yes, they worry, it will take a miracle to recover from it
all.
(END VIDEOTAPE)
ASHER: Absolutely jaw dropping what those islands are experiencing right now. Last night we spoke to the CEO of Royal Caribbean International which
is delivering meals and other aid to the Bahamas. It something we're seeing across the cruise ship industry. Carnival, Paradise, Disney as well
and Norwegian Cruise Lines are also donating money and resources as well.
And with such mammoth effort needed to help the islands, DHL is deploying its Disaster Response Team to the islands helping with cargo and logistics.
Christine Nashick is the DHL Chief Executive for the Caribbean. She joins us live now from Florida. Christine, thank you so much for being with us.
So just walk us through what DHL's role in terms of facilitating aid to the Bahamas right now.
CHRISTINE NASHICK, CHIEF EXECUTIVE FOR THE CARIBBEAN, DHL: Sure, I'm happy to. Our Disaster Response Team, as you mentioned, went in several days
ago, and our Disaster Response Team is made up of a group of individuals with core competencies of logistics, and they go in and first and foremost,
remove the bottlenecks that you can imagine exist in logistics at the airport.
So we make sure that we clear up and are able to take in goods and make sure that they get as quickly as possible to impacted communities.
ASHER: So when you think about just how some of the infrastructure on the ground there in the Bahamas is completely decimated and ruined, how much
harder does that make it actually get aid to where it's needed?
NASHICK: Sure, it makes it very complex, certainly the Bahamas are known for tourism. So they're used to taking people into the airports and not
cargo. So now there's an influx of many cargo planes that are coming in and making sure that we can quickly get the goods off of the planes and
into people's hands who are impacted is most important.
But one of the biggest complex issues is the fact of getting to the islands that are truly impacted. And right now Freeport, for instance, we need to
open up so making sure that we can get our planes there are important.
ASHER: How do you train your volunteers for these types of disasters?
NASHICK: So we have about 500 volunteers across all of our 222 countries in our network, and they come together and they go through very extensive
training that really is compared to almost like a boot camp. So that once they go into a disaster area, they can be accustomed to anything because as
you can imagine there normally is -- there's lack of connectivity, there's lack of telecommunications, et cetera, maybe not even ideal places to stay.
So they're very used to going in and making do and making sure that they can add immediate impact.
ASHER: It's been less than a week since the eye of the storm hit the Bahamas and the storm moved so slowly that it hovered around the Bahamas
for quite a while. How quickly can you mobilize teams on the ground after a disaster hits and after the storm passes?
NASHICK: Sure, within 72 hours. So we were watching Dorian very closely to see where we might need to go in, so a team was automatically formed
from several countries in the Americas. And it was just a matter of knowing when and where we were going to deploy them.
So as soon as Monday came and we realized it was definitely the Bahamas where we needed to deploy, we made sure that our people got there by
Wednesday. So we currently have a team of six individuals there who are working closely with the local team in Bahamas.
ASHER: So what is an airport like, just in terms of logistics, just in terms of the overall sort of backlog, et cetera? What is it like after
experiencing a hurricane of this proportion?
NASHICK: Sure. I think just like a lot of the Bahamas, it's a bit of a daze. They're not used to dealing with something that's truly as chaotic
as what a disaster creates.
So a lot of people looking for knowledge and know-how, how do I get in goods? Do I pay duties? What paperwork do I need? Et cetera. So really
helping streamline the whole process is what is being done currently at the airport because a lot of people with very good intentions and we want to
make sure all of the great stuff that's been donated gets to the impacted communities.
ASHER: Thank you for all the work that you're doing, Christine Nashick, live for us. Thank you.
Okay, so we told you what company are doing to help and if you would like to help the victims of Hurricane Dorian, head to our special Impact Your
World website. On that website, you're going to find list of several aid organizations. All of these organizations are working to help those in the
Bahamas and elsewhere who have been devastated by this storm. Once again, that address if you feel moved to help is cnn.com/impact.
[15:25:21]
Fish has downgraded Hong Kong's credit rating after more than three months of unrest in the territory. The agency says the persistent protests
undermine the city's credit worthiness and add to other headwinds such as the U.S.-China trade war as well.
The pro-democracy demonstrations are now entering their 14th consecutive week. Andrew Stevens reports on the impact on the economy.
(BEGIN VIDEOTAPE)
ANDREW STEVENS, CNN ASIA PACIFIC EDITOR (voice over): Hong Kong shop owner Mrs. Lau has been selling cheap toys at this popular market for decades.
She's never seen business so bad. Sales are 90 percent down, she says.
As protest stretch into a fourth month with no end in sight, Hong Kong's economy already reeling from the trade war is starting to sink. Consumer
spending has slumped, tourism arrivals are falling and economic growth is being revised down. The government's latest growth forecast this year is
between zero and one percent.
Adding fuel to Hong Kong's crisis, China's leadership is becoming increasingly vocal against the protests.
STEVENS (on camera): The biggest question in Hong Kong now is what will Beijing do? Will it trust Hong Kong to sort out its own problems, or will
it run out of patience and send it in its armed police or even its military?
STEVENS (voice over): Such drastic measures are still considered in Hong Kong to be highly unlikely. Partly because a high profile intervention in
Hong Kong could rebound on China itself.
(BEGIN VIDEO CLIP)
ROBERT KOEPP, THE ECONOMIST CORPORATE NETWORK: China's image would suffer undeniably and that would create a whole rethink about China -- is China a
reliable partner?
(END VIDEO CLIP)
STEVENS (voice over): That potential loss of trust could also extend to the international finance markets where Hong Kong is a critical link in the
flow of investment in and out of China.
In 2018, Hong Kong was the world's biggest market for IPOs -- initial public offerings. More than $36 billion was raised most of it from
Mainland Chinese companies.
(BEGIN VIDEO CLIP)
RICHARD HARRIS, CEO, PORT SHELTER: If Hong Kong wasn't in existence, China would have to invent it.
(END VIDEO CLIP)
STEVENS (voice over): Analysts say Hong Kong's independent rule of law is key to investing in China.
(BEGIN VIDEO CLIP)
HARRIS: It needs that kind of Western jurisdiction. It needs the platform that Hong Kong provides in order to provide confidence for overseas
investors.
(END VIDEO CLIP)
STEVENS: China is already struggling with an economic slowdown. Its current 6.2 percent growth rate is the lowest in nearly 30 years.
With no end in sight to the damaging trade war with the U.S., growth is expected to continue to fall and damaging Hong Kong's unique position in
China could hit China's economy even harder.
(BEGIN VIDEO CLIP)
KOEPP: I would argue that crimping what Hong Kong offers China is more damaging than the U.S. trade war tariffs.
(END VIDEO CLIP)
STEVENS (voice over): As the world's biggest trading nation, China's slowdown is already having an impact globally. Another hit to its economy
could have significant knock on effects. Andrew Stevens, CNN, Hong Kong.
(END VIDEOTAPE)
ASHER: Zimbabwe declares days of mourning to mark the passing of former President Robert Mugabe. We are live in the capital, Harare, as the
country grapples with a very difficult legacy.
(COMMERCIAL BREAK)
[15:30:00]
ZAIN ASHER, HOST, QUEST MEANS BUSINESS: Hello everyone, I'm Zain Asher, there's more QUEST MEANS BUSINESS in a moment when the former president of
Zimbabwe Robert Mugabe is gone. His economic legacy though is very much alive.
And an airline mechanic has been charged with sabotaging a plane. The problems only discovered when the aircraft was actually already on the
runway. Before that though, these are the headlines for you at this hour.
Robert Mugabe is being remembered by many as an icon of Africa's freedom movement and by others as a brutal dictator. The former president of
Zimbabwe died in Singapore at the age of 95. Mugabe led the country for nearly 40 years, leaving behind a very complicated legacy. He was deposed
in a military coup back in 2017.
And Hurricane Dorian making landfall in the U.S. off the coast of North Carolina. It has triggered flooding and trapped some people in their
homes. Meantime, Bahamian officials say their country is experiencing a humanitarian crisis because of the storm. There are 30 reported deaths,
but authorities expect that number to rise drastically.
And British Prime Minister Boris Johnson has been criticized by police chief for using his officers as a backdrop to deliver a political speech on
Thursday. The chief constable of West Yorkshire Police said he believed Mr. Johnson would be giving a speech solely on investment in the service,
but the Prime Minister used it to talk about Brexit and reiterate his call for another general election.
And when Britain's Prince Harry and his wife Meghan and infant son Archie travelled to Africa later this month, they will fly commercially. They
were criticized for using private jets in August. The visit to South Africa is their first overseas trip as a family. The trip -- the focus on
women's issues, mental health and the environment.
And it is the end of the campaign trail for Howard Schultz; the former Starbucks CEO says he is dropping his plans to run in next year's U.S.
presidential election. Schultz says not enough people are willing to back an independent candidate.
As we just told you, long-time Zimbabwean leader Robert Mugabe has died in Singapore, age 95. His successor President Emmerson Mnangagwa has declared
national days of mourning until his burial. David McKenzie is joining us from Harare. So, David, as we've been saying time and time again, Mugabe
had an extremely complicated relationship with the people of Zimbabwe. What are people saying in Harare about his passing?
DAVID MCKENZIE, CNN CORRESPONDENT: Well, it's quite striking when these liberation icons like Robert Mugabe dies, it's a huge deal. And I think
back to when Nelson Mandela died in South Africa and the outpouring of emotion on to the streets and celebration of his life that happened
spontaneously.
[15:35:00]
Barely a ripple here in Harare, the capital. People going along their daily routines, just trying to survive in an economy that is barely
struggling to survive itself. And I think that speaks to the legacy of Robert Mugabe, which it is one of a liberation icon, but also someone who
really ruled this country into the ground. Here's some people that we spoke to on the ground that speak to that complicated legacy.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Africa, we have lost an icon. We have lost a liberator. A man who stood for the African skin, a man who stood for us.
President Mugabe, his legacy will remain forever. And I doubt that even here in Zimbabwe, we'll get a man like Robert Mugabe.
UNIDENTIFIED MALE: My name is Robert Isyetz(ph), I was named after him, I was born in 1982, soon after our independence. Then as time goes on, we
begin to see the true colors, his true colors. I was here in 2008 when he forced people, when he forced us on -- when he forced himself on us.
People were raped, killed just because of him.
MCKENZIE: Because of the election?
UNIDENTIFIED MALE: Because of the election which he had lost.
(END VIDEO CLIP)
MCKENZIE: Well, the real emotion on the streets here was of course when Robert Mugabe was ousted in that apparent coup. You had people celebrating
all night because of that eventual demise of his political career. And so right now, the reaction is muted.
You had Emmerson Mnangagwa coming back from Cape Town, the World Economic Forum, calling Robert Mugabe a teacher and icon, someone who led this
country into a democratic space. Really glossing over, not even mentioning some of the more sensitive parts of his legacy, and that's being the case
with most leaders and liberation movements across the country.
You know, recently, I got off the phone with a leading human rights lawyer here, he says he's tired of this way of glossing over the legacy of someone
like Robert Mugabe and focusing only on the positives. This is a Zimbabwean and he said, well, people should learn to call a spade a spade
in his words.
ASHER: And David, just give us more, tell us more a bit more about the reaction from Emmerson Mnangagwa because he sort of helped bring Mugabe
down, but at the same time, he was a close political ally. What was their relationship like?
MCKENZIE: Well, certainly, he was instrumental in bringing Mugabe down, he was working closely with the military behind the scenes before that
apparent coup that pushed Mugabe out of power. Emmerson Mnangagwa felt that he should have been the chosen successor of Mugabe, but when it became
clear through the actions and words of Mugabe, and when he pushed out Emmerson as his deputy, that Grace Mugabe, the then first lady would
potentially have a very key role after Mugabe died.
That was really the catalyst for this coup that pushed out Robert Mugabe. So, there was an interesting moment I felt when Mnangagwa praised Grace
Mugabe fulsomely towards the end of that statement to the nation and really tried to perhaps repair some of those broken bonds between himself and the
family of Robert Mugabe.
Perhaps trying to pave the way for a state funeral. They did say that ZANU-PF, the party which had really been made in Mugabe's image has given
them -- him, the status of a national hero. As though Mugabe himself quite recently reportedly said he didn't want to be buried in the Heroes Acre
close to Harare where all those liberation struggle icons have been buried. Zain.
ASHER: All right, David McKenzie live for us there, thank you so much. Robert Mugabe leaves behind a difficult economic legacy as well. In 2008,
Mugabe won a highly controversial election. The economy shrank by 18 percent and inflation soared. The Zimbabwean dollar became so weak, the
country started using the U.S. dollar the following year.
At the height of the crisis, prices doubled every 24 hours. Inflation peaked at a staggering 7. 9 billion percent. Today, Zimbabwe's national
currency is back, inflation is at its highest point in a decade and people are struggling to buy basic goods. Tendai Biti is leading figure for the
opposition in Zimbabwe, he also served as Zimbabwe's Finance Minister from 2009 to 2013. Mr. Biti joins us live now from Harare.
So, Mr. Biti, thank you so much for being with us, just walk us through how you are coming to terms with the death of Mr. Mugabe?
[15:40:00]
TENDAI BITI, FORMER ZIMBABWEAN FINANCE MINISTER: Well, it's a coalition of contradictions. On one hand, you've got the undisputed legacy of a
liberator, and that no one can take away from Mr. Mugabe. On the other hand, you have the challenge, and a new challenge all for the way Mugabe
governed our country.
The history of close-up, the history of human rights that include Gukurahundi where 30,000 people were killed between 1982 and 1987. Yes, of
course, the challenges of economic mismanagement, a hyper inflation that rose to 500 percent. You've got the challenge of a leader who never
transformed from being a liberator to unifier, liberator to a transformer.
And regrettably, we're still paying the price today. Twenty two months after his departure, the country is in the worst position, the country is
in a terrible position, and that's the legacy of President Mugabe.
ASHER: And so what should Mnangagwa be doing differently? Because a lot of people had hoped that when Mugabe was ousted, that it would herald a new
era in Zimbabwe economic. But as I mentioned, people are still struggling, there's an issue with food shortages. Just walk us through what Mnangagwa
should be doing.
BITI: Well, the problem -- the problem is Mnangagwa himself. The reality is that the thousands of people who marched in November of 2017, the
thousands of people who celebrated the departure of President Mugabe in November of 2017. Many of them if they could, they would actually withdraw
their much and their support because 22 months after the coup of November, 2017, the reality is there are the people that it was not OK to
remove Mugabe the man without addressing Mugabe the system.
Now, Mugabe the system is in full operation in Zimbabwe. And Mnangagwa has been so bad that it has made Mugabe look like a saint, and President Mugabe
certainly was not a saint. With the situations of massive violence, people were shot in August of 2018, people were shot in January of 2019.
Inflation is now around 700 percent, GDP growth rate will be about -7 percent in 2019.
So, people are beginning to appreciate that there was some value, some decency in Robert Mugabe which is sadly lacking with Mnangagwa and the
president, rulers of Zimbabwe.
ASHER: All right, Tendai Biti, we have to leave it there, thank you so much for sharing your thoughts with us. All right, when we come back, is
big tech heading for big trouble again? Another wave of anti-trust probes hits Silicon Valley. That's next.
(COMMERCIAL BREAK)
[15:45:00]
ASHER: A group of American states are going after Facebook, accusing it of stifling competition and putting users at risk. The coalition of eight
states is launching an anti-trust investigation into the social network, and it's not the only target for regulators. CNN has also learned that
dozens of states led by Texas are investigating whether Google is in breach of anti-trust laws as well. Brian Fung joins us live now.
So, Brian, I just want to start with Facebook, what's been investigated here?
BRIAN FUNG, CNN TECHNOLOGY REPORTER: Yes, well, this is a big new risk for Facebook here. You have a number of states looking at Google -- I'm sorry,
for Facebook and whether or not it has harmed consumers in terms of the way it's handled user data, in terms of the way that it's purchased a potential
competitor, and in terms of the way that it has had an impact on the advertising market.
Now, the New York Attorney General's office has a lot of powerful tools here that it can use. And I spoke to Tim Woo, who say Columbia University
law professor who has called for the break-up of Facebook and who has previously worked for the New York Attorney General's office.
He told me that the AG's can use federal anti-trust law against Facebook, they can depose witnesses, potentially including Mark Zuckerberg, the CEO
of Facebook, they could subpoena documents in e-mails from companies like Facebook, but also potentially other companies that may have had
communications with Facebook as well.
You know, this obviously comes as Texas, meanwhile, on Monday is expected to announce a major anti-trust investigation of Google along with several
other U.S. states and attorneys general. We're hearing that as many as two dozen or perhaps three dozen states may be involved in that effort. And it
will be looking at a lot of the same issues, and whether Google has been potentially acting anti-competitively in the advertising market.
So, all in all, Zain, this is a very big risk for Silicon Valley here as, you know, state and federal officials increase their scrutiny of the tech
industry.
ASHER: And what has Facebook specifically said in response to this investigational probe?
FUNG: Well, Facebook hasn't responded to our request for comment, but it has, you know, maintained all along that it is seeking out interactions
with regulators around the world looking to develop policies to move forward on things like how to share data equitably, how to ensure that
consumers information is protected and so on and so forth.
And also maintains that, you know, Facebook is part of a vibrant competitive eco-system of social media companies, and that's reflected in
the enormous amount of interest that users have in going, you know, to Twitter, for example and other alternative social networks.
ASHER: And beyond, I guess, the break-up of Facebook, what specifically, what else specifically are these attorney generals looking for?
FUNG: Well, typically, when these investigations begin, they're looking at specific types of conduct or behaviors that the companies may be engaged
in, that may violate the nation's anti-trust laws. And typically, you know, what they look for is evidence that perhaps, maybe prices have been
affected, particularly in advertising or whether or not consumers have experienced an increase in price or a harm to competition and the choices
that they have in the marketplace.
ASHER: Brian Fung, live for us, enjoy your weekend, thank you. When we come back, a case of sky high sabotage. An American Airlines mechanic is
accused of tinkering with vital aircraft data systems. That's next.
(COMMERCIAL BREAK)
[15:50:00]
ASHER: An American Airlines mechanic appeared in court earlier today after being arrested for allegedly trying to sabotage an airliner. Investigators
say he attempted to disable part of the plane's navigation system shortly before it took off from Miami International Airport in July with 150 people
on board. The mechanic is expected back in court on Wednesday.
CNN's Rene Marsh joins us live now. So, Rene, apparently, he had tried to sabotage this airliner. Just walk us through specifically what he's
accused of doing.
RENE MARSH, CNN AVIATION & GOVERNMENT REGULATION CORRESPONDENT: Right, so the official charge, Zain, is that he willfully damaged, destroyed,
disabled and he's also accused of wrecking an aircraft or attempting to do so. As you mentioned, he was in court, he didn't enter a plea, he'll be
back in court on Wednesday.
But the focus is on this part of the plane, it's a part of the plane's navigation system where he essentially -- he put a piece of styrofoam and
super glue to block a part of this navigation system which is essential in providing pilots with critical information like the speed of the plane, the
altitude of the plane, all pieces of data that pilots certainly need to safely fly a plane or even take off.
And when he spoke to investigators about why he did this, mind you, there were 150 people on board this plane and this plane was already rolling down
the runway, ready for takeoff when the pilots actually realized what was going on and aborted that takeoff.
So, everyone was safe, but still scary moments. He told investigators, this airline mechanic that he did this because, you know, he was upset
about the union dispute with American Airlines, they've been in back and forth, a bitter dispute here between the workers union and the airline.
And he thought that by making that issue with the plane's systems, that would essentially delay the flight. He said he didn't intend on harming
anyone, but he wanted to delay the flight so that he would then be called in to fix that issue that he created and then gain himself some overtime.
So, this was his plot, and this was his scheme to get some overtime, certainly, not an issue that is making both authorities, the airline happy
at all. We know that the airline has suspended him as this makes its way through the court, Zain.
ASHER: So, could passengers have actually been harmed because of this?
MARSH: Look, I will say this. Aircraft like this, they're extremely complex, they have a lot of redundancies. However, it has the capability
of creating confusion, busying the pilots at a point that is a critical point, take off and landings are the most crucial part of flight.
[15:55:00]
So, what you don't want is a situation where they are not receiving the correct reading from their instrument or they're busying themselves trying
to figure out what is going on and becoming distracted at a critical point of flight. So things worked out well here, yes, there are redundancies on
these planes to prevent something catastrophic.
However, you know, you don't want to introduce a situation where the pilots are just getting bad readings on their instruments. We don't know. Could
it have led to a larger issue? It's possible, but again, there are redundancies on the plane.
ASHER: So, can airlines do anything to prevent this sort of thing from happening?
MARSH: So, the insider threat, and this would certainly fall in that category as an insider threat. It's a tougher thing to battle. Congress
has said, and it is on the record saying as recently as about two years ago that airlines and airports, they do need to do a better job at assessing
this insider threat and preventing it.
One way to do that is keeping close tabs on people who might have grudges, who also might perform acts like this, criminal acts like this, not
necessarily tied to terrorism, but more of a criminal act. Just paying closer attention to the vetting of people who have access to the aircraft.
So, there certainly needs to be some work done in this area, this proves that there's this vulnerability.
ASHER: Right, Rene Marsh live for us there, thank you so much. And now there are just moments left to trade on Wall Street, about four minutes, in
fact, we'll have the final numbers in the closing bell after this.
(COMMERCIAL BREAK)
ASHER: All right, there are just moments left to trade on Wall Street. The major U.S. indices are set to close flat, the Dow is up ever so
slightly about 70 points or so, even jobs report disappointed, there's optimism over trade talks with China.
Let's look at the Dow components. Specifically, most of the companies here you can see are ending the day in the green, top performers, thank you.
Intel, Home Depot and Cisco. OK, that is QUEST MEANS BUSINESS, it's been a pleasure, I am Zain Asher in New York, "THE LEAD" with Jake Tapper" starts
right now.
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