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Quest Means Business
Secretary of State Mike Pompeo Pushes Back on Calls for State Department Officials to Be Deposed; U.K. Royals Sue Tabloid Over Letter; CNN Poll: About Half of Americans Support Impeaching President Trump. Aired 3-4p ET
Aired October 01, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:16]
PAULA NEWTON, CNN INTERNATIONAL HOST: We are lucky today that that picture right there isn't worth a thousand points, only a few hundred. It is the
final hour of trading on Wall Street as you can see here. Not a good start for the fourth quarter. Here are the reasons why.
From Washington to Wall Street, the President is under pressure. New U.S. factory numbers are the worst in a decade.
It's Mark Zuckerberg versus Elizabeth Warren. I'm sure you can't wait for this one. The Facebook founder says she is an existential threat to his
company.
And UPS drones are cleared for takeoff. I'll speak to the CEO live on this program and of course, live from right here in the world's financial
capital, New York City. It is Tuesday, October the 1st, I'm Paula Newton in for Richard Quest, and this is QUEST MEANS BUSINESS.
Okay, tonight, from Washington and now from Wall Street, the headaches mount for Donald Trump. Now, on the day the U.S. President launched a
massive advertising spree for his reelection bid, he is now wrestling with a deepening Impeachment Inquiry, and now of course, those signs of cracks
in his crowning achievement, right, the health of that all-important U.S. economy.
Now U.S. stocks are lower. As you can see, they're down better than one percent. They started that around lunchtime, haven't gotten any better.
Investors are reacting to a bleak report on American manufacturing, a key indicator, show the sector shrinking faster than at any time since the end
of the Great Recession. I don't have to remind you that's truly significant.
Mr. Trump says it's not his fault. He tweeted, as I predicted, "Jay Paul and the Federal Reserve have allowed the dollar to get so strong,
especially relative to all other currencies that are manufacturers are being negatively affected. Fed rate too high. They are their own worst
enemies. They don't have a clue. Pathetic."
Paul La Monica and Matt Egan are here from CNN Business. I know I don't want to end with pathetic and then go to you guys. You guys have been on
top of this.
PAUL LA MONICA, CNN BUSINESS REPORTER: You're very charitable.
NEWTON: But you guys have been on top of this all day long. Paul to you, what are the nuts and bolts of this? And why is this happening?
LA MONICA: I mean, I think you could argue that what's really pathetic, Paula is the fact that we're having a trade war with China. That is really
the main reason why those manufacturing numbers were so bleak. You have such little confidence now from America's Heartland.
And I don't think many companies are out there saying, that Jay Powell, if only we had rated zero or maybe even negative, then the situation would be
better.
The simple reality is we need a trade truce with China so that China starts buying our products again.
MATT EGAN, CNN BUSINESS SENIOR WRITER: And to Paul's point, I looked in the ISM survey, no one mentioned borrowing costs, no one mentioned Fed
policy. They didn't even talk about Jerome Powell's putting game, right. None of that was cited.
What was cited repeatedly was tariffs and the trade war, and that's because it's raising cost for businesses. It is raising cost for household. It's
creating just so much uncertainty and all this havoc in the supply chain. So that's why we've seen these manufacturing numbers come down so
significantly.
NEWTON: And Paul, I want to get to some other stocks in a moment that are also down for other reasons, but Matt before, I want to ask you about that
monetary policy, because of course, there have been, you know, suspicions that monetary policy can't do much more.
When I talked to people who are doing business, they're like, we're getting a commercial loan at great rates. We don't need the interest rates lower.
Is there a fear now that, look, if fiscal policy doesn't do it, monetary policy can't help anymore. There's no loaded gun there.
EGAN: That's right. I mean, the impact of these rate cuts are much less because borrowing costs are already so historically low. It helps on the
margin for housing, for autos, but lowering rates by a quarter point does nothing to reduce this uncertainty caused by the trade war and these
tariffs, right? It doesn't help at all. What they really need is a trade agreement.
Now the risk, of course, is that they don't reach an agreement to either avert these next round of tariffs or roll back the existing tariffs before
it's too late because if this manufacturing weakness spills over into consumers and the real economy, that's where you can get an actual
recession.
LA MONICA: Lower rates are going to hurt bank profit margins, too, and anyone that's trying to save money, which I'd imagine there's a decent
amount of Trump's constituency that are seniors who would love to have more money in their pocket. They're getting nothing on bank accounts or any
other savings accounts because rates are so low already.
NEWTON: I know. I'm just going to hold you right there. When we're talking about trade, let's talk about trading. A component of this today
was Charles Schwab making the move to basically have feeless trading. This is a real earthquake in this industry.
LA MONICA: Yes, this is a big move announced by Charles Schwab himself in the press release and Schwab stock is tumbling on it, so are rivals like TD
Ameritrade and E-Trade.
Charles Schwab is following the lead of another smaller company called the Interactive Brokers that already has launched a similar product with no
commissions. And then obviously, the elephant in the room is that Robin Hood and apps like that have really stolen the thunder of these big
discount brokerages with free trading no commissions on apps that are extremely popular, particularly millennials who -- they're just happy.
They don't care about stock picking, you give them an ETF. They're happy with that and not paying a fee. And that's good news.
[15:05:34]
EGAN: It is jarring to your point to see just how dramatically these stocks are down. The TD Ameritrade, I think it's on track for its worst
day since 2006.
LA MONICA: A quarter of its value getting wiped out.
EGAN: Exactly. I think investors are saying that sort of like a trade war, right, there's no big winners here from these online broker wars,
except of course the individual investor who has got to be happy right now.
LA MONICA: Yes, fear was never good. We've seen that with airlines historically.
NEWTON: I'm pretty happy about the no fee trading, though. Matt, Paul, thanks so much. Really appreciate it now.
Now, well, stocks on Wall Street fall, subpoenas are dropping all over Washington. Trump administration officials are today signaling that they
might not be so quick to comply with Democratic demands.
Secretary of State Mike Pompeo tweeted that Democrats are only trying to, in his words, intimidate and is refusing to honor requests for officials to
testify under oath.
Environmental Protection Administrator, Andrew Wheeler meantime is also rallying around the President.
(BEGIN VIDEO CLIP)
ANDREW WHEELER, ADMINISTRATOR, U.S. ENVIRONMENTAL PROTECTION ADMINISTRATION: I'm focused on the E.P.A. and what we're doing I'm sure
that the President will be vindicated that. You know, they started this process before he actually was elected, and they've been trying to figure
out a way of doing that from the very beginning, but I'm sure he will be vindicated as he has from all the other charges.
(END VIDEO CLIP)
NEWTON: Now, the Impeachment Inquiry is looking at the U.S. President's attempts once again, a reminder attempts to pressure foreign leaders to
make trouble for his political rivals, and his attempt of course to then try and cover it up.
Now at the top, of course, is Donald Trump, but these are all the President's Men: Rudy Giuliani is Donald Trump's personal lawyer. Two
Ukrainians have told CNN that while in Kiev, Giuliani pushed them to investigate Joe Biden, the Democratic frontrunner in 2020.
Now in the last hour, we've learned that Giuliani has hired a former Watergate prosecutor to defend him.
Meantime, William Barr -- remember, he is the U.S. Attorney General. At the President's request, he has reportedly been traveling around the world
probing the origins of the Russian investigation. Mr. Trump has so far press the Ukrainian President and the Australian Prime Minister to try and
help them out with that.
Meantime, Mike Pompeo as we were just discussing. He is the U.S. Secretary of State. A source tells CNN, he was in fact on the call with Ukraine's
President when Mr. Trump asked for a favor. Now, Giuliani has said that Pompeo's State Department helped him set up those meetings in Ukraine.
Meantime, we have of course, Mike Pence, he is the Vice President. When he met with the Ukrainian President last month, Pence says they talked about
U.S. aid to Ukraine.
And finally, of course, can't forget Lindsey Graham, right? A Republican senator and the President's most staunch supporter, really in the press.
He has been on cable news trying to discredit the whistleblower who brought all of this to light in the first place.
Now, our Sarah Westwood has been following all of these developments at the White House. I mean, Sarah, are a lot to keep track of here. But when we
look at, as we've been saying, the President's Men, this is really the makings of a strategy. Right? I mean, Mike Pompeo couldn't be clearer. I
will fight this inquiry tooth and nail.
SARAH WESTWOOD, CNN WHITE HOUSE REPORTER: That's right. A defiant response today from Secretary of State Mike Pompeo facing that
congressional subpoena from three different congressional committees the deadline of which is Friday.
So he only have three days if he were to comply on the timeline that House Democrats want. But he raised several objections to that, one of them
being the fact that House Democrats don't want witnesses to be accompanied necessarily by State Department lawyers or White House lawyers. They want
to have candid testimony from the five current and former officials that House Democrats want to depose.
But more broadly, this just fits a pattern that the White House has engaged in since House Democrats have really begun scrutinizing the actions of this
administration over the past year.
They've stonewalled. They've tried to drag this process out as much as possible. It's a very complicated web of everything going on, but is at
the center of this Impeachment Inquiry. But essentially what you have are all of the people that you listed: Rudy Giuliani, Attorney General Bill
Barr, and Secretary of State Mike Pompeo using positions of power to pursue the President's political interests. That's what they are being accused
of. It's at the heart of this Impeachment Inquiry.
House Democrats have said, if Pompeo does not comply with their subpoena, they will consider that obstruction under the Impeachment Inquiry. So that
is, of course the risk that this White House runs if they continue this stonewalling strategy, that they could contribute to something that could
go in eventual Articles of Impeachment were those to be brought -- Paula.
NEWTON: And again, this obviously could ensnare a lot of different courts in terms of if it becomes a legal battle. But whether or not this will
become a campaign battle, we already know for sure that it will be, one way or the other.
[15:10:10]
NEWTON: Is there any sense of how the White House, those around him or his campaign are planning to fight this in terms of the President?
WESTWOOD: Well, Paula, CNN has reported that those around the President don't believe that Trump is necessarily taking it seriously enough that he
necessarily recognizes the peril that he is in politically with this Impeachment Inquiry.
Sources tell CNN that he has been warned by his aides and advisers that at this point, impeachment is not just possible, but likely and that he should
prepare for it. But also the White House doesn't seem to have an overarching strategy to defend the President against impeachment.
There's not plans at this moment to bring in additional lawyers. The President has dismissed suggestions that he should hire an impeachment
response team. He is expected to be briefed this week on an impeachment strategy from his aides.
But so far, Paula, we've not seen much in the way of an overarching strategy that's left a lot of the President's allies to sort of fend for
themselves, and a lot of that's why we've seen a lot of different defenses from Trump and those around him.
NEWTON: Yes. And if you wonder if the President doesn't believe that in the end is the best strategy at this point. Sarah Westwood live from the
White House. Appreciate it.
Now, of course, we have been talking about Ukraine, right, and the fact that it is at the center of all of this.
CNN's Chief International Correspondent, Clarissa Ward is in Kiev and was able to speak to the Ukrainian President just a little while ago.
Volodymyr Zelensky told her he can't be pressured.
(BEGIN VIDEOTAPE)
CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: Did you feel pressure from President Trump to investigate the Biden's in order to
unfreeze military?
VOLODYMYR ZELENSKY, UKRAINIAN PRESIDENT (through translator): I understood. I'd like to tell you that I never feel pressure. I have lots
of people who would like to put pressure on me here and abroad. But I'm the President of an independent Ukraine. And I'd like to think and my
actions suggest no one can put pressure on me.
(END VIDEO CLIP)
NEWTON: Clarissa Ward now joins us live from Kiev. Clarissa, thanks for being with us. I know you had a chance to speak to him directly. You
know, what he is saying is very easy to say, of course, but very difficult to prove.
In your time there on the ground, how have you been able to ascertain exactly what's at the heart of this. And you know, how rattled is this new
President? We have to point out, he is a novice.
WARD: Well, I think Paula, he is definitely very uncomfortable with the situation. I mean, he's barely been inaugurated and he is already
inheriting this sort of excruciating for Ukraine political maelstrom.
He is clearly being very, very careful in how he articulates his position and Ukraine's position on this, even in his answer to me, he says, no one
can put pressure on me.
He doesn't say no one put any pressure on me, which will be much more declarative and much more definitive in terms of answering the question as
to whether Trump and his various surrogates were indeed putting pressure on President Zelensky.
But in all of this, he's in a tough position, right, because Ukraine is very much reliant on the larges of the U.S., $400 million in military aid
alone this year, Paula, and so they can't be seen to be picking sides, Democrat or Republican. They don't know who's going to win the next
election in 2020. And so they need to be at least on the surface impartial.
And they're desperately hoping that this whole thing will blow over, but as you and I both know, and most of our viewers by now, that's not looking
very likely -- Paula.
NEWTON: No. And they might have to be much more strategic the way they play this. The question I have for you, is this. Everybody is always
looking for the proverbial smoking gun when it comes to any one of these inquiries. Is it to be found in Ukraine?
WARD: Well, this is another interesting question because once you really start to pull on the threads here of all the different various
investigations that will need to be carried out to try to get to the bottom of this, you realize that there are many different countries connected in
different ways with allegations of money laundering, allegations of impropriety, allegations of embezzlement.
And whoever it is who becomes responsible for really trying to get to the bottom of all of this web is going to have a tough time on their hands
because it is very difficult to get information here. Not a lot of clarity and transparency, and obviously all of it so charged because of the very
tense political situation in the U.S. -- Paula.
NEWTON: And there in a nutshell is what the Democratic committees are up against on Capitol Hill and elsewhere. Clarissa Ward, thanks so much.
Really appreciate you being in Kiev for us.
Now one party, two systems. Lots of problems as China's Communist State celebrates its 70th birthday, violence breaks out across Hong Kong.
And cleared for takeoff, UPS gets the first of its kind approval to build a drone airline. The CEO tells me where they're flying next.
(COMMERCIAL BREAK)
[15:17:35]
NEWTON: Violent protests rocked Hong Kong after a day of celebration in Beijing marking the 70th Anniversary of the People's Republic of China.
Now, fires were set, teargas was fired and a teenager was shot and injured by a police officer with a live ammunition and that is significant. The
officer fired after the team swung a metal rod at his arm. It is thought to be the first time live bullets have been used by police against
demonstrators.
Now, CNN reporters saw chaotic scenes unfolding through the night. Our Anna Coren was in the middle of it.
(BEGIN VIDEOTAPE)
ANNA COREN, CNN INTERNATIONAL CORRESPONDENT: We were sitting on the ground when the police fired teargas at everybody else who was standing here and
sitting here as well. It was just preposterous.
Firing again. Firing again. Firing again over at the media. I mean, they are firing teargas at the media.
(END VIDEO CLIP)
NEWTON: Jamie Metzl is Senior Fellow at the Atlantic Council and he joins me now, and of course a disturbing scene. Again, more escalation in Hong
Kong. I want to get first to the celebration, and you pointed out and others have pointed out that this celebration went on in the middle of
Tiananmen Square. We are at 30 years after that massacre.
The President, President Trump congratulated President Xi, some Republicans took a different tone and said clearly that, you know, they're thinking
about the victims of this communist regime.
When it's taken all in sum, what can be said about the last 70 years and significantly how China chose to mark it today having that big military
parade?
JAMIE METZL, SENIOR FELLOW, ATLANTIC COUNCIL: So when you tell the story of China over the last 70 years, there's certainly a good story to be told;
850 million people have been brought up from abject poverty. China has become a wealthy, powerful country and has actually done a lot not just to
develop China, but to help other parts of the world develop and that's great and it should be recognized.
But we also need to recognize that this regime is responsible for unbelievable brutality, the death or murder of 45 million Chinese people.
They have these 250,000 troops marching in Tiananmen Square, they should have 45 million dead souls marching behind them because that's the history
of the Chinese Communist Party. The people who were massacred in Tiananmen Square.
And there's certainly a role for China and the Chinese government, the Chinese Communist Party even to play in this world. But if they are not
coming clean about their history, if they are a force of doing harm, not just to the Chinese people, but undermining rule of law and international
order, then I think we need to be honest that this isn't just a day of celebration, we need to balance things that deserve to be celebrated and
things that deserve to be roundly condemned.
NEWTON: And yet you, as being involved in the Obama administration, certainly President Obama even sending his family over there for a term
offensive as it were, kind of thought, look, it is better to engage with them on a different level. It didn't work, Jamie, why not?
METZL: So we have to engage with China. China is too big and too important. There are some people who think the United States can just
completely decoupled from China. We can't decouple from them. And they can't decouple from us. That's their history. And that's our history.
Certainly, the Obama administration -- I was in the Clinton administration, the Obama administration was absolutely wrong, to say that what China
wanted was just more respect, because when the Obama -- at the beginning of the Obama administration, when they said, oh, we are just going to hug
China, the Chinese saw that as weakness.
China has a different view of the world than the United States has had. The world exists on the foundation of the world that our parents and
grandparents built from the ashes of the Second World War and that has provided peace, security and stability for a big chunk of the world
population.
China has a different vision of the future and good on them for fighting for the kind of world that at least the Communist Party wants. But that's
not the kind of world that we want to live in.
So rather than celebrating the Chinese Communist Party, President Trump should say, here are our standards. Here's what we, the United States and
our allies and friends think the world ought to look like, and we welcome you, China to join us in that endeavor.
NEWTON: And that brings us squarely to Hong Kong. President Xi in fact said we will maintain the one country two systems. How optimistic are you
given the escalation that we've seen and really know an insight to these protests.
METZL: Yes, it's meaningless for President Xi to say that one country two systems still stands when the Chinese Communist Party is destroying the
foundations of that. They're destroying the rule of law. They're destroying human rights.
There's just no way that any one can say that one country two systems is still viable, and that's what the protesters in Hong Kong are standing up
for. They know what happens if you are a minority group in China, because they've seen the Tibetans, they've seen the Uyghurs, they've seen the
decimation of even the people of Inner Mongolia, who aren't even talked about and that's what's going to happen to Hong Kong.
And they have this window, who knows how long it is, when they can stand up for their rights and that's what they're doing.
NEWTON: An extraordinary the ages of those protesters that you see in the street, many of them just 17, 18, 19 years old. Jamie, thanks so much
again for coming on the show. I am sure we will to talk about it.
Now on to UPS, which has now approval to build a drone airline. Flight Forward, a division of the delivery giant now has official certification to
fly as many drones as it wants, including -- get this -- at night. And with cargo over 25 kilograms, about 55 pounds. And it's the first full
certification in the U.S.
UPS is already flying drones at a hospital campus in North Carolina, and does in fact, of course plan to expand.
David Abney is the CEO of UPS. He joins me now from Atlanta, and thanks for being with us. We've heard a lot of promises about the potential of
drones. Will this be transformative for UPS and the sector and if so, when? Like next week?
DAVID ABNEY, CEO, UPS: Paula, this is transformative not only for UPS, but for customers. And you do hear a lot of noise, but I'm telling you that
this is the first certification by the F.A.A. under Part 135. So it's full certification, which means multiple drones, multiple locations, multiple
customers, multiple operators, so we can operate anywhere in the nation that drones are authorized to operate. So this is good news.
And it's initially good news for our healthcare customers, because we're going to be able to make very urgent shipments and be able to move
specimens and vaccines in a very quick manner. So we're real excited about this.
NEWTON: Absolutely. And how long do you think it will be before this is actually rolled out in a more expansive way?
ABNEY: We are immediately starting. As soon as we got authorization, we flew our first Beyond Line of Sight Flight last Friday, and that is just
the beginning and we are already flying in the WakeMed Medical Center that you've referred to. We will see dozens of similar healthcare campus sites
and they will build on top each other.
[15:25:02]
ABNEY: So it's one thing to be the first to get the certification. We're also going to be first to scale and scale out a meaningful way.
NEWTON: Interesting. So I should look to the sky very soon for that package?
ABNEY: That is absolutely right. And we will be there and you did point out correctly that this is not just five pounds or less. This can go up to
over 55 pounds, and a little secret, these drones do not sleep, so we can deliver at all times of the day and night.
So it just offers our customers a wide variety of services that they wouldn't have had.
NEWTON: And as I said, going on with an industry that continues to transform and has to transform, I mean, FedEx, one of your rivals, it has
lowered guidance. Is that a possibility for UPS? We've just been discussing on the show, of course, the slower growth, the terrible
manufacturing data today in the United States, how concerned are you?
ABNEY: We are just completing our quarter and our earnings call will be in a few weeks. Obviously, I can't talk about the recent quarter. I can tell
you that the U.S. economy has held up strong from a domestic standpoint, it is driven by the consumer and we're happy with that end of it.
And yes, there are headwinds, but there's also tailwinds. And what's important for us is to focus on what we can control, and how we can provide
value to our customers, how we can control our costs. And that has been and will continue to be our focus, which is execution.
NEWTON: And yet there are a lot of problems even underlying global growth at this point in time and that's whether it's Asia or Europe. I mean, how
important do you think it is, just in general for the health of the U.S. economy and other economies to actually get some of the trade irritants out
of the way?
ABNEY: Well, we would like to see a trade agreement between China and the U.S. that addresses the concerns, but also allows each country to build on
a win-win relationship.
And obviously, we would like to see Brexit get settled and give businesses continuity and where they know what to expect that is coming up. Again,
though, sometimes what's considered challenges can also be opportunities. And with this trade follows change, it creates opportunities for us to fire
our planes in different trade lanes and different locations. So we're going to focus on the opportunities and what we can do for our customers.
NEWTON: Well, in a few weeks, we'll wait for the results of that third quarter and of course, you're all important forward guidance. Thanks so
much for being with us today. Appreciate it.
ABNEY: All right, thank you, Paula.
NEWTON: Now, while Democrats spar with Donald Trump on Capitol Hill, the President is taking his message straight to the people with an advertising
blitz on Facebook.
(COMMERCIAL BREAK)
[15:30:00]
PAULA NEWTON, HOST, QUEST MEANS BUSINESS: Hello, I'm Paula Newton, and there's more QUEST MEANS BUSINESS in a moment. When Twitter faced calls to
suspend Donald Trump as he ramps up online ads against impeachment.
And the CEO of Blackstone Steven Schwarzman tells us why buying a company is a lot like shooting a basketball. Before that though, the headlines at
this hour. Ukrainian President Volodymyr Zelensky says no one could pressure him to investigate Joe Biden or his son, Hunter.
He was responding to reporter's question about that controversial July call in which President Trump urged Zelensky to investigate the Bidens. The
Ukrainian president insists he is the leader of an independent Ukraine.
U.S. Secretary of State Mike Pompeo is pushing back on a request from House Democrats to depose State Department officials in the Ukrainian inquiry as
early as this week. Pompeo says that's, quote, "not feasible" and is accusing Democrats of trying to intimidate and bully his staff.
Police have a suspect in custody after a stabbing left one person dead and nine injured at a school in eastern Finland. Report say the man attacked
students and staff with a sword. Police would only say he used a bladed weapon. The suspect, a Finnish native was wounded in the altercation with
police.
Prince Harry and his wife Meghan are suing a British tabloid over a private letter it published. The royals allege it was not only published
illegally, but that it was also edited selectively to hide, quote "lies". The paper had told about the Duchess so far, there's no response from that
tabloid.
OK, people are weighing in on this impeachment inquiry. Fresh CNN polling shows that public support for removing Donald Trump from the White House is
in fact rising. About half, 45 -- 47 percent pardon me, support impeaching the president, that's up from 41 percent who felt that way in May. Now, it
matches the high point for impeachment in this poll.
The same number said he should be impeached -- he should have been impeached back in September 2018. Now, the survey shows rising support for
impeachment not from Democrats, but this is significant, among independents and Republicans. Now, the share of independents who want impeachment is up
11 points, and 14 percent of those who describe themselves as Republicans now believe he should be impeached.
Meanwhile, Donald Trump has kicked up a massive campaign on Facebook, running ads, pushing back against impeachment. Donie O'Sullivan is here,
you've been taking a look at this along with looking at some research that's being done. You know, my question to this is why not go to
Facebook? It certainly has worked with him before from that digital campaign for 2016. But who is he speaking to? Is he just speaking to his
base?
DONIE O'SULLIVAN, CNN BUSINESS REPORTER: It's a combination of both, Paula. So, which Facebook ads you can target the folks who already follow
you and like you. But you can also sort of push your content, push your posts in front of people who don't follow you. So, a lot of Trump
supporters, a lot of people who do not follow Trump are seeing these ads.
One expert I spoke to from NYU university here in New York said yesterday that a lot of what the Trump campaign is doing with these anti-impeachment
ads is sort of a way of actually taking the temperature of their current supporters as well.
So, they're asking them to sign up to new initiatives, he's calling the anti-impeachment defense force. So, it's a good way to also see as well as
sort of recruiting new people in, new supporters, to see what is the level of support and passion about a particular topic among your supporter base.
NEWTON: Yes, and it's interesting because the president does have a lot of leverage on that platform. And now the Democrats have a problem though
with some of those things that Facebook has been doing or not doing, shall we say in the last few months.
[15:35:00]
O'SULLIVAN: Yes, I mean, President Trump and the Trump campaign are masters of social media. There's no campaign, no Democratic candidate that
can handle social media --
NEWTON: Wow --
O'SULLIVAN: Quite the way that the Trump campaign has. As we said last week alone, they ran 1,800 ads on Facebook, spent up to $2 million on anti-
impeachment ads. Now, we all remember back in 2016, the big problems Facebook had with misinformation. Facebook has since hired independent
fact-checkers to when there's something that is false on the platform, it gets marked as false.
Facebook doesn't remove it, but it does down-rank it, so it's seen by less people. That accounts for news articles, that accounts for posts, blog
posts, but it does not count for politicians. So, Nick Clegg; the former deputy Prime Minister of the United Kingdom who now works for Facebook
confirmed in a speech last week, saying that we're not going to fact-check what candidates say because we don't think we should have that power
essentially.
The DNC came out with a statement today to CNN, really taking issue with Facebook's policy here. They say Trump does not have a good reputation
with the truth, and if you're going to allow him to spend millions of dollars, the Trump campaign has spent $20 million on Facebook ads since May
of 2018, you've got to fact-check them. You can't be paid to spread lies.
NEWTON: Yes, and that would certainly be a battle that will continue through this 2020 campaign. I want you to listen now, Donie, to Kamala
Harris telling Anderson Cooper about what she thinks should be done with Donald Trump on another social media platform. Take a listen.
(BEGIN VIDEO CLIP)
SEN. KAMALA HARRIS (D-CA), PRESIDENTIAL CANDIDATE: And his Twitter account should be suspended. I think there's plenty of now, evidence to suggest
that he is irresponsible with his words in a way that could result in harm to other people. And so, the privilege of using those words in that way
should probably be taken from him.
(END VIDEO CLIP)
NEWTON: Donie, will that ever happen?
O'SULLIVAN: No, I mean, I think this is a question -- the same with what the DNC is asking Facebook to do. The DNC is asking Facebook to fact-check
politicians' posts and to make a decision whether those posts should be allowed to stay up on the platform or not. Same with Harris, she is
saying, you guys should shut down the account of the president of the United States.
We have heard the past two years -- at the same time, I mean, there are Democrats who say these companies are too powerful and need to be broken
up. So, we're always hearing how there's too much power in Silicon Valley. Yet, what Democrats are doing is trying to even give them more power, and
that is what companies like Facebook and Twitter are saying to push back.
They're saying we don't believe we should be responsible for making these decisions. Now, some people might say that's a cop-out, but others will
say, you know, these -- this is the modern public square. They are private companies, they can do whatever they want with their platforms, but they're
essentially the new town's square.
And if we're, you know, pushing out the voices of the president of the United States from that, that could be a problem.
NEWTON: Yes, and apparently, according to Nick Clegg, they're also, you know, you're entitled to your own facts as well as far as he's concerned.
Just my little -- here on that. Donie, thanks for coming because we're going to continue to discuss this, it will be very important with these
platforms going forward in 2020, appreciate it.
Mark Zuckerberg criticizes presidential candidate Elizabeth Warren in leaked audio from an internal meeting. The Facebook CEO vows to go to the
mat and fight if his company is threatened.
(COMMERCIAL BREAK)
[15:40:00]
NEWTON: Facebook's CEO Mark Zuckerberg is prepared to sue the federal government if a future Democratic president tries to break up his company.
Now, according to leaked audio posted by "The Verge". Zuckerberg admitted to employees that an Elizabeth Warren presidency would in his words, suck.
Remember, those are his words, not mine for his company. Senator Warren tweeted a response, slamming the company for fumbling its responsibility to
protect the U.S. democracy. And she also quoted the word "suck" again as you can see there. God, I hate that word, Casey Newton is Silicon Valley
editor at "The Verge", no relation. He broke this story and joins me now.
Good on you for actually getting this audio so that we can hear him in his own words which is important. And yet, what was your take-away from all of
it?
CASEY NEWTON, SILICON VALLEY EDITOR, THE VERGE: Well, you know, as noteworthy as Mark Zuckerberg's comments are in this piece, I was really
struck by the questions that the employees were asking. If you sort of watch, you know, employee after employee going up to the microphone with a
question.
What you really take away from it is the deep unease that is being felt across the company right now as they face federal investigation, potential
break-ups, competition, a declining reputation and more. So, I was just really struck at how much that seems to have sunken in with rank-and-file
Facebook employees.
NEWTON: It's interesting in terms of the concern filtering out to Facebook. When you look at that battle between Elizabeth Warren and
Facebook, are you surprised really about how either side is holding to their corners right now?
NEWTON: I'd say they're both behaving about as you would expect, right? Senator Warren has presented a pretty bold plan to break up big tech,
right? It could require Facebook to spin off Instagram and WhatsApp for example. And you can imagine why Mark Zuckerberg is going to do everything
in his power to prevent that from happening.
So, I think that all things considered, Zuckerberg was pretty diplomatic in his response. But he's also signaling that Facebook is not going to roll
over and let a Warren administration do whatever it wants to Facebook.
NEWTON: And yet, going forward, what can Facebook do in this environment over the next year? You know, the spotlight is on them and will be,
especially through the next 14 months as we lead up to that 2020 campaign. It seems to me and even being off the cuff. And I know it's a town hall,
he wants to be honest.
But then he didn't do himself any favors in that bracket if he was trying to moderate Elizabeth Warren's position or any other Democrat.
NEWTON: Yes, I think that that's a fair point to make. I think that, you know, what Facebook can do is to try a number of different things to build
trust. We saw Zuckerberg go to D.C. recently to meet with lawmakers to try to make the case to them in person that Facebook is better off when it's
all together and not broken up.
And I think you're going to see them do a lot to promote the work they're doing around, protecting the platform from election interference in 2020,
for example. But you know, at the end of the day, it's a large platform, it has proven very hard to control, and that's one reason why Senator
Warren and others are so intent on breaking it up.
NEWTON: If we try and really look at the tea leaves or where regulation comes in, OK, it may not be as drastic as what Elizabeth Warren is doing.
But you know, "The New York Times" had a great investigation this week on - - you know, unfortunately, the fact that, you know, a pedophilia is also on Facebook and now an encrypted Facebook Messenger as well.
At what point do they say to themselves, look, no one wants this, it doesn't matter if you're Elizabeth Warren or Facebook. How do we get to
that regulatory solution that is going to make everyone happy?
NEWTON: Oh, well, I think that probably, we're not going to get to a point where everyone is happy. But I think there's probably a good happy medium
in there somewhere, right? A world in which Facebook is truly accountable for some of the bad things that happen as a result of the platform that it
has built. I think we can get there.
And I think we can get there by the way in a way that still leaves Facebook a big and profitable and successful company. So, I think there's a middle
path there. The details are heavy technical.
[15:45:00]
Sometimes, you know, Congress bungles those technical details and we wind up with bad law. So, it's going to be very tricky to sort this all out,
but you know, I'm an optimist, I think we can find some sort of solution.
NEWTON: Well, and apparently, Europe will find it for everyone if they don't get to it soon enough. Casey, thanks so much, really appreciate you
bringing this story to us.
NEWTON: My pleasure.
NEWTON: Now, he is one of the biggest names on Wall Street. Next, the CEO of Blackstone Steven Schwarzman tells us his rules for investing on what is
-- as you can see there, still a very miserable day for the market.
(COMMERCIAL BREAK)
NEWTON: The CEO of Blackstone says he sees himself as more of an entrepreneur than an executive. Steven Schwarzman has more than a half
trillion dollars of assets under management, and now, he's hoping to share his success. His new book is called "What It Takes: Lessons in the Pursuit
of Excellence".
He told Richard why buying and selling companies is a lot different from trading stocks.
(BEGIN VIDEO CLIP)
STEVEN SCHWARZMAN, CHIEF EXECUTIVE OFFICER, BLACKSTONE: You don't buy anything unless you can accelerate the growth and have a special plan. And
this is not like buying a stock. Buying a stock, you buy a stock, it goes up, it goes down. Before we buy anything, we get what's called technically
due diligence.
We get the opportunity to look at the entire company and all of its information. And we formalize a plan and then we buy it.
RICHARD QUEST, CNN: Do you still get a frisson of excitement when you see a company that you can perhaps -- other people are a bit down on? But you
think you can do -- does the stomach and the butterflies start going again?
SCHWARZMAN: Well, what happens is then you know you have a winner because you --
QUEST: But you still get excited?
SCHWARZMAN: Well, it's sort of like playing basketball, and somebody throws you a ball and you're open for a shot. And it's right when you let
the ball go, you can tell the arc and you know it's going to go in. How does that make you feel? It makes you feel good.
QUEST: You say you can learn to be a leader, but you can't learn to be an entrepreneur. You can learn to be an executive.
SCHWARZMAN: That's right.
QUEST: Which are you?
SCHWARZMAN: I'm more an entrepreneur, but I've learned I had to be manager and an executive. So, for me, that was learning experience.
[15:50:00]
The intuitive part of starting things, seeing opportunity, getting people excited, knowing where to go, I've done that since I was really sort of a
kid.
QUEST: You, how you did -- I mean, you wanted your father to expand his successful linens store into some chain to rival Sears.
SCHWARZMAN: Yes, well, I --
QUEST: And he told you in no uncertain terms.
SCHWARZMAN: Yes, well, he wasn't that authoritative. He's very polite and he said Steve, I don't want to do that. And I said dad, why don't you want
to do it? I -- you know, I think we could be really successful. He said, I just don't want to do it.
So, I started limiting my ambitions from going nationwide to going all over Pennsylvania which is where we were from, and he didn't want to do that,
and I thought maybe he could expand over Philadelphia, he didn't want to do that. So, I finally said dad, why don't you want to do this? It's going to
work. And he said, I'm happy. I'm happy at the size we are.
I have enough money to own a house, to have two cars and to send you and your brothers to college. He said I don't want any more.
QUEST: Is that the lesson you've taken from your upbringing? To be happy is -- has a value.
SCHWARZMAN: Well, yes, I'm quite happy, but I still like expanding things like that. So, you can be a combination of happy, but also liking
challenges.
QUEST: We do a lot of work on this program looking at CEOs as the moral compass --
SCHWARZMAN: Yes --
QUEST: These days.
SCHWARZMAN: Yes.
QUEST: In the absence of leadership elsewhere, which I think we could probably --
SCHWARZMAN: Right --
QUEST: Agree there is, CEOs are having to take up the slack. Now, whether it's bathrooms and there's gender bathrooms in the Carolinas --
SCHWARZMAN: Right --
QUEST: Whether it's new laws in Texas, whether -- whatever it might be.
SCHWARZMAN: Right --
QUEST: CEOs, the climate issue, you can see the way governments pulled back. Is the CEO equipped to be the moral compass?
SCHWARZMAN: Well, that wasn't the historical job --
QUEST: Exactly --
SCHWARZMAN: Of the CEO. In the world we're living in, which is where everything is inter-related, it's pretty clear that you have to think about
these types of things. And you start out, you know, like a doctor, the credo is, do no harm. You know, you're not in the business of inflicting
harm on constituencies. And that, if you can, help these constituencies, that's a good thing.
QUEST: But you see it as part of your role as CEO. It's to get your hands dirty in LGBT issues, in choice issues and all the things that will come up
from your employees?
SCHWARZMAN: Well, that would be, Richard, like being a senator. You know, where you deal with every issue. I think as the CEO, you have to have a
thoughtful point of view on every issue. Whether you can act on every issue would be very unusual because you have another job as well.
So, I think, you know, for example, I was at, you know, a business roundtable event, I think it was like 2014 or 2013. And Mrs. Obama came
and talked about military veterans in the United States. And that about 20 of them a day were committing suicide, not in combat, but when they got
back.
And I sat there and I couldn't believe that 20 people a day who survived combat killed themselves because of high unemployment and other factors.
And she was asking for people to volunteer to hire veterans. So, you know, I got back on the plane, I got to New York and I usually have group
decision-making at the firm, and I was just in a car outside my apartment, and I said you know what?
We're going to hire 50,000 veterans. And I just dictated a note to her. And not only have we hired 50,000, that was a five-year commitment. We did
it in four, and we committed for another 50,000. Now, why did we do that? Because it was the moral thing to do. And so, one of the things about
being the CEO is you can't express yourself on every issue.
But you know, periodically, there are issues that you think are really important and you prioritize them. And it's almost like teaching your own
people values. I think that's important.
QUEST: On that final note, I'm going to ask you to choose one of your 25 rules for work and life.
(LAUGHTER)
Now, there's 25 of them, and which one would you choose?
[15:55:00]
SCHWARZMAN: Well, I would probably choose --
QUEST: You could have a refresher if you need.
SCHWARZMAN: Yes, well, there are a lot of them. But you know, I think one of the things -- and you know, it's more particular to me, but I think it
works for everybody, is if you're going to pick something to do in life, it should be worthy, it should be pretty grand in concept, it should be
something that's pretty unique.
Something that excites you to the point that you're willing to dedicate, you know, your life to making that vision, which I call a worthy fantasy,
come true. And you don't have to be the head of a company. You could be somebody who is working with a nonprofit, a for-profit in your area.
You can have your own small business, you can have a medium-sized business. It's something where you say I think I can create something that's unusual.
Something that appeals to me sufficiently, I can be excited about this every day. And it will find its way, it will change society. I think
that's a great way to conceptualize what you do well with your time.
(END VIDEO CLIP)
NEWTON: Steven Schwarzman there speaking to Richard Quest. There are just moments left to trade on Wall Street, it's not being a good day, we will
sum up the numbers for you right after this.
(COMMERCIAL BREAK)
NEWTON: OK, we want to tell you about something you don't want to miss on Wednesday, she is one of the most powerful women in the world, how
Christine Lagarde is about to take over her most important role yet. Richard Quest sits down with Christine Lagarde as she prepares to take over
as president of the European Central Bank.
You can see that she's going to be in the crosshairs, you can see that full interview on QUEST MEANS BUSINESS tomorrow night 8:00 p.m. London time,
9:00 p.m. in Berlin, and Richard, yes, will be back. And that is QUEST MEANS BUSINESS for today, as we're saying it was a bit of a tough day on
the markets as you can see there.
We are basically at session lows or close to on all three indices. Again, the markets reacting mainly to some pretty poor manufacturing data out of
the United States, the lowest read in about a decade, and of course we still have those concerns to do with the U.S.-China trade deal. Although,
a reminder that they are getting back to talks next week and people are still hoping for some kind of an outcome. And that brings us to Jake
Tapper and "THE LEAD".
END
