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Quest Means Business
Donald Trump Is Backpedaling On A U.S. Pledge To Roll Back Tariffs On China; Michael Bloomberg Prepares To Throw His Hat Into The Democratic Presidential Race; House Democrats Release More Key Testimony In The Impeachment Inquiry Against President Trump; Final Funerals Held For Family Ambushed Near U.S.-Mexico Border; Five People Killed In 5.9 Magnitude Earthquake In Iran; Parts Of England Hit By Torrential Rain And Flooding. Aired 3-4p ET
Aired November 08, 2019 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[15:00:20]
RICHARD QUEST, CNN INTERNATIONAL HOST: Closing bell on Wall Street in 60 minutes from now, the end of what an interesting and exciting week with the
records, and then not. Today is no record, down 54. Solidly down and there are strong reasons for why the market has fallen at key points
throughout the course of the day. We'll get to that because those are the markets and these are the reason why.
Donald Trump is backpedaling on a U.S. pledge to roll back tariffs on China. He says he is very happy to keep them in place.
Meanwhile, Michael Bloomberg prepares to throw his hat into the Democratic presidential race -- a late contender. And now opponents ask whether
billionaires like him should exist at all.
And Bob Iger's big bet. It is the CEO's status company's future and his legacy on their new streaming service.
We are live in world's financial capital -- live -- picture that and a stunning day ahead the weekend in New York. It is Friday. It is November
8. I am Richard Quest and of course, I mean business.
Good evening. We begin tonight with a week of trade optimism coming to a somewhat bitter end. President Trump has struck a defiant tone on tariffs
against China and the idea that they'll be lifted. He says he is content to leave them exactly where they are, even as U.S. and Chinese negotiators
are working on the deal Phase 1, which would lift the tariffs.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Well, they'd like to have a roll back. I haven't agreed to anything. China would like to get somewhat
of a roll back, not a complete roll back, because they know I won't do it.
(END VIDEO CLIP)
QUEST: They know I won't do it and when he said those words the market went down. You can see the stock goes to session lows. The Dow is still
off more than nearly 50 points or so.
Kristen Holmes is from the White House. So is this just negotiating? Is this just part of the strategy of keep them guessing? Because, you know,
we led our program last night on the fact that there was every possibility those tariffs would be lifted, or at least rolled back if Phase 1 was
signed?
KRISTEN HOLMES, CNN U.S. CORRESPONDENT: Well, Richard, the trade war continues today after those comments, and essentially President Trump was
dismissing these claims by Chinese officials that he or the administration had agreed to any of them these rollbacks. It certainly caused a damper.
A lot of people who had a lot of optimism about a trade deal being reached are starting to believe that perhaps they were a little too optimistic.
And of course, you said they saw that in the stock market as it started to decline there. And again, this has been going back and forth, back and
forth. If this is President Trump's tactics, we know that in the past, it certainly hasn't worked when it comes to the stock market.
As soon as he starts pulling back on any kind of trade deal, we see the market go down further and further. But right now, you know, President
Trump continues to say the same thing, which is, they don't really -- excuse me, we don't need the deal as much as they need the deal. So I'm
content to just let it wait out.
But I want to just mark here, we have talked to a lot of farmers across the country. You know, a lot of these tariffs have been put on these farm
goods and it's been very hard for them.
QUEST: But at what point does this backwarding and forwarding become risky with the election next year? At some point, if traditional wisdom is to be
believed, he is going to try and get a deal so he doesn't go into an election, sort of on the back foot on tariffs?
HOLMES: Well, absolutely, that's going to be the goal of the White House. The administration has said that, but the big question is whether or not he
can actually get it done. And as you said, this back and forth back and forth with China, these setbacks that we then end up seeing in the market,
this does not help the cause of these teams who are on the ground trying to get this done.
So even though there are, you know, all of these different components here, yes, an election is not something he wants to go into without a deal made.
But can he actually get that done?
And right now, both sides are holding strong and this really did not help particularly when you had these Chinese officials saying positively that
they were going to have these rollbacks in tariffs and that that meant things were going in a good direction. This really shuts that all down.
QUEST: Good to see you. Have a good weekend. Thank you, Kristen from the White House. Now Donald Trump is shrugging off a potential challenge from
a familiar foe, the billionaire businessman and former New York City Mayor Michael Bloomberg. He is preparing to enter the race for U.S. President.
[15:05:07]
QUEST: He has ruled out to run in March. Now, however, he says he is thinking about it and his entry would shake up a Democratic field in which
the centrist candidates seem to be lagging behind. Donald Trump says he is not worried.
(BEGIN VIDEO CLIP)
TRUMP: I've known Michael Bloomberg for a long time. If you go back early on, he had -- he said a lot of great things about Trump. But I know
Michael, he became just a nothing. He was really a nothing. He is not going to do well, but I think it is going to hurt Biden actually. But he
doesn't have the magic to do well. Little Michael will fail.
(END VIDEO CLIP)
QUEST: Little Michael, who has done nothing. He is owner by the way, just to remind you of one of the largest financial news services and trading
platforms in the world and is comfortably worth more than $40 billion or $50 billion. Little Michael has done nothing.
Harry Enten, since we're all talking about ourselves in the third person, Harry Enter is the data guru. Thank you for joining QUEST.
HARRY ENTEN, CNN POLITICS SENIOR WRITER AND ANALYST: My pleasure, sir.
QUEST: And tell me about Bloomberg entering the race. Does it change the dynamic?
ENTEN: Look, I don't necessarily think so at least in terms of the polling. I think the real question is whether or not the donors who have
been abandoning Biden or holding back their money -- remember, Joe Biden didn't raise that much money compared to Elizabeth Warren and Bernie
Sanders last quarter, whether or not now they're really going to hold back and of course, you need money to run a presidential campaign. So I think
that's the real question as to whether or not how that would affect this race.
QUEST: Right, but of course, Bloomberg doesn't need money.
ENTEN: No.
QUEST: He is worth over $50 billion. If he uses a fraction of it, he is self-funded.
ENTEN: That's exactly right. It's more about the donors who Biden needs who also like Michael Bloomberg, but in terms of actual voter support.
Look, Bloomberg has been pulling generally two to three percent nationally before he decided not to get back in there. I'm just not necessarily sure
he'll pull a lot of support from Biden's. It's about the donor class.
QUEST: He was popular in New York. He managed to do more terms and change the rules.
ENTEN: Yes.
QUEST: He got three terms in New York, but does it play well in the rest of the country? That brash, New York in your face, tell it like it is.
They've had Donald Trump do that for four years. Why do they want another?
ENTEN: Well, that's I think exactly the question, especially in the Democratic sentiment. Remember, we had another New York City mayor who ran
before. Bill de Blasio went nowhere, absolutely nowhere in the Democratic field.
And I am quite skeptical if I'm being honest with you, Richard that someone who basically ended his term on bad notes with African-American voters is
going to be able to appeal that constituency, which is the main base of Joe Biden support.
QUEST: Okay. But is there not an argument against Bloomberg that says, where have you been so far? The rest of us have been schlepping around
doing these debates left, right and center. What makes you think that you've got the right to just come join the party late because you can
afford to?
ENTEN: Yes, I think that's exactly right. And obviously, we're talking about a Democratic primary field, not a Republican primary field.
Billionaires have been lashed out against in the Democratic primary field so far.
QUEST: Well, let's have a listen to what Elizabeth Warren and others have said on that very point.
(BEGIN VIDEO CLIP)
ANDREW YANG (D), PRESIDENTIAL CANDIDATE: I'm friendly with Mike and he is a great philanthropist, or was a really stellar mayor. But I will say it's
going to be very, very difficult for him to jump in right now and somehow replace the thousands of conversations that many of the candidates have had
with voters in New Hampshire and Iowa and around the country with ad buys. There are limits to what money can do.
We're seeing some of the limits of what money can do with other candidates. And so I think he is going to have his work cut out for him if he jumps in.
SEN. ELIZABETH WARREN (D-MA), PRESIDENTIAL CANDIDATE: It's not enough just to have somebody come in -- anybody -- and say they can buy this election.
It's not enough. When billionaires, millionaires, and corporate executives get their PACs and get their fortunes and say we want a bigger (INAUDIBLE).
No, that's not what a democracy is about. We need to be a country that doesn't just work for those. A country that works for everyone.
(END VIDEO CLIP)
QUEST: But you see, I think Elizabeth Warren's argument is somewhat forcing this on that one. You can hardly say that about Mike Bloomberg.
He's just a billionaire who is buying his way in. The man was mayor of New York City and has run an extremely profitable successful news -- he has
lived his life in public affairs.
ENTEN: Yes, that's exactly right. He was the main catalyst. He spent so much money on the air. His Super PAC has spent so much money on the air
during the 2018 campaign getting Democrats elected to the House of Representatives and getting their majority.
So I think that that line doesn't necessarily play as well. But one number that I think is so important is that if you look and you ask Democratic
primary voters, are you satisfied with your choices or do you want more options? The vast majority say they're satisfied with their choices. And
so to me this Bloomberg getting is answering a question that no one really asked.
QUEST: Right. But tell me, does that quite -- is that question announce a valid -- when you say are you satisfied with your choices versus are you
satisfied and then add somebody that they may be more. They are satisfied until somebody better comes along.
[15:10:10]
ENTEN: It's certainly plausible. But you know, Fox News asked this question at the end of last month, and basically they said that only six
percent said that they wanted Michael Bloomberg. They would certainly vote for him versus in the 30s said they would definitely vote against him. So
to me, Michael Bloomberg is not necessarily the answer. Someone like Michelle Obama might have been.
QUEST: All right. But now finally, billionaires. What's the statistics saying about billionaires in the race, and the American voters' love affair
or distaste with money?
ENTEN: I would say this -- it is that the Democratic primary electorate loves the wealth tax, and we already have a billionaire in Tom Steyer who
is running and you know where he is going right now? Absolutely nowhere. He is polling it one to two percent despite the fact that he is spending
millions of dollars on the air. I'm not sure Bloomberg will be any different.
QUEST: Good to see you, sir.
ENTEN: Thank you, sir.
QUEST: Have a good weekend. Thank you.
ENTEN: You as well.
QUEST: The House Democrats have released more key testimony in the Impeachment Inquiry against President Trump. The transcripts reveal that
Lieutenant Colonel Alexander Vindman told lawmakers the request for a Biden probe was coordinated with the White House Chief of Staff Mick Mulvaney.
The former top White House Russia adviser, Fiona Hill's transcript says she testified it was clear, the Ukrainians had to start an investigation for a
meeting with President Trump.
Now just for these names, we need to remind ourselves who they are. Fiona Hill and Alexander Vindman. Fiona Hill is the former National Security
Council staffer. She was responsible for Russia and Ukraine. And she has testified that the former National Security adviser, John Bolton was
suspicious of why the Ukraine security aid was being frozen.
And Vindman, the top White House expert on Ukraine. He was actually on the famous call between Trump and Ukraine's President and has said, he raised
concerns over what he heard with the top lawyer.
Manu Raju joins me now. These transcripts are being released. I wonder what more we get when we go to hearings next week? You know, I can -- I
see a philosophical significance of a hearing being held. But if it's just the deposition and then the transcript release, and then the same person
says the same thing on public vote, what do you really gain?
MANU RAJU, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Well, a lot of Democrats believe that the American public still has not fully grasped
exactly what they have learned through the course of this investigation that has been going on for several weeks, but consistent themes are
emerging.
Witnesses are describing this effort going outside diplomatic norms to try to pursue these investigations, urged the Ukrainians to investigate the
President's political rivals in exchange for a meeting that the Ukrainians had sought in Washington and also at a time when the aid -- military aid --
roughly $400 million in military aid had not been turned over to the Ukrainians despite its approval in Congress.
Democrats believe by having these public hearings that it will be able to shine light on exactly what was happening beyond what we've been reporting
in the media, beyond just the depositions, and the thousands -- now more than 2,000 pages of transcripts that we have been going through, they
believe when American voters see this themselves is going to help them to draw the conclusion that many Democrats have that the President abused his
office, deserves to be impeached.
So in many ways, Richard, it is a political move by the Democrats to try to make their case to the American public that the President deserves to be
impeached.
QUEST: As I understand it, Manu, correct me, please, so far, nobody has come along and said, I had a conversation with Donald Trump, where he said
hold the aid until ...
RAJU: And that's what the Republicans are going to say. There has been no firsthand conversations that we're aware of, but there have been many
people who have contended that this is exactly the instruction that came from the President.
For instance, one witness, Bill Taylor, the top diplomat from Ukraine, the U.S. diplomat in Ukraine had testified that he was told by the Ambassador
to the European Union, Gordon Sondland that President Trump had told Sondland that he wanted to withhold everything, including the military aid
until there was a public announcement that those investigations would happen.
Then when Sondland testified, as you recall, he revised his testimony to later say that he informed a Ukrainian official that the aid was likely
contingent on that public declaration of investigations, but Sondland that he didn't recall how he knew that. So that's going to be the challenge for
Democrats.
But there is plenty of evidence showing the President was directly involved, even if people didn't talk to him directly -- Richard.
QUEST: Let's put this into the perspective, though, of the election. All of this could be absolutely true. And the President might come out and
say, hey, yes, it's all true. I mean, he sort of suggested as much Giuliani suggested as much as in his Cuomo interview.
But the American public might say well, yes, so what? It was our money. You were trying to do it and people do nasty things in politics and yes,
you shouldn't have done it but we don't care.
[15:05:10]
RAJU: And that's exactly the argument of the Republicans have been increasingly making, that what he's been -- what he's done is not
impeachable. It's something that any President would normally do.
What these witnesses are testifying, though, about was this is highly unusual? They are career officials, experts in this area, there are ways
of carrying out foreign policy, and this was certainly not that.
The question though is, will the American public agree, and what we're seeing from poll after poll is that the American public does not believe
the President acted accordingly, but the American public is still split on the notion of impeaching and removing him from office.
QUEST: Well, the first and the second of those two halves, Manu, one of course, is we sort of know something was done wrong, but then you get back
into partisanship with total partisanship. Good to see you, sir, have a good weekend.
RAJU: Thank you.
QUEST: Now, when you and I return, big moves at the House of the Mouse. Disney gets ready to release its streaming service. Also, the executive
exodus continues, this time Gap's CEO steps down. We need to understand the reason behind it.
(COMMERCIAL BREAK)
QUEST: Now, Disney shares are up more than three percent on Friday. Fourth quarter earnings handily beat expectations. Revenue jumped 34
percent on the previous year. The profits only dipped due to spending on Disney Plus that debuts on Tuesday in the U.S. and Canada and the
Netherlands, and the launch marks Disney's first foray into streaming and a make or break moment for its CEO Bob Iger.
Frank Pallotta is with me. So the results were excellent.
FRANK PALLOTTA, CNN BUSINESS MEDIA WRITER: Yes.
QUEST: All paths, the parks, the movies --
PALLOTTA: Across the board.
QUEST: They are doing well.
PALLOTTA: Yes, they're doing great. And they're about to be a part of maybe one of the biggest moments in their 96-year history. On Tuesday,
they're going to launch Disney Plus in the United States and Netherlands, and some other places. And it is a huge moment for the company because we
all know the very obvious. They have a vast empire that's built on theme parks, blockbusters, TV networks, and Mickey Mouse plush dolls.
Now they're going into a whole new segment with streaming and if they can really pull this off, they might even become bigger than they already are.
QUEST: Right. But can you pull that off with a back catalogue?
PALLOTTA: Yes.
[15:20:00]
QUEST: But you know, when I say that --
PALLOTTA: Without originals.
QUEST: Without originals. Netflix gave us a lot of originals.
PALLOTTA: If you have Disney's back catalogue you can. I mean, you're talking Star Wars, you're talking Marvel, you're talking National
Geographic. They have all 661 episodes of "The Simpsons." They don't necessarily need to come out of the gates with a whole bunch of new things.
QUEST: Apple for example, Apple.
PALLOTTA: Apple is going the opposite direction. Apple is all originals, not really a back catalogue. But Disney is going to have some originals.
Well, they're going to have "The Mandalorian," a new Star Wars series. They're going to have some Marvel series that are going to be original,
some things from the Disney Channel if you prefer that. They are stacked from A to Z.
QUEST: OK, and this whole business of how much people are prepared to pay.
PALLOTTA: Right.
QUEST: And I don't just mean for one of them, but the totality. What is the latest thinking on what people will pay in total?
PALLOTTA: Well, the studies have shown that people want about four streaming services.
QUEST: Four.
PALLOTTA: About four and they want to pay -- here is the thing -- only around $42.00 for a streaming services. So the numbers really don't add up
there because not every service costs $10.00. Some cost less, some cost more. But look at something like Disney.
Disney has all this great content, right? That's not the best point for a consumer. They are at $6.99. That is half the price of a Netflix standard
plan, and they offer you a ton of content, and many, many more things.
QUEST: Which arguably, and I know the reason why our own HBO streaming service has priced as it did as against the original. But it argues, you
know, Disney is priced very cleverly, even if it goes up another dollar or two in a few years, you're still cheaper than the rest.
PALLOTTA: That's true. And you say something like HBO Max. HBO Max is at $14.99, which is a good deal if you have HBO already, which HBO Now is
coming in around the same price.
But Disney is offering you this low price point with a lot of catalogue and it can because of that huge catalogue. They already own everything.
QUEST: Why the Netherlands, of all places? Why the Netherlands? Any particular reason?
PALLOTTA: I don't think there's any particular reason, but it's a great place for them to kind of test this out. They've tested it out there.
It's got an early look there. So it's just another way to kind of test it out. I mean, they could have picked anywhere. Why not the Netherlands is
the real question.
QUEST: That's a very good answer. Have a good weekend.
PALLOTTA: You too.
QUEST: Thank you very much indeed. Now, major changes at another household name, the CEO of Gap is stepping down as the company prepares to
spinoff Old Navy. Shares are down more than eight percent on the news. Eight percent.
Art Peck has head of Gap since 2015. He is the latest -- a long line of CEOs -- to leave that post in recent months. We'll talk about the CEOs
leaving and of course.
It doesn't get much more solid in the clothes marketing than the Gap hoodie. Clare Sebastian is here with a hoodie of her own.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Right, I've got another one over here.
QUEST: All right, you know, Gap, I remember when I was of a certain age, Gap may not have been the most trendiest place, but it's the place you went
to for all your staples.
SEBASTIAN: There was a time when it was trendy, Richard. Don't you remember in 1996, Sharon Stone, I think we have a picture, she wore a Gap
turtleneck to the Oscars. It was that trendy back then. This is where teenagers used to go. We all wanted one of these tops.
But look, this is a classic. Oh, there she is. That was Sharon Stone with the Gap hoodie. This is a classic case where the numbers just aren't
keeping up.
Art Peck came in in 2015. He was supposed to bring Gap into the digital age. He was supposed to revive flagging sales. I think if you look at the
share price, that patently hadn't worked and along with his departure --
QUEST: Why? Because here I can remember them trying to redo their fashion. Here, they decided to go into different colors. Here, they
decided to do something else. None of it has really worked. Why?
SEBASTIAN: A couple of things. Art Peck is known as someone who wants to use the term false messiahs when referring to creative editors. He wasn't
that keen on the people with the creative vision coming in. He preferred to look at big data when it came to creating trends.
But they've got these disparate brands. They've got a Gap, which we got these jumpers from today. They've got Old Navy. They've got Banana
Republic. And the big issue today is Old Navy. The company is supposed to be spinning off next year.
He wasn't supposed to leave before that happened. Now that throws the whole thing into doubt. Analysts are questioning whether the Board is
reevaluating. The company tells us they're not. But they're also questioning whether or not it's a good idea, because the numbers they put
out today, along with his departure show that sales at Old Navy are also falling and that is a problem. That's you know, that's why he's out.
QUEST: Right, but is there, I guess, is there something fundamentally wrong with Gap?
SEBASTIAN: It's what we see across the retail industry, Richard. Just compounded because they are the top mall tenant across many, many of
America's malls and we know that foot traffic there is declining, and they just haven't been able to drum up the kind of e-commerce business that you
need to fuel your brick and mortar in today's retail environment.
QUEST: The CEOs who are going at the moment, lots of them.
SEBASTIAN: Right.
QUEST: There's no -- I'm trying to see, I mean, if there's a common thread that you can -- here we go. So he was useless on his IPO.
[15:25:10]
QUEST: eBay.
SEBASTIAN: There are a couple of common threads. The data that's come out is from Challenger, Gray & Christmas, and I spoke to Andrew Challenger this
afternoon and he said like, we're now coming to the end of one of the longest expansions in U.S. history. This is the kind of expansion that
gives people like Adam Neumann, you know, other kind of visionaries the chance to create something out of nothing.
When these companies reach maturity, sometimes you need someone else to take over. Plus, some of these companies might be retrenching for a
downturn. They might want to put someone else in place who you know, has a new vision. Some of these people were there a long time.
Bill McDermott, Mark Parker was at Nike for 13 years. So it might be, you know, time as we enter a new economic phase.
QUEST: And that's sort of a unique circumstance.
SEBASTIAN: Well, this is another. Boards are getting tougher on ethical issues. This is something that we're seeing increasingly, I think.
QUEST: But the average tenure of a CEO traditionally has been -- it used to be three years.
SEBASTIAN: Right.
QUEST: So about a year to get in the job, a year to try and do something about it, and a year to realize that you failed and be kicked out.
SEBASTIAN: And so most of these are longer than that. We've got four years Art Peck. Four years with Steve Easterbrook. As I said, 13 years
for Mark Parker. Devin Wenig was there for eight years. So there's a lot of long-term CEOs here who shepherded these companies through this
expansion.
And now that we're at the stage where people are looking at maybe two years and thinking we're going to enter a different economic cycle, perhaps
looking for something different.
QUEST: But I just wonder whether the tenure of the CEO, the magic is gone.
SEBASTIAN: Well, I mean, I don't know if I would say that. I think, perhaps when it comes to these visionary founders, which is what we've become used to, but I think part of it is also the expectations have
been reset because we've seen this expansion and this this rocketing growth sometimes just a bit of growth, like you see at eBay, for example, isn't
good enough for Boards. They're looking for something more explosive.
QUEST: Explosive and a bit of something more. Have a good weekend.
SEBASTIAN: Thank you.
QUEST: Thank you. Now, days after renewed criticism, Facebook is mulling changes and some of these we may like.
(COMMERCIAL BREAK)
[15:30:00]
QUEST: Hello, I'm Richard Quest, there's a lot more QUEST MEANS BUSINESS in just a moment. Shelly Palmer will be with me as Facebook mulls banning
targeted political ads. I'm afraid, Shelly and I agree. But you'll find out what we agree on in a moment.
Germany is at a crossroads. It's 30 years since the Berlin wall fell. This is CNN, and of course on this network, the facts always come first.
President Trump says he's not concerned about the testimony released so far in the impeachment inquiry. But in the meantime, the lawyer for the former
National Security adviser John Bolton says Bolton has knowledge of relevant meetings about Ukraine that have not been discussed in depositions so far.
But he says Bolton isn't willing to testify until a court rules the White House claims of immunity are invalid. Remaining funerals are being held
for the nine family members massacred in an ambush earlier this week near U.S.-Mexico border. Three women and six children including two infants
were killed. Three of the victims were mother and her two children were buried yesterday. Mexican police continue their investigations.
At least five people have been killed in a 5.9 magnitude earthquake in northwest Iran. More than 300 people are injured, the quake had a fairly
shallow depth, only 8 kilometers. Iranian media says several buildings have been destroyed.
And in Australia, more than a 1,000 firefighters are battling unprecedented bush fires across new south Wales. Authorities there say they're close to
100 fires with more than half burning out of control. The flames are threatening properties and have prompted evacuations.
Severe storms have brought torrential rain and flooding to parts of central and northern England. Roads and train lines are out of commission and
dozens of people have been trapped in a shopping mall overnight. Officials say one woman died after being swept away by floodwaters.
And so we come to the end of a busy week which had several records, and now the Dow is pretty much flat, showing a slight loss, down 11 points. But
even there, just look at how the recovery -- when you and I started, right, together half an hour ago, we were down 50 odd points, now down just 10.
Could it eke out again for the session? Yes. Is it likely? No. I'll be proved wrong between now and 4:00. Stellar earnings from Disney and
investors trade worries, they're all growing after President Trump said he has not agreed a roll back of existing tariffs. The Nasdaq and S&P are up
slightly, there will be records there of course because they close the records on the previous day.
Facebook is considering tweaking its controversial political ad policy, and possibly restricting micro-targeting. Now, as it stands at the moment,
politicians can target potential voters by race, gender, income, and other personal information. Reports suggest that Google, which has so far stayed
silent on the political ad controversy is mulling changes. The Palmer Group CEO Shelley Palmer is here. Good to see you.
SHELLY PALMER, CHIEF EXECUTIVE OFFICER, THE PALMER GROUP: Hello, Richard - -
QUEST: As always --
PALMER: How are you?
QUEST: So, what's wrong with the current position?
PALMER: Well, actually, sources very close to those conversations that Facebook have confided in me that this report may have overstated what
they're thinking about. They are considering all possibilities and taking all kinds of feedback, but ultimately, there are no plans whatsoever to
change their current policy, which is to let politicians speak for themselves.
QUEST: But others have different policies, don't they?
PALMER: Yes, they do. Twitter announced that they're not going to take political advertising --
QUEST: So, that's a no -- so, that's just saying we're not doing any of it.
PALMER: And it's a good move if you're those guys. Google is looking at the policies also. This is a very complex, I think credibly divisive
issue. Everyone seems to have a very strong opinion about what is the truth and what is not the truth and what should be said and what shouldn't
be said.
And so Facebook's policy is very simple. If you are the politician, you get to speak. Now, we have a podcast, think about this, with Shelly
Palmer, Ross Martin and then we had Carolyn Everson; their VP of Global Marketing Solutions on our podcast this week, and she basically outlined
those policies in a pretty significant way, in an honest way.
We tested it and said why just give up on political advertising altogether? Twitter did, and her feeling was small politicians and small markets around
the globe need the opportunity to speak their mind and they need the platform Facebook --
QUEST: I mean, yes -- to find the whole thing --
PALMER: So, the good outweighs the bad.
QUEST: I find the whole thing bizarre in the sense that we've always known that politicians either exaggerate, fabricate or lie to a certain extent.
So why is everybody suddenly getting their knickers in a twist? We're not talking here about the same cases of Russian hacking and fake news and that
sort of thing, are we?
[15:35:00]
PALMER: Not in any way. No, and realistically, look, when the Biden campaign said to Facebook, look, this is an ad Trump wrote -- put out
there, and this ad contains falsehoods, Facebook's question was, and I think rightly so, OK, that's what you say, but we don't have proof. So, if
you have a problem with it, take it to the public and the public will decide.
And I think that's pretty much the right policy. I don't want -- like the only thing I can think of that's worse than Facebook being the arbiter of
the truth or let's say nobody being the arbiter of the truth is Facebook being the arbiter of the truth or worse, Mark Zuckerberg being the arbiter
of truth for mankind -- I'm sorry, that doesn't make sense to me. Let the public see what the politicians say and judge.
QUEST: True, then from your in-depth understanding of this, why do the public -- why has this arisen? Nobody's ever, I mean, suggested -- I mean,
maybe they do now, the "New York Times" does fact check per adverts and things like that.
PALMER: Well, this really -- this really -- I think is conflated. Fact- checking does happen on every platform, "The New York Times", Facebook, everywhere else. This is specifically political advertising --
QUEST: Right --
PALMER: And most specifically advertising by the candidate --
QUEST: Right, but the point --
PALMER: Not from the part --
QUEST: Right --
PALMER: Not the other supporting --
QUEST: Right, but what I'm saying is, if a -- if a car company wished to advertise on Facebook, Facebook would not be going around face -- fact-
checking the EPA regulations and whether or not you've -- a lot to --
PALMER: So, no. First of all, there are standards and practices for advertising --
QUEST: Right --
PALMER: On Facebook, and they do check and they do not allow ads that claim falsehoods. Otherwise, you and I will go on right now, and we'd have
the Richard and Shelly snake oil sales, right, we would sell -- get rich quick and we'd sell -- lose weight quick, I could certainly use that. And
if they weren't fact-checking, we would make a fortune. They do fact- check.
You can't do that. All they're saying is that when a politician places an ad and they are speaking for themselves and I'm so and so politician, I,
you know, support this or I endorse this or I have approved this message, that is approved and now you should take it out -- up with the politician.
QUEST: Remind me where we can enjoy --
PALMER: Oh, this -- think about this with Shelly Palmer and Ross Martin. The podcast --
QUEST: What's it called?
PALMER: Oh, it's called "Think About This" --
QUEST: Yes --
PALMER: With Shelly Palmer and Ross Martin, where you will be a guest very soon, it's available everywhere that you can get podcasts. Apple podcasts
of course, thinkaboutthis.fm, it's available on Stitcher, Spotify, which is a great place to listen to podcasts. Wherever you like podcasts, Richard,
you can find "Think About This" with Shelly Palmer and Ross Martin.
QUEST: We were just about to say by the way, what do you think is a legitimate amount to pay or the average for all your streaming services on
television?
PALMER: Everything all together, a legitimate amount, if I -- like my total amount that I want to pay?
QUEST: So, you would hear -- I'll take -- I'll take out Spotify because it is --
PALMER: Well, that's audio.
QUEST: It's audio. So, just for --
PALMER: My video streaming all in?
QUEST: Yes, what would you --
PALMER: I think if you could get it away for $50 to $60 a month, plus your broadband for $30-$75 a month, you would have a good package, that's never
going to happen. Start looking at the $200 range, that's where we're all going to be. Warner Media, Disney Plus, Apple, you put everybody together,
this is going to -- and by the way, you're not going to know where to find anything.
QUEST: And how many members of the family are using your password?
PALMER: Oh, I can't possibly say. Just me, because I'm such an honest guy, but everybody else, they all share passwords. Everybody.
QUEST: Good to see you.
PALMER: Good to see you, Richard.
QUEST: We continue tonight. Lebanon, a decades-old issue has come to a head as mass anti-government protests continue to grip the country. This
is QUEST MEANS BUSINESS, we're live in New York.
(COMMERCIAL BREAK)
[15:40:00]
QUEST: Welcome back. The World Bank is urging Lebanon to form a new cabinet within a week, and warning of a further deterioration of the
economy that's already in its worst crisis since the civil war. For weeks now, protests have gripped the country with protesters demanding a complete
overhaul of the system with the issue of corruption at the center. CNN's Ben Wedeman reports from Beirut.
(BEGIN VIDEOTAPE)
BEN WEDEMAN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): Their eyes are on our pocket, he chants. They're protesting outside a branch of
the Lebanese Ministry of Finance, the government, and the politicians leading it for three decades stand accused.
HANIA BAZI, PROTESTER (through translator): The warlords became strong men in peace time, says protester Hania Bazi. We gave them 30 years, but
things went from bad to worse. The state is infected with corruption. Lebanon's corruption ranges from petty bribes to a complex Ponzi scheme
where many politicians have a stake in banks that provided loans to the state at sky-high interest rates to rebuild the country's infrastructure
after the civil war.
But the infrastructure is still a mess. Lebanon has little to show for its more than $80 billion of debt, says investigative reporter Riad Qubaisi.
RIAD QUBAISI, INVESTIGATIVE REPORTER, AL-JADEED TV: If the money that we borrowed from the politicians, it didn't work and they didn't fix
electricity, they didn't fix water, they didn't fix anything. Why do we -- why do we have to give them the money back with an interest at a high
interest rate, extremely high interest rates.
WEDEMAN: Politicians have paid lip service to cleaning up the system.
NICOLAS TUENI, FORMER STATE MINISTER FOR COMBATING CORRUPTION: They said this is mission impossible.
WEDEMAN: For just over a year, Nicolas Tueni ran the now defunct State Ministry for combating corruption, the country's complex politics stymied
his efforts.
TUENI: Religious poll plus political party plus the warlord, a red line you cannot cross. Now, you have seen the good father one and two. You
know how it happened --
WEDEMAN: Yes, of course --
TUENI: It's not very far. Well, society is -- Syria is not very far from Lebanon.
WEDEMAN: And now the people say they've had enough.
(on camera): More than three weeks of mass protests have borne fruit, at least on paper. The Lebanese President Michel Aoun says that 17
corruption-related files have been opened for investigation, and the finances of two former prime ministers are also being investigated. But
the reaction of many Lebanese is, why wasn't it done before?
(voice-over): The protests continue unabated.
HANAN FAOUR, MATH TEACHER & PROTESTER (through translator): We're living in the land of the prince and the pauper, says math teacher Hanan Faour, 4
million poor and 200 men as the rich got richer and everyone else got poor. The gap between the rulers and the ruled has grown ever wider, says
political scientist Sami Atallah.
SAMI ATALLAH, DIRECTOR, LEBANESE CENTER FOR POLICY STUDIES: People have no faith or trust in the government, in the political parties that have run
the government over the last 30 years.
WEDEMAN: To rid Lebanon of corruption, the whole lot of protesters say, has got to go. Ben Wedeman, CNN, Beirut.
(END VIDEOTAPE)
QUEST: It's a historic day, an anniversary of it. A survivor of members crossing a deadly frontier while Germany's economy is facing new barriers.
In a moment.
(COMMERCIAL BREAK)
[15:45:00]
QUEST: Breaking news to bring to your attention. President Luiz Inacio Lula da Silva has been released from prison in Brazil. These are the
pictures that we're bringing from Curitiba, Brazil where it's just -- he's in the middle up there, somewhere we'll be able to see him. Just top left
of the camera, you'll start to see where he comes through.
Now, the reason why da Silva has been released from prison is a Supreme Court decision last night that said defendants can remain free until
they've exhausted all their appeals. The initial thought had been that after the first appeal failed, then the sentence immediately took effect
and you couldn't stay out essentially on bail and free.
But now, the Supreme Court in Brazil has said that's not right, that as long as there are more appeals to be had and bail is appropriate, that of
course, he can remain free, and that's exactly what has happened. He was on bail before, he's on bail now, he's awaiting -- he's being sentenced and
he is set for more appeals to be heard. So, there's Lula da Silva out of prison in Curitiba in northeast -- in Brazil.
Now, Saturday marks 30 years since the fall of the Berlin wall. For decades, it stood as the most visible symbol of the iron curtain that
existed between Western and Eastern Europe. Those trying to cross the iron curtain secretly and escape from eastern communists often died. CNN's
Frederik Pleitgen met up with one man who managed to cross the iron curtain.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: The line of demarcation in the cold war lies in Berlin.
FREDERIK PLEITGEN, CNN INTERNATIONAL CORRESPONDENT (voice-over): For 28 years, the Berlin wall symbolized the struggle between capitalism and
communism, and the cruel division between the people of east and west Berlin.
RONALD REAGAN, FORMER LATE PRESIDENT OF THE UNITED STATES: Mr. Gorbachev, tear down this wall.
(CHEERS)
PLEITGEN: For here at CNN, we actually own our own CNN trabant. This was the epitome of communist East Germany automotive engineering, and for the
anniversary of the fall of the Berlin wall. What we're going to do is we're going to take this car and take a drive back into history. That is,
if I fit into the car.
(on camera): Here it goes, it's small and I am big, but ready to go.
[15:50:00]
(voice-over): The remnants of the wall are a tourist attraction nowadays. But this deadly barrier with border guards, observation towers and barbed
wires struck fear into the Berliners it divided. I stopped and picked up Peter Bieber, who grew up in East Germany despising the communist regime
and the wall it needed to keep people from fleeing into the west.
PETER BIEBER, GREW UP IN EAST GERMANY: You look and saw the wall, and you know its end --
PLEITGEN: Yes --
BIEBER: It's the end of the world. You can't go where you want.
PLEITGEN: As a young man, Peter Bieber attempted to flee East Germany several times until he finally succeeded in 1972. He then helped others
get out as well until he was betrayed and arrested by East Germany's Secret Police Stasi --
BIEBER: Yes --
PLEITGEN: And spent five years in jail there.
BIEBER: It was a little --
PLEITGEN: Psychological terror.
BIEBER: Yes, I sit in the room, not so light, and one month, two months, and nobody came and said anything.
PLEITGEN: The West German government eventually paid East Germany to release Peter Bieber, but many others who tried to get away paid with their
lives. More than 100 of them in Berlin. In 1989, East Germans had had enough. After a wave of mass protests, the regime opened the wall leading
to mass celebrations as people from all over the world joined in to literally tear down the wall.
BIEBER: I think about the freedom, that's for me the highest -- the highest point --
PLEITGEN: The highest --
BIEBER: Yes, the highest -- good --
PLEITGEN: The highest good that people can have --
BIEBER: The highest point --
PLEITGEN: Is freedom, yes. Thirty years later, a united Berlin is thriving, having shed their shackles of communism and dismantled the wall
many thought could never be breached. Fred Pleitgen, CNN, Berlin.
(END VIDEOTAPE)
QUEST: So, OK, Germany has seen post cold war miracle, and an economic power house, the largest in Europe and the fourth largest in the world.
Today, the country stands at a crossroads, once again growth is slowing, Chancellor Merkel has seen her political power wane and regional challenges
like Brexit and immigration threaten to destabilize the European Union.
The economist Marcel Fratzscher is in Berlin, he joins me now. Good to see you, sir. I suppose whenever we talk now about the German economic miracle
or the problems it's facing, it has to be put to context of just progress made since 1989 that's unifying these two countries.
MARCEL FRATZSCHER, PROFESSOR OF MACROECONOMICS, HUMBOLDT UNIVERSITY: Yes, the recovery of -- yes, the growth of East Germany was really remarkable
since 1989. It started off with about a quarter per capita income in the East, today, we had 80 percent. And it was also good to West Germany
because East Germany became essentially an extension of West German firm.
A lot of West German firms are producing now in the east, they're using those workers who are highly skilled, who are highly-motivated --
QUEST: Right --
FRATZSCHER: Who were very productive by now. So, much of the miracle that we had seen with the reunification and often strong rock in recent years
would be due to East Germany.
QUEST: There's still a feeling -- I've been overseas to East Germany and the old East and West Berlin many times, and there's still a feeling there
on the east, isn't there? Of second-class citizen or even the poor cousin, even though their Ostmarks were traded one for one for the very powerful
Deutsche Mark, which many said was a grave mistake, didn't they?
FRATZSCHER: Yes, many people felt that it was a mistake. And I think there are two big challenges. One is many people in East Germany
particularly south of the border friendly takeover. So reunification basically meant West Germany companies took -- came in, they took over
whatever was left of the East German economy.
If you look at all leadership positions today, be it in companies, be it in government, they're basically all West Germans who were in those positions
in East Germany. So, it's an issue of respect, and as they say people feel in the east, many of them feel like second-class citizens because the main
positions -- except the chancellor who's East German, but many of the other positions have been occupied by West Germans.
And the second big challenge is about the future.
QUEST: Right, but --
FRATZSCHER: One of the big problems in the East was that --
QUEST: Is that because there is this view of second-class citizen, poor cousin? I mean, one assumes that there are some pretty bright people in the
old East Germany and East Berlin that can certainly run companies and run governments. So, why is it that, that stigma stands?
FRATZSCHER: Well, it is a big challenge. You should think of East German who grew up under a socialist, a communist regime where the government
decided everything for you.
[15:55:00]
It decided what education you got, it decided what job you could do. You had to shift to a market economy, the capitalism where basically --
QUEST: Right --
FRATZSCHER: You were responsible for making all those decisions. And this is really tough and was tough for many people to deal with, and you see --
you still see --
QUEST: All right --
FRATZSCHER: The consequences today.
QUEST: Good to see you, sir, thank you, I appreciate it this evening. With the markets -- we will have our profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: A moment. Let's just pause and think about 30 years ago when the Berlin wall came down. Well, I remember the days of the Berlin wall, I
crossed through it at checkpoint Charlie for an -- when I was a young journalist new in the field. And I remember, say, going on a helicopter
down the iron curtain and seeing it in all its awfulness.
So, to some extent, whenever we talk about today's Europe and a unified Germany and the freedom of peace that now exists in Europe and the peace
that exists on the island of Ireland because of the Belfast agreement, you see hard-won victories for democracy, for freedom of speech, for openness,
and though and therefore from that flows the economic benefits of corporations coming in, job creation, and an ever-increasing middle class.
You see it because it exists, because it is there. And that's something we can all raise a glass and toast to this weekend. And that's QUEST MEANS
BUSINESS for tonight. I am Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it is profitable. I'm off from my travels
for the next week or two.
JAKE TAPPER, CNN HOST: Welcome back to a special edition of "THE LEAD", White House in Crisis. I'm Jake Tapper. We begin with breaking news in the
politics lead today. Explosive testimony was released this afternoon in the impeachment inquiry into President Trump and the Ukraine scandal. Two
White House officials expressed extreme alarm at what became clear to them was a White House campaign involving Rudy Giuliani and others to push the
government of Ukraine to investigate Joe and Hunter Biden if Ukraine wanted anything from the U.S. government.
Depositions released today were from Dr. Fiona Hill, a former top adviser on Russia to President Trump and Lieutenant Colonel Alexander Vindman, the
National Security Council's top Ukraine expert. Vindman was on that July 25th phone call and testified that it was clear that President Trump was
demanding that the president of Ukraine investigate the Bidens.
END
