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Quest Means Business
Protests Erupt As Israel Reshapes Power Of Courts; Leading Israeli Businesses Protest Reforms; Survey Shows Economic Activity Slowing In Eurozone, UK; Twitter Ditches Iconic Bird For X Rebrand; Thousands Protest As Knesset Passes Controversial Bill. Aired 3-4p ET
Aired July 24, 2023 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INTERNATIONAL HOST: And a very good evening to you.
Tonight, Israel's prime minister says he will try to reach an agreement with the opposition by November, only hours after his government passed the
first part of its controversial judicial reform.
Now thousands of Israelis, tens of thousands I'm guessing are still on the streets tonight. They are protesting against the measures. Dozens of people
have been arrested outside the Parliament, the Knesset. Today's bill passed by a vote of 64 to zero.
Now, that was because opposition lawmakers refused to vote against this, they walked out of the chamber in protest.
After the opposition lawmakers walked out, their move was intended to send a message that the country has become a dictatorship.
Following the vote, the prime minister said there is room for agreement.
(BEGIN VIDEO CLIP)
BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER (through translator): We all agreed that Israel must stay a strong democracy and to maintain the rights
of everyone not to become a Halachic state and the judicial and the law system will not be controlled and ruled by any side.
(END VIDEO CLIP)
QUEST: Right. So Hadas Gold is in Jerusalem and so is Fred Pleitgen. Both of you are there? I'm going to go to you, Fred first, because it sounds
like you've got the noise and fury behind you of the demonstrators.
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Richard, the noise and the fury not just behind me, but all around me.
We're standing right in the middle of probably the biggest protest here in Jerusalem. We are right near the Supreme Court of the country.
As you can see the police has formed a line here and there is sort of a standoff that's going on with the protesters who are over here on the other
side. I am going to get out of your way so you can see a little bit better.
There still are a lot of people who are out here on the streets who say they are refusing to leave.
Now, a couple of minutes ago, I would say maybe 20 minutes ago, Richard, the police actually tried to disperse this crowd. They went in here with
water cannon trucks. They also lifted and carried away some of the protesters that came to wrestling mattress, pushing and shoving between the
protesters and the police.
As you can see, things have calmed down a little bit; however, the protesters are continuing to say they are not going to leave, they are
going to stay. They want to stay until things that have been decided today in Israel's Parliament, in the Knesset, until those are repealed and
considered null and void.
Now, I've spoken to some of the protesters and asked if they really hope that could happen. You mentioned it yourself 64 to zero, the vote happened
today in the Knesset. They say they're not sure whether or not they could really make a difference, but they also said they feel that right now, it
is such an important time in this country's history, they believe staying at home and doing nothing simply isn't an option -- Richard.
QUEST: Hadas in Jerusalem, I think in more quiet surroundings, the first bit of the judicial report or judicial reform that has been passed is not
the most important, but it does -- I mean, this idea and some rumors that the more important bits would be delayed now seems to be untrue.
HADAS GOLD, CNN CORRESPONDENT: I mean, this was important just in the fact that it was the first of the legislation to actually pass and it does have
a major impact because the Supreme Court is the really only check on government actions because of the parliamentary system and the way the
parties in power work.
And so by removing their ability to stop government actions, because the Supreme Court deems it unreasonable, that will obviously pave the way for
things like ministerial appointments that before have been blocked.
And now, whoever is prime minister can appoint whoever they want as minister. Now, for those who are in favor of this, they say that's exactly
how a democracy should work. If the voters voted these people in, they should be able to serve, but what's down the pipeline will likely
potentially have more impact, because these are things for example, like how judges themselves are selected and that is probably going to be one of
the biggest major fights coming up, it will be about the judges' selection committees and a few of the other issues.
Now in his televised speech to the country, Benjamin Netanyahu is still saying that he was extending a hand to the opposition saying that he's
willing to delay further legislation till November in order to have time for negotiations.
The question, of course, how those negotiations will look, especially after what's happened in the last few days with the last minute negotiations over
this specific legislation trying to delay it, having fallen apart so spectacularly in the last few minutes really before this vote came through,
so much so that the opposition lawmakers just walked off the parliamentary floor in protest instead of voting against it.
And now, we are seeing these protests. The Israeli Medical Association is announcing a strike. There could be more strikes, and we still have those
questions of those military reservists and whether they will still heed the call to serve, because this legislation has now passed.
QUEST: Okay, Hadas, thank you. We'll let you get back to your duties of interpreting what's going on.
Back to Fred Pleitgen who is with the demonstrators. Is there any feeling, Fred, that as these laws get passed, and an element of certainty happens,
it is a lot harder to change a law than to protest against a proposed law.
PLEITGEN: I think you're absolutely right. It's a lot harder to change a law or to challenge a law and a constitutional order than a Supreme Court
then to prevent that law from happening in the first place.
And I do think, Richard, that a lot of the protesters who are on the streets now, and again, we can pan around, and you can see the people here
are very vocal, berating the police officers from both sides.
As we can see, there seems to be some sort of negotiations also going on right now between the police and the protesters, but I think a lot of the
people who are out here on the street, they do indeed believe that potentially, time is running out for them.
One of the things that you mentioned that Hadas mentioned as well, is that the Reasonableness Act that was passed today by the Knesset, that is only
one of several measures that this government wants to take that would essentially take more power away from the Supreme Court of this country,
also make it easier for the government to appoint judges, and I think that many people here feel that their moment could be slipping away as well and
they don't want it to slip away.
And that's why we're seeing so many people who are coming out here, who are saying that they want to stand in the streets and I think there's several
things that are important about that, Richard, we have seen a lot of families here among the protesters, people coming here with their teenage
children to say, look, at this point in time, we took a stand for democracy in Israel, because it's so important and they do feel that this country is
potentially at such a turning point as they feel that it is such a dangerous turning point, that right now, they believe they simply can't be
silent -- Richard.
QUEST: Fred Pleitgen watching events there. He is on the streets. He'll come back when there is more to report. Hadas, I am grateful for you, too.
Some of Israel's biggest businesses have joined today's strike. Two of the country's largest malls were closed, their stores 200 tech company said
they would either close or let their staff attend the rallies.
A recent survey suggests the reforms will have a major impact on Israel's vital tech sector. It found some 68 percent of startups have begun legal
and financial steps like withdrawing cash reserves, moving their headquarters out of Israel, relocating staff, and conducting layoffs.
Merav Bahat is the co-founder and CEO of Dazz in New York. She is with me now.
The problem with, of course, threats is that you don't see the results until after it has happened, and the threat is carried out and in many
cases, the threats aren't carried out. But is it your view that there will be more tech leaving?
MERAV BAHAT, CO-FOUNDER AND CEO, DAZZ: Yes, so absolutely. I think at the short term, we're going to see more tech leaving, we're going to see less
investments, but I'm really optimistic that this is going to change with time, and I think that Israeli tech is really, really strong. Investors
want to invest in Israel and that is going to change. They will continue to invest.
We are going to continuously see the growth in the frustration of Israel. It's just a matter of time that, you know, we need to go the streets. And
really, you know, I think that if you look at this picture, it actually shows the demonstration of how strong the Israeli democracy is. We're going
to protect it, and definitely money will come back to Israel.
QUEST: You say how strong Israeli democracy is, but the government did get a mandate. Now, we can argue till the cows come home what that mandate was
by the number of the people who voted, but the reality is, as the prime minister says, more people voted for parties that wanted these reforms than
BAHAT: Yes, that's absolutely true. I'm not saying that the government wasn't elected. What I'm saying, I mean, what we're actually protesting
against is not the what, but the how, right?
When you want to make such big changes to the Israeli law, and make such big reforms, you need to do it by vast majority, right, you need to get
people's consent, because it is everybody's country, not just the ones who had been elected now, right?
So I believe -- by the way, I believe and I trust that that's the first law, but I think that it's going to stop at some point. I think that
Netanyahu will come to his senses.
QUEST: Interesting --
BAHAT: And we do need the support, by the way of President Biden and the US administration as being part -- you know, our best partners in the world
and the two partners and believers in Israeli democracy.
QUEST: Okay, but what happens when they don't believe in it? What happens, you know, when they are where you actually have now, you've got the US
president, recognizing Netanyahu's difficulty, but basically saying they don't agree with the new laws.
BAHAT: So we don't agree again with the pace. Reform is not all bad, right? It's the how and what's the pace and what's the majority of the people that
are actually supporting these reforms, right?
And we do need and I do believe in the strength of the partnership between Israel and the United States and President Biden and the US administration
as being partners of ours since the beginning.
QUEST: Right. Ultimately, I can't see how this works out because the fissures are so great on these particular laws, and Israel is so riven.
Look, I was there just a few months ago, a couple of times, and Israel is so riven that I could see these laws being passed, and everybody just
having to get used to them, because reversing them will be difficult as well.
BAHAT: I agree that reverting will be difficult. This is why you see all of these people on the streets, and again, you know, the people also on the
government and the coalition that I believe that at some point will make a stop to all the vast, you know, the speed of change, right?
Changes need to be done carefully and with the acceptance and consent of the majority of the people in Israel, and 61 to 64 is not the vast
QUEST: I'm very grateful to you. Thank you for joining us tonight to put it into perspective. We will talk more about this with you in the future.
BAHAT: Thank you.
QUEST: QUEST MEANS BUSINESS, after the break, JFK, the gateway for America to the United States and for millions of air travelers.
Now, John F. Kennedy Airport has just turned 75 and like many who are getting old in years, it has had more than a few facelifts.
So the head of the Port Authority is really going to try to convince me, it is not a facelift, it is a rebuild, a retrack, a reconstruction, a
different JFK, in a moment.
QUEST: Central banks, front and center, all of them.
The US Fed will decide on rates on Wednesday, and then it is the European Central Bank's turn on Thursday, and as they mull over this, business
activity in the Eurozone shrank much more than expected in July, which is exactly what you would expect if you're heading towards a recession.
The composite PMI down to 48.9, demand for services weakened, factory output posted its steep decline. Fifty marks the difference, of course,
between contraction and growth. The UK numbers suggest its economy is slowing sharply.
Its composite PMI fell to 50.7, so bear growth at the moment.
Stephen King is the senior economic advisor at HSBC, and the author of "We Need to talk About Inflation" and it is excellent, too.
I'm only halfway through it, Stephen, because I got it late, but I'm enjoying it enormously, which I'm not sure what that says about me that I'm
enjoying a book about inflation.
But before we get to the book, let's go to them decisions that they have to make in this case, and whether or not -- I mean, the PMIs are exactly where
you would expect them to be having had such radical increases in rates.
STEPHEN KING, SENIOR ECONOMIC ADVISOR, HSBC: That's absolutely right, Richard and it is certainly true that economies have slowed down through
the first half of this year. If you're a central banker worrying about inflation, you're probably quite pleased with that, even though for many
other people that's not such good news, because obviously a slowing economy will help to bring inflation under greater control.
But it is worth stressing that the relationship between growth and inflation is not as robust as it used to be. In the old days, you know,
growth slowed down and recession came along, inflation would collapse and the problems there of course is that inflation has proven to be remarkably
sticky, the stickiest it has been in in decades really.
So it is that trade off which is worse and which is making the Central Banks have a bigger headache than they used to have.
QUEST: But I'm thinking back to Greenspan, during the -- during the dot-com boom and bust. During those the boom parts, he intimated in Humphrey-
Hawkins, that perhaps the numbers have changed, the rules have changed, the sun rose in the opposite -- to set in the first. He suggested that higher
productivity was possible. And we didn't really understand why. We're getting exactly --
KING: And that's absolutely right.
KINKADE: I mean, if you look at what happened in the second half of the 1990s, we had always talked about the new economy, the new paradigm, the
idea, we're having a sort of productivity led miracle. And a lot of people bought into that. Unfortunately, also went along with the new stock market
bubble which then burst in the early 2000s. So, although there were some signs of a temporary productivity pick up, you know, the evidence, since
then, has been really quite disappointing, frankly.
QUEST: Right. So, do you think the rules have changed that I don't just mean --
QUEST: I'm talking about as we look at A.I. and as we look at the post because coming out of the pandemic, and debt crisis, that's all cyclical,
that's all normal. We've seen these sorts of things before, but the A.I. component could be quantum different.
KING: It certainly could be. Although one of the remarkable things over the last 15 years as technology has improved dramatically and yet, productivity
growth has not. And it could be a measurement issue, in part. But I think it's also the fact that technology has worked more to redistribute income
away from labor towards capital, rather than boosting productivity in the old-fashioned way.
As far -- as for rules changing, what has changed, I think, is the fact that for any given growth rate, inflation is definitely higher than it used
to be. I will also add that when you talk about debt being a cyclical problem, actually, I don't think debt is a cyclical problem currently.
We've had this extraordinary increase, particularly in government debt, all the way through from the global financial crisis which where we are
And we've only really seen those kinds of increases during wartime and typically big wars as well.
QUEST: You've got 15 -- 14 examples in the book. Which to you is the most important of all --
QUEST: -- over 2000 years, which is the most significant that we can learn about for what's happening now?
KING: There are two things really. The first is that money growth matters, which local central banks ignored, frankly, over the last two or three
years. And the second thing is that the public's behavior at the public's trust in our military authorities itself also matters. If the public begins
to think that the central banks have even like lost control of inflation, then they no longer believe the central banks when they say that inflation
will come back to two percent or whatever the target happens to be in two or three years' time.
And there's certainly evidence at the moment, particularly with pay settlements, notably in the U.K., a little bit less so in Europe, that
people's behavior is changing in light of these much higher inflation rates we've seen in many a year.
QUEST: We'll talk more, Stephen. We need to understand this inflation business. We need to talk about inflation. Stephen King's newest book, I'm
grateful to you, sir. Thank you, as always.
KING: Thank you.
QUEST: The social media site Twitter is going through a radical rebrand. Elon Musk owns and of course says it's now called X.
All right. There we go. X, just another X, not the x or big X or X tomorrow, gone today. But Musk unveiled a new logo in the domain X.com
today. This all sounds rather sleazy somewhere where (INAUDIBLE) triple Xs before we're finished. I've got a feeling. Doing the way with the company's
iconic bird, which have become one of the world's most recognizable logos, Musk also says he's dropping the word tweet in favor of I'm calling it an
All right. Clare Duffy is with me. Clare, I'm just going to an X, sound rather vulgar, actually. You know, sort of thing that you describe when
you're getting off to the bathroom. I'm just going to go and do an X. In fact, I did four Xs before lunchtime. I mean, help me out, Clare.
CLARE DUFFY, CNN BUSINESS WRITER: It just really, you know, it's so interesting, Richard. I mean, we can laugh about it. And a, you know, Elon
Musk seems to have this sort of obsession with the letter X. It's in his company, SpaceX, he made a Tesla Model X, he named his child X. And yet
it's really interesting that we're seeing him drop about 15 years of really significant brand equity in Twitter.
This is a company that has become sort of -- sort of like a part of the cultural lexicon. We talk about a tweet, we talk about a retweet. This has
become, you know, such an iconic brand. And so, it's interesting that he's trying to launch this sort of massive expansion of this company and not
build on that really, you know, meaningful brand equity.
QUEST: Why? Why? I mean, is it just the perversion of just I can change it therefore I will? Or is this man genius and looking at things that mortals
like you and me just can't conceive?
DUFFY: Well, Richard has been talking about this desire to create a sort of super app called X since prior to the Twitter takeover. He wants to make it
sort of in the style of China's WeChat, a place where people can communicate and shop and consume entertainment. And he feels like that is
going to be a really good business. And in fact, if you look back at Musk's history, this may go back even farther to his creation of X.com back in
He wanted that to be sort of an all-in-one financial app. That eventually became PayPal. And so, this is clearly something that he's been thinking
about for a long time. But I think there are questions about whether this is possible, especially given all of the changes that he's already made a
Twitter. And the financial challenges they're facing.
QUEST: Well, you'll go next about it before the day is over. Clare, thank you. JFK (INAUDIBLE) hated. It's a wonderful airport. It's an horrible
airport, depending on your point of view. It's now 75 years old. Founded, of course, yes, trivial pursuit question, Idlewild Airport, and it seems
become one of the busiest airports in the United States. But a (INAUDIBLE) lack of investment and space, all sorts of things, has pushed it out of its
Now, the Port Authority that runs the whole thing is putting $19 billion into renovating JFK, expanding, modernizing existing terminals, opening new
ones over the next few years. Rick Cotton is the executive director of the New York -- New Jersey Port Authority. And the authority that's dealing
with all of this. New records talked us through many of the developments. I was at Kennedy last week.
And I can sort of -- I love those posters you've got by the way, you know, Kennedy come to the future, not back to the 1950s. I love all of that. But
how long is this going to take? How much misery are you going to inflict to get this done?
RICK COTTON, EXECUTIVE DIRECTOR, PORT AUTHORITY OF N.Y. AND N.J.: Well, this these are big, big numbers $19 billion of construction. The two major
terminals which will be two or three times the size of existing terminals will finish in two phases. First phase in 2026 and then finish the second
phase in 2028.
QUEST: 2028. All right. And you're -- I knowing you because of the way your projects work, you'll be on budget or at least as damn near it. But you
can't really do much about delays, ATC delays, can you? Because that's sort of not really your area. You put in place the infrastructure and hope that
everybody else, the FAA and all the others do their bit?
COTTON: Well, we do but what we're doing our bit, which is that we are expanding taxiways, we're expanding the capability of terminals to handle.
What -- if you look pre-COVID, JFK handled 60 million passengers a year, we're building the new JFK to be able to handle upwards of 80 million
passengers a year. Planes will have dual taxiways so that they won't have constraints in terms of aircraft blocking them from getting in.
That's what we can do. We work with our partners. But as you point out, the airspace is controlled by the Federal Aviation Administration.
QUEST: Is this your biggest project to date?
COTTON: This is definitely the biggest project to date. LaGuardia, which is finishing up was an $8 billion project. This, as you pointed out, will be
19 billion. So, we're going to have these two new major international terminals, remodeling other terminals, and we the Port Authority will spend
$4 billion upgrading the roadway network and building new garages and new infrastructure.
QUEST: And you say it's by 2028?
COTTON: 2028 it will done and dusted.
QUEST: Are you going to be there at 28? Are you -- are you -- are you hanging around to get this done?
COTTON: Well, I want to see it done, Richard. And we'll have to see what that -- we'll have to see what the future brings.
QUEST: All right. It's fascinating the way airports and terminals are moving around. You know, B.A. obviously has moved into Americans and
different terminals. We'll all be moved around. Good to see you, sir. Very grateful that you came in to talk about what's going on. Much appreciated.
COTTON: Good to see you, Richard.
QUEST: I need to show you tonight. It's 10:40 in Israel. These are the pictures. 10:00, you know what I mean. It's always -- it's always busy at
night there. It's just in the summer, but thousands of people are still in the street protesting against the government, passing as a first part of
the controversial judicial reforms. Dozens of people have been arrested outside the Israeli parliament, the Knesset.
The anger level you is very real. As you can see the intensity is real, whether it's barricading then (INAUDIBLE) the main -- the main airport. So,
there you are, we will keep on top of that story. And the fascinating was talking about JFK. The airport and the amount of money has been spent. One
of my favorite airports in the world. I know it is popular to say not but I think JFK is a great place.
And that's QUEST MEANS BUSINESS for tonight. I'll be back at the top of the hour. Together, you and I will make a dash of the closing bell. Only after
you've enjoyed me, World of Wonder.
QUEST: Angry, noisy, frustrated. These are the protesters on the streets of Tel Aviv tonight roads coming up to 11:00 at night. Thousands, if not tens
of thousands of people are still protesting against the Israeli government, which passed the first part of a controversial judicial reform. Dozens of
people have now been arrested outside the Knesset. The Israeli Prime Minister says that they will continue past them and the protesters say they
will stay on the streets.
This is a most unedifying view of Israel and its democracy tonight. But this is the situation as the government continues to push forward the
deeply unpopular judicial reforms. The first bit, the first part of your life has now been done. The markets I need to show you that as well. The
Dow is about to lock in its 11th straight day of gains. A busy week of earnings and reports on the Fed rate are not -- look at that (INAUDIBLE)
half a percent.
If you look at the other markets, the wider, broader, you've got the NASDAQ and the S&P 500. And they are all showing a gain as well, particularly in
the NASDAQ, which has been under pressure as well. The NASDAQ's helped by in part by the toymaker Mattel. Its shares are getting a boost of the box
office success of the Barbie movie.
And there's your big list. You've got Goldman at the top, Merck at the bottom and there could be 1001 reasons as to why in between. It's all to do
with earnings and potential investment future flows.
And that's the way the markets are looking. Whatever you up to in the hours ahead, I hope it's profitable. I'll see you tomorrow.