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Quest Means Business
Biden To Meet With NATO Chief At The White House; Putin To Meet Kim Jong-Un In Pyongyang During Rare Visit; Surgeon General Warns Of Social Media's Harmful Effects; Prime Minister Netanyahu Disbands Israel War Cabinet; IDF: Tactical Pause Designed To Allow More Aid Into Gaza; At Least Nine People Killed In Flooding, Landslides In China. Aired 4-5p ET
Aired June 17, 2024 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:11]
RICHARD QUEST, CNN INTERNATIONAL HOST: Bumper day on Wall Street, we are up a half a percent after opening down, but the games throughout the course of
the session seem to build, and now, around half a percent for the better.
The markets and the events that we are talking about.
NATO secretary general says more than 20 countries now meet the goal for defense spending. Tonight, we have the Saab CEO to talk about the impact on
the industry.
Social media with a social warning label. The US surgeon general thinks that is a necessity.
It is June, extreme heat has already arrived. Just look at that.
Areas of Europe and the US struggling to cope with soaring temperatures.
Live in New York, you and I start a new week together, Monday, June the 17th. I am Richard Quest and I mean business.
Good evening.
Anytime now, NATO's secretary general will be at the White House as NATO looks for ways to shore up its support for Ukraine. Jen Stoltenberg and Joe
Biden, we will expect to see them any moment. We've already heard from the secretary general earlier today when he said NATO members have now
increased their defense spending and that the alliance is prepared to play a bigger role in getting aid to Kyiv.
(BEGIN VIDEO CLIP)
JENS STOLTENBERG, NATO SECRETARY-GENERAL: I expect allies this to agree for NATO to lead the coordination and provision of security assistance and
training for Ukraine.
It is also why I proposed the long-term financial pledge with fresh funding every year. The more credible our long-term support, the quicker Moscow
will realize it cannot wait us out and the sooner this war can end.
(END VIDEO CLIP)
QUEST: Kayla Tausche at the White House.
Now, this is interesting. This is not just war with Ukraine, but this is going to go right into the heart of US politics because Donald Trump is
going to say that threshold has only been met because he threatened NATO.
KAYLA TAUSCHE, CNN SENIOR WHITE HOUSE CORRESPONDENT: Well, and certainly, that was a repeated chorus during the Trump administration, which we
covered early and often when Secretary General Stoltenberg made his visits here to the White House to meet with then President Trump ahead of the
summits that took place during that term.
It is an annual occasion where the secretary general comes here to meet with the leader of the US, as he does with the heads of state of the other
NATO member countries to try to coordinate the deliverables and a language ahead of the NATO Summit that takes place every summer to make sure that
all of the allies are on the same page, that they agree on exactly what they are going to be doing in the year ahead.
And it is in that forum where many of these discussions have taken place in recent years over the need for more allies to meet that 2014 pledge to
actually commit the equivalent of two percent of each country's economic output toward defense spending.
That number was just 11 a few years ago, it was 18 as recently as February and the secretary general says it is 20, more than doubled in recent years.
QUEST: So, what is -- what is the presidents, US president going to try and push NATO to do because he said -- President Biden said just a couple of
days ago, we are in it for the long haul. He told Zelenskyy, we ain't going anywhere. We are going to stay with you.
What is his agenda for NATO?
TAUSCHE: Well, one of the most -- one of the things that the president has done in recent years is to try to thread a very delicate needle on the
accession of Ukraine into NATO. Ukraine has repeatedly asked for membership in the alliance and just today, the spokesman for the NSC, John Kirby said
that the US believes that there could be a path for Ukraine once fighting is over in that country, if certain anti-corruption benchmarks are met and
a certain pathway is pursued.
Now, other members of NATO feel more strongly that there should be a clearer path for Ukraine to join the alliance, to send a stronger signal to
Russia and to President Putin about the strength of the alliance. So that has been one of the areas where there has been some daylight between the US
and other allies.
Certainly, US officials tell me that in these meetings, President Biden has been pushing for more members to pay that two percent share, so that once
again, will be part of today's discussion.
[16:05:00]
Not only praising the progress that has been made, but also, Richard, there is still 12 countries that are not meeting that benchmark, and so there is
still room for the alliance to be criticized on the campaign trail here in the US.
QUEST: Grateful for you. Thank you very much -- at the White House.
So there are 32 members and 20 are spending at least two percent of GDP, which compares as you have just heard to a few years ago, even the
alliance's newest addition, Sweden, says it will reach two percent.
Stockholm's annual defense budget doubled since 2020, to roughly $11 billion US now.
Saab Automobiles, well, we are not talking about them per se, because that car business went defunct in 2011, but the Saab Group is alive and well as
a very significant defense contractor.
The CEO, Micael Johansson joins me now. We've talked before about this, good of you to join us again.
So with NATO, and you've now got more than 20 over two percent and the Ukraine issue becoming ever more significant. This has dramatic
implications for your business and that of defense contractors.
MICAEL JOHANSSON, CEO, SAAB GROUP: That's correct. I mean, thank you for having me again.
Of course, the demand is incredibly high and Europe is going through a huge wake-up call and every country spending lot more on defense including our
country, of course. So we are both sort of replenishing stockpiles, of course, in the countries, but also supporting countries to continue to
donate equipment to Ukraine, so it is all about capacity, investing in new capacity production line, automation, redundancy, new sites, so it is
really a high pace in the business right now.
QUEST: If you had to, just give me a gut feeling between replacing those armaments that have been used to backfill versus new increased armory. What
would you say it is?
JOHANSSON: Well, I think we are still pushing hard to sort of keep up with the Russian aggressor in terms of production capacity to continue to
support Ukraine to win the war, which is incredibly important. So I don't think we are there yet to start replenishing stock in building new
capabilities, neither in Ukraine or in other parts of Europe.
This is a battle to step up in Europe to reach higher capacity because we are factors below as I see it, the information I have on the Russian
aggressor is capable of. So we are pushing ahead as quickly as we can.
QUEST: I know you'll appreciate the sentiment behind this next question, but there will be viewers watching saying well, he would say that, wouldn't
he? He is selling armaments.
The defense industry is off to the races. Bonanza time. This is what they wanted. They can sell everything they can make.
JOHANSSON: Actually having a war in Europe is a big tragedy. This is not about sort of supporting war. I think we have to realize that we cannot
take our way of living or way of sort of protecting democracy and protecting our societies and people for granted, we have to have
deterrence. We have to have resilience and that is sort of the purpose of what we do as defense industry to create deterrence and resilience, so
these things won't happen going forward.
QUEST: Now, the armaments that you make are at the highest end, state-of- the-art, most sophisticated and very expensive usually by militaries. But if we look at defense spending in terms of the other 40 odd wars,
insurrections, riots, civil wars taking place at the moment, there is an enormous amount of violence in the world and arms are being generated at a
much lower level, at great numbers.
JOHANSSON: Well, I think we -- I don't see any connections that. The only thing we do is to try and sort of help defense forces creating
capabilities. So it is not hard to look at everything.
QUEST: Right. Sorry, sorry, let me -- no, no, let me, sorry, clarify. I wasn't criticizing. Sorry, that wasn't a criticism of Saab or the major
industries. It was more a comment on the state of the world and the number of armed conflicts taking place at the moment that is fueling demand.
But I was listening this morning, the discussion on this, it is getting worse. There are more conflicts and they are getting larger.
JOHANSSON: Yes, we have lots of political tensions and conflicts around the world, a multipolar world, which we have to relate to.
This is much more difficult now to find your like-minded countries to work with, to collaborate between industries in the world, so it is a very sort
of turbulent situation, which I have never experienced being with the company for more than 39 years.
So this is challenging, but it is also a big, important purpose that we have now to help sort of these democracies to defend themselves, and
absolutely most important, to help Ukraine win this war.
QUEST: Can Ukraine -- I mean, let's not parse on what winning looks like, but bearing in mind what President Putin's ceasefire demands were, which
were a non-starter and bearing in mind what would seem to be President Zelenskyy's requirements for Russia to leave everything up to Crimea, is
there a deal to be done somewhere, do you think?
[16:10:41]
JOHANSSON: I cannot judge that. I mean, I think we have a situation where we still support Ukraine and this is sort of political decisions to help
them not to lose the war, but are we doing enough to help them win the war? That's a big question mark.
I mean, there is a debate still, what capabilities must we support them with? How long-range precision weapon systems might they have to fight the
systems coming into the country? We are taking step-by-step, but of course, they need a lot more now to help them win the war and that takes an effort.
They need more and more advanced systems. Of course, otherwise, this will be a very long-term war, which is difficult to judge how it will end. I
really think, it is important to help them win for real, because otherwise they will just be sort of the next step and we are very close to the
Russian aggressor to our east, and so are many countries in our neighborhoods.
So we really, really want them to win this war, not to have sort of a consequence of the war happening in our neighborhood.
QUEST: I'm grateful for your honesty and frankness, sir. It is appreciated. Thank you for joining us tonight on QUEST MEANS BUSINESS.
Staying with Russia and President Vladimir Putin is going to go to Pyongyang on Tuesday. He will meet the North Korean counterpart, Kim Jong-
un. It is the first time Pyongyang has hosted a world leader since the pandemic. President Putin is hoping to bolster his support and Kim Jong-un
so far has been a reliable ally.
The United States has North Korea providing Russia with substantial weaponry for its battle in Ukraine.
Matthew Chance is in Moscow. Matthew joins me now.
Matthew, hopefully you can hear me. The significance of this visit. Tell me.
MATTHEW CHANCE, CNN CHIEF GLOBAL AFFAIRS CORRESPONDENT: Well, I think it comes at a time when Vladimir Putin, of course, prosecuting his war in
Ukraine, having to keep up a rate of fire of 10,000 artillery shells every day and is increasingly dependent not on his own factories, which he is
trying to sort of knock into shape, but on supplies from the Korean Peninsula, from North Korea.
Now, both Russia and North Korea deny there have been arms shipments because they are in contravention of UN sanctions, but states, other
governments as well say that millions of artillery rounds have already been shipped from Pyongyang's factories to the frontlines for Russian forces in
Ukraine.
Now, the significance of it is what would North Korea want in return? What does it want in return? Yes, it wants energy and food. It is an
impoverished nation where its population are short of food. So that's one issue, but will it also be demanding assistance through its ballistic
missile program? Assistance for its nuclear program as well?
The kremlin say they wouldn't go there, they wouldn't provide that kind of technology and they haven't been asked for it, they say, but nevertheless,
that's the concern that in this new environment, these two insulated sanctioned countries will come together in some sort of anti-Western, anti-
American alliance that create problems in Eastern Europe and in the Far East.
QUEST: The complexity of the situation is now mind-boggling. We were just listening to the CEO of Saab, you'll have heard talking about the necessity
of arming up the NATO side and you clearly have, obviously what Russia is doing as a rough equivalent in terms of the other side.
At home, where -- does Putin still have strength?
CHANCE: I think he does, in the sense that he has got complete control over the Russian media, for example, over the Russian institutions. There isn't
a significant challenger of note inside Russia that could threaten the Kremlin's power and Vladimir Putin's grip on authority.
And so in that sense, he is very secure, yes, in his position in the Kremlin, but the question about whether Russia's economy will be able to
successfully into the future, whether the sanctions, whether the isolation is something very different, and that is not clear.
[16:15:00]
Yes, it has the tacit support of important countries like China, but whether that will be enough to replace the massive loss of, for instance,
gas and oil exports to the European Union is something that is yet to be seen.
QUEST: Matthew, good to see you in Moscow. I'm grateful, sir. Thank you.
You and I tonight, coming up, the US surgeon general is calling for warnings on social media platforms like the warnings that you see on
cigarette boxes. Is that feasible and realistic? In a moment.
(COMMERCIAL BREAK)
QUEST: The US surgeon general says social media is contributing to a mental health emergency.
In response, Dr. Vivek Murthy is calling for platforms to include a warning label similar to the sort of things we are used to seeing with cigarette
boxes. Writing in "The New York Times," he says, parents often feel unable to protect their children online when they're up against some of those
powerful companies in the world, and the problem is urgent and needs congressional action.
Clare Duffy is in New York.
For the moment, let's not parry on whether or not there is a risk and a danger. Let's look at the practicalities. How would they do the warning?
CLARE DUFFY, CNN BUSINESS WRITER: Well, Richard, look, he couldn't do this unilaterally, which is part of why he has written this op-ed. He is calling
on Congress to pass legislation that would authorize him to implement such a label.
It would say something like noting to parents that social media platforms are associated with significant mental health harm to adolescents, and he
told us today that they would have to sort of play with where it would come up on these social media platforms, how often you would have to show it?
What exactly the wording it would be?
But the point would be to give parents some additional information as they try to navigate whether it is safe to allow their kids to use these
platforms, how often their kids should be using these platforms, which of course have been associated with everything from depression to body image
issues for teens.
I want to read for you just a portion of this op-ed that he wrote today. He says: "There is no seat belt for parents to click, no helmet to snap in
place, no assurance that trusted experts have investigated and ensured that these platforms are safe for our kids. There are just parents and their
children trying to figure it out on their own, pitted against some of the best product engineers and most well-resourced companies in the world."
So it is clear there that although some of these platforms have implemented some youth safety features in the last couple of years, at least the
surgeon general still sees them very much on opposing sides with parents and families in terms of this safety battle for children.
[16:20:08]
QUEST: But I just wonder whether the idea of a safety warning, however, it may be enhanced, whether it has credibility.
DUFFY: It is a good question, Richard. I mean, he does point to the success that the US has seen in terms of these labels on cigarette packages in
reducing smoking over the last couple of years, but he does say that more action needs to be taken.
QUEST: Right.
DUFFY: This can't be the only thing. He points to things like reducing push notifications for teens that can get them pulling up these platforms over
and over again, getting rid of the sort of scrolling algorithms that keep kids hooked on these platforms for hours.
And so I think, he certainly doesn't see this as a standalone solution, but potentially something that lawmakers can quickly latch onto.
Lawmakers have struggled to sort of figure out what kind of legislation is appropriate to tackle this problem, so maybe this gives them some guidance
in terms of action they can take quickly while they figure out what else to do.
QUEST: Clare, grateful tonight -- Clare Duffy is with me. Thank you.
Now, with me as well is Dr. Daniel Bober, psychiatrist and chief medical officer to Odyssey Behavioral Healthcare. He joins me.
When we look at the studies, the SG talked about teenagers are spending three to four hours a day and it risks poor mental health, but it also
risks depression and anxiety and twice the risk of that.
But do you think a warning, well, it can't harm, but it does do it -- is it worth it?
DR. DANIEL BOBER, PSYCHIATRIST: Well, Richard, you know, I don't think that it is going to hurt, but it may be a largely symbolic gesture.
We live in a very different world now and there are warning labels on everything. So I think in some way, there is a dilutional effect where we
have become so desensitized and habituated to these warning labels that I think they lose their effectiveness.
Now, some of the studies show that the single time that people see them the first time, they are effective, but the more people see them, the more
people ignore them and the more they are desensitized to them.
Now, we know this is a tremendous public health problem. Forty percent of children between the ages of eight and 12 are using social media. It is
important for kids to delay the use of social media as much as possible, and not to have these devices in their bedrooms at night.
QUEST: Now, you see, on this program, we read a very good book, "How to Break Up with Your Phone," and when we were reading that, when I was
reading it, I learned a lot about the background of the algorithms, the psychology that goes into the apps, the dopamine feeding effect --
BOBER: The reward center, right.
QUEST: The reward center, yes and, yet we know this and parents know it, but what Clare was saying is, it is this feeling of helplessness, what do I
do about it?
BOBER: Well, I think these devices or these platforms are ubiquitous, as you said, but I think the solution begins at home, and a lot of these
parents themselves are addicted to their phones and they are not modeling healthy behaviors.
We know that particularly young girls are prone to the effects of these social media platforms in terms of poor self-image, eating disorder
behavior, bullying. So I think it really starts with the parents setting limits with these devices to get kids to at least back off.
The goal would be 30 minutes of social media use, maybe that's not realistic, but certainly we can do better than what we are doing.
QUEST: And with that in mind, where do we start? Do we start with the addicted parents and put them right, and then hopefully, they move on to
their children? Is it a problem for school? Because we've also seen cases as you're familiar with, Doctor, school tries the ban people taking phones
in and suddenly does have a roar about that. I don't know where you begin here.
BOBER: I think it really begins at home and I think it begins doing simple things like not having phones at the dinner table and that includes not
only kids, but the parents. I think that is really the issue.
As you say, these behavior algorithms are highly reinforcing and you know, you're up against a mammoth and I don't know that you can overcome it, so
you have to start small.
QUEST: That goes to all of us. I mean, if I think about myself at the dinner table, the phone, and the temptation, as you say, the reward center.
Do we need legislation? And I don't mean about the dinner table -- do we need legislation? Do you think there is a role for Congress in legislating
against the companies in terms of the practices they can use? Or is that just another symbolic act that can be circumnavigated?
BOBER: You know, I think a lot of people will politicize it and they'll say that its some form of censorship, but maybe we do need some kind of
regulation, again, because there is a public health interest, because we are talking about billions of people.
[16:25:07]
Maybe it is something that the government needs to step in and do.
QUEST: You see, Doctor, you talked earlier at the beginning, you talked about the size and scale and the health crisis that it exists. The problem
is surely, if all of these people were addicted to drugs, they'd be lying on the floor and it would be an obvious health issue and the behavioral
aspects of it will be clear for all to see. But this is more insidious, isn't it?
Give me your experience of what you've seen in terms of the epidemic nature of it.
BOBER: Oh, I have kids in my office who I've seen cutting themselves because they conversate with other people online who do it. I've seen
suicides related to it, but I think part of the problem is, is that there is a little bit of nuance to it. We are talking about active us versus past
abuse.
The people that scroll through it and look at different things and don't actively use it tend to be the ones that have more problematic mental
health issues. The question is, are these social media platforms causing depression or are the people who are more depressed actually using them
more? So that is why we can't say there is a cause and effect relationship. We can just say there is a link, there is a correlation.
So I think that's what we have to kind of dig into.
QUEST: Doctor, I am very grateful. Thank you. We'll talk more about it. Thank you, sir.
BOBER: Thank you.
QUEST: As for the surgeon general, you are going to hear more from Vivek Murthy, who will be talking to Erin Burnett tonight at 7:00 PM in New York,
midnight in London. One o'clock Central Europe. It will be online as well so you won't miss it, but that you'll want to see.
Israel's War Cabinet is no more. The prime minister disbanded it and that raises all questions about what's next in the war with Hamas.
(COMMERCIAL BREAK)
[16:30:33]
QUEST: Israeli official says the Prime Minister Benjamin Netanyahu has disbanded Israel's war cabinet. It was a five-member group that was
responsible for making decisions about the war in Gaza. The opposition leader Benny Gantz withdrew from the cabinet last week over strategic
differences with the prime minister. The IDF is clarifying its announcement of a tactical pause along a humanitarian route in southern Gaza, saying
troops will fight on in uninterrupted in Rafah and elsewhere in Gaza.
Oren Lieberman is in Haifa in northern Israel. Oren is with me now. Let's start first of all the -- I mean -- did -- was it necessary to disband
after Gantz left? Could it have continued the war cabinet?
OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: It could have but it didn't really make a difference. Once Benny Gantz, former war cabinet member left
the war cabinet, it only had two members with authority left. The others were observers, and both of those were members of Prime Minister Benjamin
Netanyahu's own party. One, of course, was Netanyahu himself and his defense minister.
At that point, if it's simply going to be Netanyahu's own party, it can revert to the security cabinet. Now, an Israeli official says Netanyahu
have consultations. It's unclear exactly with who Netanyahu knows, after years, decades of practice, frankly, how to make the security cabinet work
for him. So, it's unclear that anything in terms of how to run the war will really change now that there's no war cabinet. If anything, Richard, it's
now just more on Netanyahu. The focus becomes right on him.
QUEST: And the -- this confusion over the humanitarian corridor, I'd always read it as being the military action in Rafah would continue regardless. So
where does this confusion arise?
LIEBERMANN: Well, apparently, the confusion arises in how the tactical pause was notified and where the decision itself came from, even that
little bit took us time to clarify, until we learn from the IDF that the decision was made by the defense minister without consulting the prime
minister and that likely why he found it unacceptable, until he was reassured that the Rafah offensive would continue.
And from our reports on the ground, it has continued. The entire purpose of the tactical pauses to try to get more aid into Gaza along a very specific
route right to the European hospital. Now we have to wait and see what effect it has. The U.N. welcomed it, but said it's not enough. Richard,
it's worth pointing out that we're getting reports from Gaza from the media unit for the European hospital that says eight civilians were killed while
working to secure trucks and goods along a corridor. It's unclear if it's that one, but this is a space to watch very closely.
QUEST: And finally, just bring me up to date on exactly the extent of fighting in Rafah or round Rafah because that was the bit that the U.S.
said, don't do, do not go into Rafah.
LIEBERMANN: Don't go into Rafah, the U.S. said with a major ground incursion. And at least from what the U.S. is saying, what Israel is doing
in Rafah does not qualify or classify as a major ground incursion. Yet, still, there is fighting. The IDF said just a couple of hours ago that they
had eliminated or killed about 500 Hamas militants since the beginning of May, since they went into Rafah.
Discovered a total of 230 tunnel shafts, including 100 right along the Gaza-Egypt border that Hamas would have used for smuggling. So, the
fighting there continues. Meanwhile, more than a million Palestinians have evacuated, many of them, not for the first time, to try to get out of there
and find some safe place.
QUEST: Oren, thank you. I'm grateful for your time this evening. I appreciate it. Thank you.
President Biden, a few moments ago, was speaking again alongside the NATO Secretary General Jens Stoltenberg. They're talking, of course, about the
proposal for spending as relates to Ukraine.
(BEGIN VIDEO CLIP)
JOE BIDEN, PRESIDENT OF THE UNITED STATES: -- no one got hurt. Well, Secretary General, welcome back to the Oval Office. I have to say ahead of
time, I'm going to miss you. I'm going to miss you. You know, I believe -- is this one of the most consequential moments for Europe since World War II?
[16:35:04]
I think you do too. NATO was founded 75 years ago and it's -- I think the lessons we've learned then and about standing together to defend and deter
aggression have been consequential, and we've made NATO's under your leadership, larger, stronger, and then is more united it's ever been. So, I
want to thank you, Mr. Secretary General for incredible work you've done. Together, we're deterred further Russian aggression in Europe.
I think we -- well, I know we welcome Finland and Sweden in the alliance and we strengthen NATO's eastern flank, making it clear that we'll defend
every single inch of NATO territory (INAUDIBLE) and we have a very important announcement to make today. A record number of allies are meeting
NATO's commitment to at least two percent of their GDP on defense. And in fact, the number is more than double since we took office.
As I took office, I look forward to building on all this progress next month and we have a 75th meeting here in Washington. And I look forward to
our discussion today. I just want to thank you for being here. We got a lot to talk about, and I made it sincerely. You've been great. I just wish
you'd expand your term another 10 years (INAUDIBLE)
BENJAMIN NETANYAHU, PRIME MINISTER OF ISRAEL: President Biden, Joe, thank you so much for your warm word -- words and thank you so much for your
personal commitment to NATO, to our transatlantic alliance, and also many thanks for hosting the NATO Summit here in Washington, D.C. next month. At
that summit, we will celebrate the 75th anniversary of the most successful alliance in history but also make important decisions for the future.
Not least on the issue and the importance of investing in our security. And today, we are able to publish new figures for defense spending. They show
that across Europe and Canada, NATO allies are this year increasing defense spending by 18 percent. That's the biggest increase in decades. And 23
allies are going to spend two percent of GDP or more on defense this year. That's more than twice as many as four years ago.
And demonstrates that European allies and Canada are really stepping up and taking their share of the common responsibility to protect all of us in the
NATO alliance. It's also important for the United States to know that a lot of this money is actually spent here in the United States. Allies are
buying more and more equipment from the U.S. So, NATO is good for U.S. security, but NATO is also good for U.S. jobs.
Mr. President, also thank you for your strong leadership on Ukraine and congratulations on the bilateral security agreement you signed with
President Zelenskyy with Ukraine. European allies are also stepping up and matching the U.S. contributions to military support to Ukraine. And I
expect that when we meet here next month, we will agree to have a NATO in the lead role in providing security assistance and training.
And also, that allies will agree to step up financial and military support to Ukraine. This will reduce the burden on the United States and strengthen
our support to Ukraine. I think it's important to understand that the stronger our support for Ukraine is, the sooner this war can end, because
the sooner President Putin we realize that we cannot await those out. It is in support Ukraine's strong charities, support Ukraine is in our own
security interest.
And therefore, I welcome the strong commitment of all NATO allies to continue to support Ukraine. So once again, thank you so much. Thank you
for -- once again, hosting me here in the Oval Office and I look very much forward to the NATO Summit in Washington, D.C. next month. Thank you.
BIDEN: Thank you, Ben. Thank you very much.
(CROSSTALK)
QUEST: Now you have the head of NATO and you have the U.S. President both determined on the question of Ukraine. And interestingly, the number of
countries within the alliance who are now meeting the required two percent spending of GDP. I need to say exactly a moving target that two percent.
Some say, you know, some of the countries who don't meet it say they are meeting it in other ways.
[16:40:08]
And of course, you've got the whole question of president -- former President Trump who will say that they're only meeting it because he
threatened to leave NATO and et cetera. You get the idea. We'll talk more about it.
As you and I continue on Monday, together, the head of the Cleveland fed tells me she doesn't want to be called hawkish or dovish. Loretta Mester
told me she'd like to be remembered and how she'd like to remember she prepares to step down.
(BEGIN VIDEO CLIP)
LORETTA MESTER, PRESIDENT, FEDERAL RESERVE BANK OF CLEVELAND: I always tell people, I say I don't want to be viewed as a hawk or a dove. I'd like to be
viewed as an owl. But of course, I can't call myself an owl.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
QUEST: Over her nearly four decades at the Federal Reserve, the Cleveland Fed President has been called a hawk more than once. Investors and
economists say she's wary of rate cuts, arguably, more than just vigilant about inflation. The doves are more concerned about unemployment and want
lower rates. Well, in her last weeks in office, Loretta Mester says she doesn't want to be either a devil or hawk. She wants to be an owl.
Turning from side to side and aware of the risks from any direction and prudence. I spoke to President Mester and she prepares to step down because
of term limits. And she discussed why she and others at the Fed weren't prepared for what turned out to be a post pandemic boom of inflation.
(BEGIN VIDEO CLIP)
MESTER: We did know that supply chains were being disrupted but we didn't realize how long that disruption would last. And it wasn't just one
disruption, it was a series of shocks that came through. Two, I think we did underestimate the support and the effects of the support from both
monetary policy and fiscal policy on the demand side. And, you know, that balance between demand and supply, of course, fed into stronger price
pressure.
So, I think, you know, that's kind of how I'm doing it. And that's part of where I -- when I reflect back on it. But again, remember that we did start
explaining to the public that we were intending to tighten policy before we actually took the first action in March.
QUEST: Having been of a generation that remembers the very, you know, the heady days of inflation and then we had 20 or 30 years where we've
conquered it. We know what we're doing, we know -- and suddenly the bogeyman is back. Were you surprised?
[16:45:09]
MESTER: OK. I wouldn't say I was surprised, because I was always cautious about inflation, right? So, I've been one of the ones who sort of are
thinking that, wow, we should really be thinking about this maybe a little bit differently. Everybody at the Fed is always focused on dual mandate
goals, right? And so, I think -- I think the pandemic was, in my tenure, an unprecedented shock.
I think people forget, at the beginning of the pandemic how uncertain things were and how dire some of the forecasts were for what was going to
happen in the economy. And so, I think it's natural that in that kind of environment. You wouldn't want to be, you know, too aggressive on raising
rates on the same time, right? You know, maybe we should have done it a little bit sooner.
QUEST: If I'd said to you, say, 10 years ago, five, seven years ago, that if you raise rates at this rate, the economy will be able to withstand it.
It won't go into a complete enough to reverse. It won't go into recession. You're going to raise from zero to five or whatever in a short period of
time. Most people would have said, no, no, it's going to -- it's going to tumble the economy directly into.
All research shows that this level of monetary tightening in this period of time will tip us into recession. Were you surprised it didn't?
MESTER: I think we were all when we were doing that, raising rates. We were all well aware that there was risk involved. But again, this is what I was
saying. We've got to balance --
QUEST: No. But the other side of the coin is, were you surprised that it didn't?
(CROSSTALK)
MESTER: No. That's what I'm saying. Yes. We -- I was surprised. In fact -- I mean, if you look back at, you know, the SEPs, right? We were under
estimating the strength of the economy, right? We were missing that. We thought, in fact, last year, when we at the beginning of last year, right?
We thought that maybe growth would be under trend, right? Now it's above trend. So, yes, I think we did.
But again, that goes back to what, you know, there was a lot of support for the economy, and I think that's what's playing out now. But you know, as
inflation has come down and the labor markets got into more balance, right, going forward, right, doesn't necessarily mean you just extrapolate what
happened. Right now, you have to, like, say, continue to do that assessment to balance those risks.
QUEST: A.I., I look back to the -- in those days, the Humphrey Hawkins testimony of Chair Greenspan and he always used to talk about the
productivity gains that we didn't quite understand from the internet, as, you know, the information superhighway and that they were very much fueling
the irrational exuberance of those days. We haven't really seen the productivity gains fully from A.I. and it's only in in the rearview mirror
probably, that we will, but we don't really know. Do we? This is -- this could be -- this could lead us to a new golden age.
MESTER: It could. I mean, I actually think that it's going to have an important impact on the economy and probably will enhance productivity, but
that's just my view and different people have different views, and it's about the timing as well. It's when, will those gains be able to be
captured in higher productivity growth? And that we haven't seen yet, but it has a potential. It has a potential and I guess I'm more positive about
it.
QUEST: When -- people you've seen over the many years, you've seen the hawkish dove phrase. Does it launch you out of the chair with something
approaching? You know, will you stop calling me a hawk? Will you stop doing that? I mean, what --
MESTER: Yes. I mean at the beginning, I felt like, oh, wow, I might have messed up, because they're calling me a hawk. And, you know, I'm trying to
explain things, but over time, it's like they're going to have a view of you no matter what you do. You just have to keep focused on doing the best
policy decisions you can make given your view of the economy where it's going in the risk.
And I always tell people, I say, I don't want to be viewed as a hawk or a dove. I'd like to be viewed as an owl. But of course, I can't call myself
an owl, so it's up to other people to call me that.
QUEST: Have you enjoyed it?
MESTER: Oh, yes, it's been great. You know, I've worked at the Fed for 39 years.
QUEST: Oh grief.
MESTER: I know.
QUEST: To get -- to get a gold watch or a clock.
MESTER: No, you do not get a gold watch, but you do get act -- I mean, I have to be -- I'm getting e-mails from people that I just didn't really
understand. Like, wow, this is what you saw to me? I have no idea. So, it's kind of nice.
(END VIDEO CLIP)
QUEST: Thirty-nine years. As we continue tonight, the U.S. is praising for long, lasting and dangerous heat waves. Communities around the country are
preparing (INAUDIBLE)
(COMMERCIAL BREAK)
[16:52:21]
QUEST: All right. There you have the temperatures in Europe at the moment. Extreme temperatures. They are in Celsius and you can see -- I mean, look
at Bucharest up in 35, 36. Athens nearly, nearly -- I think it was 40. Deadly consequences as a result. Now look at the temperatures in the United
States, of course, where they use Fahrenheit. It's roughly the same, by the way, in terms of -- if you were to convert the two across. But you are well
into the 90s.
Now in China, the media says at least nine people have died after heavy rains triggered flooding and landslides in the south of the country, those
drought record heats and so forth. In Greece, these are the pictures of that. In Greece, the search continues for three people who are missing
after extreme heat. They went missing during that. An American tourist has been found dead in Corfu and has been identified.
And in California, hundreds of people have been evacuated after a wildfire burned through more than 15,000 acres or 6000 hectares. 1000 firefighters
are battling the blaze. You're getting the picture. It's boiling. And staying in the U.S. the heat wave has not been seen in decades, and you're
going to send temperatures throwing even more for more than half the country's population. CNN's Chad Myers with the details.
(BEGIN VIDEO CLIP)
ZACH ISCOL, COMMISSIONER, NEW YORK CITY EMERGENCY MANAGEMENT: We are in the path of extreme heat, bringing along potential health risks in the
forthcoming days.
CHAD MYERS, CNN METEOROLOGIST (voice-over): Summer officially arrives in the northern hemisphere this week, and with it, a heat wave not seen in
decades. From the Midwest and Great Lakes to the northeast, more than 260 million Americans or roughly 82 percent of the U.S. population could see
temperatures above 90 degrees. Nearly 200 daily high temperature records could be tied or broken in major cities, including Boston, D.C., Chicago,
St. Louis, Detroit, Philadelphia, Pittsburgh and New York City.
And little relief is expected, even at night with low temperatures not dropping below the middle 70s.
ISCOL: Extreme heat is the most dangerous weather phenomenon we have in New York City. We lose over 350 New Yorkers a year on average to heat.
MYERS (voice-over): Caribou, Maine, which prides itself as the most northeastern city in the U.S. could hit their hottest temperature ever
Wednesday, with a forecast of 99. That's three degrees higher than their all-time hottest high temperature on record. Boston is forecast to be
nearly 100 degrees on Thursday, which would be their earliest 100-degree day in 99 years. And it's not just the high temperatures causing concern,
but how long they're expected to stick around.
Pittsburgh, which hasn't seen a single day go over 95 degrees in more than a decade.
[16:55:04]
It's forecast to see six consecutive days above 95 degrees. And Philadelphia is expected to see five straight days at or above 95. If it
seems like these scorching heat waves are happening more and more each year, it's not your imagination.
ASHWIN VASAN, COMMISSIONER, NEW YORK CITY DEPARTMENT OF HEALTH AND MENTAL HYGIENE: While very hot days are, of course, normal, the number and the
duration of these hot days we are seeing each and every year is not the risks to our planet present risks to our health. And heat is, of course,
the deadliest of all extreme weather events here in New York City and across the United States.
(END VIDEO CLIP)
QUEST: It's hot, very hot. We'll have a profitable moment after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's profitable moment. Look at the maps. That if you want to make something feel and sound hot, you use Fahrenheit because it's only 30s
in Europe but if you look at it in Fahrenheit, then it becomes the 90s. So, if you want to make something sound really, really hot, you use Fahrenheit.
But if you want to make something sound cold, you use Celsius. Well, if it was winter, and I was talking about 45 degrees Fahrenheit, that would be
seven degrees Celsius. 38 Fahrenheit, three degrees Celsius.
The real question is, why is the U.S. still using Fahrenheit? Why the rest of the world is all using Celsius? It's the one it's taken most of us
sometimes get used to. But why is the U.S. still using Fahrenheit? It is an outlier. It is somewhat weird and nobody really has a good explanation,
other than it just does. Hot or cold, Celsius or Fahrenheit, you make your mind up. And last QUEST MEANS BUSINESS for tonight.
I'm Richard Quest. Whatever you're up to in the hours ahead, shritching, I hope it's profitable.
(COMMERCIAL BREAK)
JAKE TAPPER, CNN ANCHOR: Exclusive Interview with two of the women who testified against Harvey Weinstein, the new mission that they're taking on
after the disgraced Hollywood mobile sex crimes conviction was overturned in New York.
Plus, are the health risks of social media akin to those of cigarettes and boots? Well, the U.S. Surgeon General is calling for a warning label for
apps. Declaring that the mental health crisis among children has reached emergency levels.
And leading this hour, Donald Trump is hosting two key Republicans at Mar- a-Lago this afternoon, maybe asking their opinions on whom his vice- presidential pick should be. The possible contenders are blitzing the country and the airwaves trying to make their cases, but as we are hearing
names such as Senator Marco Rubio or Governor Doug Burgum, floated by Trump allies, it is Ohio Senator J.D. Vance who appears to have won the backing
of the young Trump diehards. At least some of them.
This weekend, Vance won the V.P. straw poll at the turning point action convention. That's a conservative event aimed at college students. We
should note, the straw poll is far from a scientific survey and does not represent the larger Republican electorate. CNN's Jeff Zeleny joins us now.
Jeff, I want to start with Senator Vance who was asked this weekend what would make a good running mate for Trump. Here's what he said.
(BEGIN VIDEO CLIP)
[17:00:04]
SEN. J.D. VANCE (R-OH): This applies to the Vice President. There are a lot of smart, good people that Trump is looking at.
END
