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Quest Means Business
Saudi Arabia Reels After Houthi Strikes Kill 13; Multiple Oil Executives Skip Riyadh Energy Congress; Trump: It's Time for Ukraine to Get a New President; Federal Officers Search Home Of United States Rep. Ilhan Omar; Study: A.I.-Related Fields Could Generate 40M Jobs By 2035; Committee Member: Models Help Gauge Financial Policy Effects. Aired 4-5p ET
Aired October 12, 2026 - 16:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:13]
PAULA NEWTON, CNN INTERNATIONAL HOST: The Dow had a tidy gain there even though there is much worry about energy prices. It was a holiday here
though as well in the United States. Those are the markets and these are the main events.
Riyadh's main airport remains closed at this hour as Saudi Arabia's military intercepts more ballistic missiles launched toward the capital.
The Trump administration threatens to cut off intelligence to Ukraine if it strikes Russian energy sites.
And the Nobel Prize for Economics goes to two economists who helped smooth out the boom and bust economic cycle.
Live from New York, it is Monday, October 12th. I am Paula Newton in for Richard Quest, and this is QUEST MEANS BUSINESS.
So tonight, Saudi Arabia vows to stand tall after getting hit by a string of deadly attacks over the weekend and a warning now, what you're about to
see is graphic.
The Iran-backed Houthis hit Riyadh's International Airport on Saturday, killing 13 people and wounding more than 300. It is the deadliest attack on
Saudi Arabia in more than a decade. The airport came under fire again on Sunday, and officials say it will remain shut down until further notice.
Oil prices moved higher after the attacks. Brent crude is trading at about $107.00 a barrel, which is a two-week high, we note. West Texas
Intermediate is at about $94.00 a barrel.
Saudi Arabia's Energy Minister meantime, Prince Abdulaziz bin Salman promised that his country would not fold under this pressure. Listen.
(BEGIN VIDEO CLIP)
PRINCE ABDULAZIZ BIN SALMAN, SAUDI ARABIA'S ENERGY MINISTER: We value our commitment. We make sure that whatever happens, our resilience, our plans,
our commitment to the world will be adhered to. There is no way that somebody will break our back.
We are like a phoenix. We come out of the ashes all the time and every time.
(END VIDEO CLIP)
NEWTON: Now, the danger does not appear to be over yet. Just today, Saudi Arabia says it intercepted and destroyed another ballistic missile that was
launched toward Riyadh.
Nic Robertson is in London for us.
Nic, grateful to have you here on this story. I know how closely you follow this in the context that you have in Saudi Arabia.
Now, look, I followed it closely over the last few days. There weren't many warnings, and then it was a few hours before we understood the real
severity of what had happened at the airport. What are the options now for Saudi Arabia despite the resolve that we just heard there from the
Minister?
NIC ROBERTSON, CNN INTERNATIONAL DIPLOMATIC EDITOR: Yes, the resolve is key for them, of course, that's projecting stability. That's what they need to
have to be a platform for investment, which is what they want to have. They have a major investment conference at Davos in the Desert, as it is called
in a couple of weeks' time.
So there is that, but also Crown Prince Mohammed bin Salman wants to be seen as a strong leader and a strong leader in the region and that is going
to mean finding a way to not only reach some kind of diplomatic accommodation at some point with the Houthis, which is what the Saudis have
been trying to do, but also deliver a powerful enough military message to them to get them to the table on the Saudi terms, because at the moment,
they are not willing to sign up to it and that really is counterproductive for Saudi Arabia.
So I think this is the position the Saudis are in. They have a lot of airstrikes going against the Houthis at the moment. They're trying to
target the missile launchers, the ammunition stores, all of that. They have been building an alliance, Turkey, as well as Pakistan, and trying to build
a larger alliance with the potential -- potential -- that it could go in as a ground force into Yemen, and they back, of course, the internationally
recognized Yemeni government inside of Yemen.
But that package in and of itself and where things stand today don t seem to add up to enough to project the power and the message and the strength
that the Houthis are going to respect for them to back down.
So, this is a very difficult place for the Kingdom right now. They ve got the wherewithal, they've got the allies, but they ve also got to make it
count.
NEWTON: And making it count is what is difficult here. We've seen the asymmetry. I mean, Saudi Arabia has spent decades buying some of the most
sophisticated military equipment from the United States. And yet, what are their best options now because they've been at this before fighting the
Houthis in Yemen without much success.
ROBERTSON: You know, there has been a real object lesson this year for any country, but for Saudi Arabia and its Gulf friends in particular, watching
the United States and Israel try to bomb the Iranians to back down.
[16:05:08]
And the reality was, airstrikes alone don t stop a hit and run missile system that can fire ballistic missiles, drones, cruise missiles from
hidden locations. You can hit some of those locations. You can hit some of the launchers, but they can also be hidden.
And really, this is the object lesson that Saudi would go into or is going into the conflict with the Houthis right now. An air campaign alone may not
deliver the job. And of course, part of the object lesson for the Houthis here is they have witnessed that. So they know the strength of their
position.
They are, of course, very closely aligned with the Iranians. So these are lessons that they are learning, whether it is control of the Bab el Mandeb
Strait, the Red Sea, as the Iranians have control over the Strait of Hormuz, all of these are lessons learned, and the Houthis seem to be
exploiting those lessons.
Also, one has to say the lessons that they had fighting against the Saudis, even with U.S. coalition support, striking Houthi positions in the sort of
2015-2022 war in Yemen that also, I think helps embolden the Houthis. They have gone from a group that was in the caves 20 years ago to a group that
had ballistic missiles 10 years ago, to a group that has got hypersonic missiles that it has used against Israel, striking more than a thousand
miles away in the past year.
They are feeling pretty emboldened, it appears.
NEWTON: Yes. That progression that you just mentioned is so important here, especially given what we saw at the airport, the fact that that missile did
strike that airport. Absolutely chilling there what went on.
Nic Robertson, grateful to you.
Now, the attacks on Saudi Arabia have cast a shadow, as you can imagine, over the WPC Energy Congress in Riyadh. Chief executives from ExxonMobil,
Total Energy, Shell and BP are no longer attending. Saudi authorities nonetheless pushed ahead with the Energy Congress, which began on Sunday.
Here you can see just how close the event is to Riyadh's International Airport. I mean, look at this. The Energy Congress is just a short drive
away. It is meant to be that way for convenience. It is hard to blame anyone for not wanting to be so close to the site of that attack.
Now, Prince Abdulaziz thanked attendees while warning that the risk was still not over. He said recent events had been, in his words, "serious" and
that Saudi Arabia's response would be equally serious.
Anna Stewart is in London.
There is really no avoiding it and if you speak to executives in the region, as I have, it is chilling. Those are the words that they use in
terms of what happened at this airport and what it means for investment in Saudi Arabia going forward.
ANNA STEWART, CNN REPORTER: I think it is really, you can't overstate how significant these big conferences, these big international events are for
Saudi Arabia as it tries to diversify away from oil. This is a key pillar of vision 2030.
As a result, I am not surprised, actually, that WPC has gone ahead, although it is lacking some of the big names. They are expecting to speak
on stage, you know, as you mentioned, the CEOs of ExxonMobil, Total Energy, Shell, Chevron, BP have all removed themselves from the agenda. They are
not attending. And the big one coming up, Paula, of course, in two weeks' time is FII. That is colloquially known as Davos in the Desert. It is a
huge event every year. It gets in big names.
Currently on the list to speak include Jamie Dimon, CEO of JPMorgan, Larry Fink from BlackRock, Masayoshi Son the CEO of Softbank, Christine Lagarde -
- the list just goes on.
Now currently FII is still going ahead. Currently, all of those names are still on the agenda, but you have to question how many will be there over
the next couple of weeks given what we've seen in the last few days and even today, the risk around the airport and whether those delegates are
willing to take the risk and whether the companies they represent are willing to take the risk as well.
NEWTON: Yes, and the linchpin to so many of these investment conferences happens to be the travel around them. And the fact that Saudi Arabia, like
some of its counterparts in the Middle East, wanted to become a big travel hub.
STEWART: Yes, and I think with travel, that's the next thing. If the delegates do want to go to FII, they are going to experience the same
potential difficulties that some of the delegates for WPC had, which currently is Riyadh Airport, is closed until further notice.
Obviously, not as convenient when you've got the conference right next to that airport, where are you going to fly into? I think some delegates
actually flew into the UAE and drove, it is about 10 or 11 hours to get into Riyadh. There are other airports in the country, but they are also
experiencing many cancellations. And of course, the risk is still there.
How long will this disruption last? It really depends, of course, on what we see from the Houthis in terms of the attacks.
[16:10:01]
Interesting to note that Delta was about to launch a direct flight from Atlanta to Riyadh. They've now pushed that back, Paula, and they pushed it
back by five months to March 2027, which perhaps gives you a rough idea of where airlines feel things will feel safer and more normal.
NEWTON: Yes, and we will continue to keep an eye on it. And as you said, still a lot of questions there about whether or not this conference can
even go ahead, even though officially it is still on.
Anna Stewart for us in London. Grateful to you.
Now, Cedric Leighton will discuss with us what the difficulties are here. We just spoke with Anna about the problems with travel and those Houthi
attacks making things much more difficult on the aviation industry.
We just discussed Delta and the fact that it has already put on ice its nonstop service. But more broadly speaking, the airspace around Saudi
Arabia is looking a little emptier than usual today. Have a look at this.
On the left is the air traffic on Saturday; on the right, today you can see a clear decrease in the amount of planes overhead.
The U.S. Federal Aviation Administration has warned airlines, of course, to exercise caution when transiting the area.
Retired U.S. Air Force Colonel and CNN military analyst, Cedric Leighton is with us now.
Good to see you. I am wondering when you see this predicament that Saudi Arabia is in, how would you game out their options? I know there aren't any
good options, but they certainly don t want things to remain in this way.
COL. CEDRIC LEIGHTON (RET), CNN MILITARY ANALYST: Yes, that's for sure, Paula, Happy Canadian Thanksgiving to you.
There are a lot of different things that the Saudis could potentially do, some of them extremely unpalatable and others a bit less unpalatable. But
among these options, of course, would be to reengage the Houthis in some kind of a ground war.
I don't think the Saudis want to go there, but they definitely want to punish them. They may go for limited ground incursions. They may decide to
go with special operations type missions, but that presupposes that they have a -- you know, decided not to use air power as the sole kind of effort
that they would use against the Houthis. And, you know, basically the reason for them not to use air power is their experience with it in the
past, during the last time when they were engaged with the Houthis in conflict, they were really relying on air power to do the job for them. And
that is something that you really can't do in a situation like this.
When you have a basically what started out as a guerrilla group that has now morphed into a pseudo state, as Nic Robertson was mentioning, they are
really capable of many things. And with Iranian aid, they have already been able to shoot down at least one Saudi F-15 jet fighter, and that becomes a
-- you know, a very difficult thing for them to do just using that one instrument of power.
So the Saudis know that they have to do more than that. They are also going to, of course, try the diplomatic route, but the limits there are that the
negotiations with Iran are at best tenuous, you know, for the broader context of the war between the U.S. and Iran. And then they are also, of
course, a bit tenuous in terms of the relationship between Saudi Arabia and Iran itself.
So the Saudis have really very few options, but they have to do something in order to protect their ability not only to hold those key conferences
for them, but also to really protect the viability of their kingdom and that's really what this is all about.
NEWTON: Yes, when you say words like that, the viability of the Kingdom, it really puts in perspective what is at stake here.
I am wondering why you believe that the Saudis didn't give any alerts out to their population, let alone anyone at the airport. And the fact that
they did not have the defenses to keep these missiles out of their Kingdom.
Now, look, clearly, they shot some of them out of the sky and were able to protect the population from some of these strikes, but clearly, not all.
LEIGHTON: Yes, that's for sure. And it seems like there is a definite shortfall there. And, you know, I am sure that there is going to be the
Saudi equivalent of an After Action Report that lays out some of these things, and it will probably never be made public.
But the key element here, Paula, is this: The air defense and missile defense gaps that are identified by these occurrences against King Khalid
International Airport are really serious gaps, and if you can't protect a prestige project which King Khalid International was when it was opened in
the 1980s, then you have very few options when it comes to, you know, how you array all the different aspects of your air defense system.
So this is going to be a very, very big problem for the Saudis because they have to not only protect assets like the airport, but they also have to
protect their government installations, protect their military bases. They have to protect significant Royal Palaces and, of course, civilian
population centers, and that's something where they are, I think they have a shortage of those kinds of weapon systems. In this particular case, the
main system is the patriot system, and we know the shortages that the U.S. itself has when it comes to the interceptor missiles that belong within the
patriot battery.
[16:15:23]
So that becomes a real issue for them, and they are going to have to really figure things out very quickly and we are really seeing is the Saudis, who
are wedded to one form of warfare and the protection of the United States are now realizing that that protection is, first of all, inadequate, but
also that warfare itself is changing, and they have to change with it if they are going to be able to succeed in protecting their population.
NEWTON: Yes, and they basically have to change on the fly here. You did mention the fact that ground troops may be something they can't avoid.
In your estimation, is Saudi Arabia ready for that? They certainly backed away from it in their fight against the Houthis in the last few years. Do
you think there is no other solution here, though, that they're going to have to prepare for that if they aren't already?
LEIGHTON: Yes, they should be preparing for it for sure. I mean, if you're a military person, you prepare for eventualities like that and it seems to
be in this particular situation, the most -- you know, it is one of those issues that they'll have to do, that they'll have to conduct operations in
that way because, you know, as I mentioned before, air power is really not going to be sufficient to dislodge the Houthis or prevent the Houthis from
carrying out these kinds of operations.
You'll have to have a combination of air power and ground incursions based on intelligence and they will have to have really thorough intelligence.
And that's where the U.S. is probably helping them the most right now. That is going to be something that they're going to have to do, because if they
don t do that, then they really run the risk of not being able to either contain the Houthis, which was probably going to be the outcome of this, or
defeat the Houthis, which is a far less likely outcome.
NEWTON: Again, it so underscores the fact that the Houthis actually were willing to hit a civilian target like that airport and are not backing down
so far.
Colonel Cedric Leighton for us, thanks so much. Appreciate it.
LEIGHTON: You bet, Paula.
NEWTON: Now, the U.S. is apparently threatening to suspend intelligence sharing with Ukraine if strikes on Russian energy sites continue. We will
have CNN's reporting on that.
Up next, more on President Trump's growing frustrations surrounding the war.
(COMMERCIAL BREAK)
[16:20:11]
NEWTON: Ukraine's President says Russia has already violated a surprise energy ceasefire announced this weekend by U.S. President Trump.
Shortly after Trump's truth social post on Sunday, you see it there, Volodymyr Zelenskyy said Russia struck a power plant in Kharkiv.
Mr. Trump has grown frustrated with Ukraine's attacks on Russian energy facilities, at times blaming them, Ukraine, for the rise in diesel prices.
The U.S. apparently raised the stakes over the weekend. Two European officials say Washington threatened to suspend intelligence sharing with
Ukraine if those strikes continue, and President Trump called for new leadership in Kyiv. Listen.
(BEGIN VIDEO CLIP)
DONALD TRUMP (R), PRESIDENT OF THE UNITED STATES OF AMERICA: There was no reason that that war with Ukraine and Russia started. It started due to
incompetence. It should have never started. You wouldn't have lost 30 percent of your country already. You ve lost 30 percent of your country and
you've had over a million people killed -- between the two of them, over two million people killed.
That's a war that should have never started, and I think it is time for Ukraine to get a new president.
(END VIDEO CLIP)
NEWTON: Jim Sciutto is in New York with us.
Jim, good to have you on the program. I mean, look, I was quite startled by your reporting on this because it is not just about the intelligence
sharing, but also threatening perhaps to withhold weapons that Europe was buying on behalf of Ukraine.
I mean, from what you know, are they serious about this? How close is the Trump administration from doing this?
JIM SCIUTTO CNN ANCHOR AND CHIEF NATIONAL SECURITY CORRESPONDENT: They are absolutely serious about it. Not clear that they've done it yet. In fact,
the indications are they have not done it yet. But I know Ukrainians are taking these threats very seriously. And a U.S. official told us as part of
this story that, listen, they are basically communicating to the Ukrainians. The U.S. has done a lot of nice things for you, you should not
be impacting American consumers negatively.
And that shows you the thinking there, right? Because this is purely to help diesel prices in this country, which one could imagine if you're
Ukraine defending itself against an ongoing Russian invasion, that's not top of your mind. You're trying to survive daily attacks and fight to keep
from losing more of your country, but that is the connection that the administration is making quite deliberately.
And I know that it is not just Ukrainian officials that are taking these threats from the Trump administration quite seriously, but our European
allies as well, because, you know, the two threats are to stop intelligence sharing with Ukraine, which is highly impactful because U.S. Intelligence
helps Ukraine target the missiles that are coming in from Russia, to know where they're being fired from, when and where they're targeting, so it
helps them defend themselves. It also helps them pick targets in Russia.
In addition to that, the weapons purchases, because the U.S. No longer sends military assistance directly to Ukraine, doesn't gift them military
equipment, for instance, what happens is that Europe buys U.S. weapons -- European money to buy U.S. weapons, which then are sent to Ukraine. The
administration is saying it is threatening that system, known as the PURL System as well.
So on both ends, the intelligence sharing and the weapons supply, it would have enormous impact. And the final thing I will say, Paula, is the
President's comments there are revealing. It is not the first time he said it, the war should have never happened, Ukraine should end the war. He
doesn't blame Russia for its ongoing invasion. Right?
He creates this false equivalency to say these two countries just happen to be fighting and shouldn't be fighting. And as a result of that view of the
war, he is applying more pressure now on Ukraine via these threats while relieving pressure from Russia via relaxing these sanctions on energy
exports.
I mean, he is turning the whole policy on its head.
NEWTON: Yes, and the Europeans have been quite blunt in terms of what this means. But is there any leverage that the Europeans can use to convince the
President not to go through with this?
SCIUTTO: Yes. I don t know about leverage. Right? I mean, they could use -- the method they've used so far and beyond helping Ukraine just to keep
President Trump in NATO, right? Because there has been genuine concern in Europe that Trump would straight up withdraw or stop support for NATO, even
more so than he has already done, as he has been reducing U.S. force deployments in Europe et cetera.
Their approach so far has been flattery, quite public and in private, and increasing their own defense spending, because that has been a demand from
the U.S. to Europe, and not an unreasonable one to increase their defense spending, so it is not relying entirely on the U.S. That's been their
strategy so far.
It is not clear what negative leverage they have against the U.S., right? Their militaries are dwarfed by the size of the U.S. military.
[16:25:10]
You know, they are already in the midst of crushing trade wars with the U.S., tariffs, et cetera., and the U.S., by the size of its economy, can
inflict more pain, arguably, on Europe than Europe on the U.S.
I mean, there are economic sanctions that they could apply, but again, so far they've tried, honey, as it were, or the carrot more than the stick
with the U.S. whereas in reverse, it is the U.S. very much using leverage pressure, the stick, one could argue against Europe.
NEWTON: Yes, you make an important point though, about flattery as well. I mean, Prime Minister Mark Carney of Canada was on the phone with both
Volodymyr Zelenskyy and the President and was clear in his statements, and I believe on the phone that he thanked President Trump for trying to do
anything in this regard and he started there. That was his starting point.
Jim Sciutto, thanks so much for your reporting. I really appreciate it.
SCIUTTO: Thank you.
NEWTON: You'll be back in just a little bit with "The Brief."
SCIUTTO: I appreciate it.
NEWTON: Now, at least 139 people have died after a boat carrying migrants capsized off the coast of Djibouti. The International Organization for
Migration says the boat was carrying more than 300 people, including children. It sunk soon after, taking off from the shore of the East African
nation, now likely due to overcrowding, as you can imagine.
As CNN's Larry Madowo reports, aid agencies are struggling to get a full grasp of just how many lives were lost.
(BEGIN VIDEOTAPE)
LARRY MADOWO, CNN CORRESPONDENT: This is one of the deadliest shipwrecks involving migrants from the Horn of Africa trying to make it to Yemen,
eventually to well-paying jobs, they hope, in the Arabian Peninsula.
According to the U.N. Migration Agency, they set out on a boat Thursday evening, but shortly after they left, that boat capsized, killing at least
139, including more than a dozen children, and that number is just the number of bodies that have been buried by authorities, some who are buried
by the migrants themselves, are not part of that count. So, that death toll will likely increase.
There are at least 80 who are unaccounted for, who are missing, who could have been lost at sea or could be part of that death toll that is expected
to increase.
Some of the survivors, all 80 survivors were Ethiopian nationals were received at the U.N. migration Agency Center in Djibouti. They were
receiving medical support after consuming sea water, but also psychological support after going through this traumatic event.
Listen to one official explaining this devastating accident.
UNIDENTIFIED FEMALE (through translator): The death toll could rise as search operations are still underway. IOM is working alongside local
authorities, particularly the Obock Prefecture, which is coordinating operations on the ground.
The first survivors located have been taken care of and assisted by the IOM.
MADOWO: Every year, tens of thousands of migrants attempt this perilous journey across the Bab el Mandeb Strait from Djibouti to Yemen, and
eventually hoping to get into parts of the Gulf for jobs.
In 2025, more than half a million people attempted this journey, and 900 people were either killed or remain missing, according to the U.N.'s
Migration Agency. And since September 10, they've seen at least 20,000 migrants attempt to make this journey.
The attraction is simple: At its narrowest point, it is just 20 kilometers or so, so it seems like a quick journey. But it is not so simple.
On Sunday, the African Union Commission chair mourned the 139 lives that were lost in this shipwreck off the coast of Djibouti. He said there was a
need for strengthened regional and international cooperation to address the root causes of irregular migration, combat migrant smuggling and
trafficking in persons, and to promote safe, orderly and regular migration. Because some of these people pay money to people smugglers to get them
across, even though they get on these boats that are often are not worthy of being in the sea.
This tragedy is even more heartbreaking considering the recent escalation in fighting between Saudi-backed government forces and Iranian-backed
Houthis, which has led to at least 2,000 Yemenis crossing into Djibouti, the opposite direction and being received by the U.N. Migration Agency.
But these desperate migrants from the Horn of Africa are willing to risk it to go to a war zone, hoping for a better life on the other side.
Larry Madowo, CNN, Nairobi.
(END VIDEOTAPE)
NEWTON: Okay, when we return, a few weeks ahead of the U.S. midterm elections, federal authorities searched the home of U.S. Representative
Ilhan Omar. We discuss that after this.
(COMMERCIAL BREAK)
[16:32:45]
NEWTON: Hello, I'm Paula Newton, and there is more QUEST MEANS BUSINESS in a moment.
When this year's Nobel Prize for Economics was given to two U.S. professors, who developed models to minimize recessions. We'll speak to one
of their former students.
And Richard Quest speaks to former Qantas CEO about his legacy at the Australian airline.
Before that, though, the headlines this hour:
Saudi Arabia says it intercepted and destroyed a ballistic missile launch toward Riyadh today. This comes as the kingdom's main airport remains
closed along a series of Houthi attacks.
Iran-backed group is threatening more airport strikes in retaliation for Saudi attacks in Yemen.
At least 139 people have died after a boat carrying migrants capsized off the coast of Djibouti. The International Organization for Migration says
the boat was carrying more than 300 people, including children. It sunk soon after taking off from the shore of the East African nation, likely due
to overcrowding.
The world's richest man is donating hundreds of millions of dollars to help Republicans' chances in the U.S. Midterm Elections.
Elon Musk is now the top known donor to the Republican Party. He has given at least $276 million just since the summer. Most of that money went to a
super PAC that supports Republican candidates for the Senate.
So, federal officers have searched the home of a Democratic Congresswoman who has been an outspoken critic of the Trump administration. Homeland
Security says the pre-dawn search was part of a criminal investigation into Representative Ilhan Omar, who was born in Somalia and moved to the U.S. as
a teen.
The Justice Department typically avoids actions against political candidates 60 days before an election, but Omar has long been in President
Trump's crosshairs.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I love this Ilhan Omar, whatever the hell her name is, with the little shoe, the little turban. I
love her. She comes in, does nothing but -- she's always complaining. She should get the hell out, throw the hell out. She does nothing but complain.
[16:35:01]
Ilhan Omar, one of my favorites. She ought to get the hell out of our country. She shouldn't be here. She shouldn't be in our country.
How about Ilhan Omar? She comes from Somalia.
And all they have is crime and squalor, and she comes into our country. And she says, my constitution allows me -- she is talking about our
constitution, what they have done to Minnesota -- these people from Somalia, what they have done to Minnesota, should never be allowed.
(END VIDEO CLIP)
NEWTON: Now, after the raid, Omar pushed back on X. She said, it's "the latest escalation of Trump's campaign of political intimidation."
CNN's Katelyn Polantz has more now.
Good to see you and have you on this story. And we are wondering. I mean, normally we talked about the 60-day period. Right? Why the urgency here for
this kind of a raid, and what more are we learning about, you know, the grounds for them conducting this raid?
KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE CORRESPONDENT: Paula, there must be grounds for this search of Representative Omar's home, because a
federal judge would have had to sign off, and there would have had to be information presented to the judge by Justice Department. Prosecutors
saying this is why we need to do the search right now, and this is why we need to do it to potentially -- what we believe we may be able to pull out
of this home in the Washington, D.C. area.
We know that this is related to immigration, given the presence of Homeland Security investigators there, who would be the lead investigative agency.
We also know that it's a criminal investigation. That's why there would be involvement of the Justice Department and a sign-off from top Justice
Department leaders on doing something like this so close to the election, and regarding a member of Congress.
One thing I wanted to add to put a button on what the president had previously said in those clips you were just play -- that you were just
playing, excuse me. Representative Omar, she is a U.S. citizen at this point in time. She says that she has not had any immigration issues in the
past, and that there has nothing that has been done on her part that is any wrongdoing.
She also has said that this is an escalation in a campaign of political intimidation that she has faced from the president and the Justice
Department. We will see exactly what may result from this. But it is very unusual to see Justice Department activity like this so close to an
election, where she is not just a member of Congress, a prominent Democrat, but also running again for re-election to maintain her seat in Congress in
November, as the House elections will be taking place for the midterms.
NEWTON: Yes, of course. In terms of understanding exactly any kind of accusations or anything like that. I mean, the Justice Department is under
no obligation at this point, right, to release any information if it doesn't want to.
POLANTZ: That's right. And what they have been able to do is, if they are putting information together to get a judge's authorization for this
search, that would be in the court filings, and it would be under seal, confidential. We wouldn't have access to it necessarily right now.
We -- it's always possible we could get that sort of information, or if a criminal charge would be filed. That would be another very obvious step of
investigative activity. So, that may be even a tougher type of thing that could take place before an election, very likely not would be able -- would
not be able to take place before an election.
But we don't really have much more indication other than it appears to be immigration related. And also, the White House border czar Tom Homan, he
has said in the past that it's been an investigation ongoing for a while, and that there is an immigration violation, potentially as one of the
components here. Paula?
NEWTON: So, he has -- yes. And so, he has definitely disclosed at least one of the things that might certainly have motivated this investigation.
Katelyn Polantz for us. Thanks so much, appreciate it.
Now, two U.S. professors have won this year's Nobel Prize for Economics. Robert Hall and Michael Woodward, developed models to minimize recessions.
We will have more on their work next.
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[16:41:42]
NEWTON: So, one of the top concerns, of course, around A.I. is how it might reshape the workforce. Bill Gates told our Jake Tapper that the technology
is forcing society to decide which jobs should be spared.
(BEGIN VIDEO CLIP)
BILL GATES, CO-FOUNDER, MICROSOFT CORPORATION: We really do need to make a decision as a society: how do we tax AI usage or robot usage, and where do
we want to make sure the human jobs are preserved.
The idea that you need to preserve things for humans may sound bizarre, but in fact, you know, we will get there. And then, we will decide politically:
are there things that we think only humans, you know, should be allowed to do?
(END VIDEO CLIP)
NEWTON: Now, comments like these continue to raise questions about whether A.I. will be a job killer or a job creator. Now, a CNN poll found three-
quarters of Americans have fears and concerns about AI's growth and development. David Goldman has been looking at those numbers.
DAVID GOLDMAN, CNN BUSINESS SENIOR REPORTER: Will A.I. kill jobs? Well, yes, probably. I mean, according to this new McKinsey study, about 35
million jobs will be lost to automation over the course of the next decade.
But look at this: 40 million will be created. That sounds really good. It's not the full story, though. You really need to dive into these numbers.
So, about 25 million, according to this study, will not need to leave their jobs at all. You can stay in the current field that you are in and continue
to work in it, but about 11 million will, and that's a sizable part of the labor force. That 6.5 million people need to find new jobs.
So, what could they do, and will there be jobs for them? Well, yes, maybe there will be because if you remember, the population of workers is getting
older and they are leaving the job force.
We are not replacing them with immigrants and we are not replacing them with younger people as the population starts to become older and older and
older. 6 million people by the end of 2032 will no longer be in the workforce.
You can already see this trend happening in just four years ago.
39 percent of people 55 and older made up the entire labor force, but now that's under 37 percent So, you can see that maybe this is creating an
opportunity for people to move careers.
What are these people going to do, though? These are the jobs that are in demand. It's electricians, plumbers, construction workers. They are
building A.I. data centers. If that's not something that's going to be appealing to those workers, well, then, that could be a problem.
Now, of the 8,000 jobs that are posted for A.I. on LinkedIn, that's about five percent of all S&P 500 companies that are listing A.I. jobs, a lot of
these are senior level. In fact, 71 percent of them are senior level jobs.
So, that could be a problem as well, because those are data analysts. Those are A.I. engineers, those are machine learning specialists.
If you don't know how to do this, that's not something that you can easily train for.
So, your options may be build an A.I. data center or get the training that you need to do something that's pretty advanced.
[16:45:05]
Doesn't necessarily mean that all the jobs are going to be automated, but for those that are, it could be a little bit difficult to get into the
labor force.
NEWTON: Our thanks to David Goldman, there.
Now, this year's Nobel Prize for Economics was given to two U.S. professors who developed models to try and minimize recessions. Robert Hall and
Michael Woodford will share the Bank of Sweden Prize in Economic Sciences in memory of Alfred Nobel, as the award is officially known.
Now, their models focus on microeconomics to understand the decisions of people and households, rather than macroeconomic factors like inflation and
production.
Now, one member of the selection committee says their work lays the groundwork, in fact, for financial policy making. Listen.
(BEGIN VIDEO CLIP)
PETER FREDRIKSSON, MEMBER, COMMITTEE FOR THE PRIZE IN ECONOMIC SCIENCES: These contributions this year is an important tool for discussing. I mean,
first of all, judging how the economy is doing, and second of all, to judge the effects of different types of interventions, like raising the interest
rate to curb inflation and so on.
(END VIDEO CLIP)
NEWTON: Economist Valerie Ramey was one of Robert Hall's students at Stanford University. She is now a senior fellow and deputy director of
research at the Hoover Institution and a distinguished economist in your own right, I want to point out.
And yet, this is a big deal for so many people, including you.
Can you really kind of give us some insight into how modeling the microeconomic effects of things like a financial crisis, an energy crisis,
and yes, that is very tough. How instructive it can be, and what the work of professors Hall and Woodford meant for this on a practical level.
VALERIE RAMEY, FORMER STUDENT OF NOBEL LAUREATE ROBERT HALL: Yes, I'm happy to do that. So, we can't really come up with good policies unless we
understand how the economy works. Just the way doctors can't come up with good medicines unless they understand how the body works.
And the big thing that Bob Hall and Mike Woodford did was really move us forward in our understanding of the economy.
So, let me give you an example from what was the main contribution of Bob Hall? He studied consumers. So, why are consumers important? Well, they
count account for two thirds of all GDP. So, if we understand what causes consumption to change, then we understand quite a bit of what causes GDP to
change.
So, his insight was figuring out how to test competing models of how consumers behave. So, one model was the old Keynesian model that said
consumers just look at their current disposable income and then they consume a certain part of that, and that's a good approximation.
Well, subsequently, Milton Friedman and Modigliani argued, no, no, no, consumers look at the bigger picture. They don't just look at what the
paycheck is that they are getting now. They have expectations about their future income, and their future taxes, as well as their current wealth.
So, he figured out a way to test that, that was incredibly clever and really moved the profession forward in understanding and believing that
consumers really do look ahead.
NEWTON: Yes.
RAMEY: So, he took what was an old idea in finance, and then, brought it over to macro, which people had not done before, and then, came up with a
new test and figured out that consumers are a lot more complicated than John Maynard Keynes had thought.
NEWTON: Yes, and it is that keyword that you use about expectations, right? I want to try and move it forward to the present day. Now, I'll point out
that Condoleezza Rice, who is the director of the Hoover Institution, said of Professor Hall's work that it -- in her words, profoundly shaped our
understanding of economic growth, employment, and the forces that drive the economy.
I just want to put up a graphic where we are talking about what the Nobel Prize Committee was really talking about it acting as a ballast, right?
Like this information, this research was really profound in the way it could offer solutions on both fiscal and monetary policy.
So, I'm wondering from you now, at a point where we are going through certainly what is an economic energy crisis, what import do you think this
kind of research has to the present day?
RAMEY: Oh, it has a huge impact because the -- what they did to move our understanding forward means that we can make much better recommendations
for policy, rather than just shooting in the dark, saying try this, try that. We have a much better idea.
Central banks around the world use what's called the new Keynesian model, and one of the equations in that new Keynesian model, one of the key
equations. Is the equation that Robert Hall came up with and that he tested.
[16:50:00]
And then, what Mike Woodford did was he looked at a variety of other parts of the model, how firms were markups. Bob Hall also looked at markups as
well.
And then, in Mike Woodford's work, he put it all together to take into account the interactions. And so, now we have a much firmer foundation for
figuring out what should be the policy in response to a crisis here or an energy price spike there.
NEWTON: And I'm wondering how effective do you believe this research is. Because the professors do the research work, but it is the politicians and
others, the central bankers around the world, the IMF, the World Bank, that have to employ it.
You know, I was very close to a lot of the crisis meetings, because I was reporting on it for the financial crisis. Certainly, they had a lot of
meetings in London. I'm wondering if you look at that kind of a crisis, if you really think it moved things forward. Because as bad as the financial
crisis was, it could have been a lot worse if central bankers and finance ministers and governments didn't look at this kind of implication of this
kind of research.
RAMEY: Yes, absolutely. They -- you know, this research had been developed before that crisis, so, it was very, very useful.
Now, one thing that the model that we use doesn't have as much of the financial plumbing in it, and some of the problems with the crisis were the
financial plumbing, and so, we needed a little bit more.
But of course, the latest literature that looks at financial plumbing builds on the model that was developed, you know, with the inputs of Bob
Hall and Mike Woodford.
NEWTON: Valerie Ramey, you certainly explained that very well. As a professor and a distinguished PhD and an economist in your own right, I
will say I'm sure both of them will think you an excellent student. So, thank you so much for schooling us in this. We really appreciate it.
RAMEY: All right. Thank you.
NEWTON: Now, after the break, we hear from quite the controversial airline executive. Alan Joyce ran Qantas for 15 years. He recently spoke to Richard
Quest about where he believes the industry is headed. You will want to hear this.
(COMMERCIAL BREAK)
NEWTON: Chief executives are often tasked with knowing where an industry is headed and steering the company they lead safely in that direction.
At least that's what they should do.
Richard Quest recently spoke with Alan Joyce, who ran Australia's flag carrier, Qantas for 15 years.
[16:55:00]
He chronicled his experience in a new book entitled, "Riding the Jet Stream". Alan Joyce tells us where both the industry and his own legacy are
headed.
(BEGIN VIDEO CLIP)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR (voice over): For nearly a century, airlines have been trying to solve one problem: how do you get from
Australia to the other side of the world without stopping on the way? Qantas believes it finally has the answer. It's called Project Sunrise.
QUEST: Everything from cutlery to crockery has been redesigned and made lighter. Because whilst it may be a couple of grams of weight here or a
couple of grams of weight there, once you put hundreds of these on the aircraft, pretty soon you are talking real weight.
Will we both be on the first flight of Project Sunrise?
ALAN JOYCE, FORMER CHIEF EXECUTIVE OFFICER, QANTAS: Well, I'm hoping that we can celebrate that as a major success story, not in only Qantas'
history, but in world aviation. The head of Airbus told me, and it's covered in the book that this is like the moonshot.
It got both manufacturers really keen to develop an aircraft for us. It was not guaranteed anybody would develop an aircraft for Qantas to do that, and
it's going to change aviation. And it gives Qantas a unique value proposition no other airline in the world can have or will do.
And I think that's something to be proud of.
QUEST: As you look at the industry, what mistakes do you believe are being made now?
JOYCE: I think the challenges going forward, I think, are going to be on the environmental stuff still, and I think there is not enough progress
being made on sustainable aviation fuels in particular. And as we see environmental crisis is happening, I think that's going to be more and more
pressure on aviation, because it doesn't have a technology solution apart from sustainable aviation fuels that are going to get it there.
QUEST: You are still a lightning rod in Australia. I was there just a few weeks ago and mentioned Alan Joyce at a dinner party, and it's like -- it's
like lighting a firework, like the blue touch paper, and stand well back.
You're going to get a variety of views. Those who think you saved the airline, those who think you were the destroyer of the airline.
JOYCE: But I'd say look at the results. Look at the airline that is now doing Project Sunrise, which has you and the whole industry talking about
it. Look at the airline that has the most successful low-cost carrier. Look at the airline that's making record profits and it's returning a lot to the
shareholders. Look at the airline that's got the biggest order in aviation history in Australia. And I'd say, well, that's the legacy.
(END VIDEO CLIP)
NEWTON: We thank Richard and Alan Joyce.
And that is QUEST MEANS BUSINESS. I'm Paula Newton. "THE LEAD" with Jake Tapper is next.
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END
