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California Braces For New Flood Threat; Gloves Off: AI Sparks Political Showdown; Psychiatrist Explains How To Reclaim Joy. Aired 7:30-8a ET

Aired January 01, 2026 - 07:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

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[07:31:40]

BRIAN ABEL, CNN ANCHOR: New York has a new mayor.

(BEGIN VIDEO CLIP)

LETITIA JAMES, NEW YORK ATTORNEY GENERAL: Congratulations, Mr. Mayor.

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ABEL: At the stroke of midnight Zohran Mamdani became the city's first Muslim and South Asian mayor. The private ceremony held in an old subway station beneath City Hall. And later today he'll be joined by Congresswoman Alexandria Ocasio-Cortez and Sen. Bernie Sanders for a public swearing-in ceremony.

Mamdani is promising universal child care, freezing rent prices, and free buses for the city, all of which carries a multibillion-dollar price tag.

California, meanwhile, is kicking off the new year with a new rainfall and flood threat. It comes just days after a Christmas storm flooded parts of the state leaving the soil waterlogged and the state pushed to its limits. The rain today will also make for a soggy Rose Parade, a first in 20 years.

Let's get right to CNN meteorologist Derek Van Dam for the latest on all of it -- Derek.

DEREK VAN DAM, AMS METEOROLOGIST: Yeah, good morning. Happy New Year, Brian, and to everybody and our viewers.

If you're waking up in Los Angeles, kind of taking those sleeps out of your eyes here, we're waking up to a very active start to our new year. Twenty twenty-six starting off with a bang. Heavy rain, the potential for some flash flooding. The radar is lighting up very much at the moment.

And the problem here is that we've got so much activity in and around Pasadena -- of course, the Tournament of the Roses Parade, which will be a wet parade. That entire five-mile stretch will be quite challenging for the paradegoers and all the onlookers as well. It's all thanks to this slug of moisture coming off of the Pacific Ocean.

The National Weather Service has issued these flood watches and flood advisories in and around the greater Los Angeles areas warning of the potential of mudslides and debris flows, especially in those prone areas from the recent burn scars.

This is interesting, too. We do have the potential for some severe weather to move through. Damaging winds and maybe some lightning, and I can't rule out the small chance of a brief tornado in this greater area -- highly atypical for this time of year.

Nonetheless, the entire state and much of the western U.S. clobbered by yet another round of storms as we head into Friday -- tomorrow.

So here's a look at New York's Times Square still picking up the pieces from last night's celebrations. But look at this. Snow fell downtown New York as a band of heavier snowfall moves through the I-95 corridor.

Heads up, Boston. You just had this issued. This is a snow squall warning for you. You can see the band of snow coming in. Expect visibilities to be dropped below a quarter of mile here in the coming next 10 to 15 minutes. That could impact travel today -- Brian.

ABEL: All right, Derek Van Dam. Thank you and Happy New Year to you.

VAN DAM: Same to you.

ABEL: The White House wants fewer rules, but Congress doesn't agree. Lawmakers are demanding guardrails on AI's impact on jobs and keeping kids safe when using it. That bipartisan power is directly challenging the Trump administration's push to loosen regulations.

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SEN. BERNIE SANDERS (I-VT): This is the most consequential technology in the history of humanity. It will transform our country. It will transform the world. And we have not had in Congress, in the media -- and I'm glad you're doing this show -- or among the American people the kind of discussion that we need.

[07:35:00]

SEN. KATIE BRITT (R-AL): It is imperative that we put up guardrails, especially when you're looking at AIs. If these AI companies can make the most brilliant machines in the world they could do us all a service by putting up proper guardrails.

(END VIDEO CLIP)

ABEL: All right, the group chat is back.

You hear both of these senators, guys, agree that action is needed, but the Trump administration just issued this executive order that's challenging state AI laws.

Where does the power reside right now, really? Is it Congress that can actually override the White House's push for fewer rules, Stephen?

STEPHEN COLLINSON, CNN POLITICS SENIOR REPORTER: Uh, I think right now the power lies with the White House. The president has been trying to dismantle any limits on AI. A lot of those tech titans are very close to the administration and there are big questions about that.

ABEL: In and out of the White House.

COLLINSON: That said, I think it's about time there was this kind of discussion in Washington about the impact on this -- of this technology, especially on jobs. I think it's quite likely we're going to see the political power shift on this in the runup to the 2026 election.

There's going to be extreme pressure I think on candidates of both parties to come up with answers for workers who are going to lose their jobs. Just as, say, 15 years ago we saw the political impact of the loss of blue-collar jobs in the Midwest moving aboard, I think we're going to see the same political consequences playing out in the future through the loss of white-collar jobs.

ABEL: And that could change the power dynamic here as well.

Mike, I know you have a background here in tech. So we heard Sen. Sanders there warn about economic devastation.

From a business and development perspective, what's the real cost for putting up guardrails like this?

MIKE LEON, HOST, "CAN WE PLEASE TALK?" PODCAST, DIRECTOR OF STRATEGY, FREE & EQUAL ELECTIONS FOUNDATION, ANCHOR, LEGAL PODCAST NETWORK: Yeah. So there's two things. Both senators are coming at it from different angles. Let's do the jobs one first, which is what Bernie Sanders is.

So, you know, whenever we would look at our operating budget when we worked in technology and we're building out, let's say, an application, you look at AI to circumvent areas where a human effort would be needed, right? That causes elimination of redundancies.

So what's going to happen now is companies are going to look at could -- do we need to spin up somebody, pay them insurance and all of these other benefits versus using AI technology to kind of replicate some of the things that they can do, and then have the manual oversight transfer to other people.

That is a huge thing, to Stephen's point. That could start to see some reductions across different industries and sectors.

ABEL: And as you continue, I do want to show here is what President Trump's AI executive order entails. It calls for a single national AI policy. It seeks to block state laws seen as barriers to innovation. And creates AI Litigation Task Force, like what you're talking about here, to challenge state regulations.

LEON: Yeah. And -- well -- and then the second thing is what Sen. Britt is talking about with respect to children and with respect to the "happy path" as we call it in the product world of the onboarding flow. So when you download one of these ChatGPTs, what does that onboarding flow look like for somebody that's under the age of 18 versus somebody that's over the age of 18?

A lot of the times, you know, product managers and the way these companies can create the guardrails is to create that path so that the machine is asking are you this age. You have to prove it to me. We all go through the different things where we've got to pick the staircases, right, and we hate that. We've got to go through more layers and more hurdles. It's not just selecting something with a button that could be bypassed.

And I think there's a lot of talk about that and how that protects children, but the jobs one is probably the bigger impact to the economy.

ABEL: Well, let's talk about protecting children here because --

LEON: Yeah.

ABEL: -- you have Sen. Britt's bill here but it's not getting a lot of traction at this point despite, Francesca, the White House saying that they support protecting children.

FRANCESCO Um-hum.

ABEL: So why isn't there more of a push here?

FRANCESCA CHAMBERS, WHITE HOUSE CORRESPONDENT, USA TODAY: I'll be interested to see what role first lady Melania Trump could potentially play in this discussion. She has raised similar issues. Her campaign for children and "Be Best" is something that she has focused on this issue as a part of that.

So we've seen in the past that she, in this White House, you know, has had some influence with her husband when it pertains to children when you think about the role she's also played in trying to bring back Ukrainian children that were forcibly taken to Russia, for instance. So she is someone who could be a potential ally to the Katie Britts of the world in this particular debate.

With respect to the broader White House, what I think you're referring to is kind of the tension between these two things. The White House sees this as a major national security issue. It's a race between the U.S. and China to develop AI and to be the leader in the AI space. And so, you know, that is one of the arguments that the White House has laid out for why they need to have consistent rules at the national level so that states can't individually slow down the progress that they want to see made here.

ABEL: And it's also an urgent issue because we are seeing how many teens -- stories after stories of teens interacting with AI and dying by suicide. So it is something that seriously needs to be addressed and in a quick manner. Hopefully we can see that happen. [07:40:05]

Stick with me, guys.

Coming up, he might think it's a hoax, but affordability could continue to haunt President Trump in the new year. We'll check the pulse of the economy for 2026.

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ABEL: The big question for the 2026 economy is all about affordability. This year we are watching the Fed's next moves, the real cost of tariffs, whether people are just worn out by high prices, and how AI is shaking up the job market.

So here to break it all down is Courtenay Brown, economics reporter at Axios. Courtenay, thank you for being with us.

Let's start with these tariff checks. President Trump -- he's been talking a lot about all of the mney coming in from tariffs and even sending out checks. So let's listen to what he says here.

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DONALD TRUMP, (R) PRESIDENT OF THE UNITED STATES: We've taken in hundreds of millions of dollars in tariff money.

[07:45:00]

We're thinking about a rebate because we have so much money coming in from tariffs.

There's even under consideration a new concept where we give 20 percent of the DOGE savings to American citizens.

We are sending every soldier $1,776. Think of that. And the checks are already on the way.

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ABEL: I haven't received mine yet. I don't know about you.

But is this a real economic plan or is it just a political move?

COURTENAY BROWN, ECONOMICS REPORTER, AXIOS: This is going to be such a fascinating theme to watch in 2026, especially ahead of the midterm elections. We're seeing President Trump lean on a strategy he used during the pandemic that worked out well for him. Just send people money. If people don't feel good about the economy just send them money.

The problem is the fiscal --

ABEL: The overt plan.

BROWN: Right, exactly. The fiscal reality is just not there this time. We've heard the

treasury secretary say that if President Trump wanted to do something like a tariff dividend that would require the act of Congress.

There's this really interesting tension between President Trump's tariffs that the administration has implicitly said are pushing up prices, right? They acknowledge that because they rolled them back in an effort to address affordability concerns with respect to groceries. You can't roll them back if you're also depending on that pot of money to send people checks.

You have to watch this tension in 2026. It's something that my sources are really, really intrigued by.

ABEL: OK, so if they do go out, who does end up paying for them at the end? You know, is it higher prices at the store is the result or does it just add to the deficit? What's kind of the backside of this?

BROWN: Where does the money come from, right, and I think that's the big question --

ABEL: Yeah.

BROWN: -- and who gets the money, and how much? These are all things we don't know the answer to.

But I think what matters here is we're seeing the administration trying to address affordability concerns that are really, really putting pressure on the American consumer.

ABEL: OK.

So the president has also been calling the whole affordability debate as a whole a Democrat hoax. Let's take a listen to what he said there.

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TRUMP: The word "affordability" is a con job by the Democrats. Affordability is a hoax that was started by Democrats. The word "affordability" is a Democrat scam.

They use the word "affordability." It's a Democrat hoax.

You can call it affordability or anything you want.

The Democrats love to say affordability.

(END VIDEO CLIP)

ABEL: But when you actually look at the numbers people are still feeling the pinch. We can show you. There's this consumer sentiment report that's out here and it shows how much down it is.

So with sentiment dropping, is affordability just a political talking point at this point or is it still the real pain point for most Americans? BROWN: Consumer sentiment is at almost the lowest level on record, which is astonishing when you consider that the economy is growing at an over four percent rate. Inflation is lower than its peak during the Biden era.

But people don't really care about inflation. They don't care that inflation is technically lower than it was two years ago. What they care about is the kind of snowball affect of price hikes over recent years and prices aren't coming down fast enough for people and this is really, really upsetting them.

I think if you were to wake me up out of some sort of coma and show me all of the economic data, and then show me the consumer sentiment numbers, I think I'd be really confused. I think I would wonder what's going on.

But the answer is affordability concerns. And we've seen the administration, as I said before, try to address this by rolling back some tariffs on grocery items. Talking about potentially giving people money. They -- President Trump says it's a hoax, but on the other hand we see him trying to address the very concerns that he says are a hoax.

ABEL: A little -- a little bit of a contradictory --

BROWN: Yeah.

ABEL: -- situation there.

I do want to talk about the Fed because inflation, jobs -- they've had to weigh what to do as a result of both of those and which one may be more damaging for the economy regardless of what they do. So let's talk about these cuts. We've seen a series of interest rate cuts from September to December.

When you're talking to investors right now, how are you telling them to read the bond market?

BROWN: Um-hum. This is a really exciting year to be a Fed reporter, I'll just say. We get a new Fed chair. Well, we're supposed -- we're meant to get a new Fed chair announcement.

ABEL: Yeah.

BROWN: President Trump will come out and announce who he will pick to succeed the current Fed chair Jerome Powell in January. And then this Fed chair will take his position in May -- and I'm saying his because we think it's going to be Trump loyalist Kevin Hassett.

[07:50:00]

And I think the big question that the Fed hasn't really had to grapple with in several decades is are you going to lower rates because the economic backdrop warrants lower rates or is Fed -- is Trump's pick for the Fed lowering rates essentially to do Trump's bidding?

ABEL: That was kind of my follow-up -- is -- are there indicators that will let us, the public, know which version it is?

BROWN: Oh, yeah. Oh, yeah. If investors get the sense that the Fed chair is not making interest rate decisions for reasons that are not related to the economy specifically, there will be a reaction in financial markets -- in bond markets, specifically.

Right now the kind of whisper out there is that Kevin Hassett will be the Fed chair, and bond markets are OK right now. It seems like they believe that Trump will not be able to infiltrate the Fed and the Fed's longtime political independence will remain. So that's something to watch for sure next year.

ABEL: Absolutely, it is.

Another thing to watch is the economy as a -- as a whole, and jobs, and there's a lot of uncertainty about all of that.

I do want to play a sound bite from Glassdoor and get your response on the backside.

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DANIEL ZHAO, CHIEF ECONOMIST, GLASSDOOR: Uncertainty really is the theme for 2025. It's been a big driver for why the economy has slowed down over the course of the year and it is probably the blocker that is going to prevent hiring from picking up through the rest of the year.

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ABEL: So what do we do with so much uncertainty, and how does that uncertainty impact the labor market and the economy because emotions play a role?

BROWN: One thing I'm watching in 2026 is whether all of these affordability concerns that we've been talking about that are weighing on the U.S. consumer -- does that transition into concern about the labor market?

We've seen really, really soft jobs numbers, especially in the back half of 2025. And, you know, there isn't so much evidence that it's driven by AI, but there's clearly a lot of anxiety, especially among white-collar workers, that their jobs could potentially be in danger. Maybe it's not next year but maybe it's the year after that.

And so I wonder if we'll start to see still soggy consumer sentiment numbers. But the reason is less about inflation and more about the labor market and concern for their jobs.

ABEL: OK. So you bring up AI. The "Godfather of AI" has been talking about its impact on the economy, on jobs. Let's take a listen to that.

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GEOFFREY HINTON, "GODFATHER OF AI": I think we're going to see AI get even better. It's already extremely good. We're going to see it having the capabilities to replace many, many jobs. It's already able to replace jobs in all centers, but it's going to be able to replace many other jobs.

(END VIDEO CLIP)

ABEL: So you hear that there. Is there the potential for the concerns of AI and what it can do -- replacing the concerns of affordability?

BROWN: I think that's the big question. I think that people hear sentiment like that and they worry. They get concerned. And they see how fast this technology is evolving and they wonder what that means for their livelihood. Does it mean that they will have to retrain and learn how to do new skills that AI can't do, and then AI ultimately catches up and learns that skill that they just learned? Is it this constant, like, race to try to beat a robot? And it's a race that's ultimately, if you believe in this technology, is kind of unwinnable.

ABEL: All right, Courtenay Brown. I really appreciate your reporting and expertise. We will see what happens in 2026. Thank you.

Everywhere you go today you'll hear Happy New Year, but happiness isn't the same as joy. Here's Sara Sidner.

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DR. JUDITH JOSEPH, BOARD-CERTIFIED PSYCHIATRIST: We are built with that DNA for joy. It's our birthright as human beings.

SARA SIDNER, CNN ANCHOR (voiceover): Board-certified psychiatrist Dr. Judith Joseph is a joy doctor -- no, really. She's also a scientist and professor that has done groundbreaking research on finding joy and what keeps us from it.

SIDNER: What is the biggest obstacle to feeling joy?

JOSEPH: I think people don't realize that there is happiness and then there is joy. Happiness is external. It's typically dependent on something happening for you to feel that sense of happiness, right?

SIDNER: The quick fix.

JOSEPH: Yes.

SIDNER: Yeah.

JOSEPH: And joy is internal. It's harnessed within. You don't have to teach a child joy.

Well, some of us actually have something called alexithymia, which makes it difficult to name how we feel. Others of us -- we have something called anhedonia, which is a lack of joy and pleasure and interest.

People who are high-functioning -- they avoid dealing with their pain by busying themselves. SIDNER: (voiceover): Dr. Joseph is now teaching people about a new

diagnosis. After everyone else in her profession said it wasn't real she, alone, performed clinical studies to prove it is. She thought it had to be because she was experiencing it personally. It's called high-functioning depression.

[07:55:05]

SIDNER: What is high-functioning depression?

JOSEPH: In mental health we're still in the dark ages. We're waiting for people to break down. I wanted people to learn that -- listen, depression looks different. There are some people who struggle with anhedonia -- a lack of joy. They don't seem depressed.

You don't have to have sadness to meet the criteria for depression. Many of us are pathologically productive. We're the rock. We show up for others but we're struggling in silence. And I wanted people to know about this term anhedonia -- that you don't have to live like this. There are better ways to live.

SIDNER: (voiceover): She's now written a book about it.

SIDNER: As I read through this book something really stuck out to me. You said, "No one gets worried when they walk in on you sending work emails in the ladies' bathroom the way they would if they caught you doing cocaine in the stall."

Holy smokes. That is quite a comparison.

JOSEPH: Well, personally, in 2020, I was going through a period where I was pathologically productive. I wore this mask of everything looks great. And on the outside, it did look great, you know. I was running my lab and had a small child at home -- looked like the perfect family. Getting all these awards. Always on TV. But I was struggling with anhedonia -- a lack of pleasure and interest.

But because society really shows us that happiness is having -- checking all those boxes, it really doesn't prioritize joy.

SIDNER: (voiceover): She was performing but couldn't access joy anymore. And when she began revealing her symptoms on social media posts millions of people responded.

JOSEPH: There is a disconnect between research and the real world. People are finally realizing that a lack of joy -- it may not be a crisis in terms of the medical sense, but it is an existential crisis.

We are built with the DNA for joy, so if you're lacking joy there are ways to infuse it back into your life. And guess what? Joyful people have better health, better relationships. They're more likely to be active in their communities to create positive change. So we should invest in joy.

(END VIDEOTAPE)

ABEL: Sara Sidner reporting.

Coming up, New York City has a brand new mayor. What Zohran Mamdani has planned for his first day in office.

Plus, the Orange Bowl, Rose Bowl, and Sugar Bowl all later today, but that might not mean what it used to.

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