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Quest Means Business
First Presidential Caucus in Iowa Tonight; Races Too Close to Call; Alphabet Surpasses Apple as Most Valuable Company; WHO Declares Zika Virus Public Health Emergency; Nigeria May Need to Borrow Billions Due to Falling Oil Prices; Slowing Exports for China. Aired 4-5p ET
Aired February 01, 2016 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00]
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RICHARD QUEST, CNN HOST: The market is closing in New York. The Dow is off just a smidgen. It's down around 23 points. Lucky rise on the New York
stock exchange. And, oh, look at that. Now that's what you call a robust gamble on Monday, it's the 1st February.
Let the jamboree begin. The great American public are about to go to the polls in Iowa. Follow the money. Democrats are amassing the millions of
dollars in the race for donations. And an alphabet soup. Google's parent company leaps ahead of Apple. I'm Richard Quest, back in New York, we have
an hour together. Of course, I mean business.
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QUEST: Good evening. It may often seem as if it takes a long time to get here but tonight it is the moment of truth for the U.S. Presidential
candidates. In less than four hours, they are going to begin to face the only test that matters in the U.S. State of Iowa. The electorate will be
having their first say. Thousands of voters, maybe hundreds of thousands of voters, will gather in church basements, school cafeterias and sitting
rooms across this mid-western state. Which as you can see is right in the heart of the U.S.
And those people who will be caucusing will cast the first vote in a process that's going to determine who will take the Presidential oath of
office next January. Now, the key issue of course is that of the U.S. economy. But there are many other issues as well involved and the stakes
could not be higher.
(BEGIN VIDEO CLIP)
QUEST: A poor showing here, even though it's one state in the middle of the country, it can doom a struggling campaign. So on the Republican side.
CNN's Poll of Polls shows at the moment Donald Trump handily beating or at least leading Ted Cruz 31-24%. But that is down for Trump and other
candidates have shown a little bit of life left in them yet.
For the Democrats, it's the contest between Hillary Clinton and Bernie Sanders and there it is statistically too close to call. It's almost within
the sampling of 47 to 44. We need John King's help here, who has been following the race from day one. Our chief U.S. correspondent. John, over
the next few months, we're going to need much of your time to give us the king analysis on what's happening. Iowa, who and what and why?
JOHN KING, CNN CHIEF, U.S. CORRESPONDENT: Well, Richard, this is like the old Monty Python episode, I came here for an argument, right? That's what
you do in a caucus, you go into a community center, you go to a church, in some places you even go to the home, and you argue with your friends and
neighbors about who you are going to vote for and then you start the process of picking the next American president.
Let's start on the Republican side. One of the complications tonight is look at all these names. We still have a dozen people on the ballot. The
Texas Senator Ted Cruz, he's right on the top of the pack in Iowa. A tea Party favorite, a social conservative, he's counting on Evangelical votes.
The business woman Carly Fiorina, has been struggling. Mike Huckabee, won Iowa before, he's at the bottom of the pack now.
Who are the other big names, Marco Rubio, a late surge in the polls, he's the Senator from Florida, he says he's the next generation of the
Republican Party. And of course the name that has dominated American politics for the last six months, Donald Trump.
Iowa's blank right now for us because this will only fill in Richard when we start to get the results. So what are we looking for on the Republican
side? Let's go back to 2012. Look at all this gold.
Rick Santorum won last time on the backs of Evangelical Christian conservative voters. In tiny little rural counties all across the state.
That's what Ted Cruz needs tonight. If the Texas Senator is to win modeled after Rick Santorum and Mike Huckabee before him, he needs to win all these
small Evangelical counties. Why does he have to win so many of them? Because look what Mitt Romney did four years ago. He didn't win a lot, if
you notice this dark red, but he won where the people are, in the population centers. Poll county is where the capital of Iowa, is Des
Moines, 14% of the state's population there. Mitt Romney won in the cities and in the suburbs and he was able to get 25% just short of Rick Santorum
who won by 34 votes, if you can believe that.
So look tonight and see what happens. Can Trump win in the city centers and in the suburbs? Or will Marco Rubio get the traditional Republican vote?
The Romney red here is your mainstream establishment Republican vote. The Santorum gold, conservative evangelicals. That is the tug-of-war in the
state of Iowa.
Four years ago Richard, nearly 6 in 10 voters on caucus night on the Republican side described themselves as white born again Christians. We'll
want to see the composition of the electorate tonight.
Let me switch for you quickly over to the Democratic race and I'm going to go back in time here. Everybody remembers this drama. Iowa is the state
that put Barack Obama on the map. Hillary Clinton was the inevitable front- runner remember.
[16:05:04]
The young senator from Illinois, Barack Obama beat here in the contest and everything changed in American politics. The question tonight, can Hillary
Clinton hold off Bernie Sanders tonight. And the key, just like it was then, eastern Iowa. Bernie sanders has been courting liberals in this part
of the state aggressively and also again, back in the center part of the state, Des Moines, the capital, Barack Obama won it eight years ago.
Hillary Clinton needs to run up the vote in the urban areas tonight, Richard.
(END VIDEO CLIP)
QUEST: So here's the problem I have with the Iowa caucuses, John. We spend half the time telling the viewers that it is just the first in the race. It
rarely is predictive of the final results and we shouldn't read too much into it. And then we spend the other half of the time telling everybody how
significant it is as we move forward. Which is it?
KING: Let me go back to Monty Python where we began. Remember the old skit, he's not done yet? Or I'm not dead yet?
That's part of the issue tonight. Iowa rarely picks the nominee although sometimes it picks the nominee.
Remember eight years ago on the democratic side Barack Obama won Iowa (inaudible). He did become the nominee after a long battle with Hillary
Clinton but he was the nominee. It's been 16 years on the Republican side. Not since George W. Bush in 2000 has Iowa picked the Republican nominee.
Iowa's role traditionally is to shrink the field, the whittle the field. But I will say this; there are 12 candidates on the Republican side. There
is no question, if not tomorrow, by Wednesday or Thursday of this week, we will lose at least two, maybe three or four of those Republican candidates,
Richard.
But, if Donald Trump wins Iowa tonight, he's also way ahead in New Hampshire so there is a steam roll effect in any political system, in any
democracy. If you start winning, it's like a snowball down a hill. If Trump can win Iowa, he has a big lead in New Hampshire, he would then be a
force to be reckoned with.
QUEST: And we look forward to you helping us understand every part of the way. John good to see you sir, thank you.
John King, Chief U.S. correspondent who will throughout on QUEST MEANS BUSINESS help us understand what is happening in the U.S. election
electoral process. Because the journey to the White House is just beginning and of course there's a long road ahead.
February the 9th, now, we've got a caucus in Iowa. But New Hampshire becomes the first state to hold the Presidential primary and that happens
on the 9th. There, the Democrats will have a final chance to make their pitches ahead of the post. And CNN is going to host a candidate forum this
Wednesday in New Hampshire.
Moving the calendar along and you go to the first of March, where 15 states and territories will hold primaries and caucuses on the 15th. It's the so-
called super Tuesdays. And these are days that can make or break a campaign. If you do badly after Super Tuesday, just fold your tent and go
home.
By July, things should have cleared. Maybe not, but by July, you get to the conventions and the nominees will be picked for the conventions which are
one week apart. Remember one thing about the conventions. Traditionally, you could often get a brokered convention. Nobody was winning so there was
a back room deal done to put somebody as the nominee. Very unlikely so far in modern day politics.
And after that, from July, it's all down here or uphill to November the 8th, the General election. It's in the United States, it's held on the
first Tuesday, no the Tuesday after the first Monday in November.
RANA FOROOHAR, CNN GLOBAL ECONOMIC ANALYST: I've got it now.
QUEST: So it's always -- Election Day's always about the 8th, 9th, 10th, or 11th. 11th.
FOROOHAR: Very good.
QUEST: How are you?
FOROOHAR: I'm very well, how are you?
QUEST: You have sort of unfrozen after Davos.
I have, I'm back, I was stuck in Zurich for three days but here I am.
QUEST: If you were stuck in Zurich for three days, you ain't got any money left, I can tell you that. That city is just --
FOROOHAR: It's crazy. I had some really good food and I had a great massage so there you go. Not bad.
QUEST: The economy, where is the economy playing? It's important, but it doesn't seem to be, "the economy stupid."
FOROOHAR: No, I don't think so. I mean at first we have to say Iowa's a very unusual state, in the U.S. context, right. It's very white. It's very
conservative. It's an agricultural state. So it's sort of atypical. But I think the way the economy does play here is this is one of those states
that really suffered during the great recession. There are a lot of, you know, angry white voters who feel that they're part of this kind of left
behind generation in the U.S. I think that that's playing a little bit here. I think that that will favor folks like Trump. I think it will be
interesting to see whether that works in Bernie Sanders favor, right.
(BEGIN VIDEO CLIP)
FOROOHAR: Because Hillary's an establishment candidate on the left. If people are looking for an outsider, that might work for Sanders.
(END VIDEO CLIP)
QUEST: We're told, you know, that the Trump phenomenon, even the Sanders phenomenon to some extent is rare replicated when people actually have to
go into a polling booth and actually put a cross. Well I suppose tonight is that litmus test.
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FOROOHAR: And I think that that's why it's so important. I think that if Bernie were to win in this particular state, that would be -- it would be a
whole new race in some ways because everyone's been saying --
QUEST: Because he's leading in New Hampshire.
(BEGIN VIDEO CLIP)
FOROOHAR: That's right, that's right. And as we were just talking about with Trump same again Trump's way ahead in New Hampshire. If he wins in
Iowa, then you've got this incredible outsider race.
(END VIDEO CLIP)
FOROOHAR: We've been seeing it but this is the moment where we really see if the voters are going to go and walk the walk.
QUEST: How many of them go on after? I mean, I assume they all stay to New Hampshire may be just --
FOROOHAR: Well, you know, yes, I think most will stay for New Hampshire. I'm going to be really interested to see if Trump doesn't win how he
behaves. Because this is a guy who loves winning, this is a guy who --
QUEST: Well, but he's already suggested that, you know, he did sort of lean out the possibility I might not win in Iowa.
FOROOHAR: Yes, he's - I mean I think he's trying to sort of, you know, hedge his bets and manage expectations a little bit. But it's going to be
really interesting to see if his mojo goes away. Because I mean he has really thrived thus far by not having a real challenger.
(BEGIN VIDEO CLIP)
QUEST: John Kasich, the Governor of Ohio, endorsed by "The New York Times" just late last week and over the weekend but well down in the polls.
(END VIDEO CLIP)
QUEST: So does an endorsement of The Times" mean anything other than they've gone on a frolic of their own?
FOROOHAR: I don't think it mean it is anything in Iowa. I think you know, folks in Iowa are not "The New York Times" readership. You know they are
not the coastal elite. This is really Middle America. I mean I'm from Indiana so I grew up in this millu. You know these are people that I think
are very wary of the east and west coast establishments.
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FOROOHAR: I think that they really don't care what "The New York Times" has to say.
QUEST: Did you grow up on a farm?
(END VIDEO CLIP)
FOROOHAR: No, outside of a farm - outside of a farm. I shucked corn. I detasselled corn, Richard, we'll talk about that another time.
QUEST: Another time. Have you got any pictures? All right, let's have a look and see what happened on Wall Street, where it was a bumpy day for
U.S. stocks.
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QUEST: The Dow fell from the open. It did climb back and we even got a bit of green just before the close. But then it slipped off again. It was hurt
by the fall in oil which has perverted itself manufacturing data in China, which is weak.
The fall in oil prices and weak data from China hit European stocks as well. All down, the worst losses were in Paris with the CAC of 40. We also
had fresh data showing a fall in U.S. manufacturing growth and indices ended the day in the red.
(END VIDEO CLIP)
QUEST: As we come up and talk about Iowa more, it's a strange state. The heartland of America. The people who are the bedrock of the country.
(BEGIN VIDEO CLIP)
QUEST: We're going to be talking about Donald Trump's appeal in that part of the United States.
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QUEST: Donald Trump has called for his supporters to come out and vote for him on Monday. The Iowa caucuses which begin in just a few hours from now
will test whether the real estate chieftain can stay out in front.
The polls are showing Mr. Trump with a clear lead amongst Republicans ahead of his main rival and that's of course Ted Cruz.
(BEGIN VIDEO CLIP)
QUEST: Now, Mr. Trump turns to a familiar face for support last month. Campaigning with Sarah Palin, the former running mate of John McCain and
the former governor of Alaska.
CNN's political correspondent, Sara Murray is at Trump headquarters in Des Moines, Iowa. Good to see you. Now Sara, as we look at this, a win is
obviously the best scenario. But are the campaign prepared for second?
[16:15:10]
SARA MURRAY, CNN POLITICAL CORRESPONDENT: Well, of course, a win is the best scenario. But the other thing you have to remember Richard is not all
wins are created equal. If Donald Trump and Ted Cruz both come out of Iowa in a photo finish, essentially tied, that doesn't really move the ball
forward very much. But if Donald Trump supporters really do show up. If he runs away with this with say a 5 or 6 point lead, or even something larger
than that then that sends a strong signal to us that his support is real. His supporters will turn out even if they have not in past.
Now the other thing that you want to watch for is who wins out in this establishment lane. We've seen Marco Rubio on the rise in some of these
recent polls in Iowa. His campaign has been very careful to play down expectations and to say that what they are looking for is a strong third
place finish, that he beat some of the other governors in the race, the establishment candidates like Chris Christie, like Jeb Bush. But with his
poll numbers on the rise and with Iowa being so unpredictable, really anything could happen.
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MURRAY: So of course we're going to be keeping a close eye on all three of these top slots tonight, Richard.
(END VIDEO CLIP)
QUEST: And Sara, just give us a bit a feel because as a student of these Iowa caucuses yourself, Iowa loves this giving the country a bloody nose in
terms of having a first choice, don't they, Iowans?
MURRAY: Of course, I mean they really prize the fact they are first in this process. And to be honest, they take it very seriously. These are people
who will go out in the middle of winter on their Friday nights, on their Saturday mornings, and they will sit there for 45 minutes and listen to a
candidate give their speech and then ask them detailed policy questions. It's part of the reason that they argue they deserve this privilege of
being first in the process because they take it so seriously.
Now Donald Trump as we've seen has completely un-ended traditional politics here in Iowa. He hasn't done the retail stops at the pizza ranches and
diners that we've seen in the past. He's done these really big rallies and so he hasn't even done very many town halls where you can sort of ask
questions. So we'll have to see if that works for him in terms of turning out those supporters or if Iowans stick to their traditional ways and just
want to show up for people that they've met face to face that they've been able to question one on one.
QUEST: Sara, we look forward to you navigating the tricky corn fields of Iowa in the hours ahead. Thank you.
Now to the Democratic race where the turnout, beg your pardon, you're over there, wish you wouldn't keep turning around. The Democrat race turnout
that's likely to be the key.
(BEGIN VIDEO CLIP)
QUEST: A late surge by Bernie Sanders means the race is too close to call. Hillary Clinton told CNN this morning she's still confident of victory.
HILLARY CLINTON, DEMOCRATIC PRESIDENTIAL CANDIDATE: I always thought we'd have a close contest and I think that's good, it's good for the Democratic
Party. But I'm thrilled at my campaign. And we've learned a lot of lessons. We've applied those lessons. We've got a great team working literally
around the clock and I think I'm a better candidate.
(END VIDEO CLIP)
QUEST: Brianna Keilar is at the at the Clinton headquarters in Des Moines in Iowa. So now this is a moment of truth. Obviously Hillary Clinton would
like, both parties would like -- both sides would like to win, Sanders or Clinton. How damaging is it if she doesn't?
BRIANNA KEILAR, CNN SENIOR POLITICAL CORRESPONDENT: It's tremendously damaging, Richard, because this was where she had put the vast majority of
her campaign's resources, was the idea of winning Iowa.
(BEGIN VIDEO CLIP)
KEILAR: And you have to understand what happened to her back in 2008 to understand how important that was. She was bested not only by then Senator
Barack Obama but by John Edwards. She suffered a stinging third place defeat. And it was really senator Obama's win here in Iowa eight years ago
that ended up giving him momentum and propelling him towards the nomination and ultimately the presidency.
So you talk to people in her campaign and clearly what you can even tell from her and her experience in Iowa is they almost have a little post-
traumatic stress disorder from what happen heard eight years ago. They want to turn it around, they have put their all towards it, and so if they don't
it will be very disappointing.
Now the one thing she may have in her favor is that once you get past this early contest of Iowa, you get past the early contest of New Hampshire
where the electorates in the states are very white.
(END VIDEO CLIP)
KEILAR: You start moving into other states. South Carolina, Nevada, where there's more diversity. And that works to Hillary Clinton's advantage. She
has a lot more luck when it comes to black voters and Hispanic voters than Bernie Sanders. He's courting young people. He's courting white liberals.
He's courting independents and doing well with them. But she is expected to do better in states like South Carolina, Nevada and beyond.
QUEST: And just a -- there is a slight difference tonight isn't there, between the way the Republicans go about their business and the way the
democrats go about it. The Democrats have these groups of viability and a lot more arguing and a lot more noise and fury don't they?
[16:20:10]
KEILAR: That's right, I don't know if it's necessarily noise and fury but certainly enthusiasm and case making. If you were to be with in one - if
you were to be with Republicans tonight, you'd see what's kind of a straw poll. It's not too different from just voting. But if you are watching
Democrats tonight, they go through these rounds of making their case for their candidate and then figuring out where the breakdown is in terms of
how many people are for Bernie Sanders, how many for Hillary Clinton, how many are for Martin O'Malley. And if a candidate doesn't reach a threshold,
which you would expect in many of these areas Martin O'Malley won't then his supporters get to decide, hey, do I support Hillary Clinton or do I
support Bernie Sanders? So that's where the case making really matters.
QUEST: You got to love it, the caucus process, the caucus's thank you very much, Brianna Keilar, who's in Des Moines, in Iowa.
KEILAR: You bet.
QUEST: As we continue tonight, alphabet, now that's the company formerly known as Google, is pulling up the curtain on its most secretive projects.
(BEGIN VIDEO CLIP)
QUEST: It's the first time we've seen how Google's core business stacks up against what they call the moon shots in a moment.
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(END VIDEO CLIP)
(COMMERCIAL BREAK)
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QUEST: P. is for profit and Alphabet has it in large measure. Google's parent company pulled in more than $21 billion in revenue in the last three
months of 2015, it's up 18% from the year before.
And of course the whole year, an astonishing $74.5 billion came in from Google. Now, there were losses of $3.6 billion from so-called other bets.
(BEGIN VIDEO CLIP)
QUEST: Alphabet has passed Apple and is now the world's most valuable company this afternoon and you can see the two have been coming together if
you look at this map from CNN money, this graph. You see them getting closer and closer and closer and today, they actually moved past each
other.
Shelly Palmer who is host of Shelly Palmer Digital Living is here with me now.
Hey Richard, good to see you.
QUEST: We'll do to the market in a moment. These -- where's the money coming from?
SHELLY PALMER, HOST SHELLY PALMER DIGITAL LIVIING: Core businesses. The Google's core businesses have been explosively profitable.
QUEST: Which is search?
PALMER: Yes, I mean search. The mobile searches have exceeded desk top searches. They have got their mobile advertising ideas comes together a
little better than they had in the past. The core businesses at Google have been astonishing.
QUEST: Right but, and it's not just to be a one-horse town. What else is making money there?
PALMER: They have this group called other bets and it's showed that they spent a little less money --
QUEST: $3.6 billion they lost on that. What's other bets?
PALMER: Well, other bets, Next, Google Fiber, their ability to end the death, to wire the world with, you know, crazy projects. Look, they are
trying to be as innovative a company as you can possibly be. And so the street generally hates it when you make investments on things that are long
shots or moon shots as you called them before but in practice without that you can't have progress and innovation and Google has positioned itself to
be one of the most innovative companies in the world. So it's going to cost a little.
QUEST: Well yes, but if you're look at the Apple's strategy, it's sort of very clear, you know, you've got your iPhone, you've got your Macs, but
everything moves out from there. Google seems to be more random in its other bets.
PALMER: Google's going to bring you the internet. Google is causally related to the size of the connected world. So if you add another 1 billion
people, you connect another billion people to the public internet, Google will profit. They're going to causally get bigger.
[16:25:06]
PALMER: The things they're doing that are the other bets aren't quite as causally related to the growth of the internet which is fairly predictable.
So look, I agree with you there's -- but there's no cause for concern. When I look at Google, see their core business as being super strong and they're
allowed to be and I also see their spirit of innovation just on display in every way possible.
QUEST: So now let's look at that graph again and we see two titans because the issue is whether or not Apple has lost its way.
(BEGIN VIDEO CLIP)
QUEST: I mean, if you look at the fall in the share price. Are you laughing with are or laughing at me?
PALMER: I'm kind of laughing at you, Richard. I love you but these are apples and alphabets. They're not apples and apples.
(END VIDEO CLIP)
PALMER: Apple itself has an end to end hardware idea. It's an ecosystem that goes from place to place. It's a very different strategy than Google
which does have some hardware in its life but mostly is a software company and a search company. They all are trying to do the same thing, which is to
aggregate a lot of people by giving them immense value. And both companies have a different strategy for doing it. And to look at Apple and go gee --
QUEST: But now - but now Alphabet is the most valuable.
PALMER: It is. This week. And it's because - and they had a great quarter and Apple had a great quarter. Here's what I think going to happen. The
end points of data rich companies are going to show us the way and both of these companies are super data rich so let's give them a little bit of a
shot.
QUEST: Shelly Palmer, thank you very much indeed. Shelly laughing with and at and now it's time for us to have some business on the move.
So as GE says it's time to transition to led light bulbs. And that means it is lights out for compact fluorescents. GE will stop making and selling
CFLS in the United States this year. They were the first energy efficient alternatives to the incandescent bulb.
Shares of chipotle soared more than 4% on Monday.
QUEST: CDC said the chain's e-Coli outbreak appears to be over. Shares have fallen 30% on problems with all of this. Q4 out on Tuesday.
Now, anyone for golf? Members of Britain's exclusive Wentworth Golf Club are suing the new Chinese owner. (Inaudible) bought it in 2014. He wants
members to reapply and to pay a re-joining fee of $143,000. That's what you call business on the move.
Mark twain once said Americans have the best government that money can buy.
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(BEGIN VIDEO CLIP)
QUEST: The Iowa caucuses is just hours away. It's an important race and it's the money race which we'll talk about after the break. Its QUEST MEANS
BUSINESS.
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(END VIDEO CLIP)
(COMMERCIAL BREAK)
[16:30:23] QUEST: Hello, I'm Richard Quest. Of course there's more QUEST MEANS BUSINESS in just a moment when we'll talk about decent jobs for youth
with the head of the International Labour Organization who's here with me in New York.
And we'll show you which 2016 candidates have got the most donations. But before all of that, this is CNN and on this network the news always
comes first. The first votes in the 2016 race for the White House will begin in 3.5
hours from now to take place in the U.S. state of Iowa with the caucuses. The latest opinion polls show both the Republican and Democrat races may be
too close to call. The Iowa caucuses are traditionally the first vote of the U.S. elections season.
The World Health Organization has declared the Zika virus a public health emergency of international concern.
The WHO made the announcement after seeing an alarming spike in babies born with birth defects that are believed to be linked to the mosquito-borne
virus. The group's director-general said a coordinated international response would be needed.
(BEGIN VIDEOCLIP)
DR. MARGARET CHAN, DIRECTOR-GENERAL, WORLD HEALTH ORGANIZATION: There is urgent need to do a lot more work and establish whether or not there is a
definitive association between the Zika virus infection. But having said that, the information presented by the countries' person (ph), you know, including Brazil, U.S. El Salvador and also France
representing the areas and territories in Polynesia. Epic evidence is growing and it's getting strong, and so I accept it even on the microcephaly alone, it is sufficient to call a fix so that the
immediate coordinated international response to make sure that we get to the bottom of this
(END VIDEOCLIP)
QUEST: At least 20 people have been killed in a bombing on a police station in the Afghan capital Kabul. The Taliban has claimed
responsibility. The Afghan president Ashraf Ghani has condemned the bombing, calling it "an unforgiveable act."
People in Nigerian village are describing the horror of an attack by Boko Haram at the weekend. Survivors said they had to hide in the bush during
the raid on Saturday, watching militants burn down home and open fire. It happened just after evening prayers. They say at least 65 people were
killed and more than 130 were wounded. The United Nations Special Envoy for Syria says that the talks now are the
official beginning. That's despite Staffan de Mistura only meeting opposition representatives on Monday.
They'll meet with the delegation from the Syrian government on Tuesday. The U.N. is hoping to broker a ceasefire in the nearly five years of civil
war. Tonight, as Iowans cast the first votes -- the first official votes -- of the 2016 U.S. presidential election. The race for the White House will
have officially begun. The road to this day has been filled with a lot of words and, most crucially, it has been fueled by an enormous amount of money.
But when it comes to the race for donations, it has so far been an unusual election as indeed it has in so many different ways.
For the Republicans, Trump has had a commanding lead nationally in CNN Poll of Polls -- Trump 35, 19, 12, 9 and 5. Now that puts him, if you look at
that overall and then you compare it terms of fundraising, it is no -- Donald Trump comes in at number 5 with $19 million.
The winner of course in the money stakes so far is Ben Carson. He's brought in $54 million and he's only got 9 percent.
As for Donald Trump, he is financing his own campaign, but he says he's still bringing in some donations, but you can see a very big difference,
number one in the polls, number 5 in the millions raised. On the Democrat side, you've got O'Malley at 2 percent, Sanders at 38,
Clinton at 52. This is the Poll of Polls. But Secretary Clinton has raised more than any other candidate.
If you look at Secretary Clinton, she has $112 million, Bernie Sanders $74 million and O'Malley is at $5 million. In fact the O'Malley campaign is
actually in debt. [16:35:04] All of this put together shows that the Democrats lead the
fundraising parties. If you put them all together, overall you've got both Democrats -- the two leading Democrats -- higher than all the major or the
leading Republicans. Joining us now from Washington is Dan Pfeiffer, CNN political commentator and former senior advisor to President Obama.
As I look at these numbers, the extraordinary number is of course this $112 million that Hillary Clinton has amassed.
That is a phenomenal war chest.
DAN PFEIFFER, CNN POLITICAL COMMENTATOR: It absolutely is, Richard, and she's doing that in two ways -- 1) consolidate and support of the high
donors, the elite donors of the Democratic Party, but also by doing a very good job of raising grassroots donations over the internet -- $5, $10, $50.
And that's a lot -- having both of those was what put her at the top of this.
QUEST: Right, but what's the spend be like for these candidates? Because if you're bringing in a great deal of money, I mean I know Iowa is
crucially important --
PFEIFFER: Right.
QUEST: -- but you don't want to New Hampshire and Super Tuesday thereafter on March the 1st completely depleted.
PFEIFFER: Well I think both the Clinton and Sanders campaign are budgeting very carefully to spend what they need to spend to do well in Iowa, making
sure they have money as they keep going through New Hampshire and Nevada, South Carolina into the rest of it.
But it's important to remember that if you win Iowa, you're going to raise a lot more money. When Barack Obama won Iowa in 2008, we raised a lot of
money over the internet in the days right after that. So you're -- spending money in Iowa is an investment, not just in
delegates, but also in money.
QUEST: Donald Trump -- even by spending his own money, he's still managed to raise $19 million. Do we have any idea how much so far Mr. Trump has
spent?
PFEIFFER: It's very hard to say yet. But he -- what we know is he's pending I think a lot less than people expected and that others like Cruz
and certainly Jeb Bush have spent because he has found a way using Twitter and the media to get his message out without spending a lot of money on
television advertisements. George -- or Jeb -- Bush, excuse me, has spent more than just about anyone else. His Super PAC has spent I think about $85 million.
QUEST: So, these numbers that we're looking at are the direct -- which of course is a very important point to make clear to our dear viewer -- that
these numbers are direct --
PFEIFFER: Correct.
QUEST: -- fundraising, they do not count the off-budget, off-balance sheet from the so-called political action committees?
PFEIFFER: That is -- that is correct. And you've seen a lot of that in particular on the Republican side where the Super PACs are spending a lot
of money, in particular for Rubio, Cruz and Bush.
QUEST: When we look at what we think this election is going to cost, I mean, whichever nominee finally -- whether it's Clinton, Sanders, Cruz,
Trump -- whoever it is -- we're talking about well over a billion for this U.S. presidential election, aren't we?
PFEIFFER: That is absolutely correct. I mean, even the Koch brothers who are Republican donors who were funding through their own Super PACs have
said they can spend upwards of a billion dollars themselves. So just from a -- one -- Super PAC could be close to a billion dollars in this election.
So this will be the most expensive election in U.S. history by far. You know, even exceeding the 2012 election which was incredibly expensive.
QUEST: One final thought has occurred to me. The American people say they're tired of the money that's fueling this entire process, just about
everybody and their brother will tell you this. But there's no obvious or easy way to negate it, is there?
PFEIFFER: No, there is not. And that's because the Supreme Court a couple of years ago ruled that campaign spending was speech.
So it comes to almost impossible absent amending our Constitution for Congress to do anything about this.
So it's the way it's been for the last couple of elections, it's the way it's going to be for a long time. You know, if -- you know -- because of
the Supreme Court --
QUEST: Right.
PFEIFFER: -- and so get used to it because here it comes.
QUEST: A wall of money coming our way, thank you, sir.
PFEIFFER: That's right. Thank you, Richard.
QUEST: You'll help us understand over the course of the election process. We're putting together the best team possible that will explain every
nuance, every trick of the trade so that you can follow on through. As we continue, the jobs question. The head of the International Labour Organization -- it's Guy Ryder -- who will be joining me. Good to see you,
Guy, you well?
GUY RYDER, DIRECTOR-GENERAL, INTERNATIONAL LABOUR ORGANIZATION: Good to see you, I'm very well.
QUEST: Come and join me in the C-Suite and we'll talk jobs after the break.
RYDER: Good.
(COMMERCIAL BREAK)
[16:41:01] QUEST: Among Republicans and Democrats in Iowa, CNN polls show that the economy is the top issue in the election.
And despite strong U.S. jobs growth, many Americans say they're not feeling the recovery under Barack Obama.
Joining me in the C-Suite is Guy Ryder, the director-general of the International Labour Organization who will recoil in horror if I tried to
enmesh you into the U.S. presidential election at this early stage.
RYDER: Indeed I will, indeed I will.
QUEST: But if we look though at the question of job creation --
RYDER: Yes.
QUEST: -- post 2008, the U.S. has gone from a 10 percent unemployment to just over 5 percent --
RYDER: You're right.
QUEST: -- and in many ways, some would say it is a beacon --
RYDER: Yes.
QUEST: -- to guide other countries, others would say it's a warning light. Which is it for you?
RYDER: It's a bit of both of those --
QUEST: Oh --
RYDER: -- just to hedge my bets. I mean, it looks like a winner, doesn't it? It looks a success story since 2008 because the headline figure has
gone down very considerably. At the same time, we know that more people have withdrawn from the labor market, so the levels of participation have changed. But the U.S. is
creating jobs. And yet you get this feeling that people don't feel the benefit, and why is
that? I think you got to look at wages. I think about the wage trajectory and what we see there is it has been a minimal increase in real wages over
the last 12 months or so. But still lagging well behind productivity. QUEST: Right, so now we come to this question of policy and whether it is
better to get more people back into the workforce as the U.S. has, even if you have this wage growth stagnation.
Because one would argue that you can't have both in this new normal economy.
RYDER: I know the argument, I'm not sure that I would agree with it -- that you could have one thing or the other.
Because what we see in the global economy is very clearly a lack of demand and demand comes from wages, we get our economies moving through
consumption. So I'm not sure that I buy that trade-off as put as you have.
QUEST: But you --
RYDER: But you do get this reaction where people just don't think they're getting, you know, -- where they hear the narrative of recovery and they're
saying where is it for me? And that's what the politics is about.
QUEST: And nowhere is this more egregious globally than with youth unemployment which is why you started an initiative to deal with youth
unemployment.
RYDER: Yes.
QUEST: How bad is it?
RYDER: Look, if you're under 25 years old, you're three times more likely to be unemployed than other members of the workforce.
And it's not just open unemployment because, you know, in the developing world, you can't be unemployed, you've got to live.
So here's the other figure that we really worry about -- 40 percent of young people in the world either do not work or work but can't get out of
poverty. That's a lot of people.
QUEST: So what's the answer? Well you've been battling this for years -- decades -- has been the issue. Youth unemployment was one of the greatest
downsides marked, bad-marked, black-marked -- whatever you want to call them -- after the recession.
Youth unemployment bit hard.
RYDER: You're right.
QUEST: So how do you solve it?
RYDER: Well you've got two things you've got to do. I mean, you got to get people back to work in general -- you know -- you will not turn against
the tide of the overall economy. But at the same time, you do have to focus on young people -- but you still have --
QUEST: But your (inaudible) -- but --
RYDER: -- to.
QUEST: -- traditionally organizations like yours are against, for example, lower pay at the earlier -- at the younger age.
RYDER: Well I'm mean, we're talk -- we've seen many countries talk about sub-minimum wages --
QUEST: Right.
RYDER: -- for young workers. And there's two things to say about it. One is there's very little evidence that it's worked where it's been tried.
Just simply hasn't produced the results. Greece has tried it, it hasn't worked. And the second thing is, I mean, we're not necessarily against it, but it should be time-bound and it should be with a specific purpose in mind.
There's a real danger in creating a displacement effect. Lower paid young people taking the jobs of other people, it's not a sort of a -- an excuse,
it's a reality.
QUEST: Surely you don't want to talk about -- answer some questions on the U.S. presidential election?
[16:45:02] RYDER: Next time.
QUEST: (LAUGHTER). He didn't get to where he is without being able to avoid that one.
RYDER: (LAUGHTER).
QUEST: Nigeria says it may need to borrow billions of dollars from the World Bank and other organizations if it's going to fill a budget gap left
by the falling oil prices. Nigeria's the second major oil producer after Azerbaijan is now admitting it might need emergency financing due to oil's sharp decline.
CNN's emerging markets editor John Defterios is in Abu Dhabi for us tonight.
(BEGIN VIDEOCLIP)
JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: President Muhammadu Buhari has only been in office for eight months, but he's being dealt a very
difficult hand when it comes to oil and trying to manage his government's finances.
The problem is a simple one. Oil is trading around $35 a barrel, but Nigeria needs about $120 to break even due to its domestic spending
obligations. Africa's largest economy is looking to borrow up to $9 billion this year
and it's considering whether to ask the World Bank and the African Development Bank for about a third of that.
As far as budget deficits go, this is not what economists would call a full-blown crisis. A projected deficit of $15 billion is equal to about 3
percent of GDP. Another problem though is the pressure on the currency. The Naira is down
sharply and the government has been spending money to defend it. Foreign exchange reserves were hovering around $50 billion six years ago and are now reportedly below $30 billion.
For the past ten years, Nigeria was one of the top performing economies worldwide, a darling of the emerging market world.
Between 2004 and 2014, it averaged growth of 6.8 percent. That growth is projected to be around 4.1 percent or below this year.
And why IMF managing director Dr. Christine Lagarde last month said some tough decisions would need to be made.
Like many crude producers of the world, oil represents 90 percent of export earnings. Trying to diversify in an economy when the price of crude is
near a 13-year low is no simple task. John Defterios, CNN Abu Dhabi.
(END VIDEOCLIP)
QUEST: The falling price of oil is one major factor that's weighing on global markets. Another is the slowdown in China where falling demand has
forced many Chinese shipping companies to slash staff and off-load vessels at a discount.
CNN's Matt Rivers went aboard a giant cargo ship setting sail to California through Southern China and saw at firsthand the pressure on Chinese
exporters.
(BEGIN VIDEOCLIP)
MATT RIVERS, CNN CORRESPONDENT: It's longer than the Eiffel Tower. It's got an 80,000 horsepower engine and weighs up to 240,000 tons. And yet
thanks to the magic of buoyancy of Benjamin Franklin floats, it's leaving China soon, heading for Los Angeles.
This is the largest container ship that has ever docked in the U.S. Being onboard you really get a sense of scale, mainly because of how small
you feel. But for a transport ship like this one, the most important figure is how much it can hold.
The Benjamin Franklin can take on 18,000 containers. Placed end-to-end, they would stretch 68 miles.
VELIBOR KRPAN, CAPTAIN, "BENJAMIN FRANKLIN": It's cheaper to have bigger ships, you know, it can carry more products, you know, and you have less
things to pay after that.
RIVERS: Often on the other side of doors like these are things like electronics, toys, clothes, consumer goods made in China that will sell in
American stores. This is what trade between the two countries looks like. And far more stuff is exported from China to the U.S. than the other way around. A difference of hundreds of billions of dollars.
That imbalance has been a source of conflict for some time. In the middle of a U.S. presidential race, it makes for easy fodder.
DONALD TRUMP, U.S. REPUBLICAN PRESIDENTIAL CANDIDATE: They're killing us. And if you want to do business with China, it's almost impossible.
RIVERS: Republican frontrunner Donald Trump suggested slapping a 45 percent tax on Chinese goods to even the playing field.
But critics have attacked his idea as bad for business and bad for states. Trump's political future along with his rivals relies in a big way on Iowa
where caucuses are set to kick off in this year's presidential election. And it's a state that exports billions of dollars' worth of things like
crops and machinery to China each year. U.S.-China trade is incredibly intertwined and the next U.S. president will have some ability to influence those ties. And that will impact people's
lives on both sides of the Pacific which is why we're talking about U.S. politicians in Iowa while we're thousands of miles away on this giant ship
in the South China Sea. Matt Rivers, CNN off the coast of Southern China.
(END VIDEOCLIP)
QUEST: If you caucus, they will come. The state that brought us "Field of Dreams" is now gripped by election mania.
We'll speak to the opinion columnist at the "Des Moines Register" after you've had a chance to do a bit of your own Make, Create, Innovate.
(COMMERCIAL BREAK)
[16:51:40] QUEST: "Our liberties we prize and our rights we will maintain." That's the Iowa state motto and it's emblazoned on its flag and
within a matter of hours, Iowans will maintain their right, their liberties, their prizing and maintaining it all the way through to kick off
the U.S. presidential primary season. Now, if you should ever travel to Iowa as I have on many occasions, here are some of the things you really won't want to miss.
Corn for miles in every direction. Iowa is America's heartland and grows more than 2 billion bushels of corn every year.
Much of this of course is grown not for cereals and food but for ethanol as part of the ethanol mandate in the United States.
And then you have the city of Dubuque where you can ride the cable car at the Fenelon Place Elevator Company. Now, that looks like a rickety old
contraption. But it is the world's shortest, steepest scenic railway. And you can play baseball on the "Field of Dreams." The 1989 movie
starring Kevin Costner was shot on location in Iowa. There it is -- there's the corn, there's the farm, there's baseball and it stands to this very
day. Joining us now is Rekha Basu, a columnist for the "Des Moines Register." How lovely to see you --
REKHA BASU, OPINION COLUMNIST, "DES MOINES REGISTER": Very nice to see --
QUEST: -- and to learn a little bit more about your fascinating city and state. Tell me, you pride yourselves by law on being the first caucus, the
first election in the presidential season, don't you?
BASU: Indeed we do, it's our great claim to fame, and you know, when you're in a small landlocked state in the middle of the country without
mountains or oceans or much else to speak of, it's something you take very seriously every four years.
QUEST: So --
BASU: It's our identity.
QUEST: It's your identity but tell me for the rest of the world watching this, we hearing about a conservatism almost bordering on an evangelical
right wing. Is the whole state like that? Is there any liberal elite?
BASU: Yes, absolutely. Oh yes, there's an liberal elite, and in fact some say and recent studies have said that Iowa Democrats are more left-leaning
than the rest of the country is. So you might argue that, you know, we have sort of people who are very passionate on both sides of the aisle.
The Republicans definitely are -- at least the Republicans who participate in caucuses, who are organized and active in voting in caucuses, those tend
to be very evangelical and lately Tea Party dominated. But it's not that there aren't more mainstream Republicans -- there are. They're just not that active politically --
QUEST: Now --
BASU: -- whereas the Democrats -- yes.
QUEST: Whenever I've been to Iowa, and I've been there many times -- I used to have some relatives who moved to Iowa.
It's a fascinating place -- the Davenport, the whole areas are fascinating because it is real heartland America.
BASU: That's right, that's right, it is. It is. I mean, real salt-of- the-earth kinds of values. [16:55:03] And it's a lovely state. It's mostly flat but it's agricultural
and a lot of small towns. Unfortunately, a lot of small towns that have lost their economic base, so
young people tend to leave the state when they graduate from college. So there's a bit of a brain drain and a lot of those people, those employers, have turned to immigrants to do some of the work that otherwise
native-born Iowans would have done in the past. So that's brought a lot of Mexican immigrants to the state and that has caused some tension, and that's an issue that some of the candidates,
particularly Donald Trump, have seized upon on the Republican side, talking about illegal immigration --
QUEST: Right.
BASU: -- and trying to make a case that Mexicans are all criminals.
QUEST: Thank you very much for joining us. We look forward to you joining us again for some analysis. How wonderful.
BASU: Thank you (inaudible).
QUEST: We'll have a "Profitable Moment" after the break.
(COMMERCIAL BREAK)
QUEST: Tonight's "Profitable Moment." It's easy to be cynical about the U.S. presidential election, the length of time it takes, the amount of
hoopla on the money that's spent, but there's something delicious about the Iowa caucuses wherein ordinary Americans get together in school rooms and
firehouses and church basements and have the first say. And, yes, we may tell you that it means everything and it means nothing, and frankly, nobody really knows what it all means.
But by tomorrow morning, we might just have a little glimmer, a little scintilla, a little soupcon, a better idea of how the Americans are going
to vote. And that's QUEST MEANS BUSINESS for tonight. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, (RINGS BELL) I hope it's
profitable. The Iowa caucuses are next.
END
