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Quest Means Business
Iran Blames Protests on Enemies; Wall Street Hits New Highs on 2018 Debut; Trump Takes Credit for Air Safety Record; BP Braces for Big Bill After U.S. Tax Change. Aired 4-5p ET
Aired January 02, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[16:00:00] BIANNA GOLODRYGA, CNN HOST: And U.S. markets are heading for all-time highs in the very first trading session of 2018. It's Tuesday,
the second day of January.
Tonight, Iran's leaders blame their enemies, and not the economy, for a string of deadly protests.
A happy new year on Wall Street. The Nasdaq and S&P 500 head to fresh records.
And Donald Trump takes the credit for steering the U.S. through the safest year in aviation history. I'm Bianna Golodryga. Happy New Year, and this
is QUEST MEANS BUSINESS.
Good evening. Tonight, protesters are back on the streets of Iran, as the U.S. rejects Iranian claims that outside forces are to blame for the
unrest. Social media video from Shiraz appears to show clashes between protesters and police. Across the country, 21 people have died, 450 have
been arrested. The U.S. is calling on Iran to unblock the social media tools used to organize the demonstrations, like Instagram and Telegram.
This is the biggest challenge to the authorities in Tehran since a wave of mass demonstrations in 2009. The country's supreme leader says Iran's
enemies are to blame.
(BEGIN VIDEO CLIP)
AYATOLLAH ALI KHAMENEI, IRANIAN AND SUPREME LEADER (through translator): The enemy is waiting for an opportunity, for a flaw, where they can enter.
Look at these events over the last few days. All those who are against the Islamic Republic, those who have the money, those who have the policy,
those who have the weapons and the intelligence mechanisms, they have all joined forces in order to create problems for Islamic Republic and Islamic
revolution.
(END VIDEO CLIP)
GOLODRYGA: And joining me now from Tehran, Ramin Mostaghim, is a reporter for "The Los Angeles Times." Thank you so much for joining us, Ramin, we
really appreciate your time. So, what is behind these protests? Is it more a domestic policy issue and the economy, or more geopolitical?
RAMIN MOSTAGHIM, REPORTER, LOS ANGELES TIMES: It is domestic policy and it goes to unemployment and policy of the young people. And no future for
them in the horizon. So, these young people have seen in the past six days, they have nothing to do -- they have no idea about whatsoever about
geopolitics, foreign policy. They don't care, they don't follow this sort of issue. They just want, self-centered. They want their own future, and
they don't see it anywhere.
GOLODRYGA: So, when you hear the Ayatollah say this is caused because of Iran's enemies, what is he talking about?
MOSTAGHIM: He just actually wants to project that of the government. The problem sometimes it happens. So, they maybe might be involved. They may
be happy, yes, U.K. or European or Americans, anyone who has some problem with the ruling establishment in Tehran may be happy to hear that. But
officials actually, they are sympathizing with it. And by sympathizing with the protest they want to say that we understand your agony, we
understand your problem, please let us do, in a way that less damage happens in the country, less collateral and human casualty.
But at the same time, they are worried about some slogans, which are antiestablishment, like a dictator or something. And that's why they just
try to -- try to categorize it as a two-part protest. Protest their rights, and are entitled to protests and those who are not entitled,
because they are doing something which is not -- the domestic agenda. That is what official line says.
GOLODRYGA: You're seeing a huge population that is unemployed, a large percentage of that is the youth population there in that country. And it
triggers images, of course, from 2009. The last time we saw such protests in Iran and on the streets of Tehran. Ramin, we really appreciate you
joining us. Thank you so much.
[16:05:06] The Iranian president rejects the idea that these protests are just about the economy. But it's undeniable that there is deep
disappointment about Hassan Rouhani's economic record. This was the scene over two years ago when the nuclear agreement was announced. The economic
benefits President Rouhani promised, have largely failed to materialize. The economy is growing, and inflation is falling. But unemployment,
especially among urban youth and women, remains high.
Many educated Iranians are leaving the country, frustrated by the lack of jobs. Living standards are stagnant, and the government has proposed
cutting subsidies for food and services for the poor. Fuel prices could increase by as much a 50 percent. And while the oil and tourism industries
have benefited from the nuclear deal, red tape and corruption have held back the promised wave of foreign investment. So, the protests may have
begun with these economic issues, but they have not ended there. As the Iranian president acknowledged in Parliament.
(BEGIN VIDEO CLIP)
HASSAN ROUHANI, IRANIAN PRESIDENT (through translator): Their problem is not only economic ones. It's not like people have come to streets to say
that we want money, bread, water. They have other demands, as well. They are claiming for other things, as well. One demand is allowing freer
environment. People's demand is not only money, not only economy. Yes, one of them is economy.
(END VIDEO CLIP)
GOLODRYGA: Robin Wright has reported on Iran since the 1980s. She is a distinguished fellow at the Wilson Center, and is joining me now from
Washington with more. Robin, thank you so much for joining us. We heard from Rouhani that one of the issues is the economy. It's not the only
issue. Do you support his statements?
ROBIN WRIGHT, DISTINGUISHED FELLOW, WILSON CENTER: I think the economy is indeed the primary motive. It's in many ways a perfect storm. You have
some of the prices that have gone up by as much as 40 percent, part because of the removal of subsidies, and partly because of kind of accidental
moments. There are the Iranians have been calling poultry, because of fears of avian flu. And so, the price of eggs has skyrocketed.
But the cause doesn't make any difference to the working poor and the young in a country where you have somewhere between 30 and 40 percent of the
young population unemployed and the majority of the population is young. And so, this -- the promises, the hope they all felt after the 2015 nuclear
deal, have not been realized. And as a result, you find the kind of backlash against the regime that's taking on a political component, as
well.
GOLODRYGA: And by all indications, the latest round of protests has taken the regime by surprise. Is the regime at any risk of failing at this
point?
WRIGHT: Well, the regime clearly has the edge in its security forces, whether it's the regular police, the Basij, paramilitary volunteers or the
revolutionary guards. So, it has the upper hand, and will, as it did in 2009, after much larger protests that went on for almost six months. But
it does underscore that there is a deep dissatisfaction, and the aging revolutionaries understand that for the revolution to survive, for the
Islamic Republic to survive, they have to address these basic grievances, and that will the challenge in the weeks and months ahead.
GOLODRYGA: And as you know, the president has been tweeting about it over the weekend. He said just last night, quote, all the money that President
Obama so foolishly gave them went to terrorism and into their pockets.
He, of course, is referring to the Iran nuclear deal, which he talks about almost routinely, as being one of the worst deals in history. Is he right
to bring that up right now, and do you expect him possibly to rip up the deal?
WRIGHT: Well, first of all, you have to know that the money that the Obama administration gave back was Iran's money that dates back to military
equipment bought by the Shah that's been in dispute ever since. So that was -- we weren't giving them or paying them off for anything. The
question is, what does the U.S. do next? And does intervention, does this high-volume series of tweets give the Iranian regime an excuse to blame it
on the outside world? And what does the Trump administration do next? There have been growing tensions between Washington and Tehran since he
took office. And he has some big decisions to make in the next few weeks about whether to wave sanctions that were part of the nuclear deal.
GOLODRYGA: We will be watching, as always, Robin. Thank you so much for your insight.
WRIGHT: Thank you.
GOLODRYGA: Oil prices are easing little after the unrest in Iran, lifted them to two-year highs previous session. Brent Crude and WTI both started
the year above $60 a barrel [16:10:00] for the first time since 2014. Prices are also underpinned by continued restrictions in supply from OPEC
and Russia.
Meanwhile, on Wall Street, U.S. markets kicked off the new trading year with the Nasdaq and S&P 500 both setting records. The Nasdaq closed above
7,000 for the first time in history. The Dow finished nearly half a percent higher. A rise of more than 100 points.
Paul La Monica joins me now to explain. What's behind this recent rise, given the uncertainty we're seeing playing out around the rest of the
world? It's a trend we have seen over the past last year and it looks like we are continuing into 2018.
PAUL LA MONICA, CNNMONEY CORRESPONDENT: Yes, I think part of it, Bianna, is what we have already been talking about with Iran, the oil price spike
has helped companies like ExxonMobil and Chevron, two leading Dow components. That's one thing. But also, tech stocks, they were the big
winners in 2017 and they started off 2018 with a bang, too. Amazon, Apple, Google, Facebook, all of them really surged today. Big showing that
investors aren't ready to give up on last year's winners any time soon.
GOLODRYGA: And a lot of that had been anticipation of the President's tax deal, which was passed. So now what?
LA MONICA: I think a lot of people are wondering just exactly how much of an earnings boost are companies going to get? We started to see some
companies like BP and Shell talk about a short-term pain because of the tax bill. But that's probably just a one-time accounting issue. You're going
to see more companies that will be saving money, because of the lower taxes. FedEx is one big company that reported results just before the
holidays. They said they may generate up to $1.5 billion more in earnings this year because of lower taxes. I think as companies start reporting
their results later this month, you'll see a lot more of them talking about the big boosts that they're going to see. Whether or not they pass it on
to shareholders with dividend increases or dare I say, even hire more workers and give raises, that's another question entirely. But I think
it's definitely going to be good for Wall Street, if not necessarily main street.
GOLODRYGA: The president keeps pointing out consumer confidence being at highs, as well as CEO confidence at the same record highs. What, if
anything, could reverse that trend?
LA MONICA: I think the biggest wild card right now is that even though there is not much evidence of inflation just yet, it's always the type of
thing that just comes out of nowhere, and a lot of Fed chiefs have been flummoxed by, oh, wait, we haven't had much evidence of inflation, and now
all of a sudden, it's here. And there's really only one recipe to try and fix that. It's raise interest rates. And if the new Fed chair, Jerome
Powell has to raise rates more aggressively than his boss, President Trump, would like, that could potentially be a problem that hurts the economy and
slows down this red-hot stock market.
GOLODRYGA: Had been a report over the weekend that a lot of CEOs are attributing their new-found confidence in the pulling back and easing of
regulations that we have seen from President Trump. Is that something that you're hearing from your source, as well?
LA MONICA: I think that's fair that there are so people who wondered if there was too much of a tightening of rules and regulations during the
Obama administration as a result of the great recession, and all of the froth that was created in the financial markets before then. Maybe the
pendulum swung too far. And I think people are optimistic about President Trump rolling back a lot of regulations. Now whether or not he goes too
far, and you wind up having big businesses get into trouble again, that still remains to be seen.
GOLODRYGA: It's hard to believe it's been a year since the president has taken office. And he started as you may recall, from time to time, he
still does, personally attack individual companies, right? For something he didn't like, whether it's the "New York Times," whether it's specific
tech companies, what have you. And initially, we saw real fear and trepidation from a lot of these CEOs. Do they still fear retribution from
the president?
LA MONICA: I don't get the sense from people I talk to that people are as nervous, and especially people on Wall Street. I think they find this more
amusing than anything else. It's clearly unprecedented. We have never had a president use social media. Of course, because social media didn't exist
really until the past few years, as a bully pulpit to shame companies into getting what he wants. So right now, I think we know that President Trump,
there's a difference between tweeter-in-chief Trump and what happens behind closed doors. And I think most people are of the mind-set that cooler
heads eventually prevail, despite all the rhetoric that he can now put into 280 characters instead of just 140.
GOLODRYGA: Exactly. Interesting how we acclimate to so many things. Paul, great to see you, happy new year. Thank you for joining us.
Well the cost of hate speech and fake news is unqualifiable. But now a crackdown in Germany means social media firms could face multimillion
dollar fines if they spot it and do nothing. More on that, coming up next.
[16:15:00] (COMMERCIAL BREAK)
GOLODRYGA: In Germany, a new crackdown on hate speech and fake news has hit a member of Parliament over an online post insulting Muslims. And it
all started with this tweet from police in Colon. Written in Arabic, it simply wishes people a happy new year. Journalist, Chris Burns, has the
story from Berlin.
(BEGIN VIDEOTAPE)
CHRIS BURNS, JOURNALIST: Germany's new network enforcement law already having impact. This law that requires social network sites to pull any
kind of controversial material inciting hatred off of their sites. And they face a fine of up to 50 million euros or $60 million if they don't
pull it off within 24 hours and the maximum one week. This law has already had impact through the new year's. There was a new year's tweet by one of
the leaders of the Alternative for Germany, that is the AFD, the far-right party that got more than 10 percent in the last election. She made a
controversial tweet, criticizing Muslims.
The police are now investigating that. Her site was frozen for 12 hours. And the tweet was pulled. And she has come back saying this is the end of
the constitutional state. Is this an assault on free speech? Some people say that. But there is a poll that was taken last year that shows 70
percent of Germans in favor of this new law. Heiko Maas, the justice minister saying freedom of speech ends where criminal law begins.
But what is all this going to cost? Well, Facebook is already hiring hundreds of people to help in this effort to stop any kind of incitement to
hatred on Facebook. And, of course, there is coming up in spring a new data protection law across the EU, that is also likely to cost this the
social networks a lot of money. Chris Burns, CNN, Berlin.
(END VIDEOTAPE)
GOLODRYGA: Thanks to Chris.
A young YouTube star has issued a second apology after posting video of a suicide victim to his millions of followers. Logan Paul said sorry in a
video on Twitter after people slammed an earlier written apology as insincere.
(BEGIN VIDEO CLIP)
LOGAN PAUL, YOUTUBE STAR: I have made a severe and continuous lapse in my judgment, and I don't expect to be forgiven. I'm simply here to apologize.
So, we came across that day in the woods was obviously unplanned and the reactions you saw on tape were wrong. They were unfiltered. None of us
knew how to react or how to feel. I should have never posted the video. I should have put the cameras down. And stopped recording what we are going
through. There was a lot of things I should have done differently, but I didn't. And for that, from the bottom of my heart, I am sorry.
(END VIDEO CLIP)
GOLODRYGA: The controversial video in question shows what appears to be a body hanging from a tree. The footage apparently shot in a forest in
Japan, known for suicides.
(BEGIN VIDEO CLIP)
PAUL: I don't feel very good.
UNIDENTIFIED MALE: Yes, I don't feel good either.
PAUL: Well you never stood next to a dead guy?
UNIDENTIFIED MALE: No.
PAUL: [LAUGHS]
(END VIDEO CLIP)
[16:20:00] GOLODRYGA: If you're not already familiar with Logan Paul, he's big in the YouTube universe. He has 15 million YouTube subscribers, around
six times more than CNN. He has his own line of merchandise, including backpacks at $100 each. And he's appeared on shows like "Law & Order" and
in a YouTube original movie.
Samuel Burke is in London with more. Samuel, for many, including myself, this is the first time we have heard of Logan Paul. Of course, he's got
millions of followers, as we just said. What is the overall impact of a video like the one posted?
SAMUEL BURKE, CNN TECH, TECHNOLOGY AND BUSINESS CORRESPONDENT: Well, you can't underestimate its power. This is a fascinating side of this story,
because he is so popular with young people. So, while we certainly don't want to elevate what he was showing there, if we just isolate the fact that
this is somebody with so many millions of followers, likely their parents have never heard of, but their children may have seen this video.
Keep in mind, that more than 4 million people saw this video before it was taken down. So, on the one hand, it shows the real generational divide.
And on the other hand, it can show that young people can log on in what feels like an episode of "Black Mirror," the Netflix show, see this content
when they're so young and maybe not even have age filters on it in this case. So that shows the power of this particular person. And the reach he
can have. In this case, in a very unfortunate circumstance.
GOLODRYGA: Speaking of filters, what onus, if any, is on YouTube itself for not monitoring these types of posts, especially somebody who has such a
huge following?
BURKE: How could this video have stayed up for so long and then later on, we heard basically nothing from YouTube. Now we finally have heard from
them. If we just go through their statement, I want to put this up here and dissect it a little. Because it may leave people somewhat more
confused than not.
They say they prohibit violent or gory content posted in a shocking, sensational or disrespectful manner. If a video is graphic, it can only
remain on the site when supported by appropriate educational or documentary information. In some cases, it will be age-gated.
In other words, we're reading all this, and it seems like this video violated almost every norm that YouTube has, yet it stayed up for all this
time. And remember, it was Logan Paul who took this down. It wasn't YouTube. And all this happens just a couple months after YouTube faced a
huge wave of advertisers leaving their platform. Everybody from Marriott to Etihad Airways for exactly this reason. Their ads were playing
alongside this content. YouTube pledged that they would do better. That they would have 10,000 human beings in total by 2018 reviewing this
content. Imagine that. Human beings, not algorithms. But here we are in 2018, and one of their most popular and successful vloggers has this
content up and they literally don't do anything about it. They don't take it down. The vlogger himself takes it down.
GOLODRYGA: Yes, I'm wondering what this does, if anything, to his reputation, given that we're talking about him right now and for millions
of viewers, this is the first hearing about Logan Paul. But as you mentioned, a lot of questions to be asked of YouTube executives. Thank you
very much for joining us. We appreciate it.
The movement against sexual harassment in the entertainment industry was one of the big stories of 2017. Now some of Hollywood's most powerful
women are pushing forward, saying they want to stand up for every housekeeper, every janitor and every waitress. The "Times Up" project was
announced in a full-page letter in the "New York Times," which said, quote, to women in every industry who are subjected to indignities and offensive
behavior that they are expected to tolerate in order to make a living, we stand with you. We support you.
CNN's Brian Stelter and Chloe Melas joins us now for more on this. So, this story just continues to get bigger and bigger. And Brian, how
significant is it that this is not just focused on Hollywood right now? But really expanding across the board to various industries.
BRIAN STELTER, CNNMONEY, SENIOR MEDIA CORRESPONDENT: These celebrities reaching out to farm workers, offering financial support in the form of
legal defense fund. And I think as we look forward to the award season, the Golden Globes this weekend, all of the other big awards shows that are
coming up, I think there are Hollywood A-listers that are actually eager to get the spotlight off of themselves and on to other -- in some cases more
obscure professions. You know, folks that are not in the limelight, not in the news. I think there a desire in Hollywood to make this about every
industry and not just entertainment industry.
GOLODRYGA: And there is something, Chloe, about the power that Hollywood has to bring focus to some of these, I hate to say it, but less sexy, maybe
industries that we don't talk about on a daily basis. And people that have stories to tell, and have been subjected to the same kind of discrimination
that more prominent people and women in particular have faced.
CHLOE MELAS, CNN ENTERTAINMENT REPORTER: You're exactly right. And I think that what makes this so different than other initiatives from
Hollywood that we have seen before is that they are actually taking action. This is not just words. The open letter they published in the "New York
Times" isn't just a letter. There are specific goals that they have that they are already in the process of doing.
[16:25:00] They have this legal defense fund, that Brian just mentioned, where they have already raised nearly $14 million in 12 days to offer legal
services to people who can't afford it. Who have been discriminated against and harassed in the workplace. You know, also, they are looking to
go to Washington to get legislation to penalize companies that allow harassment to happen in the workplace, turn a blind eye.
And also, which is something that's really important that Brian and I have been discussing, is that they also want to make sure that nondisclosure
agreements are not allowed to silence people. And that's something you had spoken about with Gretchen Carlson, right, when she went after Fox News and
Roger Ailes. That was like the beginning of us talking about this nondisclosure agreement. You know, also, celebrities, it's symbolic and
it's really important, they're asking each other to wear black to the Golden Globes this weekend. In support of the #metoo movement and to raise
awareness. And you have big names like Meryl Streep and Steven Spielberg and Reese Witherspoon who have donated a lot of money to help reach that
$15 million goal that they are close to getting. I really think change is going to happen. I mean, these are real things.
GOLODRYGA: And you're really seeing people take a look now at even walking the red carpet, right? Women saying, oh, I don't necessarily need to be
paraded. How does that look now, to be focused on what I'm wearing as if I'm some sort of Barbie doll, and these are things we never thought about
in the past. It's something I will admit I look forward to when I see women walking the red carpet and seeing what they're wearing.
MELAS: Well, black is very fashionable.
GOLODRYGA: Yes, case in point. But Brian, this is still not the end, though, as far as fallout. And -- new developments in the media industry,
as well to executives will be leaving because of sexual harassment.
STELTER: The president of vice now is on -- basically been sidelined. So is the chief digital officer, and that's just today, the latest examples of
fallout from a "New York Times" investigation into vice. Into the free- wheeling, fun culture of vice, that sometimes turned very dark, very ugly. And there's been a lot of complaints from staffers about what vice is or is
not doing to take accountability there.
Think about the media landscape, just in the entertainment and news industries, how many jobs are still open. The head of Amazon studios, for
example, Roy Price. He resigned three months ago. His job is still open. This gets to the gender parity that many of these Hollywood stars are
calling for. Will there be an equal number of women and men in key jobs in Hollywood and other fields? So, Amazon is a place to look at there.
Today, NBC's "Today" show replacing Matt Lauer with Hoda Kotb, who has been on the show for a long time, but never as the star of the show. Now she'll
be the cohost of the show with Savannah Guthrie. You're a regular on "CBS This Morning," Charlie Rose's spot there is still vacant. But there is
lots of other jobs like that that are still open.
MELAS: Gretchen Carlson taking over the Miss America.
STELTER: That's another interesting one. These e-mails leaked out showing the head of Miss America talking in disparaging ways about the contestants.
Now he's been ousted. Now for the first time an actual former Miss America will be running Miss America. Kind of feels like it should have happened a
long time ago.
GOLODRYGA: Is Washington lagging? We've talked about sexual harassment in Washington over the past few months, as well. We have some fallout.
STELTER: Al Franken did step down as of today.
GOLODRYGA: Right. Are we going to see more focus, though, do you think from our industry, and from Americans as a whole, as to what their elected
officials are doing in Washington? Not just in corporate America?
MELAS: I really believe when you have these big-name celebrities coming out and calling out the abuse that they see to themselves or others have
experienced, it really is empowering others to speak out. And I think across all industries, we're going to see more people standing up for
themselves and for others. And I really do think, like I've said before, that change will truly happen, like Brian is saying. There are a lot of
job openings and a lot of big shoes to fill by some pretty incredible women that have a lot to offer. And so, I do think that we're going to see more
women in positions of power in 2018.
STELTER: And when it comes to D.C., just one word. Midterms. We have the midterm elections coming up. There are at least some prominent politicians
that want to make this a conversation in the midterms.
GOLODRYGA: Elections have consequences, right. Brian, Chloe, happy new year.
STELTER: Same to you, thanks.
GOLODRYGA: Love black. I wear black all of the time. There's nothing wrong with wearing black. Great to see you, thank you.
Donald Trump is starting a new foreign policy offensive. The U.S. president marks the new year with a verbal assault on two Asian countries.
[16:30:00] (COMMERCIAL BREAK)
GOLODRYGA: Hello, I'm Bianna Golodryga, and there's more QUEST MEANS BUSINESS in a moment. When BP is the latest company bracing for a big bill
now that the U.S. has changed its tax code.
And after the safest year in aviation history, the White House says it's Donald Trump who deserves the credit. But before that, the headlines this
hour.
Iran's supreme leader now blames nationwide protests on the country's enemies. As anti-government demonstrators take to the streets for the
sixth straight day. The death toll has climbed to 21. Just hours ago, the White House expressed its support for the, quote, organic popular uprising.
Peruvian state TV says at least 25 people have been killed in a bus crash in Lima province, Peru. The bus plunged down a cliff on to a rocky beach
dozens of meters below. 54 passengers were on board. Firefighters and police are now working to rescue any survivors.
South Korea wants to hold high-level talks with North Korea and fast. It's suggesting a January 9th meeting at a village in the DMZ. South Korea's
president wants to use the upcoming Winter Olympics as a catalyst toward peace. That's after North Korea's leader said he considers sending a
delegation to the games.
U.S. Senator Orrin Hatch announced on Tuesday he will not seek re-election this year. Hatch is the longest-serving Republican in the United States
Senate. The decision leaves the door open for former governor and presidential nominee, Mitt Romney, to run for his seat.
Well, Donald Trump has begun 2018 by targeting two countries he says are misusing American funds. Iran and Pakistan. The U.S. president's first
tweet of the year accused Pakistan of lies and deceit. Now the country's foreign minister is hitting back, saying President Trump quoted a figure of
$33 billion given to Pakistan over the last 15 years. He can hire a U.S.- based audit firm on our expense to verify this figure and let the world know who is lying and deceiving. Earlier, the U.S. ambassador to the
United Nations warned aid to Pakistan could be stopped entirely.
(BEGIN VIDEO CLIP)
NIKKI HALEY, U.S. AMBASSADOR TO THE UNITED NATIONS: Pakistan has played a double game for years. They work with us at times and they also harbor the
terrorists that attack our troops in Afghanistan. That game is not acceptable to this administration. We expect far more cooperation from
Pakistan in the fight against terrorism. The president is willing to go to great lengths to stop all funding from Pakistan as they continue to harbor
and support terrorism.
(END VIDEO CLIP)
GOLODRYGA: Sara Murray is at the White House. Sara, happy new year to you. A lot of people scratching their heads, not at the overall issue,
because most would say that Pakistan hasn't been a forthright partner in fighting terrorism.
[16:35:00] But I think a lot of people are wondering why now? Why the president issued this tweet yesterday or today, whenever that was. Today.
SARA MURRAY, CNN WHITE HOUSE CORRESPONDENT: Yes, it's a great question. And we didn't really get a straight answer from the White House on this
issue. There doesn't seem to be any new development, at least any new development they're willing to make public about what inspired the
president to fire off this warning. And remember, it wasn't too long ago, just a few months ago, that the president said he believed that Pakistan
was actually beginning to respect the United States.
We've now seen a sharp change in that tone of rhetoric. And as you pointed out, this is not a new issue with Pakistan, the notion that they are not a
worthwhile partner or at least a fully honest partner in the fight against terrorism. And I think time and time again, the U.S. has looked at the
amount of aid they give to Pakistan and whether essentially, we're getting what we're paying for in that sense. But why it's suddenly come up again
now, that's still a little bit of a mystery.
GOLODRYGA: The president also issuing tweets about Iran and the protests there, throwing his support behind the protesters. The Iranian president
responding, though, people that you call terrorists in the past can't be people you support now. Is it helpful at all that the president is issuing
these tweets as this unrest is taking place in Iran?
MURRAY: Well, I think that's a debate that's happening right here in the United States. You know, there was criticism of the Obama administration
for not taking a firmer line in support of protesters in the past in Iran. I think the Trump administration feels like they certainly don't want to be
likened to the Obama administration, and in their view, they don't want to repeat the same mistakes of the past. But it's worth noting how ambiguous
they are still being on this issue, even in spite of the president's tweets.
Today, White House Press Secretary, Sara Sanders, came out, fielded questions from reporters. But she stopped short of calling for a regime
change in Iran. So, it's not clear exactly what outcome this White House wants, what they're hoping to see change in Iran or how they are hoping to
affect that change, if at all, or if this was just the president seeing these images on television, for instance, and deciding to fire off that
tweet. We haven't really seen a coherent strategy from the White House.
GOLODRYGA: So, the protests in Iran taking many by surprise. You could also argue that the message sent from Kim Jong-un on New Year's Day to the
South Korean leader was an overture to thaw some of the tensions between the country. Is this necessarily a bad thing?
MURRAY: Well, it's a great question. I think we don't really know yet how this is going to play out. We know that South Korea has been pressing the
U.S. over and over again to try to get the U.S. to the table involved in talks with North Korea. We have seen the secretary of state indicate maybe
that would be possible at some point. So far, the White House, though, hasn't indicated they're willing to go to the table.
And maybe this does sideline the U.S.' role. We really haven't seen president Trump weigh in on this. He was asked about it on New Year's Eve.
He essentially said we'll see when he was talking about North Korea's nuclear capability. He has taken a very tough line publicly, but that's
essentially been all it is. He's exchanged insults with Kim Jong-un. The two of them have certainly exchanged threats. But, again, so far, we
haven't seen from the administration how they're hoping to resolve this issue with North Korea, despite all of the criticism president Trump has
levied against previous administrations for doing too little.
GOLODRYGA: Kim Jong-un also reminding everybody around the world he has a nuclear button he's prepared to use on his desk, as well. Sara, happy new
year. Thank you.
For more on President Trump's Twitter attacks on Pakistan and Iran, I'm joined by Nicholas Burns, a former U.S. Undersecretary of State, and was
the lead U.S. negotiator on Iran's nuclear program. Nick, great to have you on. Let's start with Iran, given your role in that negotiation. Many
in the Iranian regime were surprised by the uprising that we have seen over the past few days. Were you surprised?
NICHOLAS BURNS, FORMER U.S. UNDERSECRETARY OF STATE: I think everyone was surprised, because it doesn't appear to be coming from the natural reform
movement that's based in Tehran. It comes from the working class. It comes from people who are affected by corruption, the lack of jobs of the
reported up to 40 percent unemployment, the real unemployment rate in Iran. And the fact that the nuclear deal negotiated by the Obama administration
did not end up leading to a great deal of investment in Iran.
There are still U.S. sanctions on Iran for ballistic missiles, for instance. So, I think all of that amounts to a movement that is hard to
judge. We've now had statements today from the Iranian Revolutionary Guards that they're just about to put down this rebellion. We'll see if
that happens in the next day or two. That would be a consequential development. But I think this is -- you're seeing a powerful wave of
protests throughout the country in Iran that has to be taken seriously.
GOLODRYGA: And conjures images of the 2009 protests we saw following election results. What are the similarities and differences you're
currently observing from what we see now?
[16:40:00] BURNS: I think that the great difference is that in 2009, it was really young people, reformists, taking to the streets in Tehran,
against a government that had stolen an election back in June 2009 from the people of Iran. This is, as I said -- it appears to be a series of
protests, really disconnected from each other in various cities in Iran, among the Azeri and Kurdish as well as Persian populations of Iran. Pretty
much people who are not part of the Tehran reform movement. And you are also seeing a muted response in Tehran, because some of those reformers
have supported the current prime minister, Prime Minister Rouhani and his government. So, I think there are substantial differences between the two,
between 2009 and this year's demonstrations.
GOLODRYGA: And the president didn't waste a day to bash the Iran deal, which he's called one of the worst deals in U.S. history. He said today on
Twitter, all of the money that President Obama so foolishly gave them went into terrorism and into their pockets. Does he have a point, in the sense
that the citizens of Iran, or at least the ones that we're seeing out on the streets right now, are not seeing the net effect of what was promised
them?
BURNS: I don't think that's the point that President Trump was trying to make. I disagree very much with president Trump, with his bashing of the
Iran nuclear deal I certainly -- I was the Iran negotiator in the George W. Bush administration, but I supported President Obama's Iran nuclear deal of
2015. It makes sense. For the United States. it's in the interest of our country.
And for President Trump to continue to criticize it, I think is unwarranted. I do think President Trump has been right to speak out in
defense of the protesters. Any American president should do that. I would hope that the European leaders would speak out much more strongly than they
have in support of people's right to express themselves in an authoritarian country like Iran. I do think that the problem and the challenge for
President Trump is, he doesn't want to inject himself into the middle of this debate, because if he does that, then he gives the Iranian regime an
excuse to say, to point to the United States as somehow supporting or fueling these protests.
GOLODRYGA: And let me ask you quickly, your reaction on another hot spot. The other part of the world. And that's between North and South Korea.
What was your take on the surprise overture from North Korea and their reciprocated response from the South Korean president, obviously in
anticipation of the Winter Olympics there?
BURNS: Well, two contrasting thoughts. First, I think it's an attempt by Kim Jong-un of North Korea to separate the South Korean government of
President Moon with the United States. He didn't make an overture to the United States. He made it to South Korea. I do think it's good for the
two sides to talk. It is good if they meet and positive if they meet in Panmunjom.
We need to take down the temperature level here. And I think diplomacy is the way forward, not war. And the early months of 2018, it wouldn't make
sense for the United States, in my judgment, to launch a preventive attack against North Korea without having had negotiations with the North Koreans
first. So, if this is the precursor to that, if Kim Jong-un is hinting that he's willing to talk with China and the United States, South Korea and
Japan, that, in my view, is a necessary step.
GOLODRYGA: Perhaps turning down the temperature just a bit as we start off 18. Nick burns, always great to have you on. Thanks for your insight.
BURNS: Thank you.
GOLODRYGA: U.S. President Donald Trump's corporate tax cut is proving pretty expensive at least for now. Costing some companies big money and
they say it's still a good thing. We'll tell you why, coming up.
[16:45:00] (COMMERCIAL BREAK)
GOLODRYGA: BP is the latest major company to admit the new U.S. tax code could cost them billions. At least in the short-term. Other major names
taking hits between 1 billion and 3 billion, Royal Dutch Shell and European banks Barclays, Credit Suisse and UBS. But they all say lower tax will be
positive in the long run.
CNN Money's Allana Petroff, it is joining us from London with the latest on this. Allana
walk us through this news. Companies were really anticipating and looking forward to this tax bill. Now we're hearing that there actually going to
have to be paying billions of dollars. How does that make sense? What were they excited for?
ALLANA PETROFF, CNN MONEY SENIOR REPORTER: Bianna, what we're seeing here is short-term pain, but ultimately, long-term gain. So, we can expect many
more big U.S. and international companies to report big tax bills worth billions, or tens of billions, over the next few weeks. But in the long
run, looking ahead to two years, five years, ten years, we can expect that they will have much lower tax bills. For example, U.S. earnings, the tax
rate was 35 percent. That's been dropped down to 21 percent.
That's just one example of tax cuts that corporations will see. But the thing that we really have to focus on here, that's really important, is the
change to tax on overseas earnings. So, U.S. companies have been known to store a lot of money offshore. And not bring that money back to the U.S.
to avoid having a very high 35 percent tax bill. Now there's this new tax bill on the earnings that they have overseas that they're going to have to
pay up. So that's what we're expecting over the next few weeks or month or two. Big, big tax bills from U.S. companies, and we're just going to have
to wait to see how all of this pans out. And we might see hundreds of billions of dollars' worth in new one-off taxes.
GOLODRYGA: And as you've mentioned earlier in your reporting, Trump promised, this would be good for businesses. Of course, we shall see what
the net result will be. Alana, thank you so much.
PETROFF: Thank you.
GOLODRYGA: President Trump has taken credit for a strong economy, and red- hot stock market. Now he's suggesting the safest year on record for global aviation is also, well, thanks to him. We'll tell you how the White House
explains that after the latest in our series on the entrepreneurs redefining global trade.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: In the ultra-modern city of Tokyo, Japan, the new is celebrated. But by repurposing the old, a Swiss brand has built up a
fashionably conscious customer base around the world. 9500 km away at its creative base in Zurich, the Freitag brothers have been using recycled
materials to design apparel for 25 years. The raw material consists of truck tarpaulins and seat belts from cars.
MARKUS FREITAG, CO-FOUNDER, FREITAG: The production of Freitag bags always starts with truck-spotting on the street. So, we have to spot the nice
colors we want to change into bags. Then they are delivered to the warehouse here, where we cut them into smaller pieces. This piece then
fits into the big washing machines we have in-house here. We wash the tarps with our rain water, which we collect on the roof up here. After
that, it's going through a drying process.
DANIEL FREITAG, CO-FOUNDER, FREITAG: It's not just about designing the shape of the bags, it's an individual design process for each bag.
UNIDENTIFIED MALE: Every fourth bag is sold online. And because they're all different, they all need to be photographed separately for the website.
The brothers' company has grown steadily over the years, and now has 180 employees, and 21 stores around the world. The brand has a lot of fans in
Asia, so they're opening three new stores there this month.
[16:20:00] MARKUS FREITAG: I think we are much further than I ever expected. For example, today is maybe the opening of a Freitag store right
now.
DANIEL FREITAG: Right now.
MARKUS FREITAG: And two years ago, I would not expect there are thousands of people buying Freitag bags. And this is -- for me, it's unbelievable.
UNIDENTIFIED MALE: Next, Freitag is transferring their sustainable approach into clothing. The clothes are made compostable materials,
without using any toxic chemicals, all to combat a bigger problem. The trade-onomics of the tech style industry has a thread of wastefulness
running through its seams. Over 80 billion garments are produced annually worldwide. The majority, a whopping 85 percent, end up as landfill.
Making it the second-largest polluter in the world, behind the oil industry. And on average, the clothes we decide to keep begin to fall
apart after two years. But the new Freitag clothes will decay much quicker than that.
MARKUS FREITAG: Here we have our factory compost. So, this is about two or three months within this process. The world needs examples that it
could be from a biodegradable material that is not destroying the world.
UNIDENTIFIED MALE: It's that environmental conscience that's at the heart of the Freitag brand. With the new business venture, the brothers will
have to prove once again that their idealism can eventually be turned into profit.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
GOLODRYGA: Aviation experts are pushing back hard after President Trump appeared to claim credit for the best year on record for airline safety.
This is what he tweeted. Since taking office, I have been very strict on commercial aviation. Good news, it was just reported that there were zero
deaths in 2017. The best and safest year on record.
The White House points to Trump's initiative to modernize air traffic control and enhance security. Joining me now, David Soucie, CNN's safety
analyst and a former safety inspector at the FAA. David, prior to coming on, our producers were saying it's been so long since you've been on, and
that speaks to the fact there haven't been many bad aviation stories to cover. What do you make of the president's tweet, first of all?
DAVID SOUCIE, FORMER SAFETY INSPECTOR, FAA: Well, I think that there's a couple of things that are not proper, not correct. Although there is
something to mention that he did do. And that is the increased security. And those are things that can't be announced. They can't be told what
we're doing or how we're doing it. But those were very much supported by the president.
[16:55:00] Now, as far as the safety record, you have to be very cautious about what you do with statistics on aviation safety. Because complacency
is the number one thing to worry about. If you look at one year individually, it doesn't necessarily reflect that there was some causal
factor. It could just be that it just happened to be a safe year.
GOLODRYGA: To what do you attribute, though, this trend that we have seen in airline safety? I mean, air traffic continues to grow, and there's one
fatality reported for 16 million flights. That's pretty impressive.
SOUCIE: It's very impressive. And to me, I think there's about four major things that have happened. Namely, the crew resource management. That's
one of the things that has really changed the way that the crew works together, and does things together. The second I think that's really
important is the focus on the overreliance on the cockpit. And overreliance on automation. That's what happened, and that's where air
France 447 was a direct result of that. That the training overtook the common sense, and at that point, relied on the training and did some things
that were not the right thing to do in the cockpit. So those are the top two things.
There are many others. If you look just at the security, the security screening and what's going on with that. It's been very much improved.
But I think the third and most important, too, is that the copilot minimum number of hours has been raised to 1,500. And so, you see much more
experienced copilots. It's going to have an adverse, effect, though, as these pilots start trying to gain that experience.
Where do these pilots come from? If they come from the military, that's good. That's a good resource. However, there is going to be a very large
shortage of experienced copilots coming into the industry, and that's I think going to be our next challenge that we have to look forward to.
GOLODRYGA: So, as you said, you know, these are great statistics, and, of course, we should encourage them to continue. But if there's one thing
that you can tell passengers and flyers at home who are watching right now, what can you expect to see over the next few years, to even enhance further
the safety of aviation?
SOUCIE: Well, one of the things I think we really have to congratulate travelers for is their concurrence and their assistance in the
prescreening. You remember when we first started to tighten these things down after 9/11, it was very difficult. There was a lot of issues with
passengers refusing to do things, or conflicts and that sort of thing. But I think now they've understood this is for their better good. And that
they're doing that. The second thing that passengers need to really be aware of is that they are truly part of the safety system.
GOLODRYGA: And they're working together.
SOUCIE: Their input is what's necessary.
GOLODRYGA: And, of course, it's so crucial. Thank you so much. We appreciate having you on. And that's QUEST MEANS BUSINESS. I'm Bianna
Golodryga in New York.
END
END
