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AROUND THE WORLD

Obamacare "State Exchanges" Run Smoothly; Facebook Allows Violent Videos; Bolshoi Dancer Acid Attacker Begins Trial; Russian Bus Explosion; Australian Fires; White House Briefing

Aired October 22, 2013 - 12:30   ET

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


SUZANNE MALVEUX, CNN ANCHOR: They detail multiple drone attacks, including several that have killed civilians. The highly critical reports were made public a day before President Obama is due to meet with Pakistan's prime minister.

Now the report calls for a series of measures to bring the drone program in line with international law, including impartial investigations into several cases, bringing those responsible for human rights violations to justice, and offering compensation to the families of those civilian victims.

Twenty-two days into the roll-out of the new healthcare website, the program's website, some people, they are actually able to log in. Others still facing problems we know.

Even the president admits that there are problems that have plagued the online application process.

But listen to this. It turns out that the state-run Obamacare programs, these so-called "state exchanges," they have been operating rather smoothly. That's good news.

Senior medical correspondent Elizabeth Cohen joins us for some good news. We like that.

Why is this any different than the way the federal government is running its programs?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: You know, it's interesting. I talk to folks in Kentucky and New York and I said, what did you do right? I want to know what you did right. And I talked to other experts, too.

And it kind of boils down to three principles. And so the first principle is that many of these states got started really early. The minute that this law passed, they, years ago, they started, whereas the Feds spent a lot of time in 2010, '11 and even 2012, trying to get states do their own sites and weren't really focused on healthcare.gov as much.

And efficiency, this one is really, really important. In New York and in Kentucky, it seems like it was very lean and mean, very streamlined. In Kentucky, the state workers and the contractors were in one building. Like, they were all there together getting the job done. By many accounts, in -- for the federal site, when contractors had questions, they didn't get answered so quickly. There was an election going on, there was stuff happening and there may have been some bureaucracy going on there that impeded efficiency.

And the third one is an interesting technical point. If you go on healthcare.gov, it is not sort of automatic. Now it's better, but before it was even less automatic. You could window shop.

You could put in just a little bit of information about yourself and window shop, and then apply. It was really designed to apply first and then see your policies.

New York and Kentucky set it up differently and apparently setting it up without the window shopping at the beginning may have slowed things down.

MALVEAUX: So what about what the critics say? You know, you've got Senator John McCain. We expect John McCain that will be critical of the president.

But, also, you know, he says himself, look, you know, take Air Force One, send it to Silicon Valley, get a couple of smart people here, make this thing work.

Is it that simple?

COHEN: It's interesting. The experts that I talked to said that it's not that simple.

They said, look, the contractor that the Feds used is a widely respected contractor for doing this kind of site, and, as a matter of fact, they did Kentucky's site, the same contractor.

The point of this is the management of it. So you could fill up ten Air Force Ones with Silicon Valley geniuses, and if you don't manage them well, you're not going to have a Web site that, would.

It's about managing people well and answering questions. If geniuses have great -- have questions, they need them answered.

So this is showing the 14 states that have their own exchanges, and again, you can see Kentucky is in the yellow; New York is in yellow. Talked to executives from there, and they said contractors will constantly have questions. They need those questions answered quickly.

Building these sites is difficult. It is not an easy thing to do. The federal one, 36 states, and each of those states have a whole bunch of insurance policies. Like, the data here is voluminous, to say the least.

MALVEAUX: So it's all about the management. Manage the sites, get the federal government on board and actually be able to manage this kind of massive undertaking. COEHN: Right. It's not just the Silicon Valley geniuses. You need people to answer their questions. You need people to manage it. You need people to move the project along.

I mean, I know it sounds kind of boring, right? But anyone who's ever managed a project knows that that's what you have to do, and was the federal government doing that?

MALVEAUX: Well, they're listening to you now.

COHEN: They're listening now.

MALVEAUX: They're taking suggestions.

Elizabeth, thank you. Appreciate it.

Facebook doesn't allow drug use or nudity on its site, but believe it or not, you can see beheadings.

That is right. Ahead, the outrage. Why the company changed its rules.

(COMMERCIAL BREAK)

MALVEAUX: Facebook has now decided to lift its ban on violent videos, so videos of beheadings are now actually allowed to be viewed on Facebook.

Laurie Segall joins us from New York to explain why did they make this decision in the first place.

LAURIE SEGALL, CNN CORRESPONDENT: Let me give you a little bit of back story.

Now, a couple days ago, Suzanne, a video resurfaced of a woman being decapitated. It looked like she was in Latin America. And it was a very graphic video. I couldn't bring myself to watch it.

And a lot of users said -- they went to Facebook. They said, you should take this down.

Then it was revealed that they had initially banned that content, but they had lifted that ban.

So I spoke with Facebook. Let me read you what they said to me in a statement.

They said, "Facebook has long been a place where people turn to share their experiences, particularly when they're connected to controversial events on the ground, such as human rights abuses, acts of terrorism and other violent events.

"People are sharing this video on Facebook to condemn it. If it a video were being celebrated or actions in it encouraged, our approach would be different."

So, Suzanne, what they're really saying here is it's all about the context of the video.

Now, that being said, let's take a step back here. There are 13-year- olds using Facebook.

Suzanne?

MALVEAUX: Yeah, I imagine the argument is that if you see this atrocity, maybe people will be moved to do something about this, to intercede and intercept in some sort of way.

But the backlash clearly could come from parents or people who think there is no form, there is no way that my child or my teenager should be viewing such things.

SEGALL: Absolutely. And there has been a lot of controversy, I mean, as you can imagine.

Let me read you a tweet. Now, this was sent by British Prime Minister David Cameron.

He said, "It's irresponsible of Facebook to post beheading videos, especially without a warning. They must explain their actions to worried parents."

Now, Facebook is -- they're reacting to this, and they're beta-testing an actual warning sign that would go in front of these videos. And the warning sign would essentially say something like, you know, "This contains extremely graphic content and it may be upsetting."

What you're looking at currently right now is currently being beta- tested on the site.

MALVEAUX: Laurie, is there any change in policy when it comes to things like people doing drugs on Facebook or sexual acts or anything of that nature, or are they pretty consistent?

SEGALL: They are pretty consistent. Facebook bans nudity, so, you know, they will take down a picture of a woman breast-feeding. Also pornography, drugs, all this type of material is banned from Facebook.

Now, what they have said about these graphic images that they are allowing is they're significant, as you mentioned before, Suzanne, when it came to the Egyptian revolution, and we saw some very eye- opening images. Same with the Boston bombings, those were allowed to stay on the site.

MALVEAUX: It's strange, though, when you talk about context and breast-feeding, you'd think that they would understand and make allowances for that, the context of that, but they all consider that under one umbrella of nudity or --

SEGALL: You know, they -- it's funny because, tech companies like this, they struggle with the idea of free speech and what you can show and what you can't.

And what really has people a little bit outraged here is the fact that a video of somebody being decapitated could remain on the site, and it's up to Facebook to decide if it's OK and decide about that context.

Yet, you have women who want to share a moment when they're breast- feeding, and this is being taken offline.

MALVEAUX: Yeah, very good point, Laurie.

Well, obviously, parents have to play a critical role in what their children or teens are able to get hold of and see on Facebook, as well.

But thank you, Laurie. I really appreciate it.

We're looking at this situation. We're talking about home after home just simply gone.

That is what people are dealing with when you take a look at the wildfires that are burning now in Australia, today, now even worse.

(COMMERCIAL BREAK)

MALVEAUX: The Russian ballet dancer accused in an acid attack that nearly blinded the Bolshoi Ballet's artistic director, that went on trial today.

The 29-year-old dancer now faces up to 12 years in prison if convicted of intentionally causing grave bodily harm. He's already admitted he wanted the director to be roughed up a little bit, but he claims he was shocked to learn that the assailants used acid. The dancer has said the director played favorites in distributing financial grants. The director has now had 20 surgeries and is expected to need several more.

And staying with Russia, we head to the southwestern city of Volgograd. That is where investigators say they believe a 30-year-old female suicide bomber is now responsible for this bus explosion. You see it there. At least six people were killed, another 33 injured. It happened around 2:00 p.m. local time on Monday. Now, they say that the blast ripped through the bus right after the bomber got on board at a bus stop. CNN's Phil Black, he picks up the story from there.

(BEGIN VIDEOTAPE)

PHIL BLACK, CNN CORRESPONDENT: The explosion was captured on a dash board video camera. Debris blast across the road. Moments later, passengers are seen running from the bus. Investigators say one of those survivors told them the bomb detonated moments after a woman boarded that bus. They believe that she was the suicide bomber. A 30- year-old from the Russian Republic of Dagestan, where militants are still fighting for an independent Islamic state. It's also close to Sochi, where the Russian government knows it faces a big security challenge safely hosting the Winter Olympics next February.

(END VIDEOTAPE)

MALVEAUX: All right, thanks to Phil Black. We appreciate that, reporting from Moscow.

Also, a line of fires now that we're following here. This is nearly 1,000 miles long. This is burning across Australia's most populated state. The bush fires, they have destroyed more than 200 homes since Thursday. This is searing an area about the size -- if you can imagine this -- of Los Angeles. Officials are fearing that tomorrow's conditions are going to be about as bad as it gets with the possibility of more lives lost, more homes lost, as well. One in three Australians actually live in the state where these fires are burning. Residents there, they are simply preparing for the worst.

(BEGIN VIDEO CLIP)

GRAEME WINCHESTER, RESIDENT: The kids gone. I've got the fire-fighting hose around the corner. We've got a bunker next door. So we'll wait till it comes.

STEFAN KREMER, RESIDENT: That's a NATO - a NATO gas mask from the '80s. It was used obviously for nuclear warfare, but it will do a fine job here in the smoke (ph) as well.

(END VIDEO CLIP)

MALVEAUX: Want to bring in our Chad Myers to talk about this.

Chad, it's really extraordinary when you think about it. How is the weather going to impact this? Because this could turn into something much, much bigger and they think it could be the worst ever tomorrow.

CHAD MYERS, AMS METEOROLOGIST: It's a front that's going to go through that's going to shift direction of the wind. And that seems like a good thing because the way the wind is blowing now, you're blowing into new leaves, into new trees. When the wind shifts, it blows back.

The problem is, it's also going to shift in the opposite 90 degree angle, so it's going to blow back together. Two fires could actually merge and be a lot worse as one big fire than at two. There are some showers but well south of where the fire is. It's the wind and fire danger to the north that's remained very, very windy. Winds could gust 30 to 40 miles per hour. That's what it looks like, the fire ring there of the State Mine Fire and then down toward the Springwood Fire.

And as the winds blow, and I know everyone is going to look at that graphic and go, hey, wait, all your graphics are going backwards. No that's the upside down. We're on the - that's the other side of the world, so the high does spin the other direction and so does the low. So our graphics were correct on that. I had to double check when I was looking at it earlier. Wait, the winds are going the wrong way. No, that's the way they're going to blow in and so that's the real danger, dry, hot winds, 40 to 50 miles per hour.

MALVEAUX: And, Chad, talk a little bit about -- more about this because small little fires everywhere across Australia, that is actually not uncommon. But there is going to be the fear of this mega fire.

Got to leave it there, Chad, because I understand the White House Briefing has just started with Jay Carney. So let's listen in.

(JOINED IN PROGRESS)

(BEGIN LIVE FEED)

JAY CARNEY, WHITE HOUSE PRESS SECRETARY: -- is the president's chairman -- rather, the chairman of the president's Council of Economic Advisers. Many of you know him.

Today, because of the shutdown, is jobs day, as you know -- and he'll mention that at the top. But I think he also is here to give you a quantitative look at the economic effects of the shutdown that this country experienced and how those effects were negative for the economy and for the American people.

So I'll turn this over to Jason. He will give you remarks at the top. He's here to take your questions about his analysis and other job and economic issues, and then I will return to the podium to take your questions on other subjects.

Thank you.

JASON FURMAN,CHAIRMAN OF THE COUNCIL OF ECONOMIC ADVISERS: Thank you, Jay.

This morning we found out that the economy added 148,000 jobs in the month of September. The unemployment rate ticked down to 7.2 percent. And those are both part of a steady more than three-year trend of job creation and reduction in the unemployment rate.

There's no question, though, that that pace of job creation is below what we can be fully satisfied with and that the conversation we'd like to be having is a conversation about how to add to jobs. Instead, what we did in October was a self-inflicted wound that will subtract from jobs when we eventually learn the jobs number for October.

Normally economists love jobs day, because it's the most recent, fresh look at what's going on in the economy. This jobs day was delayed several weeks and, as a result, covers data from September, which was before the very significant changes that happened in October.

So one thing we've been trying to get a handle on is what the economic consequences of that economic shutdown and debt limit brinksmanship have been. This first slide gives you a number of private-sector estimates of the consequences, and they all show that GDP growth in the fourth quarter was reduced by anywhere from 0.2 to 0.6.

These estimates are useful and informative, but it's important to understand that they're based on predictions. Basically, they say, if government services ceased for this amount of time or this amount of money, we have some type of multiplier model, here is the consequence for GDP. They're not based on actual data, and they don't necessarily capture the full set of effects on confidence, on uncertainty on things like oil drillers not getting permits, small businesses not getting loans, homeowners not able to get mortgages. What we tried to do at the Council of Economic Advisers was look at actual data on the economy. And the next slide shows some of the data we looked at. These are all indicators that are available on a daily or a weekly basis. The most recent set is available through October 12th, so it covers about three-quarters of the shut down, or most of the first half of October, and these eight indicators all tell a very consistent story.

Sales growth, as shown in those first two indicators, slowed in the first half of the month, and one survey said 40 percent of consumers cut back on their spending because of their uncertainty. U.I. claims soared by 50,000. The Gallup job creation index slowed. Economic confidence fell to the lowest level in years. Steel production fell, and mortgage applications slowed, as well. And we think some of that is certainly a direct effect of the shutdown.

What we then tried to do was take all of these disparate indicators -- each one of them is individually noisy and tells you only part of the picture -- and try to extract a consistent economic signal from all of these indicators using something that my colleague, Jim Stock, who's a member of the Council of Economic Advisers and one of the country's leading time-series macroeconometricians, calls principal components analysis -- I wanted to make sure we got that word in the briefing -- and you see that in this next chart.

The blue line is an index that combines all eight of these variables into a consistent measure of the economy. If you look in the past, it generally tracks job growth and job destruction, so it's a reasonably accurate measure of the economy. And one thing you see is that it fell very sharply in the first 12 days of October.

You see similar size, although not quite as sharp falls the last time we did the debt limit brinksmanship, and the Eurozone crisis in 2012. And if you calibrate that fall, you see circled there at the end, it translates into 0.25 percentage points off the fourth quarter growth rate. We're 120,000 fewer jobs than we otherwise would have had in the month of October. And I want to stress, that's just based on the data we have through October 12th. So as we look at more of October, those numbers could change and could potentially get worse.

This all just really underscores how unnecessary and harmful the shutdown and the brinksmanship was for the economy, why it's important to avoid repeating it, and instead consider jobs that are adding to growth, not subtracting. And later today, we will have a report out that provides the mathematical derivation of all of this for those of you who I know will be turning straight to the appendix of that report and will work -- work through all this.

And I think, as I said, it's a clear story. You see private- sector forecasters -- you see it in the actual data, that it was a significant and unnecessary self-inflicted wound that we shouldn't be repeating.

CARNEY: Questions for Jason?

QUESTION: Will this trend continue? We still have the threat of another shutdown.

FURMAN: You know, I certainly hope it doesn't. And there's no reason that it should. We're now going through regular order with a conference committee on the budget. There's time to figure these things out. There are significant economic opportunities when it comes to up-front investment and job creation, replacing the sequester in a balanced way, more medium- and long-term deficit reduction, and the president will be urging the conference committee and the Congress to do exactly that.

QUESTION: Jason, even if there isn't another shutdown, how concerned is the White House that the cumulative effect of a weak September jobs report and the impact that we may have seen over the last three weeks could lead to slowed economic growth through the end of the year?

FURMAN: Look, I think the good news is, we've had a private sector that's really led the recovery throughout this past year, so we've had things like the Eurozone crisis, the sequester, the shutdown, the brinksmanship, and throughout it, you know, we've continued to see the private sector adding jobs.

We'd like to see them, you know, adding more jobs, and we'd like to do what we can to help, whether it's investments in infrastructure, business tax reform, rather than being an obstacle in the way of that job creation by adding uncertainty and having this type of shutdown.

So, you know, I think -- you know, I think in September you did see job creation. You saw 148,000 jobs. You saw the unemployment rate come down. That's consistent with, you know, the roughly 2 million jobs a year pace we've had that's consistent with the roughly nearly three-quarters of a point per year reduction in the unemployment rate.

(LIVE FEED ENDS)

MALVEAUX: You've been listening to the president's head of the president's Council of Economic Advisers talking about the economic impact of the government shutdown, the brief government shutdown. He says this was a fall in economic confidence, that there are less jobs that were created, less mortgages that were extended, as well as fewer jobs that were created during that period of time.

We're going to have more on the back end. We're going to take a quick break. We'll be right back.

(COMMERCIAL BREAK)