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A Driver Has Rammed Into Pedestrians In Melbourne, Injuring 19; Catalonia To Vote For New Regional Government; May Brexit Date Changes In Exceptional Circumstance. Aired 2-3a ET
Aired December 21, 2017 - 02:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN VAUSE, CNN ANCHOR: This is CNN Newsroom live from Los Angeles. Ahead this hour.
ISHA SESAY, CNN ANCHOR: Gunshots ring out as another North Korean soldier defects across the DMZ.
VAUSE: This time it's personal. Ahead of the U.N. vote on Jerusalem, President Trump warns foreign aid could be cut the countries which go against the U.S.
SESAY: Plus a mass grave uncovered in Myanmar. The country banned the U.N. official investigating the brutal crackdown on Rohingya Muslims. Hello and welcome to our viewers all around the world. I'm Isha Sesay.
VAUSE: I'm John Vause. This is the third hour - the third hour of Newsroom L.A.
SESAY: Well, for the fourth time this year a North Korean soldier has defected to South Korea.
VAUSE: He crossed the DMZ early Thursday. South Korea says it's soldiers held their fire during the defection but warning shots were later fired at North Korean guards who were close to the boarder apparently searching for the soldier.
SESAY: All right, well let's bring in Paula Hancock live from Seoul, then. And, Paula what more are you learning about this individual and shots fired?
PAULA HANCOCK, CNN CORRESPONDENT: Well, Isha, what we're being told by the military at this point is that the defector is young. He is a soldier. He's 19 or his early 20s that we're being told. He was carrying a firearm, as well, but it was, as you say, there were no shots fired as he was crossing the boarder but the fact - 45 minutes later there were shots fired by the South Korean military.
They say that they were about 20 rounds but they were warning shots because they could see North Korean soldiers approaching the boarder clearly trying to find the defector and trying to see where he was. And then, about 40 minutes or so after that there were shots fired on the North Korean side. Now, it's important to point out that these weren't shots fired towards one another between North and South Korea but any shots fired along the DMZ will obviously increase concerns of any sense of miscalculation. And, interesting that the DMZ once again begin the point where a defector decides to cross the second in just about two months.
It was once a pretty rare defection route but we're certainly seeing more soldiers crossing there. Isha?
SESAY: All right then. Paula Hancock joining us there from Seoul. We appreciate it. Thank you.
VAUSE: U.S. ambassador to the U.N. Nikki Haley is warning she'll be taking names in the General Assembly in the coming hours when there's a vote on a resolution critical of President Trump's decision to recognize Jerusalem as Israel's capital.
SESAY: Well, the move has sparked protest throughout the Middle East and criticism from even the closest U.S. allies. As Trump says there will be a price to pay for those who do not support the U.S.
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: For all of these nations that take our money and then they vote against us at the Security Council or they vote against us potentially at the Assembly they take hundreds of millions of dollars and even billions of dollars and then they vote against us. Well, we're watching those votes. Let a vote against us. We'll save a lot. We don't care.
VAUSE: Foreign ministers from Turkey and the Palestinian Authority say the threats from the U.S. amount to bullying.
MEVLUT CAVUSOGLU, TURKISH FOREIGN MINISTER (through translator): What will you do by getting these names? Will you allow invasions into those countries, as well, or will you punish them? The world is changed. The notion of I am powerful therefore I am right has changed. Now the world is rising against the unfair. From now on no honorable nation, no honorable state will bow to such pressure.
RAMI HAMDALLAH, PALESTINIAN PRIME MINISTER: This is a new definition of world order in politics and it seems that (inaudible) they are putting this staff (ph) on a new political reality.
VAUSE: Joining us now, California talk radio host, Ethan Bearman and California Republican National Committeeman Shawn Steel. Shawn, I know you want to talk about the tax cut and the tax reform so we'll get there. I promise you. But first we want to talk about Jerusalem and what looks to be like a shakedown at the U.N. And the big concern among a lot of experienced diplomats is that this type of action, these kind of threats will only lead to increasing U.S. isolation and countries to be digging in and standing up to the United States. So, the outcome will be quite the exact opposite of what the president is looking for.
SHAWN STEEL, REPUBLICAN NATIONAL COMMITTEEMAN: I disagree. I think the United Nations -
VAUSE: Why am I not surprised?
STEEL: It's been a cancer on our - on the world freedom scale. Most of the country's that belong the United Nations are not friendly toward freedom. They're misogynistic; they're various forms of dictatorships. There are very few democracies. Israel's one of the brightest spot in the entire world and of course we're going to recognize the capital of Israel.
Every president said he was going to do that Congress has voted to support since 1995, democrats, republicans. That's why you haven't found a single major democrat opposing what Trump is doing on this and there's going to be a big vote to try to embarrass America and no longer is Obama president.
If you want clearer evidence, is that the United States is doing the right thing by recognizing the appropriate capital that Israel has chosen, not other nations. These cutthroats that you just had on TV, these are low level, radical dictatorships. The Palestine organization is not democratic, it's a bunch of bullies that have been terrorizing their people...
STEEL: ...a government -- if Turkey -- this is a great occasion and I'm delighted.
VAUSE: Let's not get in the (inaudible) (hold) because, Ethan, the issue here is not necessarily the United States decision to recognize Jerusalem, but what we're talking about here is the tactics being used at the United Nations by President Trump and his Ambassador, Nikki Haley.
ETHAN BEARMAN, RADIO HOST, CALIFORNIA TALK: Right. And this is the issue and what we saw through the primaries, through the general election. He doesn't want to act presidential, he wants to be a big bully and now he wants to be a big bully on a big world stage. United Nations has it's share of issues that Shawn and I might actually have some agreement there. But it's an important organization, we have to have these conversations.
VAUSE: The U.S. Ambassador, Nikki Haley, well the U.N. Ambassador rather, Nikki Haley, also (reading) into diplomats from most of the member countries. This is what part of what she wrote.
As you consider your vote, I encourage you to know the President and the U.S. take this vote personally. So Shawn, once again, everything is about the President. Why elevate Donald Trump onto the same level as Jerusalem is the capital of Israel, because now it essentially -- this isn't just about countries deciding whether or not to support the United States and it's decision, it's now all about Donald Trump.
STEEL: John, it's not bad at all. What's really happening is this is about American no longer being a nation to be stepped on, being taken advantage of. Billions of dollars given in foreign aide to people that are ungrateful, that usually don't go to the people that really need, they go to various forms of totalitarian societies and it's appropriate to say, look if you vote against us on a simple issue of honoring Israel, the Jews of Israel and the capital of Israel determined by (foreign) people, if you're going to vote against us, don't consider us your friends.
VAUSE: Let's get onto tax cuts, because we're -- I want to make you're happy tonight. OK, the President and his victory lap and there's a lot of winning, a lot of love today. Look at this.
(BEGIN VIDEO CLIP)
PAUL RYAN, SPAKER OF THE U.S. HOUSE OF REPRESENTATIVES: Something this big, something this generational, something this profound could not have been done without exquisite presidential leadership. Mr. President, thank you for getting us over the finish line.
DIANE BLACK, U.S. REPRESENTATIVE: Thank you President Trump for allowing us to have you as our president and to make America great again.
ORRIN HATCH, UNITED STATES SENATOR: You're one heck of a leader. And we're all benefiting from it. This bill could not have passed without you.
MIKE PENCE, V.P. OF THE UNITED STATES: President Donald Trump delivered a great victory for the American people.
(END VIDEO CLIP)
VAUSE: Ethan, will they be thinking Donald Trump at the mid-terms?
BEARMAN: Oh my goodness. Well here's the -- this is actually very complicated, because the mid-terms, this could potentially, actually help the Republicans at the mid-terms.
It's going to be 2020 that we begin to see what the actual affects are with deficits, the debt increasing, because this think is a gigantic giveaway to corporations and wealthy people that is going to be on the backs of mostly lower and middle income people and wealthy people actually, in cities and places like California and New York, are going to bare the brunt of this.
But really, the biggest thing that was buried in all of this besides the fact that they weren't actually kissing Donald Trump's ring in that little video clip is, the minor amount of tax money that people on the lower end of the economic scale are going to get back. They're going to be destroyed because healthcare costs are going to go through the roof.
VAUSE: And Shawn, I just want to read this to you. (High-five) for the guys in the control room, this is from the "Financial Times," the Tax Policy Center think-tank said the bill would reduce taxes for all income groups in 2018, increasing average after-tax income by 2.2 percent, but in 2027, the year after most of individual tax provisions expire, it said, low and middle-income Americans would see little change in their tax bills versus current law, while taxpayer in the top one percent would receive an average cut of almost a percent. Is that really smart politics?
STEEL: Actually, it's brilliant politics on so many levels. I don't know where you want to start. The Brookings Institute, a far left think-tank in Washington, D.C., admits that 81 percent of the taxpayers are going to benefit.
Now when you start with the liberals engrained with a conservative economist, this is a big start. Not only are we seeing all tax groups going to benefit and including -- except a lot of loop holes have been closed up, but we're going to see an economy that's really been gearing up and getting much stronger this year, mainly because of the Trump effect.
The Stock Markets been anticipating this all this time and now it's finally come across and then Chucky Schumer, this pathetic little democrat from New York, one of those regional democrats that are not very important anymore.
He today, attacked AT&T and said this is a disaster, people are going to die, it's going to be a horrible situation. And he attacked AT&T, within hours; AT&T announced a $1,000 -
VAUSE: It's Christmas -
BEARMAN: $1,000 bonus to -
VAUSE: All right -
STEEL: -- 200,000 employees, that's $200 million and then a number of other corporations followed suit. This is the beginning of a fabulous America's back like Ronald Reagan, the economy -
VAUSE: Wasn't Ronald Reagan the retired addition of tax increases to make up for the deficit -
STEEL: And the good news is, the republicans are going to do well in the -
VAUSE: OK, I guess we'll see because the reality is this is the most unpopular piece of legislation, what, in generations -
STEEL: Except -
VAUSE: If not longer. There were tax hikes and values that were more popular than this. And so now if you're looking at the latest poll, a big majority of Americans prefer democrats to be in control of congress. If you look at the numbers, there it is, 56 percent to 38 percent. So whatever issue you have -
VAUSE: Because the deeply unpopular tax plan - selling this tax plan with a deeply unpopular president, that's a pretty big uphill climb.
BEARMAN: The key is going to be for the democrats to latch on to what President Trump said today in him own words that this thing was all about the corporate tax cut, it had nothing to do with middle class. He said that in his own words today -
STEEL: Actually, completely fabricated. You find a venue; you pay $100, but he -
BEARNMAN: It's on my phone right now -
STEEL: His entire purpose was to help the working class which no party has disregarded -
BEARMAN: The president's own words today at the white house.
VAUSE: All the independent analysis says about two thirds of the gains of this goes to the top 20 percent, that's not exactly middle class.
STEEL: Except the troubled - the top 25 percent means 80 percent of the taxes - of course the people that are paying taxes -
BEARMAN: He made the corporate tax permanent but the income taxes are temporary.
STEAL: What you don't like is that the economy's growing; workers are getting jobs again -
VAUSE: Because there's growing concern -
STEEL: You don't like success and you hate ethics -
VAUSE: We love winning so we love winning. But there's growing concern about democratic -
STEEL: I'm not trying to -
VAUSE: Might be actually on the verge of firing Robert Mueller. The special council initiating the Trump campaign size to Russia. Listen to this.
MARK WARNER, U.S. SENATOR: Any attempt by this president to remove special council Mueller from his position or to pardon key witnesses in amy effort to shield them from accountability of shut down the investigation would be a gross abuse of power. These truly are redlines and simple cannot allow them to be crossed.
VAUSE: Almost out of time, but Ethan, clearly the President's had a big win, he's flexing his muscles, he's feeling pretty bold and he's got a lot of support, a lot of love from the republicans. Could that now mean that he feels like he could actually politically get away with firing the special council?
BEARMAN: Well with his mercurial behavior, we don't know. It's going to be up to his mood of the day. I would suggest up until now he's actually taking the right approach which is not to address and firing Robert Mueller -
VAUSE: He did actually say I have no plan over the weekend -
STEEL: Actually he said it today, he said it yesterday, he said it the day before. Robert Mueller's a disgrace to the FBI.
STEEL: America's number one bad cop. He should resign in disgrace.
VAUSE: I'm going to stop you right now because Robert Mueller was head of the FBI after 911 and did a lot for the United States.
STEEL: He made a lot of mistakes at that time.
VAUSE: The director of the FBI, he got a lot of praise from the republicans at the time so you're going to let it right there. Ethan and Shawn, thank you.
STEEL: Thank you.
BEARMAN: Thank you.
SESAY: Well we have more on our developing story in Melbourne, Australia where police are trying to sort out why a vehicle slammed into more than a dozen pedestrians a short time ago. They're not yet sure if it was an accident of something deliberate here.
The incident happened at the Flinders Street station shutting down the center of the city.
VAUSE: The driver has been arrested; a small child is in a serious condition with head injuries. The ambulance services paramedics transported 13 others to hospital. This comes almost a year after a car killed six people at another intersection in Berg Street. It's just a few streets away from where this actually happened.
Police said that incident in January of this year was not terror related. Jim Stoupas is the owner of Walkers Donuts in Melbourne. He saw the incident today; he joins us now on the phone. Jim, I was just looking at the map, your shop is just right down the corner of Flinders and Elizabeth. You had a pretty good view what did you see?
JIM STOUPAS, OWNER OF WALKERS DONUTS: Well - hello, how are you? we had - it was actually on the street and a Suzuki SUV, it was traveling at about 100 kilometers per hour so about 60 miles per hour and it just didn't stop at all and he intersection was completely chugged with pedestrians and it just barreled through the pedestrians and the only thing that I think slowed it down was just the volume of the pedestrians that we hit which is pandemonium.
All you could hear was screams and just people bouncing off the car. It was -- it was awful.
VAUSE: So you saw the car obviously not slow down. Did you hear maybe the engine revving as if it was gaining speed, as if he was accelerating?
STOUPAS: That's a good question. Yes. Yes, I -- I think so. I mean look, obviously foremost in all our minds was was it a terrorist (inaudible) incident. But I don't -- I don't know. It could have been somebody that had a heart attack in the vehicle, but somebody's in custody. But it seemed to not slow down, if that makes sense.
You know? So there was no breaking, there was no attempt to slow down. He literally just careened (ph) as if he was on a freeway. Just...
VAUSE: OK. So the Suzuki barrels through the intersection, there. It's just before peak hour. This is a very, very busy part of Melbourne, it's in the heart of Melbourne. It's just across from the Yarra River. So there's a lot of people that say (ph) once this car barrels through the pedestrians, what happens then? Did the car just stop? Was the driver in it and police move in? What did you see?
STOUPAS: Yes. Well, the -- I saw the vehicle stop. So I think he would have stopped because I think you know, he hit (ph) that many people. But then I think he hit the tram, the side of the tram stop. Then people were attending to the injured. And within -- within a minute a or two, there was already police cars on the -- on the scene. And they surrounded the vehicle and started to -- to -- to attend to the injured and then ambulances came after that.
VAUSE: So a lot of people who were trying to help out the people that had (ph) been hurt, right?
STOUPAS: Yes. It was immediate -- immediate sort of people just surrounding every -- every -- every couple of meters, there was somebody on the ground, people were attending to them.
VAUSE: There is a new terror warning system in Melbourne, I believe. It's a system which sirens are activated in the case of a terrorist threat or a terrorist incident. Do you -- have you heard those sirens at all? Have they been activated?
STOUPAS: I haven't -- no, I haven't. The only sirens that were (ph) heard were the emergency services, you know? Police, fire, ambulance. But I didn't hear anything unusual.
VAUSE: But the -- the police presence on the scene right now, how would you describe it? Because from what we've seen, some of the images, it seems like there are a lot of police. Not just at this part of Melbourne, but throughout the entire city.
STOUPAS: Yes. Look, a lot of police here now. Well, not as many as there -- there were before. There's -- the major collision investigation unit is here and the critical incident response team, so (ph) like a SWAT team is here as well. And they're -- they're sort of -- you know, they're armed around the perimeter, so to speak (ph). We've got one (ph) (inaudible).
You know, at each point there's a SWAT member, plus there's normal police. And the -- there's no ambulances left. I think there's -- there's one ambulance left. I don't know if there's any deceased, but -- yes. So -- and there's a lot of detectives here as well, plain clothed. (ph)
VAUSE: Jim, (ph) we'll leave it there but thank you so much. Obviously, you've seen something incredibly traumatic, so thank you for taking the time to speak with us. We wish you well.
STOUPAS: No worries.
VAUSE: And of course -- wow. Some interesting details there from Jim. (ph)
SESAY: Yes, absolutely. (ph0
VAUSE: Essentially this car probably got (ph) 60 miles per hour -- at (ph) 100 kilometers per hour. It appeared just, you know, not to slow down or maybe possibly speed up, heading into the crowd. There are questions being asked is this terror related. We don't know. Police have yet to say anything about this at all. And it is interesting, because there is this terror alert system which they have.
So if that hasn't been activated, maybe it's because it's over, there are other threat. Who knows.
SESAY: Yes. And he also did -- if I heard him correctly, say there were less...
VAUSE: Yes. Police on the scene (inaudible).
SESAY: Yes, so again...
VAUSE: This happened about an hour or so ago.
SESAY: Yes. Also interesting (ph) see what they would consider the status of the situation right now. We're going to watch this very closely and try and get you more details and really try and pass through (ph) and figure out what's at play.
VAUSE: In the meantime, we'll take a short break and we'll be back in just a moment.
SESAY: Myanmar has banned a U.N. official from investigating the military crackdown on the Rohingya. The country claims some of her reporting has been biased and unfair.
VAUSE: The ban came a day after the military uncovered a mass grave with 10 bodies in Rakhine State. It is still unclear who is responsible for those killings. Well 650,000 Rohingya have fled to Bangladesh since violence broke out in August.
SESAY: Akshaya Kumar is Deputy United Nations Director for Human Rights Watch and she joins me now from New York. Akshaya, I think you so much for being with us. I want to share with our viewers some satellite imagery obtained by your organization showing the recent torching of dozens of Rohingya villages in Rakhine State. So according to your organization, this first photo shows some villages before their destruction and then this next one that we're putting up on screen captures the many burned out buildings. And what's frightening to me, Akshaya, is the fact that these images show damage or destruction since October which drives home the fact that the Myanmar authorities continue to terrorize the Rohingya population despite all the international condemnation, even though the actions have been labeled ethnic cleansing by the U.S. and the U.N. What does that say to you about this regime? What does it tell us?
AKSHAYA KUMAR, DEPUTY UNITED NATIONS DIRECTOR FOR HUMAN RIGHTS: Absolutely. This satellite imagery does just add to the weight of evidence that we have that this campaign of ethnic cleansing has not completed. It's not finished. And unfortunately the international community's lukewarm statements haven't done the trick. Myanmar authorities are not feeling the pressure. They don't see a need to change their ways. And, in fact, they're becoming more obstructionist by the day. Today they announced that they're not letting the U.N. special rapporteur into the country at all which is a big shift.
KUMAR: So things are just getting worse on both fronts-multilateral and (inaudible).
SESAY: So I want to read an extract from a survivor of the violence in Rakhine State and really it is to make the connection with the point you just made about the special rapporteur being banned. I want to read this. It's from actually one of your reports, one of the Human Rights Watch's reports and it's difficult to read and some of our viewers may find the details extremely disturbing. It's from Shalfica(pf). She says, "I woke up and realized I was in a pool of sticky blood. I tried to wake the others up but they didn't move. Then I broke through the bamboo wall and escaped. All the houses in the area were on fire. I could hear women screaming from some of the other houses. They could not escape from the fires."
This is just one of many stories that appears in this, you know, recent 30-page Human Rights Watch report called "Massacre by the River, Burmese Army Crimes Against Humanity in Tula Toli". And then, of course, separately on Tuesday, we learn of this mass grave being discovered in Northern Rakhine State. How much harder is it going to be Akshaya, to ascertain the scale of the killings, the-the-the all the harmful practices that have gone on-the rapes, the destruction. How much harder is it going to be to get a full picture now that the U.N. special rapporteur has been banned?
KUMAR: It's, it's going to be harder but it's not impossible. Look, the Burmese military, the authorities are hopeful that if they just keep all of us out, if we're not allowed into Northern Rakhine State that somehow the truth won't come out. But, we've proven them otherwise. We use satellite imagery. We've taken testimonies (pf), I went to the camps myself. We spoke to people like Shalfica(pf). I can still see her in my eyes. Another woman I spoke to whose entire face, her skin, her arms had been burned because of fire. So these wounds, this evidence, is so blatant it can't be covered up. And so this flimsy attempt to kick out the special rapporteur will actually just make things worse for them. Hopefully it'll give some of the members of the U.N. Security Council a wake-up call. They need to take action now; the Burmese are not taking this seriously.
SESAY: You mention going to the camps and speaking to survivors like (Shafika). What about those survivors there in northern Rakhine State? I mean we showed the pictures at the beginning of our conversation of the destruction since October. For those still there on the ground in Myanmar, do we know what conditions they are in, what conditions they're living in?
KUMAR: It's deeply worrying, our satellite imagery counted 40 villages that were destroyed in past two months so we know that this campaign is still ongoing, but we don't have enough access certainly not for independent journalists, for human rights workers, not even for aid workers who want to deliver life-saving assistance.
And so for those who are (trouble) remain and it could be up to 100,000, we have to be really worried because they're trapped without access to people who could champion their rights or monitor what's happening to them.
SESAY: And actually I want to switch gears because there is so much that is happening right now in the world and I want to turn our attention now to a refugee crisis of even greater proportion in the Democratic Republic of Congo, some 1.7 million people have fled their homes in the country this year alone. We're looking at about 5,500 people a day due to the ongoing violence in the region. A large percentage of them don't have access to clean water or toilets; conditions in the camps are described as being simply horrible. I mean Akshaya the truth is what we're hearing is that DRC is facing a constitutional, humanitarian and human rights crisis all rolled up into one. What can you tell us about the situation?
KUMAR: Well you're right we have a problem at the highest level with the political situation. There was supposed to be an election before the end of the year, it doesn't look like that's about to happen. And more generally in the Kasai we have a huge human rights issue where there's been a climate of impunity; the U.N. has discovered up to 80 mass graves, they estimate 5,000 people have been killed in violence and just no accountability or justice and no attempt from the government to stop the killings. In fact it's exactly the opposite, today news came out that there's good reason to believe the government itself could have been responsible for the killing of two U.N. investigators who were trying to get to the bottom of what's happening.
And I emphasize that because this is a dire humanitarian crisis, people have been forced to flee their homes, schools have been torched, there's mass displacement but it doesn't come in a vacuum, this is a man-made crisis in many ways and the government should shoulder some blame.
SESAY: And to give our viewers the proper context, this is a multi- regional crisis that is playing -- multi-region rather, multi-region crisis playing out in the DRC that has seen all these people flee. How much of the violence, and I don't know if Human Rights Watch has done the analysis, but how much of the violence is being perpetrated by non-state actors versus state security forces? Do you have an idea?
KUMAR: We don't know but we know that violence is being perpetrated by both sides; by government actors or state security and by these non-state actors, militias that are emerging, including Kamwina Nsapu which is a really brutal militia group that has come out of Kasai region. So it's hard to tell on balance and one of the reasons that it's so hard to tell is that there have been these cover-ups. There've been restrictions and limitations on independent investigators like those two U.N. experts I mentioned really looking into things and trying to find out when is the government responsible and who's behind all of this violence.
Our experts actually worry that the government sort of taking a calculated approach of chaos to stir things up in this region to just make it easier to push off the elections and we can't discount that possibility.
SESAY: No absolutely. What is at stake here, what is a stake here when we look at the situation in DRC which some have said may be sliding back towards the civil wars we saw in the 1990's that saw millions of people's lives devastated? As you look at the situation today, where is this heading and what are the consequences here if the international community don't step up?
KUMAR: I really see the DRC on a precipice right now, you have a massive peace-keeping mission there who aren't able to stem this violence and fighting; you have increasing threats, not coming from these armed groups as it has historically, but from the government itself. And then a ticking time bomb of President Kabila refusing to announce his intentions.
[02:30:00] Will he stay? Will he go? Will there be a credible or real election where the Congolese people feel their voices are heard? And then an atmosphere like that unless something changes we're really at a breaking point. I think people need to be watching the DRC much more closely going into 2018. This year, it slipped off the agenda and the situation just deteriorated for the people who are living there.
SESAY: Well, I can assure you that here at NEWSROOM L.A. we're going to be watching the situation very, very closely going forward and look forward to speaking to you again soon. Akshaya Kumar, thank you so much.
KUMAR: Oh, thank you. We appreciate you're covering these issues.
VAUSE: Well, according to the experts the anticipation on the Trump tax cut has been driving stock markets around the world a point not lost on the U.S. President. But could that be like the rooster claiming credit for dawn? Be back in a moment.
VAUSE: Welcome back everybody. You're watching CNN NEWSROOM live from Los Angeles. I'm John Vause.
SESAY: And I'm Isha Sesay. Our breaking news. The driver of a vehicle has been arrested after more than a dozen were run down in Melbourne, Australia. Police have also arrested a second person. One witness says, the vehicle was going about 100 kilometers per hour when it slammed into the crowd in the city center.
VAUSE: And so many people have been taken to the hospital. That includes a child with a serious head injury. Police don't yet know if it was an accident or some kind of deliberate act. But they -- we did hear from somebody saying that police have now dispersed from the area but there remains a heavy detective presence as well as other officials as this investigation gets underway. Also, another North Korea soldier has defected to South Korea across the DMZ. South Korea says it fired warning shots only after the defection at North Korean guards who actually close to the border looking for their missing soldier. And then four members of North Korea's military have defected to the South this year.
SESAY: And U.S. President Donald Trump is threatening to cut financial aid to countries that don't support his recognition of Jerusalem as Israel's capital. The U.N. General Assembly will vote Thursday on a resolution criticizing the move. Ambassador Nikki Haley says the U.S. will be taking names.
VAUSE: Meantime, President Trump is celebrating his big tax win with the Republicans who actually got the measure to Congress. Donald Trump says the reform will create jobs and fulfills a campaign promise. Critics say the plan eases the tax burden on corporations and the wealthy while shortchanging the middle class.
[02:35:12] VAUSE: Well, after the vote, Wall Street took a breather. The main indexes did on Wednesday after weeks of record highs.
SESAY: And the Dow Jones is approaching another milestone and it's less than 300 points away from 25,000 mark. The tax fund cut in the corporate rates from 35 to 21 percent is expected to boost corporate earnings and lead to higher dividends and stock buybacks.
VAUSE: Well, more now we're joined by Ross Gerber, he's a co-founder, President, and CEO of Gerber Kawasaki, Wealth and Investment Management. It's been a while. Welcome back.
ROSS GERBER, PRESIDENT & CEO OF GERBER KAWASAKI: Yes. Thank you. VAUSE: Good to see you. Ok. It's a rare day when President Trump
does not boast about the stock market, about the Dow. Here he was on Monday, he was in the middle of a major policy speech on national security. Listen to this.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: The stock market is at an all-time high and just a little while ago hit yet another all-time high, the 85th time since my election. And America is gaining wealth leading to enhanced power faster than anyone thought with six trillion dollars more in the stock market alone. Since the election, $6 trillion.
(END VIDEO CLIP)
VAUSE: Did you hear that? It's six trillion. Ok. Clearly, he wants credit for the bull run. But up until, you know, today, Wednesday, and the over -- and he signed the overhaul the text code. The president hadn't actually signed any major piece of economic policy that I see go in sign into law. He hasn't actually done anything aside from cutting a lot of regulations.
GERBER: Right. I mean I've definitely done much more to help the stock market go up than Donald Trump for all the money we've buying stocks with, so, you know, the truth of the matter is the real person behind the engineering of this amazing recovery we've seen over the last eight, nine years has been Janet yelling in the Federal Reserve and their debt management of this first adding so much liquidity and now trying to take it back and this is such a delicate thing, and she's done a masterful job. So, you know, I congratulate the fed.
VAUSE: But --
GERBER: So far.
VAUSE: So far because this is now a very precarious time because you got this strategy huge overvalued. It's been a really long bull run about a hundred and three months, the second longest ever and you have a situation where you got overvalued stocks and the fed racing interest rates at the same time which in the past has led to some pretty big corrections.
GERBER: That's correct. And I think we have to look at a few different things. Number one, you know, we went through a period of time in '15 and '16 that was almost a recession, so in a way, we look at this is almost like a new cycle. Just because the economy didn't hit recession by just a little bit, it doesn't mean that it wasn't a very difficult time for stocks and also for earnings, and now we've seen that recovery. So I don't know if I'm going to say it's the longest period of time. The second thing that you have to consider is where it's such a low real interest rate that even though they're raising rates -- I mean these rates are ridiculously low. So if you look back into the last decade, you know, you're talking six and seven percent rates are what hurt the market. So, you know, we're protected from there. VAUSE: It's still free money.
GERBER: Yes. But I mean with the tax reform, you cannot underestimate the potential for growth that can be created from this.
VAUSE: Ok. When I say about the tax cuts driving the stock markets because, you know, they come in believe full of theory is that you obviously, people get more money. They get to spend it. Companies make more stuff. They make more money. But there's a lot more expectation with these tax cuts when it comes to the corporate as well in terms of buying stock buybacks for instance.
GERBER: Right. And so if you think fundamentally that companies are paying their quarterly earnings and taxes and that amount is just subtracted on the tax side. Those profits flow straight to the shareholders, so that can be distributed in many different ways. But it goes straight into the economy versus into the government's pockets, and let's keep in mind. The government is one of the most inefficient places for money. I mean it rarely produces anything there. So anything that doesn't go there it means it's going to be better for growth by coming back into the economy.
VAUSE: A columnist Justin Wolf has pointed out that the market -- and he's looking at the S&P 500 has risen 17.5 percent so far. In the in Trump Presidency, it rose 37.5 percent of the equivalent part of the Obama Presidency. (INAUDIBLE) to the biggest companies. I thought, adjust it for inflation, it -- but it should be noted at all say that the stock market is not the economy despite what Donald Trump says, you know, it is a measure of future profitability, right?
GERBER: Right. But it is also is kind of the economy or leading indicator of economic growth too. So you have to look at those two different periods of time, you know, when Obama took over at one of the worst period of times, we have Republicans, you know, who almost destroyed the financial system and Obama came in and during much of his presidency really just got the country back to where it needed to be where Trump took over where things were like ready to go, you know, it's like, here's the baby, you know, run with it, you know.
[02:40:18] VAUSE: Does the -- does the economy need this stimulus right now? Because I mean, you know, as we said this is the second longest bull run in history at 103 months. We look at the numbers here, Trump can claim 11 months on his watch, the rest under Obama. So this is the Obama-Trump bull run if you like. At this point with this mark going so long and this economy doing so well, does it need the extra stimulus from what will come from all these tax cut?
GERBER: I think we're going to learn that soon, you know, honestly, I think it actually does. I mean when you look at rising rates and still a lot of people out of the workforce, you know, maybe this economy is really just getting going here and this puts a little bit of fuel into the fire to push it into a few more years of growth versus, you know, we were thinking maybe we're -- or at a turn for a recession pretty soon too. So, you know, let's not underestimate -- this is a fundamental change in the way we've done business. My entire career taxes on corporations have been much higher. So let's see how this works before we are critical or this is good or bad. But I can tell you as a guy that owns a lot of stocks we're thrilled about it and we expect the markets to go higher.
VAUSE: Well, I'm having a great time.
GERBER: It's great for our clients.
VAUSE: Merry Christmas.
GERBER: And our clients are regular people, so, you know --
VAUSE: Ok. Well, good to see you and have a great Christmas. Enjoy the stocks. I'm sure you're going to have a good time at least the next couple of months before that bubble birth.
GERBER: Well, we'll see. We'll see.
VAUSE: And we shall see. Next here on NEWSROOM L.A., the future of Catalan independence is facing a crucial test as voters in that Spanish province prepare to choose new leaders. Also, the E.U. sets an end date for any Brexit transition period to the U.K., the implications just ahead.
[02:43:55] VAUSE: Welcome back everybody. The live pictures from Melbourne, Australia where an SUV had plowed into a pedestrian crossing, at least 13 people have been treated for various injuries. Just how serious those injuries are not known at this point, but we have been told a preschool-aged child has been taken to the hospital with serious head injuries.
SESAY: Yes. A witness stander -- a witness said -- a witness said that we spoke to a short time ago that the vehicle never slowed down.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: When the excellent view, I was actually on the street and a Suzuki SUV that was traveling at about a hundred kilometers per hour over 60 miles per hour and it just didn't stop at all, and the intersection was completely off the chart with pedestrian, and it just barreled through the pedestrians, and the only thing that -- I think slowed it down was just the volume of pedestrians that he hit, and was just pandemonium, and noise, there were screams, and just people bouncing off the car. It was -- it was awful.
(END VIDEO CLIP)
SESAY: Yes. It does indeed sound awful. Jim (INAUDIBLE) speaking to us a short time ago and that is the scene right now.
[02:45:01] As you can see still emergency services and they're on the ground really trying to figure out what exactly was behind this collision if you will, police don't know if it was an accident or deliberate. VAUSE: It is 6:45 in the evening in Melbourne right now and just what this in contact, this is outside the Flinders Street Train Station which is an iconic train station in Melbourne. It's just across the Yarra River, the main city, the main downtown area is just a short walk across the bridge over the Yarra River and then you get into the city of carrier of Melbourne.
So, this is a major part of the city, this is the major city about where 5 million people live here. And so right now the much of the city has actually been left in gridlock because this part -- this is so central to, you know, getting around the city.
SESAY: And as you know Melbourne well, John, let me ask you this, for our viewers perspective. This area would it have been frequented by tourists? I mean, who would be there, is it a general thoroughfare?
VAUSE: Yes, just (INAUDIBLE) call you have the Southbank Casino which is that you know, a major tourist are filled with shops and new restaurants and coffee shops. Melbourne people love their coffee, yes, it's a very outdoors the kind of place. So, yes, so, this is an area popular with locals (INAUDIBLE) tourists, and this all happened a couple of hours ago, about 4:30 in the afternoon, on a -- on a Thursday.
So, you know, it was just coming into the afternoon peak hour. We heard from gym that witness who has the turnout shot right at the scene. He said this area was packed --
VAUSE: -- with pedestrians. There a whole lot of pedestrians crossing the street when this car plowed into them. So, right now 13 people at least --
VAUSE: -- have been injured and --
SESAY: including a child.
VAUSE: -- tourist, yes.
SESAY: What is get more details, and of course we're keeping an eye on the condition of those involved in the situation. So, stay with us for that.
Turning our attention to Spain now, and Catalan voted head to the ballot box in the coming hours to choose a new regional government.
VAUSE: Madrid is looking to this election for a backlash against pro- independent politicians and unauthorized referendum on independence in October triggered a crackdown by the Spanish government and ouster of the Catalan leaders.
SESAY: Well, joining us now from Houston Texas to discuss the future of Catalan independence, European Affairs Commentator Dominic Thomas. Dominic, my friend, good to see you. So, do you foresee a clear win that emerging from this Regional Election?
DOMINIC THOMAS, CNN EUROPEAN AFFAIRS COMMENTATOR: Well, the whole question of even deciding what a winner would be -- I mean, it's an extraordinary situation as the leadup story pointed out. Where you have two of the candidates, one sitting in prison and the other in exile. And of course, this is not an election over, it's not a regional election, and not a referendum, although, of course, the outcome of this will provide a very strong indication as to where folks in Catalonia stand on the question of independence.
As the polls point to right now, it's extraordinarily divided. And on all sides of the political spectrum, you don't have the same kinds of alliances as you had back in 2015. And there's a sort of negative view of the way in which Puigdemont basically fled the country, and went into exile. And his former Vice President, of course, is the guy sitting in prison representing the ERC. So, it's also hard to see that if the independence parties do well, how they will be able to come together and form some kind of coalition with independence in sight.
SESAY: Yes, absolutely. I mean, when we look at it and we look at how fragmented the political landscape has become after that referendum -- I mean, it really does point to the fact that turnout is going to be key for this vote.
THOMAS: Right. And what all the sort of research points to right now is there are an awful lot of undecided voters and a lot of voters who are really divided over the question of economic prosperity and so on, that sort of goes against their perhaps deeper feelings and in support of independence. This is an extended, protracted problem that has deeply divided people within Catalonia, and also deeply divided the country in terms of the relationship of the region to Spain in a more general manner. And it's very hard to foresee how this particular election, which is a repetition of the one that was held in 2015, is going to bring any kind of closure.
Rajoy, in many ways, is going to be seen to have shaped this election in a way to try and get a desirable outcome. But that does not mean that the question of independence and the valid grievances that folks in the region have which drive this move toward independence is going to go away overnight, just because of this outcome of a regional election.
SESAY: And to be clear, regardless of whether it's the pro- independence or, you know, those who favor pro-unity that emerge the victors and form a coalition, is the Madrid government ready to actually get to grips with the fundamental issues that continue to roil the relationship with Catalonia?
[02:50:03] THOMAS: Right. Well, I think that the -- obviously, if the outcome produces a coalition government that is not an independent secessionist government that changes the conversation. That puts them in a dynamic where Rajoy can, from Madrid, help guide them along. If that doesn't happen or if it is extraordinarily divided as the polls are indicating at the moment, it's going to be absolutely essential for Rajoy to demonstrate a different kind of leadership than in the leadup to this particular situation.
And they're going to have to engage in meaningful dialogue or this situation is really going to negatively impact the region and the broader potential political landscape in Spain. And this is where Rajoy has a deep responsibility now to start to think about -- and of course, it's left all kinds of negative sentiments in the region because of what is perceived as the overreaching aspect of the Madrid government.
SESAY: Yes. It's going to be a very important vote, and we'll just see how many people turn out. As you talk about, you know, negative impacts of landmark decisions, let's talk Brexit, shall we? The European Commission, Dominic, says it would welcome a transitional period to help Britain ease out of the E.U. but only through the end of 2020, and that leaves about a year and 3/4 after the final Brexit deadline which right now is March 2019. But an amendment to Britain's E.U. withdrawal bill would allow that bill to be changed which would most likely mean even later. So, Dom, even though British Prime Minister Theresa May says that you know, that's more of an emergency plan than anything else I want you to take a listen to her view of the situation.
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THERESA MAY, BRITISH PRIME MINISTER: We'll be leaving the E.U. on 29th of March, 2019, at 11:00 p.m. The bill that's going through, though, does not determine that the U.K. needs these -- that's part of the Article 50 process, and it's a matter of international law. And it's important I think that we have the same position legally as the European Union, and that's why we've accepted the amendment. We would only use this power in exceptional circumstances for the shortest possible time, and an affirmative motion would be brought to the House.
(END VIDEO CLIP)
SESAY: All right. Dominick, this deadline that the E.U. has set for the end of the transition period, what does it tell us about where the E.U. stands on these talks, and, you know, what's about to happen in this next round?
THOMAS: Well, what it tells us, first of all, is that we need to not only mark our calendars for the 29th of March 2019 but to be very clear, it's 11:00 p.m., Isha, OK. Not 11:15 or quarter of --
THOMAS: Right. So, that's important. And that's also important to point out that in addition to that, of course, the second amendment is, which is that the parliament now in what can be seen as a kind of second rebellion in just a one-week period, that's specifically said they would like the opportunity to be able to change that date and if it doesn't look like things are going very well. So, that was another sort of knockback to particular policies. But the European Union has been very clear on this. First of all, 2020 is the cutoff. So, let's not go too far down the road thinking that it's going to be possible to extend this transition.
And of course, the hardcore Brexiteers in her cabinet, which are really obviously making the situation very difficult. Certainly, don't want to see it go much beyond 2019, because they, of course, are concerned that if we get into another election cycle, or if this government collapses there's a possibility this might not just go ahead in the way that they are expecting this to happen. And of course, the paradox of all of this is the longer this goes on beyond the 2019 date, the more the U.K. has to conform to European Union laws, rules, and regulations beyond that period. But also accept rules and regulations that have been passed since then in which they will have absolutely no input. So, the whole very question of sovereignty comes up again.
SESAY: Yes, absolutely. And with the backdrop of two rebellions, two parliamentary rebellions in a matter of days, where does this leave Theresa May as she heads into this next round of talks? Is she going into them from a position of strength or deeply wounded, deeply weakened?
THOMAS: Well, I think that first of all the only position of strength she has really right now is that there's absolutely probably nobody on the planet that wants her job. So, for the time being, that's what's keeping them together. What's further weakened her, of course, is this other scandal, which on top of the defense minister being embroiled, Michael Fallon, in sexual harassment problems, and Priti Patel who, of course, left not long ago because of her sort of, you know, extra-office activities that she was involved with Israel, is of course, that her deputy leader today, Damian Green, has had to step down because he also got himself embroiled in all sorts of problems and with pornography on his computer and with sexual allegations.
And that's a real blow to her because this was a strong ally for her in the cabinet. And she now, I think, as we enter the beginning of 2018 is going to have to think very seriously about a cabinet reshuffle so that her position is not further weakened because of these recent departures.
[02:55:12] SESAY: Goodness gracious me, it's one problem after another for Theresa May. Dominic Thomas, we always appreciate the insight, though, you're always steady. Thank you.
THOMAS: Thank you.
VAUSE: A quick break now, we'll have an update on the breaking news out of Melbourne when we come back. There has been carnage on the streets of Melbourne, stay with us.
SESAY: No, Stay with us.
SESAY: Hello, In one on updates in our "BREAKING NEWS", police in Melbourne, Australia have arrested two people after a vehicle ran down more than a dozen others at a busy intersection, 13 people have been taken to the hospital.
VAUSE: (INAUDIBLE) in a serious condition with the head injury. Right now, police are not saying if this was an accident or some kind of deliberate act, but clearly, there are thoughts about this may have been some kind of attack but that is not been confirmed because, not a year ago, back in January this year, there was a similar incident. Six people were killed in Bourke Street which is not far from Flinders Street where this happened. That incident in Bourke Street in January of this year though was not a terrorist attack but of course, allow of details but (INAUDIBLE) questions at this point that we still (INAUDIBLE) --
SESAY: yes, investigation on the way, we will shall you details as they come into us. Well, you've been watching CNN, NEWSROOM, live from Los Angeles. I'm Isha Sesay.
VAUSE: I'm John Vause, the news continues with Rosemary Church, after a short break.