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Measuring the success of the Trump election; Chinese influence felt inside the White House. Aired 2-2:30p ET
Aired January 29, 2018 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTIANE AMANPOUR, CNN HOST, AMANPOUR: Tonight, America open for business. With stock markets at record highs and unemployment at a 17-year
low. Is President Trump right to claim all the credit? My discussion with the Treasury Secretary Larry Summers and conservative thinker Niall
Plus, President Trump's foreign policy amid the rise and rise of China. My conversation with Evan Osnos of "The New Yorker".
Good evening, everyone, and welcome to the program. I'm Christiane Amanpour in London. The US president takes every opportunity to tout
America's booming economy as the success story of his first year in office, whether on Twitter, at last week's capitalist Mecca in Davos, Switzerland
or tomorrow during his State of the Union address.
(BEGIN VIDEO CLIP)
DONALD TRUMP, PRESIDENT OF THE UNITED STATES: I'm here to deliver a simple message. There has never been a better time to hire, to build, to invest
and to grow in the United States. America is open for business and we are competitive once again.
(END VIDEO CLIP)
AMANPOUR: So, is President Trump's tax reform responsible for reversing the American carnage that he derided at his inaugural last year? And is
the boom sustainable?
Joining me now from New York is the economist and former US Treasury Secretary Larry Summers; and from Stanford University in California, the
historian and writer, Niall Ferguson, whose latest book is "The Square and the Tower".
Gentlemen, welcome to the program as we try to dig down into what exactly is happening with the US economy.
So, can I ask you both to take up the premise that I pose. First, as former Treasury Secretary Larry Summers, is the president right to take
this amount of credit for a booming stock market and, as he says, America back in business.
LARRY SUMMERS, FORMER TREASURY SECRETARY: I don't think so. The economy's growth rate last year was below its long-term average. If you look at the
upwards revision in forecasts, they were much greater for Europe and for Japan than they were for the United States.
In common currency terms, the Europe and Japanese stock markets rose faster than ours did. And if this was some kind of Mecca of American capitalism,
why wouldn't the dollar be going up rather than the dollar going down.
That doesn't suggest that we are open for business in some remarkable way. I think the right interpretation is that after many years of crisis, the
global economy has started to pick up for reasons that aren't related to President Trump. He is not the president of the whole world and that the
United States and its stock market have been a beneficiary of that.
I think these kinds of claims for credit are very much unfounded.
AMANPOUR: But you can't ignore the fact that this is a booming stock market over this last year. That, coupled with the tax, and especially
corporate tax slashing, is very attractive, especially to basically, I guess, your crowd in Davos.
SUMMERS: Not my crowd. I wasn't -
AMANPOUR: No, your like-minded crowd. And I'm not a - I don't know about that. And I'm not a CEO and I don't I'm in step with those who are
behaving, I think, in some cases, almost sycophantically towards the president.
Yes, if you cut the taxes on major companies, major companies will be grateful that you did that. But is there a basis for assuming that this is
going to create some kind of enduring prosperity, I don't think there's anything in the data that suggests that.
And what we do know is that we're going to be piling up debts at an even more rapid rate than we were before. I think, over time, we'll come to
regret the magnitude and the distribution of these tax cuts.
AMANPOUR: And, Niall, to you. I mean, you have heard Secretary Summers talk about other economies doing better, other stock markets around the
world doing better, the president is not president of the world. And yet, there was a huge welcome and a reception for him in Davos. Do you give him
credit for these stats that he's touting?
NIALL FERGUSON, AUTHOR, "THE SQUARE AND THE TOWER": Well, they certainly didn't pelt him with Swiss rolls at Davos, but that didn't come as a huge
surprise to me.
Look, I will disappoint you a bit, Christiane, by not disagreeing entirely with Larry. I think we have to set what is going on in the US into some
kind of global context.
[14:05:00] But I do think it's important to recognize that something's happening here. It's not entirely unfounded. After all, if you back on
the response of markets and business opinion to Trump's election, from the minute that it became clear he had won, there was a surge in business
confidence, big business and small business confidence.
And ever since then, I think there's been a strange disconnect, which people find hard to process, between the political news, which just seems
to be one disaster after another, see Michael Wolff's book "Fire and Fury" and the economic realities as reflected in financial markets, which, as you
rightly say, have surged.
Now, you can't give Trump all the credit, but it would be very strange indeed if an economist of Larry Summers' stature were to that it made
absolutely no difference that a Republican won as opposed to a Democrat Hillary Clinton, who essentially promised more of the same.
And let's emphasize two things that have been done concretely. Not only has there been a big tax cut for corporations, I think, more importantly,
this administration is driving a deregulation agenda that is extremely heartening from the point of view of business.
And I think that gets almost no coverage in the media because it's not very glamorous. But I think from the vantage point of the boardroom, this is
the stuff that really counts.
So, I think we have to recognize that there is some kind of Trump trade at work here. It has to be set in the context of global conditions. You'd
have to say that central banks still matter more than presidents when it comes to monetary conditions and, therefore, market conditions.
But he is a veritable. He's a factor. And I find it hard to imagine, with all due respect to Larry Summers' friends in the Democratic Party, that the
mood would be the same if Hillary Clinton had been elected.
AMANPOUR: OK. I'm going to get to Larry in a minute to ask about Clinton. But let me first ask you, Niall, because apparently there is not much
economic evidence to suggest that regulation or deregulation boosts, or otherwise, the economy.
And I want to ask you whether you think the forgotten who Donald Trump is always talking about, his base, are the ones who will benefit from these
corporate tax cuts and other tax cuts and the tax reform because we've just seen that Walmart has said, for instance, it's announced some bonuses,
entry-level raises, but at the same time it has laid off thousands of workers.
And according to Reuters, just 2 percent of US adults said they'd gotten a raise, bonus or other additional benefits because of this tax cut.
So, I guess, the people who voted for him will matter. Where do they stand in all this?
FERGUSON: Well, I have argued all along populists seldom delivered to their base. Just to make it clear to your viewers, I was not a Trump
supporter and I'm not here speaking on behalf of President Trump.
But you see, the lesson of history is that you can get elected promising income gains, real income gains for lower-income families in middle
America, but what ends up happening is that they generally don't get the payoff.
It's a bit early to tell how far this is going to feed through to the key swing states that delivered to him the electoral college and the White
House. I mean, I think there is evidence that wages are rising, but the problem is they are rising faster in places like California, near where I'm
situated, near the Stanford campus, than they are in, let's say, Wisconsin or Michigan or rural Pennsylvania, the places that delivered for Trump.
So, I don't think it's possible to argue yet that all the benefits of the tax cuts are going to flow to the 1 percent. I think one has to wait and
see just how this plays out in the economy at large.
And I think workers may see some improvement. The trouble is they may not be the workers that Trump really wants to pay off.
But one last point, Christiane, which is important. In the realm of populism, voters don't just vote with their pocket books. There's a solid
38 to 40 percent of voters who are going to stay on board with Trump as long as he keeps delivering on what you might call the culture wars front.
And I have a sense that many people who voted for Donald Trump back in November 2016 didn't expect a pot of gold at the end of the rainbow. If
you talk to people in those heartland states, they don't really expect the 1980s to come back magically and automobile production to expand, employing
huge numbers of people.
They're realistic, I think. What they do expect is kind of change of tone. And what they voted for was a repudiation of what the elites on the two
coasts have come to represent, which was not just globalization, not just free trade, not just easy immigration, but also multiculturalism.
And Trump is very good at delivering to his base on those cultural issues.
AMANPOUR: Right. So, Larry, I mean, that's a long litany of, frankly, what Trump's voters like and want and expect.
You said that this economy seems to be on a sugar high. What do you think that those people can expect, the people who he was elected by?
SUMMERS: I don't think much is going to flow through to them. There is some cosmetic things like the Walmart announcement. I think most of the
benefits are going to go into share buybacks, are going to go into measures that benefit those who are most fortunate.
[14:10:14] Yes, there will be some wage increases, but that's a consequence of the fact that there's some long-standing trends pointing towards more
tightness in labor markets.
I agree with Niall that Trump has a profound appeal to nativism, people who want to see America look like it did 50 years ago. They are drawn to large
amounts of what he's saying, including the forceful opposition to immigration, including the kind of sentiments that were sparked by his
comments about Confederate statutes. Yes, there certainly is a constituency for all of that.
But I don't see the evidence that it's really translating into important economic benefits.
And, look, on deregulation, of course, if you remove regulations in the short run, businesses are going to like it. The problem is that when the
financial system becomes less stable, it doesn't collapse overnight, but you've got a greater risk of financial problems.
When you do away with environmental restrictions, you don't destroy the environment overnight, but, over time, you're more likely to have the kind
of thing that happened in the Gulf of Mexico a few years ago, the kind of destruction of wilderness that we've seen at other points in our history.
So, I think it's much too early to come to any kind of balance sheet on the deregulation.
And, look, there just is a problem for the view that the president and his friends want to push, which is, if this was such a great time for
investments in America, you'd expect the capital be coming in and the dollar be going way up.
If there was something unsound about this and people were in doubt, then you'd expect to see the dollar going down. And, of course, when the dollar
goes down, things that are priced in dollars, like stocks go up, but that's the evidence that you have an unhealthy and an unsound kind of prosperity,
which is the kind of thing I talked about when I referred to sugar high.
AMANPOUR: Just quickly, on that issue, what do you make then of Apple saying that it's going to repatriate billions and billions of dollars and
reinvest in the United States.
SUMMERS: Apple was holding the money that it was going to repatriate in dollars in global banks. It's a pure accounting transaction that doesn't
have major economic substance in terms of job creation.
AMANPOUR: I just want to move on on that theme to Niall because the title of his latest book is "The Square and the Tower" and you talk about Silicon
Valley proclaiming to be very decentralized into the square, the network, and yet actually been quite hierarchical and potentially even exacerbating
the inequality gap.
Give us a little bit of that theory of your new book.
FERGUSON: Well, it's extraordinary to witness what's happening here in Silicon Valley. I'd say as a kind of segue from our last discussion that
without Facebook and, to a lesser extent, Twitter, I don't think Donald Trump would be president because those platforms are absolutely crucial to
His campaign understood better than Hillary Clinton's how to use Facebook advertising. And so, one of the great ironies of 2016 was that a
community, which is very liberal indeed with only a handful of exceptions, that's to say the Silicon Valley tech community, found itself unwittingly
responsible for Trump's selection and we're still, I think, going through the kind of inquest as to how that came about.
Most of the focus, of course, is on the Russian intervention in the election. But I think it's fair to say that whatever Russia achieved
through Facebook advertising and Twitter bots was a drop in the ocean compared with what was going on on those platforms with American-originated
So, Silicon Valley in a little bit of a crisis right now as it comes to terms with the reality that it probably bears a very substantial part of
the responsibility for Trump's election.
The other thing I'd emphasize is that this liberal community here in Silicon Valley, which loves to preach the virtues of decentralization,
we're all supposed to be netizens these days in a giant global community, must, I think, admit that it's somewhat hypocritical in many of the claims
that it makes.
I point out in "The Square and the Tower" that one consequence of creating giant online social networks like Facebook is, in fact, to create enormous
wealth for a relatively small number of people, namely the founders and early investors in these companies.
[14:15:04] AMANPOUR: And you've also said that the Internet may pose a bigger threat to democracies than dictators do. So, let me ask you, Larry,
the last point in that, it's been said that the liberal world order that the US pioneered and led around the world is very much, well, at risk right
So, given what Niall is saying about the Internet, given the threat to - that we've been seeing, what and who are going to save this world order if
it should be saved?
SUMMERS: Look, history, going back to the Industrial Revolution through the creation of electricity, through the creation of a computer is that new
technologies drive the world forward, but they don't do it all steps forward.
There are some steps forward and some steps back and they need to be regulated and appropriate policies need to be set and social networks
aren't going to be any different and it's going to be a huge public policy challenge.
Look, the question about the global order is that, for 75 years, since the end of the Second World War, the US has underwritten -
SUMMERS: - that order. And the president, unfortunately, has called American willingness to do that into question.
AMANPOUR: All right.
SUMMERS: And that, I think, is very threatening.
AMANPOUR: All right. We'll pursue that as we carry on with all of this. Larry Summers, Niall Ferguson, thank you so much indeed for joining us
So, as we heard, stock market in other countries, such as Germany and Japan, are enjoying even bigger booms. And another major development is
clear. China's economy continues to outperform expectations.
And as it grows, it gains more influence globally, especially as America pulls back from its traditional leadership role in the world.
Evan Osnos has been covering China and East Asia for many years for "The New Yorker". His new article called "Jared Kushner is China's Trump Card"
tracks China's efforts to assert its influence inside this White House.
Evan Osnos, welcome to the program.
EVAN OSNOS, STAFF WRITER, "THE NEW YORKER": Thanks for having me.
AMANPOUR: You have written extensively now about China and the Jared Kushner connection. I'm interested because you say that, for a long time,
everyone has been worried about Russia's political influence in the United States, but that the intelligence community is equally worried about
China's influence. What exactly are they worried about?
OSNOS: Well, over the last several years, China has made a more concerted push to try to practice what's known as influence operations.
These are the kind of, in some ways, conventional intelligence operations that seek to affect policies in foreign countries.
The difference, I suppose, between what's happening - what Russia is doing and what China is trying to do is that Russia, after all, as we know, tried
to affect the outcome of an election in the United States in 2016.
China takes a different approach. And what they've tried to do is to affect the decision-makers themselves, to try to influence the policy
choices that they make.
AMANPOUR: Well, let's dig down a little bit because, obviously, you are suggesting and, frankly, written for "The New Yorker" that Jared Kushner is
their connection. That's what you have reported.
And we know that Jared Kushner has had many meetings with the Chinese ambassador to Washington, Cui Tiankai. Is it the fact that he went into
those meetings without the usual support group, the experts, the note keepers, the notetakers that worries you?
OSNOS: Well, that's exactly it. In some sense, national security 101 is that when you go into a meeting with a diplomat, particularly with a
country that is perhaps not an American ally, in this case - China occupies this space between being a partner, of being a rival - you go in fully
equipped with the best minds in the business, you go in with the top Asia specialists in the US government, you go in with notetakers, you go in with
people who can help to relay a reliable version of events.
Jared Kushner didn't want that. As he said, and he's said as much to us, he didn't want to go using the machinery of government, using the full
bureaucracy. He'd thought he could get around it. He thought he could cut through some of that, some of the diplomatic niceties and try to make
progress on the relationship.
Now, I should add, Christiane, that the intelligence officials who we've spoken to about this subject, they were concerned about Jared Kushner's
practices. They also say that there is no evidence that the influence operation was - to use one word - successful, in the sense that he was
compromised by it.
But it raised their concerns that his way of doing business was leaving himself at risk in ways that he didn't need to be.
AMANPOUR: And, of course, we do know, because it's been reported by you and others, that Kushner has very big business interests, or his family
operation does, in China and, of course, so does his wife, the president's daughter and adviser, Ivanka Trump, with her fashion business and all the
trademarks and licenses she has received.
[14:20:02] OSNOS: They do. They have extensive business operations there. And to take one example, a recent project had about a quarter of its
investment from Chinese investors, whose names are not disclosed under the terms of the deal.
Now, the Kushner companies and Jared Kushner himself had said that they have been able to separate him from the business. He resigned as CEO after
January 9, but this points up the fact that he remains, in some sense, difficult to disentangle from his family business.
He retains large assets - real estate assets - in other companies. And as long as he does, he is vulnerable to the possibility of being courted, of
being compromised, and this is what counterintelligence officials wanted to talk to him about when they briefed him in March.
And they held a closed-door briefing with Jared Kushner, in which they said to him that they identified him as one of the leading targets of an
influence operation in the United States from China, but also from other major intelligence services, including the Russians and the Israeli, and
they wanted him to be on notice that this was going to be an ongoing concern.
AMANPOUR: So, why is this dangerous? Why should Americans, Chinese, Europeans care about this?
OSNOS: In some sense, this points to the challenge that the Trump administration faced when it came into office under the banner of throwing
out the best practices of American governance.
What they said was that we are running against the establishment. We're running against the deep state, as they often call. And in practice, that
means that they are often going into some of the most complicated and sensitive diplomatic negotiations unilaterally disarmed, meaning they're
going in without the benefit of expertise, they're going in saying we're not going to follow the traditional rules about how do you keep yourself
safe, how do you make sure you're advancing American interests.
And this is part of what has come to be recognized by American allies and also by others around the world as a radical shift in the way that America
conducts itself as a diplomatic power.
After the first US-China summit in the spring, Chinese officials said, and said as much to American officials, who later visited, that they discovered
that Donald Trump was less knowledgeable, less equipped than they expected him to be.
They thought he would push back on basic controversial issues, things like Tibet, North Korea, areas of disagreement between US and China. And what
they found was that he simply didn't have enough information. He didn't know enough to be able to do that.
So, this marks a break in the tradition of American diplomacy. It has been some of the most sophisticated players around.
AMANPOUR: Well, let's just dig down into that diplomacy because that is, obviously, incredibly important given the danger that North Korea poses and
the US reliance on China to try to reign in North Korea and influence North Korea.
So, what do the Chinese say then?
OSNOS: China remains wary of Kim Jong-un, of course, but it is also wary of Donald Trump. And this gets to the heart of the problem.
From China's perspective, they're balancing two unpredictable, unreliable leaders. And for that reason, China is conservative in what it's willing
to do. It's not willing to go the extra mile because it's not sure that, if it does so, that it can count on Donald Trump on the other side.
AMANPOUR: Well, you've just been to North Korea and you've written extensively about it. What did you find - in this regard, the whole
nuclear confrontation, what did you find the atmosphere to be, the people who you talk to, any difference now and the previous times you reported?
OSNOS: What was interesting about it, Christiane, was the degree to which the North Korean officials who I spoke to are following Donald Trump's
every word. Every syllable. They follow his Twitter feed. They listen to his speeches. They scrutinize them.
I was spending time with - it happened to be one of the North Korean government analysts, whose job is to analyze the American president. And
in the past, they had more or less built up a body of ideas about how American presidents operate.
And they've sort of had to chuck that out. They truly don't know what to believe. They often ask me questions like how normal is it for a US
secretary of defense or a US secretary of state to contradict the president on a policy matter like North Korea.
And I was in the position of saying, I mean, just as a journalist who is visiting, I said no, it's not normal, but that's the moment in which we are
And for them, it's a bit of an improvisation.
AMANPOUR: Did you come away feeling that - for all their questions to you and their inability to read President Trump, did you feel that they were on
the verge of lashing out or are they hunkering down to see what might come their way?
OSNOS: I would say that I felt that they are not on the verge of lashing out. They don't live as if they are a people who feel as if they are
prepared at any moment to enter a conflict that, by any rational calculation, would lead to the end of North Korea.
They recognize that the United States is the power that it is. But they also feel that they are in a fight for survival. And so, the most distinct
impression was that, if they felt that they are challenged, that they are provoked, that they are facing the end, they are willing to take steps that
we would find unthinkable. And that is worrisome.
[14:25:09] I think we have to be realistic about the fact that they are so secluded in their own self-image of a country under attack from the United
States - in their view, they've been under attack from the United States for 70 years.
And so, when we use sort of casual language about provoking a war, about the possibility of nuclear conflict, we have to be concerned about the
consequences and take it very, very seriously.
AMANPOUR: And, I guess, in the broader context, how would you describe America's positioning in the Pacific right now? How do other countries,
whether it's Kim Jong-un or other leaders, view America's influence in that region now?
OSNOS: It's at a moment of tremendous change. China, for a long time, was very wary of asserting its role as a primary power in East Asia. They
always wanted to be cautious not to inflame America's anxieties about China's rise.
China used to say that they would bide their time and not challenge the US too overtly. That moment is over.
AMANPOUR: And indeed, the Trans-Pacific Partnership, the TPP, has now declared itself an 11-member strong unit - free-trade unit without the
OSNOS: This is an important moment. In some sense, people expected that the TPP, after the United States withdrew, would expire. That would be the
end of it.
And instead, what you found is that Canada and other countries have stepped into the breach and have said, look, we will seek to maintain the global
order that the US once chose to lead.
And the question for the US will be whether or not we want to try to regain that position and reestablish our authority or whether we are more
comfortable in an age in which we are not so clearly the primary leader.
AMANPOUR: Evan Osnos, thank you so much indeed for your insight.
OSNOS: My pleasure. Thanks, Christiane.
AMANPOUR: And my conversation earlier with Evan Osnos. And that is it for our program tonight.
Remember, you can always listen to our podcast, see us online at amanpour.com and follow me on Facebook and Twitter.
Thanks for watching. And goodbye from London.