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QUEST MEANS BUSINESS
US Senate Confirmation Hearings For Brett Kavanaugh Get Nasty; Amazon Joined The World's Most Exclusive Club, The One Trillion Dollar Club; Two Of America's Biggest Brands Get Close To The NFL -- Nike And Pizza Hut Embrace The Institution Which Has Been The Target Of President Trump. Aired: 4-5p ET
Aired September 4, 2018 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA NEWTON, CORRESPONDENT, CNN: It is that month on the calendar, September when the markets tend to pull back, markets doing exactly that
today. It's September 4th, as the US Senate confirmation hearings for Brett Kavanaugh get nasty, we'll dig in to the Supreme Court nominee's view
on big business.
This new ad from Nike is kicking up lots of controversy and working hard on the "Cosby Show" to Trader Joe's after Jeffrey Owens has a message for
those that try to exploit them. I'm Paula Newton and this is "Quest Means Business."
Good evening. Tonight, it's a bitter fight over the future of the US Supreme Court and the court's decisions, which could now echo for
generations to come. Right now, on Capitol Hill, President Trump's nominee, Brett Kavanaugh is really in the hot seat. It was like that all
day. We are expecting to hear from him though in just a few moments.
Democrats want these hearings delayed altogether. They say they need time to review 42,000 documents released last night. Republicans accused them
of obstructing the hearing for political purposes and that battle played out right in front of the cameras.
(BEGIN VIDEO CLIP)
JOHN CORNYN, US SENATOR, TEXAS, REPUBLICAN: This is the first confirmation hearing for a Supreme Court Justice I've seen basically according to mob
CORY BOOKER, US SENATOR, NEW JERSEY, DEMOCRAT: What is the rush? Why are we trying to hide by not having the documents out front? What's with the
rush? What are we hiding by not letting those documents come out? Sir, this committee is a violation of the values that we, as a committee have
striven for -- transparency -- we are rushing through this process in a way that is unnecessary.
(END VIDEO CLIP)
NEWTON: CNN's Jessica Schneider is following all the developments and Jessica, we are expected to hear from the nominee in just a few moments
from now. We will go to that live when that happens, but Jessica, it was incredibly unpredictable even though everyone expected this to be a very
JESSICA SCHNEIDER, CORRESPONDENT, CNN: Yes, a very contentious hearing for what has become a very contentious nomination and you pointed to it there.
This has become in large part about politics, but also about documents. We talked about that last minute document dump of about 42,000 pages, but
there's also a missing 100,000 pages that the White House has not handed over.
And really, that's the tip of the iceberg in what has become and continues to unfold as a bitter partisan fight. Democrats are raising questions
about why the administration is not releasing those documents from Brett Kavanaugh's days in the George W. Bush White House. They've asked several
times today in the past six and a half hours to delay this hearing until they get more information. Of course, the hearing ongoing though, so they
have not been able to get it delayed.
But on top of that, Democrats are raising a lot of issues politically here. They do not have enough votes to block Kavanaugh's confirmation, but they
are putting up a fight nonetheless. They have questioned Kavanaugh's stance when it comes to abortion, even though Judge Kavanaugh has told
senators behind closed doors that Roe v. Wade is settled law. Democrats are also wondering about how Judge Kavanaugh would rule if an issue
involving President Trump and the Russia investigation were to come to the Supreme Court. That's because Judge Kavanaugh has written about the power
of the presidency and how investigations should not interfere with the President's duties. So that's a concern for Democrats.
Plus of course, the President's former campaign staff, many of them are embroiled in legal trouble so Democrats are arguing, "Look, Kavanaugh's
nomination, it's really illegitimate," that's their claim anyway, and Republicans meanwhile say, Kavanaugh is one of the most highly qualified
judges to ever be considered for the nation's highest court. They say that Democrats should just stop blustering and move on with it.
So really, the reality is, while we will see three days of this hearing that has really become quite contentious, we'll continue to be contentious
if Judge Kavanaugh does hold on to all of that Republican support, Paula. It is very likely that he will be confirmed and confirmed quite easily but
of course, the politics continue to play out on Capitol Hill as lawmakers, many of them vying possibly for a 2020 bid for president. They want to get
their names out there. They want to get their voices out there in this really second Supreme Court nomination of the Trump administration.
NEWTON: Yes, it is such a good point when you hear all of these senators and exactly what is on the line. Our Jessica Schneider continues to follow
that now. Apparently, we are on a break. We will go back to those hearings though when the nominee speaks.
We want to continue with what Jessica was talking about though and the fact that lawmakers are scrutinizing Kavanaugh's views as she was saying on
those important issues. Things like abortion, guns, and of course business.
Now, last year, Judge Kavanaugh argued that rules upholding net neutrality violated free speech laws, regulators later overturned those rules though
in 2016. He said, Crisis Arab banking laws had placed too much power in the hands of the Director of the Consumer Financial Protection Bureau ...
NEWTON: ... and four years before that, he argued the environmental protection agency exceeded its authority in regulating greenhouse gases.
He later criticized the agency for failing to consider cost when imposing new regulations. CNN's senior political analyst, Ron Brownstein is
following it all. He's also a senior editor at "The Atlantic." I can't think of a better person to have me holding my hands here right now. I
mean, we've been -- I just want you to comment first on what we've seen here so far because then after that, I want to get to some insightful
things that you have said about this nominee and big business. But in terms of what you see right now in terms of the politics on display in
RON BROWNSTEIN, SENIOR EDITOR, THE ATLANTIC: Yes, well first of all, I mean this nomination is so contentious because it is so consequential,
right? Neil Gorsuch replaced Antonin Scalia, a conservative replacing a conservative with Donald Trump's first appointment onto the court. This is
Anthony Kennedy who he is replacing has been the swing vote on the court, to the right of senators, certainly, but not as ideologically rigid or
doctrinaire as other conservatives on the court, and now, there is the potential for a five-member Republican appointed majority that could last
for many years.
I mean, Clarence Thomas, the oldest member of this Republican coalition on the court is only 70, so we could be talking about a court that could be
setting the rules for American life in business on affirmative action, on Civil Rights, on gay rights, on many of those kinds of issues well into the
2030s regardless of what happens in the intervening years of American politics. And to just add real quick, that's not -- we have seen this
before in American politics. The court is a lagging indicator because people serve on it a long time, it tends to reflect the political
majorities of an earlier era, and often, as in the 1850s when had a court that was dominated by appointees of pro-slavery, pro-southern Democratic
Presidents or in the 1930s when you had a court that was dominated by the appointees of anti-Federal action, anti-Federal authority Republican
Presidents, the coalition can be explosive between that court rooted in an earlier majority and the views dominating at a given point in American
NEWTON: Yes and such a good point when you consider the fact that he could in fact serve more than four decades the way that this goes. I wanted to
let you know in terms of what you write in your most recent article in "The Atlantic," saying that look, business is kind of caught here. They like
the policies from this nominee even if they find that it rails against certainly some of the more divisive topics from President Donald Trump.
How will big business like this nominee if he becomes that swing vote in the ...
BROWSTEIN: Oh, they will like him enormously and it really goes to this question of how does the Republican coalition hold together in the age of
Trump because certainly, one of the things that Trump has done is move racially divisive appeals much more centrally into the Republican argument
as a way of consolidating their support among blue collar, older and rural white voters. That's difficult for a lot of businesses to swallow.
You see Nike making Colin Kaepernick the face of their new campaign. Many businesses recognize that the future American consumer is an increasingly
diverse audience, and thus, they are uneasy about getting too close to many of the themes and arguments that President Trump has used to build this
On the other hand, this is the payoff. This is along with tax cuts, and deregulation, the appointment of justices to the Supreme Court who are very
skeptical of Federal authority is the reason the business I think does not divert or break away more decisively. This is exactly what they want from
the Trump administration and a Republican Congress.
NEWTON: And they are going to continue to get it perhaps through his nominee. We will continue to watch all of this, Ron. Thank you so much as
we continue to watch the proceedings in Washington. Now, as I was telling you earlier, it was a bumpy start September for Wall Street after the long
Labor Day weekend. The Dow finished in the red. Nike stock as we were just talking about was a major drag down; almost three percent. It is
facing backlash over its choice of footballer Colin Kaepernick as the new face of its "Just do it" campaign.
Now, Kaepernick was the first NFL player to kneel during the US National Anthem as a protest against racism.
In the meantime, the S&P and NASDAQ also ended lower after five straight monthly gains after trade worries are also rattling investors. In the
meantime, Pizza Hut is hoping to score with its new NFL sponsorship. It got parent Yum! brands rang Tuesday's opening bell on Wall Street. And of
course, though it was a tough day for shares of JD.com, the founder and CEO of one of China's largest e-commerce giants, Richard Liu is now back in
Beijing after being arrested in the US last week over alleged sexual misconduct.
Now, there was plenty of excitement when Amazon joined the world's most exclusive club, the One Trillion Dollar Club. So far, there is only --
well, only one other member here, we'll remind you, it's Apple. Amazon's total market value past the one trillion dollar mark a few hours ago. It's
been turning up that dial on ...
NEWTON: ... profits. Clare Sebastian has been closely tracking those profits. I mean, we shouldn't get all overheated about one number, but at
this point, it does seem as if Amazon has found the right formula, not just across e-commerce but a range of businesses.
CLARE SEBASTIAN, CORRESPONDENT, CNN: Yes, Paula, it is just a number, but this is also an inflection point for Amazon because for so many years,
after 21 years frankly that it's been a public company, we've seen this as a future looking company. A company that is growing, that is generating
revenues that really hasn't been able to sustainably turn a profit. This year, that all changed. It's now posted its third straight quarter of
profits over a billion dollars, the last one was $2.5 billion and that's really driven not by its e-commerce business, which of course is the
biggest part of its revenues, but by Amazon Web Services -- the Cloud business. That was more than half of its profits in the last quarter.
Not only that, but it's starting to become a real player in advertising as well as people are increasingly looking to Amazon at the start of their
product searches. This is a major force in online advertising, and all of these markets, Paula are continuing to grow. E-commerce is only just
starting, Cloud is only just starting. Digital advertising is only growing. So I think this is a real vote of confidence in Amazon's not only
current ability to generate profit, but its future ability to do so as well.
NEWTON: And Clare, you've been doing a deeper dive into its businesses for a while now. I mean, its competitive advantage is undeniable. Why?
SEBASTIAN: It's really interesting, Paula because this is what Jeff Bezos calls a culture of high standard and it's visible in every part of the
business. I was particularly interested in the fulfillment network because this is the real engine of its e-commerce business. This is what is
driving the efficiency and the growth of that, the growth of Prime in particular. And it's also what started to generate some criticism of the
company as people look at paying conditions.
So, I went earlier this year to Windsor, Connecticut to a fulfillment center there to meet some of the people who work in this area.
(BEGIN VIDEO TAPE)
TODD PETERS, AMAZON FULFILLMENT CENTER ASSOCIATE: Technically, I am a picker, so that basically means you just literally pick the item from the
pods and then you put into a tote there. You can't help but think about a warehouse type factory thing and not have the idea of a sweatshop, but it's
clearly not that.
SEBASTIAN: And yet Amazon has faced criticism for the conditions in these centers. Lori Pelletier, head of the Connecticut Chapter of the AFL-CIO, a
national organization of trade unions said she's been approached personally by some employees.
LORI PELLETIER, HEAD, CONNECTICUT CHAPTER OF THE AFL-CIO: There's a lot of pressure on these workers. There are timeframes, they need to get things
out, and so, that's what we're concerned with. It's what kind of atmosphere these workers are in, in these warehouses.
SEBASTIAN: What's the pressure like on the employees there?
UNIDENTIFIED MALE: So what we do is -- so there are customer demands, right? At the end of the day, there are customer demands. We are a
business, right? At the end of the day, we're a cost center and we have to be profitable so to speak, so everything is cost management from our
perspective. A lot of the robotics here is really sort of leaning towards that to help enhance the experience of the associate.
(END VIDEO TAPE)
SEBASTIAN: So you see there, Paula. A relentless drive for efficiency. Amazon for its part says its wages are competitive with the rest of retail
and offers the same benefits to people in fulfillment centers to those in head office, but I think as we see the scale of this company grow with its
market capital, the wealth of the CEO, Jeff Bezos who is now the richest man in the world will continue to attract this kind of scrutiny whereas,
it's entirely far less clear is whether that will lead to more regulation which could cause a risk to the company going forward.
NEWTON: Yes, it's interesting that that is the one Achilles heel that people are saying Amazon could have. Hard to find a bear on Amazon right
now. Our Clare Sebastian, thanks so much. Appreciate it. Coming up after the break, two of America's biggest brands get close to the NFL -- Nike and
Pizza Hut embrace the institution which has been the target of President Trump. You'll remember, it was over taking the knee at the National
Anthem. And the Bank of England's Chief wants Britain to know he is their go-to guy for help with Brexit. We'll explain a little later live from
NEWTON: All right, Nike's slogan, we all know it, "Just do it." And yes, they just did it when it comes to taking sides with President Trump. It's
using one of the NFL's most polarizing figures to star in an ad campaign. Former 49er Colin Kaepernick controversially took a knee during the
National Anthem in a protest to racial injustice drawing the ire of President Trump and many fans we have to say as well. Now, he's featured
in an advert with a slogan, "Believe in something, even if it means sacrificing everything." It's a high stakes gamble and Nike's customers,
some support the protest, some do not.
There was a mixed reaction on Twitter, but investors are decidedly against this. They do not seem to be on board. As you can see there, Nike stock
closed down more than 3% on the NYSE.
Ahiza Garcia joins me now live. I mean, look, let's deal first with what they did. This was a controversial ad they put out and it really took off
as soon as everyone saw it. Again, because it puts you squarely in one camp versus the other. There is nothing in between about this article.
AHIZA GARCIA, SPORTS BUSINESS REPORTER, CNNMONEY: Right, right. Kaepernick, there is no in-between road there. It's one way or the other.
And so by doing this, Nike is making a huge stand. What's interesting is that now, they are trying to kind of walk it back it seems and say, "Well,
this is about other aspects as well." But there's no question about it. If you choose to create an ad campaign where Kaepernick is a part of that,
you're taking a clear stand.
NEWTON: And we have to say, you just pointed out, they just signed a contract with the NFL. My point is that if you want to take a moral high
ground on this, you could have shied away from having anything to do with the NFL. You've got all of those other sports franchises to go to.
GARCIA: Right, and absolutely. And there are so many social justice causes. Nike is very pro-LGBTQ. They have come out in so many social
justice -- such impactful movements, but this is certainly polarizing and certainly taking -- I mean, the NFL, I don't know. I mean, they could have
some grounds to potentially maybe question the contract they just signed with Nike because this is hurting Kaepernick. If they can make a case that
Kaepernick has hurt their business, I don't know, an attorney I spoke to said that there might be a legitimate case there.
NEWTON: That is so interesting, and I know a lot of the owners will have something to say about that. Having said that, there were a lot of fans
who will think, finally, somebody stood up for this and yet, we have to say CNN Money did a story on Nike. It's been following this all year. They've
had 11 executives that have had to go because of misconduct and also, there's a lawsuit at stake here -- CNN -- we reported that there were two
women that are now suing Nike basically saying that it's a company where women are devalued and demeaned.
If find it interesting that a company that is under scrutiny so much in different areas that they would choose to do this now at this time, staking
out a moral high ground where some people would be able to really pull the floor from underneath them, right? And say, "uh-uh, not so fast, you can't
GARCIA: Yes, it absolutely puts them in the cross hairs of public scrutiny, and I think, I mean, at the end of the day, they are a business,
so while it is easy to say that they are taking a social stand or taking a moral high ground, I think you have to understand that they did tons of
research I am sure before deciding to do this and there's got to be some incentive economically, and I think that it's driving the conversation away
from that pending lawsuit is certainly one impetus for why this a good move for them as a company.
GARCIA: But I think, yes, definitely, like it definitely puts them in a place where the rug could certainly, as you said, be pulled out from under
them because it's like you're taking the high ground on one stance, but yet, treating your female employees, gender issues, gender rights is
certainly another issue that's a hot button topic right now, and they aren't leading on that.
NEWTON: And the lawsuit is pending, these are allegations, but of course, they have their problems within and they're trying to answer those. I have
to ask you, so the stock is down 3%, I mean, look, some people would argue, this is really just a blip. Nike has had an incredible year. I think if
you speak to anyone in terms of branding, they're incredibly well placed. Does this just move them into a different sphere when it comes to brand?
When you think about Adidas or Under Armour?
GARCIA: Yes, I mean, I think they are the entity to beat. Adidas is constantly trying to compete with Nike, so is Under Armour. So, I think it
just kind of -- they have some leverage. There is some room there, right, to play? I don't think there's any one super hot on their heels, but at
the same time, like they are wildly are the dominant player internationally like just in terms of the market. I think that anything like this, you
never want something that could compromise that kind of thing.
NEWTON: Its issue was consumers being so capricious about what they might wear -- one month is definitely not what they want to wear the next month,
and so you have to watch that.
NEWTON: Thanks so much for coming in as we continue to follow the story. Something tells me we're going to be talking about it again. Now, in the
meantime, Pizza Hut is taking over from Papa John's as the official sponsor of the NFL. Before his departure, Papa Johns founder and CEO said the
kneeling controversy was hurting his business. John Schnatter said on a conference call last October, "The NFL has hurt Papa Johns shareholders."
He want to say, "The controversy is polarizing the customer, polarizing the country." And put this, in the column, Kaepernick moved Pizza Hut's US
President on "Quest Express" earlier and no, he definitely didn't want to go there.
(BEGIN VIDEO TAPE)
ARTIE STARRS, PIZZA HUT US PRESIDENT: Seventy percent of Americans consider themselves NFL fans and half of those are women. We believe
that's an audience that really hasn't been spoken to and bringing and entertaining at-home experience to people's homes while they are watching
NFL. We're introducing a concept called Home Dating, which are two NFL stars, JuJu Schuster and Antonio Brown will be representing for us in our
advertising, and we're really focused on exciting the at-home pizza eating and NFL-watching experience.
NEWTON: But what is that going to do to tone down the politics of the NFL right now, because right now, some people say, "I do not want my brand
associated with all the politics of the NFL right now."
STARRS: Yes, we're about pizza, not politics. We are about -- we want people to be focused on enjoying the game with their family and friends.
NEWTON: Understood, but how do you get there?
STARRS: Yes, we do that through celebrating the at-home viewing experience and making sure that people have a lot of fun, have a hot fresh delicious
Pizza Hut pizza when they're home watching the game or if they're doing with friends.
NEWTON: We have been following Nike stock, it is down substantially given what's been happening with Colin Kaepernick and the fact that they have
made him the face of Nike in terms of what your brand will associate with. I mean, if you look at that, that is not looking like a good brand move.
As far as the market is concerned, Nike has other issues.
STARRS: Yes, I think we've always been about entertainment. We're bringing entertainment to the occasion. We grew up going to a red refresh
spots, and now we're bringing that experience home and the NFL stars that we're celebrating with, they're fans, too and they are dancing with some of
the best dancers in America and when they score a touchdown, they celebrate and we want fans to do that, too.
NEWTON: But what does that have to do with Colin Kaepernick and Nike? I'm just asking you a direct question. Right now, Nike stock was down 3%
because they decided to go with Colin Kaepernick. Again, back to the original question, are you worried that at this place in time, the NFL is a
STARRS: Yes, 70% of Americans consider themselves NFL fans and we're going to bring entertainment to the partnership that no one has ever done before.
(END VIDEO TAPE)
NEWTON: Sticking to that script, okay, if you want to keep on top of the day's business headlines in just 90 seconds, try our Daily Briefing
Podcast. It's updated twice a day before and after the bell rings on Wall Street, you can just ask Alexa or your Google Home Device for your
CNNMoney/briefing, that's every week day.
Coming up in a few minutes, the head of Britain's Central Bank tells the UK, "I am here for you." Plus, the world's largest ad agency makes a push
for continuity by putting a company veteran in the top job.
NEWTON: Hello, I'm Paula Newton, and there's more "Quest Means Business" in a moment when Argentina goes hat in hand to the IMF and the man Facebook
hired to exterminate those Russian trolls speaks exclusively to CNN.
Okay, any moment now, we are awaiting for President Trump's nominee to the Supreme Court to address senators. It follows a contentious day.
Democrats want the hearings delayed. They say, they need time to review 42,000 documents just released last night. Republicans accused them of
obstructing the hearing for political purposes.
We are hearing explosive new details from a book written about the Trump administration by Bob Woodward. Among other things, it says that aides to
the President sold papers from his desk, to quote, "protect the country." The White House has responded. Press Secretary Sarah Sanders calling the
book, nothing more than fabricated stories.
Tropical Storm Gordon's other bands are lashing the Florida panhandle. Forecasters say the potentially life-threatening storm could smash into the
coast as a hurricane within hours creating a storm surge across parts of Louisiana, Mississippi and Alabama.
Now, I have to warn you, the images we are about to show you are graphic. Scientists have discovered the carcasses of 87 dead elephants. The
nonprofit Elephants Without Borders says they found dozens of dead mutilated elephants during regular aerial surveys. The remains were found
over a two-month period.
Argentina's Finance Minister is in Washington to ask the IMF for help in averting yet another financial crisis. The country wants the IMF to speed
up payments on its credit line. In a statement, the US President and this is interesting, said he has confidence in Argentina's President and will
strongly encourage and support his engagement with the IMF. Christopher Sabatini joins me now. He is a lecturer of International and Public Policy
here at Columbia University. First to the President's comments. Interesting that he chose to interject himself there. Why do you think
CHRISTOPHER SABATINI, LECTURER OF INTERNATIONAL AND PUBLIC POLICY, COLUMBIA UNIVERSITY: Well, first of all, it's history. In 2001, George W. Bush did
not back then US-backed, US-supported government of Fernando de la Rua and caused a huge run and the government had to end up defaulting on his loans
and it went bankrupt and it caused a depression that lasted more than three years. So this is actually a very positive sign from the Trump
administration, he wants to show support for a pro-market government, who wants some demonstrated stance behind it, and it's very important. It's
learning from -- this is a government that is learning from past mistakes.
PAULA NEWTON, HOST, QUEST MEANS BUSINESS: Let's get to the finances, and I want to get to the politics for a minute. If we look at the finances,
we're not talking about default yet, the point is though --
SABATINI: No --
NEWTON: They want the cash injection, 50 billion from the IMF and they need it now.
SABATINI: Exactly, so what's happening is, people have lost faith in the peso, and as U.S. interest rates have increased, money has left the
countries. So basically, what Macri; the president of Argentina is trying to do is prevent or run a central bank and then make sure it has enough
hard currency to keep the money going.
They're not anywhere close to default, they're simply trying to basically bolster faith in the peso which has lost more than 60 percent -- I'm sorry,
more than 30 percent against the U.S. dollar.
NEWTON: You know, you mentioned the crisis from a decade and a half ago, we all remember that and we remember, you know, a brain-drain from
Argentina. Some people still haven't returned to their home country after that, and the people that are there really suffering through this.
We have anecdotal evidence that people were checking the exchange rates hourly, just to figure out what to buy, when and what their money would
actually buy for them in terms of necessities. Politically, do you think this is untenable even if it's the right thing to be financially?
SABATINI: Well, I think it has to be done. I mean, I think the market is --
NEWTON: OK, but we've been saying that for so many years --
SABATINI: True, that's true, and then this is the problem. This is really an upset(ph) right now, because it's a real risk that he gets this $50
billion loan from the IMF, and people just use it as a way to basically get out of the market. So we will only actually speed one on the banks and
speed one on the dollar.
So you know, he's hoping this will bolster faith, but it may not precisely because Argentineans have been -- basically had a bipolar economy and a
bipolar political system for decades now. Going back to the hyper- inflationary years of the late 1980s to the dollar currency board of the 1990s and then the collapse.
And so our defense are very skittish as are investors. So that's really the risk here. And he's really trying to basically bolster confidence.
NEWTON: Macri came in with such hope three years ago, so pro-business people thought investment really go there. Did that just not happen? Did -
- it was, you know, quick enough in terms of really getting the fiscal policy underway. What happened?
SABATINI: We had a couple of tough things against him. First of -- and he did well for most of them. First of all, he didn't have a majority in
Congress, he was really not expected to win and the economy really hadn't suffered as much as it had in past years.
They're still sort of living pretty large, and of course, because of the past government that had cooked the books, people didn't know what
inflation was, they didn't know how much the economy was contradicting.
So they really hadn't suffered enough, and then he tried to implement a series of austerity measures for people who really quite -- weren't quite
ready for them. Having said that, he did a good job of building a coalition in Congress, he actually did well in the mid-term elections, now
he's going to be up for re-election in 2019, and he's got to make this economy grow.
It was supposed to grow by 3 percent this year. It's going to contract by 1 percent this year. And of course, with now, with the interest rates in
the country, up to close to 60 percent, it could really throttle economic growth and really hurt his chance of re-election which would really put a
damper on investor expectations.
NEWTON: Because in terms of investors, they're looking at this government saying we still better stick with this one, because if they go further to
the left, what happens there in Argentina then? If that happens. Because they're even talking about a lot of protest in the street, is what people
are expecting in the next few months.
SABATINI: Precisely. But one of the things that Macri is promising to the IMF for this deal is to basically slash the ministries in half. That is
going to -- and then hopefully, it won't be just a shell game, because it won't mean laying people off.
And the problem is the labor unions and a lot of the community groups, social movements are controlled by the Perons, the opposition Perons. And
they can take the streets. If they did in 2001 and caused basically a series of street coups that eliminated four different presidents.
So the question is, can he keep people sufficiently satisfied, implement these austerity measures that he has to do, all the well letting the
economy grow. And he's had a tough road at home.
NEWTON: Yes, to say the least, we'll see what happens with these IMF negotiations which are ongoing right now in Washington, appreciate it,
SABATINI: Thanks very much.
NEWTON: Now, how do you prevent election interference on Facebook? Coming up, you'll hear exclusively from Facebook's top troll hunter and the
company's former security chief who warns what will happen if Facebook failed at it.
[16:35:00] (COMMERCIAL BREAK)
NEWTON: OK, there are just two months to go until the mid-term elections here in the United States. And security experts warn the United States is
in fact still at risk. Tech executives, Facebook's Sheryl Sandberg and Twitter's Jack Dorsey will face lawmakers on Wednesday to explain how they
plan to rid their platforms of foreign disinformation campaign.
Now, the man who actually has to do it is Nathaniel Gleicher; he is Facebook's head of cyber security policies. Speaking exclusively with Cnn,
he explained how he's staying one step ahead of the trolls.
(BEGIN VIDEO CLIP)
NATHANIEL GLEICHER, HEAD OF CYBERSECURITY POLICIES, FACEBOOK: We have manual investigators that are running sort of focused investigations. And
we think of these sort of like finding a needle in haystack. And then secondly, complement that with automated-at-scale work to detect and remove
the less sophisticated threat actors.
And if the manual work is like looking for needles in haystack, then the other work is like shrinking the haystack.
UNIDENTIFIED MALE: Have you found evidence of actors in the U.S. working on their behalf?
GLEICHER: We haven't seen clear indications of that, but as we make this harder and as we limit their ability to operate from a distance, these
actors are going to have to make a decision. How much are they willing to commit? And the more they commit, the more they put their necks out, and
that's part of the goal here.
(END VIDEO CLIP)
NEWTON: And we will get back to that story here on CNN. In the meantime though, we want to bring you back to Washington where Donald Trump's
nominee for the Supreme Court is now addressing senators.