US, Russia warships nearly collide in Philippine Sea
U.S. Navy says Russian ship made 'unsafe' move, nearly colliding with U.S.S. Chancellorsville; reaction from Hudson Institute senior fellow Rebecca Heinrichs.
This is a rush transcript from "Your World," June 7, 2019. This copy may not be in its final form and may be updated.
NEIL CAVUTO, Host: Stocks take off as jobs slow down.
Welcome, everybody. I’m Neil Cavuto.
And it really was a piece of work, not nearly as many Americans finding work last month, still a respectable 75,000, but not the 185,000 expected. But in a case of bad news being good news, investors focused on the possibility the Federal Reserve is all but certain to cut interest rates now, fueling talk that gained steam earlier in the week that the Fed was so worried about a trade war with Mexico or China, or maybe both, whacking the economy that it would reverse course on rates to save the economy.
No word yet on how those Mexican talks are going, but first to FBN’s Susan Li on how the money guys don’t seem to be worrying.
Hey, Susan.
SUSAN LI, CORRESPONDENT: No, not, exactly, when the Federal Reserve says that we have got your back.
So the best week for the markets this year, going all the way back to nearly Thanksgiving. And that’s because there’s close to a 100 percent chance that we’re going to get at least one rate cut this year. And the majority of economists say that we will actually get three in 2019.
Also, a 25 percent chance that the Fed will start cutting rates next week, that’s right, in this month of June, but more likely will start the rate- cutting cycle sometime in July, where more than 80 percent of the market says that the Fed will eventually lower interest rates.
So the jobs reports was less than half the number that we expected the month of May, not terrible, but not great, and reductions of 75,000 for the previous two months of March and April, the jobless rate holding at 3.6 percent, close to its lowest still in 50 years. Wages were a bright spot because they’re still growing at a pretty strong rate of over 3 percent.
You know that’s actually higher than the average that we saw for all of last year, 2018. And there are pockets, sectors of the economy that are still hiring, and that includes the professional and business services, mostly where tech reigns. Health care and construction also saw job adds as well in the month, but we did see retail cutting around 7,000 jobs.
Plus, manufacturing has been down for the first four months of this year. Now, also we know and there was also this news that came out that President Trump has been very vocal about calling for the Fed to cut interest rates. Well, apparently, they spoke by phone, President Trump and Fed Chair Jerome Powell.
They had a chat on April the 11th, Neil, and people are thinking maybe they talked about lowering interest rates for the year to backstop the U.S. economy -- back to you.
CAVUTO: All right, Susan, thank you very much.
And Susan kind of intimated there that all the major market averages were up. The Dow reversed what had been six down weeks in a row. And given the fact that the averages had this heady advanced this week, they had their best week of the year.
Now to the trade talks with Mexico. Something has got to happen advanced and fast, or tariffs on billions of dollars’ worth of Mexican goods hit bright and early Monday morning.
Rich Edson with more from the White House.
Hey, Rich.
RICH EDSON, CORRESPONDENT: Hey, good afternoon, Neil.
Another day of negotiations with U.S. and Mexican officials. The Mexican foreign minister arriving earlier this morning at the State Department for another day of talks with the American side.
What they’re trying to do and the concerns for U.S. officials are those migrants traveling through Mexico and ending up at the southern U.S. border.
(BEGIN VIDEO CLIP)
CARLA PROVOST, U.S. BORDER PATROL CHIEF: And just as of this morning, we have apprehended over 614,000 people crossing our southwest border illegally.
CAVUTO: Wow.
PROVOST: That number is higher than any of the fiscal years for the last decade. And we still have four months left in this fiscal year. So these numbers are unprecedented.
(END VIDEO CLIP)
EDSON: Traveling back from Europe, the president says there is a good chance the U.S. and Mexico will reach an agreement, though the White House says the administration is still on track to implement tariffs Monday.
(BEGIN VIDEO CLIP)
KEVIN HASSETT, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: The president has all the options on the table. But the talks have been very collegial, amicable, and my briefing on them has been that there’s been a lot of progress where our technical experts have really taken a deep dive into what the Mexicans could do to help get out in front of the border problem, that the Mexicans have agreed to do a lot of those things.
(END VIDEO CLIP)
EDSON: The White House says it is unclear if these discussions will continue over the weekend, President Trump expected back here shortly at the White House from that trip to Europe -- Neil.
CAVUTO: All right, Rich Edson, thank you very much, my friend.
Nancy Pelosi wasted little time lambasting the latest jobs report, for example, saying -- and I quote here -- that: "The May jobs report is a disturbing sign the administration’s disastrous special interest agenda is hollowing out our economy, fueling instability and jeopardizing the financial security of working families across America."
Of course, she didn’t have much to say about all the good ones we have had prior, but that’s neither here nor there.
Republican strategist Nick Adams is here. We have got Democratic strategist David Burstein and money watcher Courtney Dominguez.
Courtney Dominguez, what do you think? I mean, is it a good report, bad report? Is it a sign things are working or is this something politically the president should be concerned catches fire?
COURTNEY DOMINGUEZ, PAYNE CAPITAL MANAGEMENT: I think there’s a lot of silver linings with this report.
I think the immediate headlines are saying, oh, we didn’t add as many jobs we were hoping to. We now have 104 consecutive months of increases in jobs. Unemployment is still at 3.6 percent, which is a 50-year low. Yes, it’s a little slower than we wanted. But we’re still seeing such a strong economy here.
And all that data is continuing to come out and just show how resilient we are, even despite all the trade wars that are going on right now.
CAVUTO: You know, Nick, you could look at this a variety of ways, but I can remember when President Obama was just taking over as we were bleeding close to a million jobs a month.
Last time I checked, these are still gains. So, what’s the problem?
NICK ADAMS, FOUNDER, FOUNDATION FOR LIBERTY AND AMERICAN GREATNESS: These are still really good, Neil.
I mean, I we get kind of spoiled. And all of a sudden, when the number isn’t exactly where we thought it was going to be, suddenly, we’re tearing our hair out. These are good results. At this rate, the unemployment rate is going to continue to go down. It’s at its lowest it’s ever been, 3.6 percent.
I think that this economy is booming. I think Americans have got money in their pocket. I think they are really happy about that. And I think that bodes really, really well for the president’s political fortunes in 2020.
CAVUTO: You pretty much feel the same way, right, David?
DAVID BURSTEIN, DEMOCRATIC STRATEGIST: Well, look, I mean, I think they are positive signs. But, as always, we shouldn’t get too caught up in being too exuberant about these things.
CAVUTO: Or too negative.
(CROSSTALK)
CAVUTO: What did you think Nancy Pelosi saying that? She hasn’t said boo about the job gains we have had under this president.
BURSTEIN: Look, if we’re being frank about this, I think these job numbers have been way politicized from where they once were a long time ago. You have been covering this stuff for a long time, Neil. And I think you probably remember a time when these numbers were much less political than they have become.
And so everybody...
CAVUTO: They have always had a little bit of politics.
BURSTEIN: Right. They’re always going to be a football. But I think the reality is, what what’s actually going to happen with these tariffs? How - - what does that actually -- because it’s not going to not have an impact forever.
If we keep piling on tariffs, and we keep going down this road, it is going to have an impact. It may be delayed. It may not come until the holiday shopping season.
CAVUTO: You almost sound like you’re hoping for that.
BURSTEIN: I’m not. I’m not. Of course I’m not hoping for that.
CAVUTO: OK.
BURSTEIN: But I just would like to see more new mindfulness from this administration on the negatives and the concerning trends, as opposed to just coming out and trumpeting, hey, everything’s great all the time.
CAVUTO: Well, leaving the politics aside, Courtney Dominguez, I would rather be in a position overseeing an economy where one demographic group after another has experienced record low unemployment than the other way around.
DOMINGUEZ: Yes.
CAVUTO: Now, again, I think it’s a fair point that David raises that it hasn’t materially helped the president yet. You would think, with all of that, he would be doing much better. And in a lot of these key states, albeit very early in the process, he’s not.
DOMINGUEZ: Yes.
CAVUTO: But what do you think’s going on here?
DOMINGUEZ: Well, consumers, they are doing really good right now. And what we did see on the jobs report is incomes are going up right now. And it’s at a real -- they’re having a real wage growth, because...
CAVUTO: Well, it was 3.1 percent in the latest...
DOMINGUEZ: Exactly.
And inflation is still really muted. So people are actually seeing tangibly more they can spend. They’re spending more on the economy, but we have a really disciplined consumer right now. They’re still keeping their savings rates really high right now.
What I see also is, there’s a lot of cash on the sidelines. Despite the fact that market is doing well this year, money markets are at their highest level since 2010. It’s over $3 trillion right now.
(CROSSTALK)
CAVUTO: So, that’s money that you argue would be put to work for spending, for buying stock.
DOMINGUEZ: Exactly.
CAVUTO: You might be right about that.
(CROSSTALK)
CAVUTO: But a lot of people seized on this and revisions in prior reports and started saying, Nick, well, maybe this is the beginning of something we should worry about.
ADAMS: Yes, Neil, and I think I was on a couple of months ago with you doing a segment where we were talking just about that as well.
CAVUTO: Right.
ADAMS: Look, anything can happen. These things are unpredictable.
But I think with this president at the tiller, with this president in charge, I think they have got the right approach. They have got the right ideas.
CAVUTO: But does the trade thing worry you?
ADAMS: No, it doesn’t. It doesn’t at all. I have got to tell you....
(CROSSTALK)
CAVUTO: That lingers. That could linger.
ADAMS: Yes, I got to tell you, I am full on in favor of these. I don’t like tariffs as a principle.
But I have got to tell you, we need to -- we need to secure our southern border, Neil. And if we don’t do that, then we cannot -- the economy...
(CROSSTALK)
CAVUTO: But do you like using trade as a lever to do that?
BURSTEIN: This is not the way.
ADAMS: Whatever it takes.
BURSTEIN: This is not the way to do that. That is -- that is a geopolitical problem.
To throw this in there, I think, shows a lack of understanding.
(CROSSTALK)
CAVUTO: You’re right. You can argue that point.
I just want to know about the economic impact, whether you like it or not. Do you think that if these tariffs take hold with Mexico -- and we will know maybe this weekend -- the president could delay or cancel them if the talks are promising -- combined with what is coming for China, that you are -- you think that this is going to have a whammy?
BURSTEIN: Yes. Well, it’s not just me. It’s bipartisan economists and people across the spectrum who have those concerns. And there are a small number of people who think it’s the right way to go.
But...
CAVUTO: Are you surprised we have done as well since we first went after China, what, 14, 15 months ago? The markets are up anywhere from 3 to 5 percent.
BURSTEIN: Well, sure, but the real -- we haven’t actually seen the real impact of these yet.
CAVUTO: But you think it’s coming?
BURSTEIN: Yes, I think...
CAVUTO: Is it coming?
DOMINGUEZ: I think the economy is strong enough to withstand even if trade wars are happening. I think that’s why the markets are doing so well.
I think when a resolution comes, I think it will sooner rather than later. I wish -- I know we all wish we would we know exactly what that would happen. That will really set the markets off even higher. But I don’t think we need that for the markets to do well.
I just think that’s when you have a catalyst even further.
CAVUTO: But do you think people are prepared for this?
I mean, I know you talk about the president is doing the right thing, and he might very well be doing the right thing. I can’t tell you the number of people I bump into who think the government’s going to pay these tariffs and all.
And I say, well, technically, you are. A lot of people are not prepared for that. And I don’t know not necessarily that they would absorb a 25 percent hike in goods, but you can’t pass along everything. I mean, people are going to feel that.
ADAMS: Well, Neil, look, they have been talking about avocados.
And looking at me, I could probably do without an extra side of guacamole for a while.
(CROSSTALK)
CAVUTO: Tell me about the Corona thing. That caught my attention.
(LAUGHTER)
ADAMS: That’s a bit more difficult.
CAVUTO: It’s a little more difficult.
ADAMS: But, no, look, at the end of the day, I think it’s good for California avocado growers.
CAVUTO: You buy the notion that people find alternatives.
ADAMS: Absolutely.
CAVUTO: For a lot of this stuff, especially the China stuff, there are no alternatives.
BURSTEIN: That’s right.
And I think particularly people are talking about now this stuff could hit at retail season, at peak holiday season. Trust me, if people can’t get what they like to get at holiday season and their electronics and these kind of products, whether or not people actually blame it on the government or understand that link back...
(CROSSTALK)
CAVUTO: But you think the sticker shock is real?
BURSTEIN: Absolutely.
CAVUTO: Assuming the president can get what he wants on Mexico, get what he wants on China, then what?
DOMINGUEZ: Yes.
I think it’s going to be a catalyst to bring the markets higher, in my opinion. I think we’re seeing such a strong economy right now. The trade wars are just leading to a lot of uncertainty. And if there’s anything the markets like -- don’t like, it’s uncertainty.
ADAMS: Uncertainty.
DOMINGUEZ: People just don’t know what to do. I think that’s probably leading into the jobs report. You’re seeing these employers just proceeding with caution.
They’re not booming and hiring right now.
(CROSSTALK)
CAVUTO: Yes.
And the Federal Reserve all but said, we have your back if everything hits the fan. I don’t know if it’s a good or bad thing, and whether you should welcome the Fed promising lower interest rates or all but doing that, because it does see a slowdown. Right?
ADAMS: Well, look, it does. It does.
But at the end of the day, Neil, I think if you took a poll on this, I think that most Americans out there in the heartland, in the states that made sure that Donald Trump was president, I think that they are willing to pay a few more cents for avocados.
(CROSSTALK)
CAVUTO: You talk to farmers...
(CROSSTALK)
CAVUTO: I don’t know. The Corona thing, maybe.
ADAMS: Call it the visceral instinct.
BURSTEIN: They count every dollar.
CAVUTO: All right, we shall see. Guys, thank you. Very good job.
In the meantime, look how close a Russian warship got to one of ours. And what if I told you this just could be a preview to coming attractions?
(COMMERCIAL BREAK)
CAVUTO: This was close.
The U.S. Navy releasing video the USS Chancellorsville nearly colliding with a Russian destroyer in the East China Sea. But it’s not just Russia that has done that sort of thing. We have seen it before with China and Iran. They’re happening more often.
So what are we looking at here? And what do we do about it now?
The Hudson Institute’s Rebeccah Heinrichs.
It does seem to be a steady pattern here. What’s going on?
REBECCAH HEINRICHS, THE HUDSON INSTITUTE: It is a steady pattern, Neil.
And Russia has been doing this for many, many years with little media attention. Remember, in 2008 is whenever the Russians invaded Georgia. 2014, they invaded Ukraine. Those got a lot of attention, of course, but they have been doing other sort of low-level provocations and then getting increasingly more provocative, buzzing U.S. airspace, buzzing NATO airspace, and then needing to be escorted back to their own airspaces.
In the case of over NATO countries or near NATO countries, they don’t turn on their transponders. They’re dual-capable aircraft, meaning they could be nuclear capable. So these are incredibly provocative. They do it for propaganda purposes in their own country. And they do it to see how the United States and our NATO allies respond, because of their gathering intelligence as they conduct these incredibly provocative operations.
CAVUTO: Rebeccah, these were international waters, right?
HEINRICHS: That’s correct. They were in international waters. The United States Navy was doing nothing wrong.
CAVUTO: Yes.
HEINRICHS: And you will hear the Russians continue to say that it was actually the U.S. Navy, the Chancellorsville, who conducted the aggressive action. That’s just a lie. It’s Russian propaganda.
Our U.S. Navy sailors are doing nothing wrong. And it was the Russian warship that came close. And...
CAVUTO: No, on, it doesn’t lie. I mean, I don’t have to be a Navy man to figure out that they’re the provocative one there.
But I am curious. I always worry that something goes wrong. I mean, I’m old enough to remember the USS Pueblo. We were arguing that was an international waters. The North Koreans famously argued, no, they weren’t. They seized the ship. They seized those men. They beat the hell out of them. They were held captive for the better part of a year.
Things can easily get out of control. What do you do?
HEINRICHS: They can easily get out of control. And this is why, especially in the case of the Russians, the U.S. government now has said in our security documents that we’re going to take Russia and China on. We’re going to compete with them.
And what that means is that whenever they conduct operations like this, we have to have a clear response. We can’t just act like it was an accident and these things happen and good -- and so we have to have a response that’s clear and restrained.
Again, our sailors acted with cool, calm heads, everything they were supposed to do, because, like you said, these things can spiral out of control. I mean, wars have been fought over things like this. And so it’s important that United States respond clearly.
And the acting Secretary Shanahan, the acting Secretary of Defense Shanahan, did say we’re going to respond to that to the Russians, we’re going to have to have a conversation with them and come up with a solution, because the other thing that’s worrisome about this, Neil, we talked about China yesterday.
This was in waters far from Russia. So, normally, Russia kind of has these...
(CROSSTALK)
CAVUTO: Yes. Yes, what were they doing there? Yes.
HEINRICHS: Well, nobody -- they have been conducting military-to-military operations with the Chinese. So that part is not unusual that -- lately -- that they have been cooperating with the Chinese.
But the fact that they were so far away from their own shores, still there, it does seem a little curious that now they’re acting sort of defensively, it seems, if you look at this growing military relationship, partnership, near alliance with the Chinese.
CAVUTO: Yes, just this week, the two leaders were meeting and signing off on a host of deals here. You do wonder about it.
The reason why I want to get back to what -- definition of international waters, because one could abuse that privilege, is what happened when an Iranian vessel captured our own and held American sailors for a while, claiming that they were in their waters, I believe off the Strait of Hormuz at the time. I don’t remember the exact details.
And it was a back and forth that just showed no end. That’s what I worry about, incidents that provoke bigger incidents.
HEINRICHS: That’s right.
And this is really what this geopolitical contest is about. This is the heart of it. The United States believes that these international waters are free for commerce, that if you’re -- if you’re going through them, that there’s procedures in place so that we have transparency and understanding that anybody can go through these waterways.
And the Chinese and the Russians and the Iranians all contest that and they all say, no, in fact, these are ours. And so, obviously, the Russians are notoriously -- notoriously do this. They have been militarizing the Black Sea, where our NATO allies really are feeling the heat from Russian provocations.
And now the Chinese are doing it obviously in the East and the South China seas. And so we claim -- this is when we talk about international rules- based orders.
CAVUTO: That’s right.
HEINRICHS: It’s what policy analysts call it.
And I think it’s more fruitful for us to say -- to be more clear about what our U.S.-specific interests are in this region. And then whenever the Russians act like this, they need -- there needs to be a consequence, Neil, that we can’t just look the other way and just say these things happen, because it’s going to continue.
They’re going to continue to push, gain intelligence for how the United States responds. And so we really do have to have a forceful response before it escalates out of control.
CAVUTO: All right, no, I hear you, because the timing is, shall we say curious?
Rebeccah, thank you very much.
HEINRICHS: Thanks, Neil.
CAVUTO: All right.
Well, President Trump is feeling pretty good about his trip overseas. He’s expected home very, very soon. Maybe he was focusing on the foreign press, which said he did a great job, and not our own press, that, well, said just the opposite.
(COMMERCIAL BREAK)
CAVUTO: President Trump and the first lady are on their way back after a successful European trip over there. You wouldn’t know it looking at media coverage over here, even though press coverage over there was very, very favorable, saying he made a very strong speech at Normandy, et cetera.
The time he had with the queen was well-received, but, instead, the focus here on what he was wearing or whether the first lady should have been wearing sunglasses, the kind of stuff that normally wouldn’t generate much interest or discussion at any time with almost any president.
What’s going on here?
Nile Gardiner, former aide to the British Prime Minister Maggie Thatcher, and Axios White House reporter Alayna Green -- Treene -- sorry -- Alayna Treene.
Nile, here’s what I don’t understand, where the foreign press, normally not very receptive to a Republican president, let alone this one, has nicer things to say about him than the American press.
NILE GARDINER, MARGARET THATCHER CENTER FOR FREEDOM DIRECTOR, HERITAGE FOUNDATION: Yes, it’s an interesting point, Neil.
And I have been on the ground here in London all week. And I have to say, I think that not only was this one of the president’s best overseas trips, it may well have been his most successful. And I think the response here in the U.K. has been -- it’s been tremendous, very positive press coverage here for President Trump, even from some of his critics as well.
You had some demonstrations, far smaller than anticipated, just about 7,000 demonstrators on the streets. But I have to say the objects of this trip, his meetings with the queen, the state banquets, his speeches and so on, I think this has been a very, very effective visit.
And he also, on the policy front, really pushed forward the idea of a U.S.- U.K. free trade deal. He hosted a business roundtable at St. James’s Palace. And I think that, on many policy fronts, this was a very successful trip as well.
So I have to say that the White House did a superb job with this trip, coordinating, of course, with Downing Street and with the royal family as well. But I have to say that, actually, this was a very impressive visit. And the president did very well. He projected statesmanlike leadership on the world stage, which I think is exactly the right approach.
CAVUTO: You know, Alayna, I’m not here to play problems one way or the other. I can see the good and the bad and all.
But I will say, I mean, the fact of the matter was even networks in this country normally critical of the president said he did a very good job in his speech at Normandy. But no sooner had they gotten that out there then they started saying, yes, but he was late for the event because he was doing a FOX interview.
Or just a couple of days, they were -- ago, they were focused on his tux, rather than what he said that event, a unique honor given an American president.
And I just found myself saying, all right, that balance of import just is not there. But that’s just me. What do you think?
ALAYNA TREENE, AXIOS: Well, I think that I will say if the worst criticism that the president is receiving is about an ill-fitting tuxedo, that’s kind of a win in the president’s book.
But I think that, you know, I totally agree with what you both are saying that, especially by this president’s standards, he did -- this trip was really very normal for -- as state visits go. And I think there was a lot of trepidation beforehand, especially on the U.K. side, given Theresa May, the prime minister, was on her way out, and this president was weighing in on who potentially should replace her.
There were these massive planned protests that were expected to take place and threatened to overstage the week’s events. And then, of course, we have a president who has weighed in, in the past, sometimes in very controversial ways, on Brexit.
And we saw the exchange between him and the mayor of London. There was, I think, a lot of concern there. But none of that happened. He didn’t embarrass the prime minister. He didn’t embarrass the queen or the royal family.
(CROSSTALK)
CAVUTO: Well, he did zing the mayor. He did zing the mayor of London, which I thought might have been justified in his mind because the mayor had been lampooning him.
TREENE: He did zing.
CAVUTO: I don’t know where this all started, but, to me, he is the leader of the free world. He shouldn’t punch down.
TREENE: Right.
And I mean, granted, like they were both -- there were attacks on both sides from the mayor and from the president.
CAVUTO: You’re right. You’re absolutely right.
TREENE: I think where the media, though, did -- and justifiably so -- be a little bit more critical of the president was that in his -- that idle time, when he was back at the hotel and the rest of Europe was sleeping, he was tweeting about Bette Midler being a psycho, or the Senate minority leader, Chuck Schumer, being a creep, and weighing in on the Mueller report.
That’s where we normally see. I think, from a foreign perspective, or foreign media perspective, his D-Day speech was very well-received by both the foreign press and domestic press. But it was some of where he started tweeting or talking about domestic policy we see some of that...
CAVUTO: Yes, where he steps on his own otherwise positive message.
TREENE: Exactly. Exactly.
CAVUTO: No, I see what you’re saying.
Nile, could I ask you this then?
GARDINER: Yes.
CAVUTO: Obviously, Maggie Thatcher was no stranger to protests at all in her own country. I can remember covering Ronald Reagan when he first visited London, of course, and he got an earful, as he did in follow-up trips to Paris, what have you.
So maybe they save this wrath for Republican presidents, I don’t know, or conservative leaders. Again, I don’t know. But it does seem to be out of sync. What do you think?
GARDINER: Yes, I think that there were a small number of protesters.
Some of these protesters were actually violent, and there were some assaults of pro-Trump protesters as well. And I have to say that every single Republican president is faced with protests, but I think the vast majority of the British people were happy to see a U.S. president who is very pro-British, who is a big supporter of the special relationship.
Also, President Trump is a huge backer of Brexit. And Brexit is the official policy of the British government. It is backed by a majority of the British people who voted for Brexit.
And so his support for Brexit, I think, is highly welcome here in Great Britain. It’s great to see the leader of the free world supporting the right of self-determination of the British people. That’s a wonderful thing.
CAVUTO: All right, Theresa May, by the way, stepping down formally today, although she gets to hang out at 10 Downing Street until the successor is chosen.
All right, thank you, guys, both very, very much.
All right, I have a little assignment for in the commercial break. I want you to Google the term antitrust. I could say you the trouble. It’s spelt Alphabet. You see what I did there?
This is free basic cable -- after this.
(COMMERCIAL BREAK)
CAVUTO: All right, look at this guy lunging at a Dunkin’ Donuts to steal some donuts, the Donut Desperado on National Donut Day.
And, no, this was not me.
(LAUGHTER)
CAVUTO: Almost.
After this.
(COMMERCIAL BREAK)
CAVUTO: All right, some big news on Google, Alphabet, whatever you want to call it, and the government may be circling the wagons.
Charlie Gasparino has more on this developing story.
Sir.
CHARLIE GASPARINO, SENIOR CORRESPONDENT: Well, we are clearly in the nascent stages of this, of this government crackdown on tech.
They’re looking at all the companies. They divide it up between the FTC and the DOJ. If there was one company I would say that stands the most -- at least according to my sources with direct knowledge of the investigation, one company that stands the most to lose or is definitely in the crosshairs in a major way, in the biggest way, it’s Google.
And what we understand is that the DOJ antitrust is ramping up its antitrust investigation of Google. And here’s where it gets interesting. We have been told that DOJ antitrust hasn’t ruled out civil or criminal.
Usually, they tell you it’s a criminal case, it’s a civil case, it’s not a criminal. What we’re being told is that they’re signaling it could be either, and it could be against...
CAVUTO: Right.
What is their beef now, their...
GASPARINO: So you have to know a little bit about the background of how this came about.
The FTC did an investigation of Google a couple years ago, whether they were using its search engine to basically help itself, directing stuff back to itself, any way to benefit Google. OK? And they control about 90 percent of the search engine business.
That is part of this probe, I understand, this old FTC staff report, that the staff recommended bringing civil antitrust charges. The full FTC under Obama said no. They voted 5-0 not to bring the case. That is part of this probe, from what I understand.
It’s not quite a referral, but it’s a -- but they’re using some of that evidence.
CAVUTO: But it wasn’t driven by -- remember the attack lines that conservative groups felt that they were alienated in searches and all that?
GASPARINO: Well, I’m sure that’s part of it as well.
CAVUTO: Yes.
GASPARINO: But they are using as their evidence this staff report.
CAVUTO: OK.
GASPARINO: So what we do know now, it could be civil or criminal. It is clearly ramping up. They have made no determination.
CAVUTO: What about on the others that have been fingered?
GASPARINO: Listen, clearly, they’re looking at all of them. But I’m telling you, based on the sort of feedback I’m getting from sources close to the investigation -- and if you’re owning the stock, I mean, this is obviously an issue.
Google seems to be in the biggest crosshairs. That’s where they’re devoting a lot of time. And here’s the interesting thing. FTC, DOJ divvied everything up. DOJ wanted this, and DOJ has the hammer of, let’s face it, criminal or civil charges.
CAVUTO: Yes.
GASPARINO: And they’re saying they’re not ruling it out against the company or individuals, again, early stages. But this is something to keep in mind and watch.
CAVUTO: Can I switch gears real quickly?
GASPARINO: Sure.
CAVUTO: You have been following the money guys and Joe Biden. He’s not -- he’s not lacking for that. Right?
GASPARINO: Right. No, no.
And it’s interesting. What we understand is, behind the scenes, he’s actually reached out and there’s been some discussions with Dick Gephardt, remember, the former House majority leader, now a fairly significant guy in corporate America. He advises corporate boards. He does some lobbying work. He does a lot of stuff with corporate America.
I spoke with Gephardt today. He says there’s no official or unofficial designation. He -- clearly, he said the campaign reached out, there’s been some discussions.
CAVUTO: So, no one’s getting shaky? The former vice president has had some eruptions of late and reversals on things like abortion and all that.
GASPARINO: Well, he’s got to give it in a little bit to the left wing of the party.
CAVUTO: Right.
GASPARINO: Listen, I think, based on what I’m hearing...
CAVUTO: None of that’s rattling them, in other words?
GASPARINO: No.
CAVUTO: OK.
GASPARINO: They think that he’s the guy to win.
Now, whether he does or not, no one knows. But you could see him assembling his coalition of Democrats.
CAVUTO: Right.
GASPARINO: Gephardt, from what I understand, is part of it.
Gephardt tells me, just so you know, just to be real clear, because I spoke with him. He’s a very nice man. He said he gives advice to anybody that asks. He hasn’t spoken specifically with Biden, but he has with his staff.
CAVUTO: Got it. All right.
GASPARINO: All right?
CAVUTO: How’s the anger management going? Good?
GASPARINO: You know, I’m in the nascent stages, as they say, of anger management classes. But it’s weird with me.
Just the opposite happens when you -- when I have to go to these classes.
CAVUTO: Yes.
GASPARINO: I get more angry. I don’t know why.
CAVUTO: Yes. Well, every day is a gift.
GASPARINO: Yes, yes.
CAVUTO: All right. Thank you, buddy. You’re the best, Charlie Gasparino.
There are other business journalists in the country, of course. He just so happens to be the best.
All right, in the meantime, New York’s Times Square almost, almost the target of another potential terrorist attack. But you won’t believe how police caught the guy before he could make good on the threat.
(COMMERCIAL BREAK)
CAVUTO: All right, this was a close one.
A man in court today for allegedly planning to throw explosives at people in New York’s Times Square. The suspect apparently tipped off authorities by discussing the use of guns, suicide vest and hand grenades, which, generally, if you’re trying to keep something secret, is not a good idea.
Jacqui Heinrich from Times Square with more on this -- Jacqui.
JACQUI HEINRICH, CORRESPONDENT: Neil, that man just made his first appearance in federal court.
His mother was also in federal court. She was crying as the judge read out the charges against her son and ordered him permanently detained, saying that he was a risk to the community.
The suspect’s name is Ashiqul Alam. He’s 22 years old from Bangladesh and was living as a permanent resident in Queens. Police arrested him last night after he allegedly tried to buy two semiautomatic pistols with the serial numbers removed from undercover officers.
The FBI had been building the case against him since August of last year, when an undercover agent had the first of at least 20 meetings with Alam. During that meeting and others, investigators say Alam repeatedly praised ISIS, Al Qaeda, and Osama bin Laden and said he admired the attack on September 11.
Later, he allegedly talked about planning his own attack with a suicide vest in Times Square or Washington, D.C., where he could kill a senior government official.
Agents said Alam settled on an attack in Times Square and wanted to use grenades because they could -- quote -- "take out at least eight people." He allegedly went so far as to record cell phone video of Times Square, so we could put out a map of his targets. And, on another occasion, he allegedly said it would make him happy to see the flag of Islam on the Twin Towers or the Empire State Building.
Times Square has been a target for terror threats for a number of years. Back in 2010, a crude car bomb was found smoking in a car just one block south of where I’m standing. And, in 2017, a man tried to set off a suicide bomb in the subway at Times Square. Both of those bombs failed to detonate.
Investigators said there was never a risk to Times Square, as agents were watching this man’s every move, but the criminal complaint certainly paints a dark picture sure of what agents say he wanted to see happen -- Neil.
CAVUTO: Man, that was close.
Jacqui, thank you very, very much.
Well, on to less worrisome news. It is National Donut Day. But here’s the worrisome thing. Police are trying to hunt this guy down because he’s trying to destroy it. They are calling him the Donut Desperado.
And, no, it wasn’t me.
(LAUGHTER)
(COMMERCIAL BREAK)
CAVUTO: And the side hustle. A growing number have second jobs just to make ends meet. They’re calling it the new normal.
Let’s ask it with some people who are decidedly not.
"Your World" audio technician Dion Baia is here, entrepreneur extraordinaire Michael Parrish DuDell, and last, but not least, my good buddy Kat Timpf.
They’re all young. They’re all restless. They’re all here. And they’re all convinced that they know why so many, so young, are working so hard.
What’s going on?
KATHERINE TIMPF, CONTRIBUTOR: I have never had just one job.
I have two jobs right now. Plus, I do speeches and I do stand-up.
(CROSSTALK)
MICHAEL PARRISH DUDELL, ENTREPRENEUR: You can go to the Web site.
(LAUGHTER)
TIMPF: But even back when I was out of college, I had internships. I was waitressing.
I don’t understand what’s the big deal. What else are you going to do besides work? Watch TV? Socialize with your peers?
CAVUTO: But wait. They have full-time jobs. And they’re adding other jobs to it.
DION BAIA, CORRESPONDENT: Yes, but this is nothing new.
My father, I remember, he used to do stuff on the side too. And he worked with people who would be an electrician on the side or a plumber or a contractor.
I wrote a book. I have a podcast.
(CROSSTALK)
TIMPF: I would be a great plumber.
(CROSSTALK)
DUDELL: They have to do it.
So, people are freelancing more these days because the cost of living is rising. It’s projected, by 2025, more than 50 percent of Americans will have some type of freelance job, whether that’s on the side or full-time. Cost of living is going up.
(CROSSTALK)
CAVUTO: Well, maybe if you stopped spending so much.
(CROSSTALK)
TIMPF: Avocado toast, got to have it.
CAVUTO: Yes, that’s going up with the Mexican...
DUDELL: Yes, I don’t think you can have avocado toast every week now.
BAIA: What is an avocado?
CAVUTO: Yes. Exactly.
(LAUGHTER)
DUDELL: Just the toast. All you can have is the toast.
BAIA: All the toast.
(CROSSTALK)
CAVUTO: All right, it’s sad, but just hopefully don’t work.
(CROSSTALK)
CAVUTO: All right, meanwhile, Impossible beef is getting impossible to find.
Have you heard about this? The company is now struggling just to keep up with demand as interest in meatless alternatives really soars, and rival company Beyond Meat, that stock came public just, what, the beginning of last month. It was up 40 percent today after a strong quarterly earnings report.
It’s up more than 455 percent since its offering price, again, little more than five weeks ago, of 25 bucks a share.
What makes this so big?
DUDELL: It’s clear that more and more Americans want to eat meals that are meatless, whether that’s for the environment or for the animals, whatever that reason is. Maybe it’s just a trend.
I think it’s good that it’s happening. I mean, if you think of animal agriculture...
CAVUTO: But all this stuff has been around.
DUDELL: Yes.
CAVUTO: I just think the change is that it actually tastes pretty good.
TIMPF: It does, right?
I have had this Impossible burger and the meatless burger. I have had these. These tastes actually kind of like meat, whereas veggie burgers that I have had in the past kind of taste more like a like an envelope of wet chickpeas.
(CROSSTALK)
DUDELL: To be exact.
BAIA: And I think now, with the social media and everything, you can see now for the ethical issues of how animals are treated. Coca-Cola is now facing a boycott because one of their companies, Fair Oaks Farms in Indiana, there’s footage that came out of them abusing the animals, beating the cow calves, leaving some out to die.
(CROSSTALK)
CAVUTO: But that kind of stuff always comes out with the PETAs and what have you.
(CROSSTALK)
BAIA: But what the critics are trying to say is that this isn’t -- this is the norm in these kind of facilities.
So people are trying to show their opinion or their voice and say...
CAVUTO: I don’t think it’s that.
(CROSSTALK)
CAVUTO: I think you hit on it with the fact that it tastes like real meat.
TIMPF: Yes.
CAVUTO: I have tasted one of these things. And I got to tell you, it tasted great.
Now, I didn’t know what was in it. I start worrying, if this tastes so much like a regular burger, what the heck is in it?
TIMPF: Black magic, right?
DUDELL: Black magic.
(CROSSTALK)
DUDELL: I think you have to combine the two. It has to taste good. You have to also be responsible.
If you can get something that is in the middle and you give consumers a choice, they will choose that.
(CROSSTALK)
CAVUTO: ... as much calories, if not more, than the regular burger.
TIMPF: Right, and probably less protein.
So if I’m going to be eating a burger, I do want it to have been alive at some point.
BAIA: But, no, some of the stuff like Beyond Meat does have chickpeas.
If you read the back...
CAVUTO: Oh, it does have chickpeas?
BAIA: Well, I mean, there’s stuff that is going to give you a source of protein and stuff like that.
CAVUTO: Got it. Got it.
BAIA: There is natural stuff in there for flavors. It’s not like extract number nine or some crazy stuff like that.
DUDELL: And it’s better for the environment, which millennials on both sides of the party, they really want something that’s going to help...
(CROSSTALK)
CAVUTO: You’re so pure.
(CROSSTALK)
CAVUTO: All right. All right. Yes.
(CROSSTALK)
DUDELL: I have never said I was pure, to be on the record.
CAVUTO: There is another thing here that, fortunately, shows that some things that maybe might be bad for are still very, very popular.
This is National Donut Day. I bet you didn’t know, but I have it marked on my calendar. But police are on the hunt for the guy they are already calling the Donut Desperado. He’s seen on video hopping the counter. This is at a Dunkin’ Donuts in South Brunswick, New Jersey.
Here’s why you know it’s not me, by the way. And many people thought it was. I wouldn’t be hopping on any counter one way or the other. And I wouldn’t take just one donut. I might take that entire cart out and then hook it up to a truck.
But, anyway, what do you make of that?
BAIA: I think this behavior is despicable. I mean, this is just -- to me, there’s no difference from someone livestreaming someone getting beat up or sucker-punching somebody.
If you notice, in the video, he’s livestreaming himself doing it. And...
CAVUTO: He doesn’t have a weapon.
BAIA: No. He’s got a cell phone, though.
CAVUTO: Right.
BAIA: And if he hops -- look at him. He’s dancing to himself and all this. He’s scaring the people who work there.
I think this isn’t...
(CROSSTALK)
CAVUTO: Well, she doesn’t seem too intimidated.
BAIA: I don’t think we should promote kind of behavior.
TIMPF: I don’t know. I disagree. I disagree, honestly.
(CROSSTALK)
TIMPF: Because, when most people steal, they don’t have the courtesy to do it with that kind of pizzazz.
(CROSSTALK)
TIMPF: He has a lot of pizzazz.
CAVUTO: And he’s thin. He doesn’t seem to be -- another reason why a lot of people...
(CROSSTALK)
DUDELL: He took the one donut because he’s probably very health-conscious, going to have the Beyond Meat burger later after that.
CAVUTO: Beyond Donut.
DUDELL: Beyond Donut.
CAVUTO: With chickpeas, probably.
(CROSSTALK)
BAIA: The fact that he’s livestreaming it, I don’t think people even realize it. They don’t think that, when it goes up to the Internet, that they’re going to get caught.
DUDELL: Exactly.
BAIA: In 48 hours, this guy’s going to get caught and he’s going to go to jail.
TIMPF: Probably what he wants, though. He probably wants attention.
BAIA: I don’t think he’s even going beyond that. He wants attention in his social media group. But I don’t think he’s going...
(CROSSTALK)
CAVUTO: But he got it on this show, right?
(CROSSTALK)
DUDELL: And if you’re take one donut, really, Dunkin’ Donuts? I mean, go to a Krispy Kreme. There’s a $100 donut in Brooklyn you can find.
CAVUTO: Whoa. Whoa. Whoa.
(CROSSTALK)
TIMPF: You’re a donut elitist, is what you’re saying.
(CROSSTALK)
CAVUTO: Guys, thank you very, very much.
Food for thought. Oh, see?
BAIA: Drinks are on the house.
CAVUTO: All right, well, the president might like tariffs to get what he wants, but what if I told you that you’re footing the bill if he doesn’t?
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
TRUMP: Tariffs are a beautiful thing. It’s a beautiful word, if you know how to use them properly. Republicans should love what I’m doing.
(END VIDEO CLIP)
CAVUTO: Well, the president might love tariffs, maybe even think they are a beautiful thing. But they are not, unless your idea of a beautiful thing is to pay through the nose, because governments don’t pay tariffs. You do. Governments don’t shoulder the suddenly higher costs of their targeted products. You do.
Governments might not like it, but you’re the one paying for it. And in the case of Mexico, the government there isn’t the one potentially paying up to 25 percent more for a Corona. You’re the one picking up the tab, just like you’re the one picking up the tab for pricier pecans or rising raspberries or suddenly sizzling strawberries, just a few of the Mexican products fingered by the White House that are going to be a lot pricier in your house.
Now, don’t get me started on telephones either or televisions or cars and car parts and all that other stuff that is made over there, then makes its way over here. It is going to be pricier here, up to 900 bucks per household pricier here.
Now, naturally, the companies that make all this stuff do their darndest to contain the sticker shock. But there’s only so much they can do, just like there’s only so much even the Chinese companies can do, even with their government helping them out, to absorb the higher costs of the stuff they sell here. And they sell a lot of stuff here.
Now, the president is betting that you will find alternatives. Well, good luck with that, because, for most of this stuff, not all, there are no alternatives. And good luck figuring out where all those extra millions of dollars from all of this suddenly pricier stuff is going and will be going.
Now, the president says that the U.S. Treasury is making a mint. I just want to know what they’re doing with that mint. Now, to be fair, he has channeled some of that dough to help out farmers. But last time I checked, all of those billions have not done a lick to improve our deficit.
It’s actually getting worse. And, like I said, the revenues that he’s getting, you are paying, not Mexican companies, not Chinese companies, not the Mexican government, not the Chinese government, you, us.
Now, don’t get me wrong. The president is right to be frustrated. But that doesn’t give him the right to fool. He is right to say he’s trying even -- and trying real hard to even the playing field by fighting fire with fire. But he is not right to leave out the fact you are the one getting scorched.
He’s entitled to his point of view, but he is not entitled to his own set of facts. And the facts are that tariffs are not beautiful, and they are not wonderful.
Look, I understand a frustrated president wanting to do battle, just as long as you understand you’re the one suiting up for that fight. So, we shall see.
The president now and the first lady, they are back in the U.S. of A., after their trip to Europe. The president is going to have a busy weekend, we’re told, trying to negotiate and ongoing negotiate with the Mexicans over avoiding tariffs that could come as early as Monday on better than $300 billion worth of goods.
Now, we’re going to be exploring that tomorrow on "Cavuto Live" as we look at this issue. We will be looking at how much you’re paying. We’re also preparing ourselves for what will be a big protest planned in Tijuana, Mexico, which will be taking place as these tariffs presumably come close to kicking in. We’re live on all of that.
We’re also live looking at the effect this is having on the economy and the markets, because, if they’re worried, as I said, they have a very, very funny way of showing it -- 10:00 a.m. Eastern time, we get cracking, because it doesn’t matter the time of day or the day. We have got you covered. We will again on Saturday.
See you tomorrow.
In the meantime, here comes "The Five."
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