Transcripts For CNBC Squawk Alley 20161115 : vimarsana.com

CNBC Squawk Alley November 15, 2016

Immelt. Adapting to a new media and Political Landscape following Donald Trumps surprise victory one week ago. And efforts to control hate speech onity platform, google banning new fake sites reportedly from using its proprietary Advertising Software and facebook continues to push back saying fake news on the network helped skew the election in trumps favor. Nick, question this morning in my favor . At large is facing some kind of identity crisis. Its interesting. I wrote a column for vanity fair in april that said Silicon Valley created donald trump. The backlash i got from that was insane. People saying it was nonsense, there was no base to it, i was making stuff up. Now theyre all realizing that they did. You know, there were no rules, no regulations, no anything on these platforms. And trump used that to his advantage. And, you know, it was propaganda. It was lies. It was fake news. It was everything. And these platforms did nothing to stop it. Now, finally, theyre looking at themselves and saying, wait a second. What have we done . Nick, i saw where legacy journalism is about transmitting quality of information but the tech component were now seeing of journalism is transmitting volume of data. Are they just trying to shovel as much bits as they possibly can . Is that what this is about . A problem that a lot of these sites face is, yes, it is about volume, right . The more numbers they have, the higher numbers they have, the more people on the platform, tweets and things create more advertising. More advertising, the more their stock goes up. So if they start banning users, start deleting things and stopping people from being able to share, then it affects the bottom line. So, it has never been in their interest to fix this. I think there was an article written in buzz feed a while back, talking about how troling on twitter was not a bug, it was a feature. It was a feature because it allowed people to join the platform. It was one of the things that made it so successful. At the same time, you know, one of the great things about what were seeing right now is that it turns out that Silicon Valley actually has some morals. Theyre questioning what exactly they have done to create this. Inside these companies, there are a lot of employees ive spoken to that are saying, hey, should we have stopped this earlier . My response is, yes, absolutely. And finally, theyre starting to realize that at the top side of the company. Tech companies have tried for a long time to avoid becoming content companies. They havent wanted the editorial messiness that comes along with that. They wanted usergenerated content that was democratizing from the bottom up and be as functional as commercially produced content. From netflix, amazon, we have this idea of the rise of original content, that it is worth the hassle of creating your own and this backlash of dominant platforms distributing news that perhaps isnt news, according to our traditional definitions. Its fake. Isnt this Silicon Valley having to come to terms with content at its core . Yeah. I mean, its interesting. Weve all covered these companies. Weve all seen this said were not Media Companies. But they are. At the end of the day, facebook, twitter, snap chat, instagram, they are Media Companies. They sell media ad buys. They host media. We can get into the discussion of what the difference is between the words, semantics and so on. That is what they are. They have a responsibility, if that is the case, to decide what is right and what is wrong. The problem is when ive spoken to people at facebook they said, look, you dont want us to get into the business of saying what is news and what is fake and what is not because at the end of the day, the cure may be worse than the disease. And i completely understand that argument. Im not saying that somebody should be saying on facebook yes, no, yes, no. But there has to be something in the middle that really kind of protects the users and also protects the company and doesnt lead to whats happened that were dealing with today with donald trump as president on the basis of hate and fake news and things that helped get him there. Why your right its a slippery slope, that facebook in making what would appear at the face of it be a binary decision between fake and real would then become an arbiter of trustworthiness of news organizations. From an investment standpoint, so many investors refuse to buy shares of alibaba because of the counterfeit goods on its platform. They fear counterfeits are a large percentage of the goods they sell and some government retribution is coming. Its a different good that facebook is pedaling. Is there a comparison to be drawn here between what alibaba is dealing with and facebook is dealing with . Absolutely. One of the reasons twitter has been so unsuccessful with investors is because of the fact that a lot of people have not joined the service. Because that have is all the hate on the service, all the trolls. Annet do eecdota anecdotally, ive seen it over and over again with people. Theres also the data to prove it. These companies at the end of the day will lose credibility if they dont some up with some sort of solution. Its amazing you have a company like facebook with 1. 7 billion users and can build the infrastructure to make that website go every single day without fail and yet they cant come up with any algorhythmic solutions. Im not saying its all or nothing. There has to be some balance in the middle. If they dont, if this continues, there will be some sort of retaliation, investors, users, whatever it is. I truly do believe that. Hey, nick, its been a year, i think. But i remember you coming on the show and saying that trolling and abuse was an existential threat. It was probably 3 billion a year ago. All right. When you have a certain amount of scale like facebooks, is that kind of prediction invalid . Whats real interesting is, you know again, im not attacking facebook for this. I really do understand the middle ground of all of this. Whats really interesting is that all the data, pollsters and everything came out. They said look at the numbers of people who voted. If one in 100 people would have voted differently, voted for hillary rather than trump, Hillary Clinton would have been the president. When you look at that, thats 1 , right . If you look at what Mark Zuckerberg was saying only 1 of fake news shared on our site news shared on our site is fake. That 1 could have changed the election. It played an Important Role, very Important Role that could have changed the outcome of this country. There has to be some responsibility for that. Whether its 1. 7 billion people or 300 Million People, these companies when you lock from a percentage standpoint, they are playing a massive role in whats happening in the state of politics. In the piece i wrote earlier this year, the line between politics, entertainment and the media has completely evaporated because of things like social media. That is the truth. Were seeing the results of that as we look at who is going to be the next president of the unite it will change and like the new york times, cnbc, fox news as they seek to have power in determining the business of the platform and Media Companies seek access to that audience . You know, i think that theres a really interesting thing thats happening within media today. You know, you have there are all these different factions going on. You have newspapers that are doing tremendous journalism. Then you have the cable news shows. Some of which come on. We know what fox is like. Theyre spewing out propaganda half the time. And then cnn, of course, goes all over the place. I think from a consumer standpoint, a lot of consumers do not care what a byline is. They dont even care what the place is that put out the story as a result of the denver gazette, putting out all this fake news. There has to be something that journalism, as a whole, has to do to try to figure out how to communicate to the public that something is real and something is not, that something has been vetted in a certain way or something is opinion. I dont think that theyve done that. New york times, for example, there are 10 different kinds of stories from opinion and editorial to straight fact news. And the differential, most readers dontnd the difference. And i think there has to be something maybe that social networks and newssites can do together to figure that out. Thats a big collective action problem. Well see where the industry goes with that. Good to talk to you again. See you soon. Nick bilton, joining us from vanity fair. When we come back, exclusive interview with jeff immelt. Well talk about the election, market response and how digital is changing the face of the industrial economy. Well go live to partnering for cures conference and talk to Michael Milken of the Milken Institute. Youre watching squawk alley. Dont go away. Breaking news with the fed and its stress test. Steve liesman has that. Saying the fed failed to give Vital Information to some companies. Qualified victory for the banks who have complained about their ability to meet the stress test and disclosure of whats involved in them, in assessing them. They do say, though, one of the faults of the fed here is in not stressing other situations. That of just a single situation. Thats sort of defeatus. It seems to be a victory for the banks. Fed essentially gives the banks enough chance to pass the stress tests and if its fair in implementing them. Lets go to carl in San Francisco. Steve, thanks so much. Steve liesman at hq. Jeff immelt has been a huge proponent of tpp and free tad. With donald trump headed to the white house, what is ges strategy Going Forward . Here in San Francisco is the chairman and ceo of general electric, jeff immelt. Hey, carl. Always good to have you. Good to see you. Thanks for having us. We want to talk about the Amazing Things going on behind us today. What a week. You got this election. You got this market response. People want to write this script, investors warming to a pro growth playbook where weve gone from deflation scare to inflation story. After brexit and a number of things around the world, nothing should surprise people anymore. The election broke definitely the way most people thought. We shouldnt be surprised. You have a president in place thats talking growth that looks like hes willing to invest back in the economy in a number of different ways. You see bond prices going up and investor enthusiasm, maybe a little bit of relief for the banks, which i think is a good thing. So, look, weve been in such a slow growth world, i really think that if you can find the right mechanisms to drive some growth back in the United States, thats a good thing. Now, you know, the real missing gap has been productivity. So weve got to get some investment back into the u. S. Economy, some Capital Investment, which really has been lacking since the financial crisis. And that, i think, is the president s biggest task. So of the pillars that are intended to do that, infrastructure, tax reform, profit repatriorepatriotion. I look at tax reform, carl, and say basically whats been sitting out the past decade is Capital Investment back in the u. S. Its a good chance that tax reform is kind of the missing ingredient that can help drive some of that Capital Investment back. Thats the difference between a 3 gdp growth u. S. And 2 gdp growth. 0 Interest Rates for a decade now. If youre a consumer and have a job, you feel rich. But thats not enough to create the kind of Economic Growth that i think the president wants to create and most people want to see. I think tax reform is actually quite important with territorial system, repatriation is part of that. You sound optimistic. Ive been through every cycle known to mankind. The u. S. Had been in a slow growth mode. Theres enough growth around the world to be able to keep us Going Forward. And i think if you could just solve a few things in the u. S. It doesnt matter who does them, but if you could just get a few things going, theres lots of pentup demand and opportunities for growth. Trade has been a big part of this story. Carrier plant is turning into a test of whether a Trump Presidency can keep production from going overseas or being reversed, coming back in. How likely is that . Voters who voted on that, is that a fools bet or not . So, i think protectionism has been going on for a decade or more. President trump isnt the first one to talk about it. Its been going on in europe, china. The world i grew up in with these free trade deals and anything like that, anybody that was planning on that going into the future is thats not the way weve thought about ge. I think it remains to be seen exactly what the new trade rules are going to be. And i think we have to wait and see. For someone like us thats an exporter, really, we make and sell things around the world. We can navigate the world on our own. But if you walk through walmart, home depot, do all those products have to come back to the United States . Do all the hair dryers and sneakers and refrigerators have to come back is that whats going to, you know, make the economy grow again . I think people have to sit and think through exactly what the puts and takes are. For us were a global company. We sell in 190 countries around the world. We do it from a local standpoint. Were going to keep globalizing. Were an exporter. Were going to keep globalizing. I think the world we live in today is so different than it was 10, 15, 20 years ago. You know, i believe in trade deals. But we dont need trade deals in ge. What the president will learn, what President Trump will learn is that as he travels the world, trade deals gives him power. The ability to use trade as an economic, lets say, negotiating technique, makes him more powerful. Because hes speaking the language of our country. Other countries. Who are trying to do the same thing . Exactly. Ive traveled the world, carl, for 35 years. People care about safety. They care about growth. If the president of the United States travels around the world and has nothing to offer from a standpoint of economic connection, you lose half of your negotiating power. This guy is a negotiator, a deal maker. Lets just wait and see what he does. Can you think of a policy can you game out a policy change that would result in a net increase in ge Domestic Production . Is that easy to do . Look, i think so our Domestic Production will go to different markets around the world. Things that make us more productive in the u. S. Will make us better, tax reform, the ability to invest better. Better roads. Better ports. Export import bank. Things like that. For us to make more jet engines, we have to win even higher market shares in africa, latin america, china, places like that. Thats the footprint we have. Our growth here has to come through exports. You gave a now famous speech at nyu in may where you basically said look, backlash against globalization isnt going anywhere. Its going to be around for a while. Were going to localize. The old playbook is not going to cut it. I assume the election of trump reinforces that view . At that point, carl, we had two people running for president , neither one who wanted trade deals. If youre sitting here as a ceo of a company and want a trade deal you should have your head examined. I think what i would say to your viewers is ive done this job since 2001. If you asked me to write down all the ways that the world is different today than it was in 2001, we would still be here at midnight. And i worry about people using an old playbook to look at the world today. The way European Union is different, the way the middle east works, after having these conflicts in the middle east for so long, is different. I hope President Trump takes a forwardlooking view and not backwardlooking view. I hope he puts people around him that have a contemporary perspective not from 2005, 1995 or 1985. You worked with him before. You said he was endearing, fun to work with, competitive. Is there an experience youve had with him that you find instructive . Look, i think he likes to win. If you just think about the apprentice saga itself, this this is a comcast problem now, not mine, right . But we handed him a show that was the thinnest concept i had ever seen and he made it like a 14year hit success. So, this is a guy thats a competitor. He wants to win. I always found him to be a listener and a guy that wanted to do good work. Right . One last thing here. I dont want to inflate this question. You have steve bannon on the cover of the new york times. How does an appointment like that get talked about in business . I never met steve bannon. Were a diverse company. We have many muslims, mexicans and many great americans that work for the company. A Million People in the u. S. Depend on ge to get it right for their livelihood. Our workers, our suppliers. We believe that every person around the world deserves to be treated with respect. I dont care who he brings in. Ill never change my opinion on how much i believe merit, diversity, treating people with respect thats a core american value. Thats a core american value. Thats what makes american capitalism the envy of the world, the fact that we know how to win in markets but we also know how to develop people. We know how to treat people. We know how to follow the rules and set high standards. Thats why were welcome. Youre not worried about a change . It cant change. In other words, its so core to who we are. Thats not the donald trump i knew, though. Ill let people draw their own equations, but we can never forget who we are. I want to talk about whats going on in this room. I just walked past a

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