Olympic Organizers Giving Away Tickets to Fill Seats; 12% of Rio Paralympic Tickets Sold; Olympic Sponsors Protected by Strict Rules;



Paralympic Tickets Sold; Olympic Sponsors Protected by Strict Rules;

Wharton: Trump's Immigration Plan Would Kill 4 Million Jobs; McCaughey:

U.S. Taxes "Killing the Economy"; U.S. Stocks Fall from Records; New York

Fed: September Rate Hike Possible. Aired 4-5p ET - Part 1>

Paul R. La Monica >

McCaughey, Mario Monti, Angela Ruggiero, Lance Ulanoff, Bruce Turkel>

ticket sales for the Paralympics are positively dismal. The organizers

have resorted to giving away Olympic tickets to samba schools that took

part in the opening ceremony. Olympic organizers are providing some of the

money for the Paralympics athletes to get to the games. But the Brazilian

court is blocking the cash from being disbursed. Whether you're over in

the Olympic park or here in the Olympic fan zone, what you won't find a

whole lot of is brand competition. That's because the only refreshments

you can buy are the Coke brand, the only beers, Brazil's Skol and all these

companies have paid big bucks to be official sponsors of the Olympics.

Donald Trump's alma mater has a gloomy prediction for the Republican

presidential nominee's immigration plan. It estimates that the plan to

deport 11 million undocumented workers would actually kill 4 million jobs

by 2030. Mr. Trump came out and said he's going to reduce taxes for

everyone. Most economists and experts said it would add an extra $10

trillion to our national debt. On Wall Street, stocks fell from Monday's

record. Mario Monti says the Eurozone should be more concerned about

Brexit than Italy's banks. Visa has launched a recruitment drive for

Olympians only. Google has launched a new app. It's Google's answer to

FaceTime. The global pop super star Justin Bieber has deleted his

Instagram account. It follows unpleasant comments Bieber received about

his girlfriend, Sofia Richie. >

America; Government; Advertising; Elections; Politics; Taxes; Immigration;

Banking; Europe; Italy; Stock Market; Media; Technology; Music Industry; >

[16:00:00] RICHARD QUEST, CNN ANCHOR: Good day on Wall Street. The Dow Jones is down 85 points. The gavel is about to be hit to bring trading to a close. You call that a true, firm gavel, bringing trading to an end on Tuesday, the 16th of August.

Tonight, half empty stadium, half empty bank accounts. New problems for the Rio Olympics and the Paralympics. Mario Monti say Europe is at risk of disintegrating. The former Italian prime minister is on this program today. And Google's dynamic duo is in a face-off with Facetime.

I'm Richard Quest. We have an hour together. And of course I mean business.

Good evening. Thank you for making time to be with us for our nightly conversation on business and economics. And we begin tonight with no medals for ticket sales in Rio. Attendance at key marquee events have been sparse and ticket sales for the Paralympics are positively dismal. In an effort to fill seats -- and just look at these numbers -- look at these pictures while were just considering these facts. You can see row after row, in fact whole blocks of the stadium are absolutely empty. Well, the organizers have now resorted to giving away Olympic tickets to samba schools that took part in the opening ceremony. Don Riddell is at the Olympic Park. Don, give us -- I don't want to sound carping but this, but the pictures do tell the story. How bad is it?

DON RIDDELL, CNN WORLD SPORT: Well, it's not great. I mean, I was in the Olympic stadium to see Usain Bolt win his sensational 100 meters the other night. I will say that that was full. That was a relief, because that's the marquee event of every Olympics. It would have been a real crying shame if it was half full. I've been to many events and I don't think any of them apart from that event have been close to a sell-out.

I will say that the atmosphere in some of the arenas has still been very good. But there are a lot of empty seats. That is not good on so many different levels. I mean, for the IOC, which packages this event and sells it to broadcasters around the world for a lot of money, it doesn't look good when the stadiums are half empty. You take the Premier League for example, and we see what a massive financial success that has been. One of the reasons for that, Richard, is because all the stadiums are absolutely packed. It looks like everybody's having a great time. The atmosphere comes through on the screen and that becomes a part of the package.

This is not what the Olympics would have wanted. And I can't understand why it's taken the IOC and the local organizers so long to effectively give these tickets away, because I've been having this exact conversation with my friends and colleagues here for well over a week now. It feels as though we're pretty close to the end of the Olympics and they've only just figured out, you know what, let's give them away and fill the stadiums and give young people a chance to experience sport.

QUEST: Was this in a sense inevitable, in the sense that unlike London, where you've got 70 odd million people in the United Kingdom, but you've got several hundred million just across the English Channel who can be there in an hour or five to sort of make up the numbers, and you have a day trip or weekend away. Getting to Brazil is expensive and it's a long way pretty much from most places.

RIDDELL: Well, that's true. So you're counting on the locals to come. And we all know about the problems that Brazil has experienced over the last few years. I mean they were awarded the Olympics seven years ago. As you know, a lot has changed in that time. At that time, Brazil was an up and coming economy. It was one of the brick nations, everybody was excited about the future of Brazil. But of course more recently we've seen the government in turmoil and the economy collapse.

And a lot of people here just aren't interested in the Olympics. And even [16:05:00] if they were interested in attending sporting events, that doesn't necessarily mean they can afford to go. I will tell you the lady sitting next to me at the 100-meter final paid only $120 for her ticket. If that was being held in the United States, that would be an absolute snit. Here, $120 is still quite a lot of money. And I think a lot of people here are finding it very, very difficult to go to these events and support them, especially when a lot of the events, which make up the magic of the Olympics, are not necessarily the kind of thing you would want to see, like badminton or table tennis or weightlifting.

If you're not a fan of those sports, maybe you're not going to want to go. But the kind of people that do enjoy the Olympics really don't care what they're seeing because they know it's all a part of the games and it's going to be very entertaining. But I guess for people who are struggling financially, that's becomes a harder sell.

QUEST: Thank you, Don. I remember very clearly in London lots of people sort of -- in the balancing, saying I only got tickets for weightlifting but I'm going anyway. Don, thank you, sir, good to see you.

The other side to our Olympic story tonight from Rio are the problems spilling over to the Paralympic games. Now they are to open in 22 days' time. If you think the situation is bad for the main able-bodied games at the moment, where there are depleted stadia, now organizers are racing to sell tickets and close a huge budget gap. So you've got -- this is the way the situation is at the moment. So far, only 300,000 of 2.5 million have been sold in Brazil for the Paralympics, even though the cost for most of them is just barely $3. If you compare to London which also -- there was a moment for London where there was a crisis for the Paralympics in terms of the number of tickets sold. London at this point had sold seven times as many tickets and smashed the record. Now, in the end, it ended up selling 2.8 million tickets, and had to add on extra seating. But in Rio, the organizers are struggling even to get funding, to get to the starting line. And some athletes are depending on the funds for traveling. And now the Brazilian -- it's a real mess because the organizers are providing some of the money for the Paralympics to get there. But the Brazilian court is blocking the cash from being disbursed. The organizers are still hopeful they can recover from rather slow and some might say is a pathetic start.


MARIO ANDRADA, SPOKESMAN, RIO 2016: What has affected the Paralympics in terms of financing was, obviously, low ticket sales, lack of sponsorship. We understand that with late too soft of ticket sales for Olympics, we'll be able to sell more Paralympic tickets. So it's yet to be found how much money will be needed for the Paralympics.


QUEST: Joining me now Baroness Tanni Grey-Thompson, a former wheelchair racer and winner of 11 gold Paralympic medals. Your ladyship, thanks for joining us. How concerned are you, when I look at these numbers at the moment? Because dependent upon these sales, depends upon so much of the money that is used to get the Paralympic athletes to the games.

TANNI GREY-THOMPSON, 11-TIME PARALYMPIC GOLD MEDALIST: I think the first priority is to make sure that the support goes to the countries. There's 50 countries that need the money to get the athletes to the games, because a depleted Paralympics will be a real struggle. London was amazing, and each cycle of the games moved forward. But Rio is really crucial for the next stems for the Paralympic movement. And you're talking potentially 4,000 athletes that could be affected if this money doesn't come through. With 22 days to go, we're kind of running out of time for that money to be released.

QUEST: Now the mayor of Rio says the money is there, and that what's preventing it being disbursed are legitimate anticorruption regulations on transparency. Many of these national Paralympic organizations have to be able to prove how they're going to spend the money so it doesn't disappear into somebody's pocket. It is a valid point there.

GREY-THOMPSON: It is a very valid point. But actually this probably should have been sorted out several weeks ago. And I think the International Paralympic Committee got to the point where they had to go public with it to make sure it moved on. Because the reality is the athletes are going to be starting to leave their countries in the next week or so to be in Rio ahead of the Paralympic games. And they'll going to start losing their flights. They'll be limited availability. That could be a real problem. And I think the other thing is the ticket sales will also be a quite a challenge, because, you know, it's hard to compete in front of very few people in London and in other games like Beijing. The huge number of ticket sales really spurred on the athletics performances.

[16:10:05] QUEST: I understand the blame game, whilst it might be good television, is fruitless in solving the problem. But why do you believe these numbers that we are looking at the moment, 300,000 versus, say, 2.3 up to 2.8 million. What do you think has gone wrong here, your ladyship?

GREY-THOMPSON: I think it's a combination of lack of sponsors and maybe just not pushing the tickets hard enough. In London what happened was the Olympic tickets went on sale first, it generated this huge amount of interest. And then they put the Paralympic tickets on sale. And then there was a big, in the last two weeks of the Olympics, there was a big push on Paralympic tickets.

What's surprising is that Rio and Brazil are a really strong Paralympic nation. Five years before the opening ceremony of Rio they had a huge party in Rio, 150,000 people turned up on the streets. So I don't think we expected this sort of reluctance of people to buy tickets. But if you look at the economic crisis there, the reality is, if you've not been paid this month and you're struggling to feed your children, you're not going to be buying tickets for either the Olympics or even buying very cheap tickets for the Paralympics.

QUEST: Finally, I insist on ending on a more positive note. We've seen some marvelous sport and some great records and some superb athletic achievements. From your knowledge of the current state of Paralympic athletes, when they start competing, are you expecting to see key victories, records broken, superb examples?

GREY-THOMPSON: I think what we are going to see is incredible sport, brilliant achievements. There's more media coverage than ever before. And four years on from London, we're seeing even more talented athletes. So I think the sport is going to be good, and actually the athletes will just ignore all this politics. They're not interested. They just have to concentrate on being the best they can be. But come the start of the games, it will be fantastic.

QUEST: Thank you for joining us, good to see you your ladyship. Thank you very much for putting it into perspective. We'll watch the numbers very closely in the days ahead.

Now the competition between the athletes is fierce. Olympic sponsors have the field to themselves. After all, just think about it, you've paid billions of dollars for the privilege of sponsoring and having your name attached. But of course, think about it. If your company is attached to the Olympics, you want to make jolly certain that the competition is not. Shasta Darlington reports.


SHASTA DARLINGTON, CNN CORRESPONDENT: Whether you're over in the Olympic Park or here in the Olympic Fan Zone, what you won't find a whole lot of is brand competition. That's because the only refreshments you can buy are the Coke brand, the only beers, Brazil's Skol. In fact, the city of Rio de Janeiro has turned into one big advertisement. Here at the megastore you can get your Rio 2016 mascots. But the only official sporting brand you'll find is Nike. And the only card they accept is Visa. All these companies and more have paid big bucks to be official sponsors of the Olympics. Competitors are nowhere to be found.

PETER SHANKMAN, SHANKMINDS BUSINESS: Advertisers have paid anywhere from 4 to $6 billion overall to be involved in this year. So it makes sense that the Olympic committee will want to protect that investment for the advertisers.

DARLINGTON (voice-over): Staging the Olympics is expensive. The Olympic committee needs the money big advertisers bring to the table. To help protect their official brands and guard against what they call over commercialization, the IOC has rule 40, which restricts athletes' ability to mention companies on social media if they're not official sponsors. There are also strict rules on what you can or can't say about the Olympics in commercials.

SHANKMAN: If you are not an official sponsor and haven't been given clearance to say that you are an official sponsor, you can't say things like "Olympics" or "gold" or "silver" or "bronze" in conjunction with your advertising.

DARLINGTON: There are ways unofficial brands get around these regulations. Under Armour's, Rule Yourself, spots starring superstar Michael Phelps make no mention at all of the Olympics. General Mills puts animals through their paces in track and field this summer in a so-called rabbit showdown. And Google's home page features the doodle fruit games. Amid all the restrictions, some are fighting back.

SHANKMAN: When Donald Trump and the Pope both tweeted about the Olympics, the rule 40 twitter account said please cease and desist from wishing good luck to our athletes as you are not an official licensed sponsor. It was obviously parody and was designed to mock the IOC for the draconian rules.

[16:15:03] DARLINGTON: Don't expect the Olympic committee to change its rules anytime soon as it moves to protect its profitable brand. Shasta Darlington, CNN, Rio de Janeiro.


QUEST: Oh, the Olympic rings. Now, as we continue talking about Donald Trump, his economic plan has received much scrutiny and a great deal of criticism. After the break, one of his economic advisers joins us to tell us why it's not as bad as the critics suggest. The plan, that is. In a moment.


QUEST: Donald Trump's alma mater has a gloomy prediction for the Republican presidential nominee's immigration plan. It's the University of Pennsylvania's Wharton School and it estimates that the plan to deport 11 million undocumented workers would actually kill 4 million jobs by 2030. In comparison, it says Hillary Clinton's proposals create a pathway to citizenship and would cost around 400,000 jobs in the same period.

The whole question of Donald Trump's economic plan is now very much under debate and discussion. In just a moment, we're going to be talking to one of Mr. Trump's economic supporters and on his economic council of advisers who will be telling us why the critics perhaps are wrong. But first though, Cristina Alesci is with me to dissect and to set, if you like, the parameters for our discussion. Cristina, what do the critics say about Mr. Trump's plan?

CHRISTINA ALESCI, CNNMONEY, CORRESPONDENT: Well, let's put the immigration stuff on the side for a second because it's economics. So let's stick to taxes, trade, regulations, three big tenets of his policy. On taxes, Mr. Trump came out and said he's going to reduce taxes for everyone, essentially, three tax brackets, 12, 25, and 33 percent. If you remember, when he came out with his original plan, that top bracket was at 25 percent, and most economists and experts said it would cost an extra $10 trillion, add an extra $10 trillion to our national debt. So he's revised that. Most experts say it will cost less but still cost us a lot of money.

On trade, he's saying that he's going to implement strong protections against currency manipulation and he's going to put tariffs on cheaters. How were going to do that? Still a little bit fuzzy on all the details, but most pro-trade people will say this does not account for the fact that we are losing manufacturing jobs because of innovation and technology improvements, which is plan does not really address. Third, regulation. Every business in the U.S. is really happy to hear about less and less regulation. Big, medium, and small businesses want more of this. The problem is that Trump is saying that regulation under Obama has cost America jobs. That's not necessarily true. When you look at the energy sector, a lot of these jobs have been lost because of the price of oil. Now, "The Economist."

[16:20:02] QUEST: Yes, "The Economist."

"The Economist" came out with a very strong anti-Trump message. They're a free trade publication, basically saying ".his proposal threatens the jobs and living standards millions of Americans. Rarely has a candidate been less deserving of such a leap of faith."

QUEST: That's the background. Thank you, Cristina. You been watching these things. Now let's talk about this with -- Thank you very much Cristina. Betsy McCaughey is a Trump supporter who is listed as a member of Mister Trump's economic policies. We're talking taxes. You heard Cristina Alesci putting into perspective the tax plan.

BETSY MCCAUGHEY, TRUMP SUPPORTER: She left out the most important part of the tax plan, which is the reduction in corporate tax rates. That's what's killing the economy. American companies paid the highest corporate tax rates in the world, not just nominally at 35 percent, but across the board, the average is about 27 percent. Much higher than other countries in the world.

QUEST: The Committee for Responsible Tax, whatever the foundation is, says that that tax cut on the corporate tax will raise the deficit by $2.3 trillion.

MCCAUGHEY: It will not. Let me explain why. And in fact the tax foundation has demonstrated why it will increase revenue over the course of a decade. We collect about $273 billion a year in corporate income taxes. But when you lower corporate tax rates, you increase business activity. Companies invest more in the tools that labor uses. Wages go up. Income goes up. Corporate income goes up. And as a result -- just a moment -- as a result, tax revenues go up. You see an increase in the payroll tax. You see an increase in individual income tax revenues. And over the course of a decade, you will see a $400 million per year increase in total tax revenue.

QUEST: But in Donald Trump's plan, not only is he cutting the corporate level, he's cutting the income tax level as well.

MCCAUGHEY: That's right. I do want to make one more point about this.

QUEST: Before we get to your other point, if we may. And at the same time, he's increasing expenditures on things like defense whilst protecting social care.

MCCAUGHEY: That's right. Very much of what Ronald Reagan did.

QUEST: Yes, and he ballooned the deficit. He ballooned the deficit.

MCCAUGHEY: That's right, he did. But over the course of a decade he produced enormous prosperity. Here is where I'm coming from on this. Voters this time around have a choice between class warfare and economic growth. I'm choosing growth. And here's why. 8 million more people are living in poverty today than when Barack Obama took office, 14.5 percent of our people are living in poverty. And why? Stagnant wages --

QUEST: Hang on a second. But the entire Trump plan rests on greater economic growth.

MCCAUGHEY: That's right.

QUEST: And nobody has ever seen the level of growth necessary to make up the shortfall for tax revenues by lowering taxes. So a question, do you accept that in the short term this balloons the deficit?

MCCAUGHEY: There's no question that it does. But Americans will be better off. They're enduring very stagnant wages. And when you --

QUEST: That's not true. The wage growth has risen. If you look at the last numbers, wage growth is up 3 to 5 percent.

MCCAUGHEY: It's not satisfactory, and you know it. And more or less, more than that, our economy is now limping along at 1.2 percent growth despite robust consumer demand. Why because businesses are not investing.

QUEST: No. No, no. With respect. I accept that 1.2 to 1.5 percent growth is subpar. But --

MCCAUGHEY: Subpar? We can't survive with that. Reagan's recovery was 4.5 percent.

QUEST: They were different eras with different economics. And if you take the U.S. --

MCCAUGHEY: We can get back to that. We can get back to that level of growth.

QUEST: Not when you've got the EU growing at less than 1 percent.

MCCAUGHEY: Ireland grew 7.8 percent last year.

QUEST: That is completely fallacious and you know it, because Ireland was coming out of a dramatic recession, and it was a bounce back as a result of the bailout.

MCCAUGHEY: Look at their corporate tax rate, 12.5 percent.

QUEST: Yes, and look at what's happened with Ireland and its corporate tax rate at 12.5 percent. And look at what the U.K. is proposing to do because of Brexit.

MCCAUGHEY: Slash rates. They're all slashing rates to be competitive except the United States where Hillary Clinton is running ads saying corporations ought to pay their fair share. That's the most demagogic ad I've ever seen. Americans ought to know corporations are paying the highest rates in the world.

QUEST: So do you also support, along with this, measures to, for example, allow the repatriation of overseas money?

MCCAUGHEY: Oh, yes, that's a very good idea. Because the temporary repatriation -- I'm glad you brought that up -- will bring in $2.1 trillion, which will enable companies to invest that here in the tools of productivity.

[16:25:00] QUEST: Why go for, other than, frankly, political philosophy --

MCCAUGHEY: I like your spirit, by the way.

QUEST: Well, I can admire yours as well. The estate tax. Inheritance tax, death duties, whatever you want to call it, you accept, you must accept that it will only benefit the truly rich.

MCCAUGHEY: Well, it will benefit people who start small businesses and want to pass them on to their children and farmers. This is a major issue in the agricultural parts of the nation.

QUEST: You can change the rules to allow for farmers without giving Donald Trump and his family a $4 billion advantage.

MCCAUGHEY: You're falling for that class warfare rhetoric, you know, it's kind of silly.

QUEST: No, I'm not. It's a fact. God forbid Mr. Trump --

MCCAUGHEY: If somebody works their whole life to build a drugstore chain or a farm, why should they have to sell it because the estate tax at 50 percent was taking half of it?

QUEST: Why give the truly rich a tax break at the same time?

MCCAUGHEY: They've already paid taxes on their income.

QUEST: Well, what I hope is that you will come back to discuss other aspects.

MCCAUGHEY: It's a deal.

QUEST: There's a lot more we need to get to.

MCCAUGHEY: Absolutely. Next time, regulation.

QUEST: We might talk about regulation. We'll regulate the regulation. Thank you so much. I'm exhausted.

On Wall Street, stocks fell from Monday's record. Paul La Monica is at the New York stock exchange. Paul, what particular reason, why did it go up like a rocket yesterday and stay there and today comes down like a stone?

PAUL R. LA MONICA, CNNMONEY CORRESPONDENT: Yes, well, let's put things in perspective here. I don't want to sound as combative as your previous guest, but the selloff wasn't that dramatic. And we are coming off of record highs. I think the reason for the slip today, investors now got a wake-up call from one key Fed member, Bill Dudley of the New York Fed, saying a rate hike is possible in September. I think most people have written off the possibility of a rate hike because of what your last guest was talking about, namely the presidential election. Everybody thinks the Fed is on hold until December or maybe 2017. A rate hike next month could rattle the markets upset the apple cart.

QUEST: Now on this question of a rate hike, I mean, I seem to remember, I think it was George Bush, you'll correct me, I'm sure, our guru, the Fed has raised rates during, in the immediate preview up to the election. So it's not against doing that. But it would be less than desirable in this very febrile environment.

LA MONICA: Exactly. The Fed is apolitical. It tries its best to not look partisan. And you are correct, Richard, George Bush, George W. Bush's father, in 1992, did think that possibly one of the reasons for his loss was that you did have interest rates going higher at a time when the economy seemed to justify it. I think the Fed will act if they need to. But right now, when you look at what every other central bank around the world is doing, the Fed is hard-pressed to have a legitimately good reason to raise rates when they're near zero or negative just about everywhere else.

QUEST: Paul La Monica at the stock exchange. We are grateful for you being there tonight. Thank you, sir.

LA MONICA: Thank you.

QUEST: The talk of a possible Italian banking crisis, perhaps it's just a smokescreen. It's designed to deflect attention away from the real culprit of what's happening in Europe, Brexit. The view of the former Prime Minister of Italy, Mario Monti will talk about that and the health of the Eurozone as QUEST MEANS BUSINESS continues this evening.


[16:31:06] QUEST: Busy days, hello, I'm Richard Quest. There's more of QUEST MEANS BUSINESS in just a moment. When I'm going to be talking to the athlete who won gold at the Olympics and lost on "The Apprentice." And Instagram loses one of its most powerful users, Justin Bieber. Will tell you why in just a moment. Before all of that, you're watching CNN, and of course this is the network where the news always comes first.

A British court has found extremist cleric, Anjem Choudary, guilty of inviting support of ISIS. Choudary has pledged allegiance to the ISIS leader an associate of Abu Bakr al-Baghdadi in 2014 and the authorities say his jihadist rhetoric inspired Britain's to fight on the terror groups behalf. He is to be sentenced next month.

Russian forces have loaded bombs and missiles on their planes and taken off for Syria from an air base in Iran. It's the first time I ran has opened one of its bases for the Syrian war. Russia has been striking the groups fighting the Syrian president Bashar al-Assad. Both Russia and Iran are supporting the Assad regime.

The United States has transferred 15 prisoners from Guantanamo Bay to the United Arab Emirates. Most of prisoners are from Yemen. It's the largest prison transfer from Guantanamo since president Obama took office.

The eldest son of the drug lord known as "El Chapo" may have been kidnapped in Mexico. The family's attorney, says it's likely his son was abducted from a restaurant in the town of Puerto Vallarta. The local attorney general says Ivan Guzman is among 16 people who were taken.